CBSE Class 12 Economics Forms Of Market VBQs

CBSE Class 12 Value Based Questions - Economics - Forms of Market Based on CBSE and NCERT guidelines. Value based questions are now being given in exams to promote morals and values in students, Students should read and understand the following VBQs to get better understanding and score good marks in exams

Question. Which of the following features is not seen in Imperfect Competition?
(a) Few Sellers
(b) Product Differentiation
(c) Price wars
(d) All goods are Homogenous
Answer: D

Question. In which of the following market structures is the demand curve of the market is represented by the demand curve of the Firm?
(a) Monopolistic competition
(b) Perfect Competition
(c) Monopoly
(d) Oligopoly
Answer: C

Question. Free Entry / Exit is a characteristic feature of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) (a) and (c)
Answer: D

Question. The AR Curve and Industry Demand Curve are same in the case of —
(a) Monopoly
(b) Oligopoly
(c) Perfect Competition
(d) None of the above
Answer: C

Question. What is the other name given for Average Revenue Curve?
(a) Profit Curve
(b) Demand Curve
(c) Average Cost Curve
(d) Indifference Curve
Answer: B

Question. Which of the following statements about Price and Marginal Cost (MC) in competitive and monopolized markets is true?
(a) In Competitive Markets, Price = MC; in monopolized Markets, Price > MC.
(b) In Competitive Markets, Price = MC; in Monopolized Markets, Price = MC.
(c) In Competitive Markets, Price > MC; in Monopolized markets, Price > MC.
(d) In Competitive Markets, Price > MC; in Monopolized markets, Price = MC.
Answer: A

Question. Air Travel Service Industry is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: D

Question. The relationship Industry = Large Number of Firms, is applicable for —
(a) Perfect Competition
(b) Monopolistic Competition
(c) Monopoly
(d) Both (a) and (b)
Answer: D

Question. Railways is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: B

Question. Agricultural Goods markets depict characteristics close to —
(a) Perfect Competition
(b) Oligopoly
(c) Monopoly
(d) Monopolistic Competition
Answer: A

Question. Which of these is not a feature of Market?
(a) Buyers and Sellers.
(b) Commodity, Product or Service.
(c) Bargaining for a Price
(d) Government Regulation and Control
Answer: D

Question. Which of the following is an Oligopoly?
(a) Mobile Industry
(b) Cold Drink
(c) Automobile
(d) All of these
Answer: D

Question. Toothpaste Manufacturing Industry is an example of
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: C

Question. Which of these is a feature of Market?
(a) Perishable Nature of the commodity
(b) Government Regulation and Control
(c) One Price for a Product or Service at a given time
(d) Scarcity of Resources
Answer: C

Question. Free Entry / Exit is possible in —
(a) short—run
(b) long—run
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: B

Question. Mobile Phone Service Providers is an example of
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: D

Question. A market characterized by a Single Buyer of a product or service.
(a) Monoposony
(b) Bilateral Monopoly
(c) Duopoly
(d) Oligopoly
Answer: A

Question. Which of the following is an element of Market Structure?
(a) Buyers & Sellers
(b) A product or service
(c) Bargaining for a Price
(d) All of the above
Answer: D

Question. Under which of the following forms of market structure does a Firm has no control over the price of its product
(a) Monopoly
(b) Monopolistic competition
(c) Oligopoly
(d) Perfect Competition
Answer: D

Question. In Economics, a place where Buyers and Sellers meet and bargain over a commodity for a price is called—
(a) Den
(b) Shop
(c) Market
(d) Exchange
Answer: C

Question. conditions of Firm Equilibrium, i.e. MC = MR, and MC cuts MR from below, is applicable for —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) All of the above.
Answer: D

Question. Short run price is also known as:
(a) Market price
(b) Showroom price
(c) Maximum retail price
(d) None of these
Answer: A

