Which of the following is an assumption of the perfect competition model? MCQ with Answer and Explanation

Question
Which of the following is an assumption of the perfect competition model?
A. Product differentiation
B. Selling costs are significant
C. Firms face a downward-sloping demand curve
D. Free entry and exit of firms
Answer: Option D
Solution (By JKSSB Mock Tests)
Perfect competition assumes free entry and exit, homogeneous product, large number of buyers and sellers, and perfect information, resulting in firms being price takers.
This question belongs to: Economy GK Economy Set 1
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Question #1
The 'overdraft' facility is typically associated with:
A. insurance
B. fixed deposits
C. drawing more than the balance in a current account
D. credit cards
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Correct Answer: Option C

Explanation:
An overdraft allows a customer to draw more than the available balance in a current account.
This question belongs to: Economy GK Economy Set 1
Question #2
The 'Emission Trading System' is a market-based approach to control pollution by:
A. creating tradable emission permits
B. taxing all production
C. subsidizing polluters
D. banning all emissions
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Correct Answer: Option A

Explanation:
Emission trading creates a market for tradable emission allowances, limiting total emissions.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Human Capital Formation' includes investment in:
A. machinery
B. physical infrastructure only
C. financial assets
D. education, health and training
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Correct Answer: Option D

Explanation:
Human capital formation involves education, health and training investments.
This question belongs to: Economy GK Economy Set 1
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