Under perfect competition, the profit-maximizing condition for a firm is: MCQ with Answer and Explanation

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Under perfect competition, the profit-maximizing condition for a firm is:

A. P = AC

B. MR = MC and MC is rising

C. MR is maximum

D. TR is maximum

Answer: Option B

Solution (By JKSSB Mock Tests)

A perfectly competitive firm maximizes profit where marginal revenue equals marginal cost and MC is rising.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Reserve Bank of India' issues currency notes of denominations up to:

A. Rs 5,000

B. Rs 1,000

C. Rs 10,000

D. Rs 100

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Correct Answer: Option B

Explanation:
RBI issues currency notes up to Rs 1,000 denomination, while one rupee notes are issued by Government of India.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is NOT a objective of fiscal policy?

A. Control of money supply

B. Full employment

C. Price stability

D. Economic growth

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Correct Answer: Option A

Explanation:
Control of money supply is the objective of monetary policy. Fiscal policy aims at economic growth, price stability, full employment and equitable distribution of income.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of development economics, the 'Lewis Model' focuses on:

A. The role of surplus labour in agriculture and its transfer to industry

B. Only the role of foreign aid

C. Only technological progress in agriculture

D. The importance of balanced growth across all sectors equally

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Correct Answer: Option A

Explanation:
The Lewis dual-economy model emphasises the existence of surplus labour in the traditional agricultural sector that can be transferred to the modern industrial sector at a constant real wage.

This question belongs to: Economy GK Economy Set 1

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