Question. In which of the following types of market structure, do Firms produce homogeneous products?
(a) Monopoly
(b) Differentiated Oligopoly
(c) Perfect Competition
(d) Monopolistic Competition
Answer: C

Question. The relationship Industry = a Few Firms, is applicable for —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: D

Question. Automobile (Cars) Manufacturing Industry is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: D

Question. Electricity Supply Service is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: B

Question. The relationship Firm = Industry is applicable for —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: B

Question. P = MR = MC = AC = is the condition of —
(a) Long run equilibrium for a Firm under Perfect Competition
(b) Long run disequilibrium for a Firm
(c) Long run equilibrium for a Firm under Monopoly
(d) Long run equilibrium for a Firm under Monopolistic competition
Answer: A

Question. A person who charges different prices in different sub—markets is —
(a) Discriminating Monopolists
(b) Simple Monopolists
(c) Selective Monopolists
(d) None of the above
Answer: A

Question. In which of the following types of market structures can a Firm earn abnormal profits in the long run?
(a) Perfect Competition
(b) Monopolistic competition
(c) Monopoly
(d) None of the above
Answer: C

Question. Duopoly is a market situation in which —
(a) there are only two Firms in the market
(b) there is a Single Buyer of a product or service
(c) there is only a Single Buyer and a Single Seller
(d) none of the above
Answer: A

Question. The market for Foodgrains, Cereals, Vegetables, etc. closely resembles —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: A

Question. In which of the following market conditions, does a Firm maximizes its profit when its Marginal Revenue is equal to Marginal Cost?
(a) Perfect Competition
(b) Monopoly
(c) Monopoly Monopolistic Competition
(d) All of the above.
Answer: D

Question. Which of the following statements best describe a "Market"?
(a) Place where Shares and Securities are bought and sold.
(b) Place where Fruits and Vegetables are bought and sold.
(c) Place where Buyers and Sellers meet and bargain over a commodity for a price.
(d) Place where transactions takes place.
Answer: C

Question. Toilet Soaps Industry is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: C

Question. Free Entry / Exit is a not a characteristic feature of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) All the above.
Answer: B

Question. Market situation in which there are only two Firms in the market
(a) Monoposony
(b) Bilateral Monopoly
(c) Duopoly
(d) Oligopoly
Answer: C

Question. Which among the following market structures has the highest product differentiation?
(a) Pure or Perfect Competition
(b) Monopolistic Competition
(c) Oligopoly
(d) Monopoly
Answer: D

Question. As in Perfect Competition, the Firms operating in a monopolistically competitive industry can realize only Normal Profits in the long run because
(a) The Firms tend to have diseconomies of scale in the long run
(b) There are virtually no entry or exit barriers
(c) Consumers are more price sensitive in the long ruin that in the short run
(d) Cartels agreements tend to be more unstable with the increase of time as member Firms try to increase their profits by cheating on the agreement
Answer: B

Question. The structure of the Cold Drink Industry in India is best described as
(a) Perfectly Competitive
(b) Monopolistic
(c) Monopolistically Competitive
(d) Oligopolistic
Answer: D

Question. Why is the Demand Curve of the Market in Monopoly is represented by the Demand Curve of the Firm?
(a) Because there are many Firm in the market
(b) Because there is only one Firm in the market
(c) Because there is only one buyer in the market
(d) Because there are many buyers in the market
Answer: B

Question. A market structure in which many Firms sell products that are similar but not identical is known as —
(a) Monopolistic Competition 
(b) Monopoly
(c) Perfect Competition
(d) Oligopoly
Answer: A

Question. Which among the following market structures has the highest price elasticity?
(a) Pure or Perfect Competition
(b) Monopolistic Competition
(c) Oligopoly
(d) Monopoly
Answer: A

Question. The Market for ultimate consumers is known as
(a) Whole Sale Market
(b) Retail Market
(c) Unregulated Market
(d) Regulated Market
Answer: B

Question. Which of the following types of market structure is the exact opposite of Perfect Competition?
(a) Monopolistic competition
(b) Monopoly
(c) Oligopoly
(d) Duopoly
Answer: B

Question. Which of these is not a Market Structure in Economics?
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Intense Competition
Answer: D

Question. Which of the following statements is incorrect?
(a) Even Monopolist can earn losses
(b) Firms in a perfectly competitive market are Price Takers.
(c) It is always beneficial for a Firm in a Perfectly Competitive Market to discriminate prices.
(d) Kinked demand curve is related to an Oligopolistic Market.
Answer: C

Question. Bottled Cool Drinks Industry is an example of —
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) Oligopoly.
Answer: D

Question. A market structure in which there is only a Single Buyer and a Single Seller
(a) Monoposony
(b) Bilateral Monopoly
(c) Duopoly
(d) Oligopsony
Answer: B

Question. Which of the following market forms will never suffer losses in the short run?
(a) Perfect Competition
(b) Oligopoly
(c) Monopoly
(d) None of these
Answer: D

Question. Which of the following is not a characteristic feature common to both Monopolistic Competition and Perfect Competition?
(a) Many Buyers and Sellers
(b) Identical Products
(c) Easy entry and exit of Firms
(d) Firms take other Firms' prices as given
Answer: B

Question. In which form of the market structure is the degree of control over the price of its product by a Firm very large
(a) Monopoly
(b) Imperfect Competition
(c) Oligopoly
(d) Perfect Competition
Answer: A

Question. A market characterized by a small number of large buyers.
(a) Monoposony
(b) Bilateral Monopoly Duopoly
(c) Oligopsony
Answer: D

Question. Which of these is a Market Structure in Economics?
(a) Stock Exchange
(b) Reserve Bank of India
(c) Oligopoly
(d) Government of India
Answer: C

Question. Which of the following statements is not true with respect to the long run?
(a) A Firm in a monopolistically competitive industry earns only normal profits in the long run
(b) A Monopolist does not make losses
(c) A Perfectly Competitive Firm earns only normal profits in the long run
(d) Monopolistically Competitive Firms will be producing at minimum average cost
Answer: D

Question. Which of the following types of competition is just a theoretical economic concept, not a realistic case where actual competition and trade take place?
(a) Monopoly
(b) Oligopoly
(c) Perfect Competition
(d) Monopolistic Competition
Answer: C

Question. Under which of the following market structures is the price lower and output larger?
(a) Perfect Competition
(b) Monopolistic Competition
(c) Monopoly
(d) Oligopoly
Answer: A

Value based questions-Micro-Unit IV-Forms of Market.

Question. The higher the degree of product differentiation in the monopolistic competition, the higher the element of monopoly. How? 
A firm under monopolistic competition is neither a price taker nor a price maker. However, it is able to exercise partial control over price by differentiating their products. By producing a unique product or establishing a particular reputation, a firm is in a position to influence the price.
Value:- Critical thinking./consumer welfare ignored

Question. How does the price discrimination influence the monopolist to earn abnormal profit? 
A monopolist may charge different prices for the same product from different sets of consumers at the same time. By practicing price discrimination, the monopoist can dominate the entire market and can earn abnormal profit.
For example, a doctor can charge less fees from poor people and can get more from the rich people. So he has the power to set his price without losing his entire share of the market.
Value: Social responsibility

Question. Do you think perfect competition is practice- able now?
Not possible, unrealistic one because in the real world , homogeneous product is unrealistic
due to large no. of sellers and stiff competition. Consumer prefers variety.
Value: Critical thinking

Question. consumer awareness is necessary for a buyer in a monopolistic competition. Why? 
 product differentiation and price discrimination exists in this competition, consumer will be exploited otherwise.
Value: Consumer awareness/consumer rights.

Question. Is existence of monopoly beneficial to the society? 
Efficient utilization of resources/ cost effective technology/ social
Welfare can be achieved.-ex: Indian railways.
Value: Social welfare./efficiency of individual recognized.