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# CA Foundation | Meaning and Types of Markets MCQ Test | Chanakya Commerce Classes

CA Foundation Paper 4 Business Economics Chapter 4 Unit 1 Meaning and Types of Markets MCQ test page with instant scoring by Chanakya Commerce Classes.

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Business Economics MCQ
Meaning and Types of Markets MCQ Test
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CA Foundation · Paper 4 · Business Economics
Chapter 4 · Unit 1 ·
Meaning and Types of Markets
MCQ Test Page · CA Foundation level · ICAI pattern · instant scoring and answer review
30 MCQs
Foundation Level
Past Exam Style
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Question 01
In economics, the term market refers mainly to:
a specific building where goods are sold
a weekly fair in a village
a set of conditions in which buyers and sellers interact for exchange
only a wholesale mandi
In economics, market is not merely a place. It refers to the arrangement or set of conditions under which buyers and sellers come into contact for exchange.
Question 02
Which of the following is essential for the existence of a market?
a physical shop
buyers and sellers in contact with each other
government control in every case
retailers only
A market exists when buyers and sellers are in contact and are able to enter into exchange relations.
Question 03
A market may exist even without:
a specific geographical place
buyers
sellers
a commodity
Modern economics treats market as an arrangement, not necessarily a definite physical place.
Question 04
Classification of markets on the basis of area includes:
perfect and imperfect markets
spot and future markets
regulated and unregulated markets
local, regional, national and international markets
On the basis of geographical area, markets are classified as local, regional, national and international.
Question 05
A market limited to a small locality is called:
local market
national market
international market
future market
Local markets are confined to a limited area or locality.
Question 06
Which market covers the entire country?
local market
regional market
national market
spot market
A national market extends over the whole country.
Question 07
A market in which goods are bought and sold across countries is called:
regional market
local market
national market
international market
International markets involve exchange across national boundaries.
Question 08
Classification of markets on the basis of time includes:
regulated and unregulated markets
very short period, short period, long period and very long period markets
wholesale and retail markets
perfect and monopoly markets
On the basis of time, markets are classified by the period allowed for adjustment in supply.
Question 09
In a very short period market:
supply cannot be increased
all factors can be changed
new firms can enter freely
technology changes fully
In the market period or very short period, supply is fixed and cannot be increased.
Question 10
Perishable goods are commonly associated with:
very long period market
long period market
very short period market
regulated market
Perishable goods like fish, vegetables and milk are classic examples used for market period analysis.
Question 11
In a short period market, producers can adjust:
plant size only
all factors fully
technology completely
some variable factors
In the short period, some factors are variable while plant size generally remains fixed.
Question 12
In the long period market:
supply is perfectly fixed
firms can change plant size and output
no factor can be changed
only demand changes matter
In the long period, all factors can be varied and firms can adjust scale.
Question 13
The very long period market is mainly associated with changes in:
technology, population and habits
daily supply only
current stock only
wholesalers only
In the secular or very long period, factors like technology, population and tastes may change.
Question 14
Classification of markets on the basis of transaction includes:
local and national markets
perfect and imperfect markets
spot market and future market
wholesale and retail markets
On the basis of nature of transactions, markets are classified into spot/cash and future/forward markets.
Question 15
In a spot market, delivery and payment take place:
at a future date
immediately or on the spot
after one year only
after government approval only
Spot market means immediate contract, payment and delivery.
Question 16
A future market is one in which:
goods must be delivered immediately
there are no contracts
only consumers participate
transactions are agreed now for delivery in future
Future market involves present agreement for future delivery and payment terms.
Question 17
Classification of markets on the basis of regulation includes:
regulated and unregulated markets
local and international markets
spot and future markets
wholesale and retail markets
Markets can also be classified depending on whether they are officially regulated or not.
Question 18
A market supervised by rules and authorities is called:
future market
unregulated market
regulated market
retail market
A regulated market works under prescribed rules and institutional supervision.
Question 19
Classification of markets on the basis of volume of business includes:
perfect and monopoly markets
wholesale and retail markets
short period and long period markets
spot and future markets
On the basis of quantity or volume of business, markets are classified as wholesale and retail.
Question 20
A market where goods are sold in small quantities directly to final consumers is called:
wholesale market
future market
regulated market
retail market
Retail market deals in small quantities and usually sells to final consumers.
Question 21
A market where goods are sold in bulk quantities is generally called:
wholesale market
retail market
spot market
local market
Wholesale markets involve trade in bulk quantities.
Question 22
Classification of markets on the basis of competition includes:
local and regional markets
spot and future markets
perfect competition, monopoly, monopolistic competition and oligopoly
regulated and unregulated markets only
A key ICAI classification is by market structure or degree of competition.
Question 23
A market with a large number of buyers and sellers dealing in a homogeneous product is:
monopoly
perfect competition
oligopoly
monopsony
Perfect competition is characterised by many buyers, many sellers and homogeneous product.
Question 24
A market with a single seller is called:
perfect competition
oligopoly
monopolistic competition
monopoly
Monopoly means one seller controlling the supply of a product with no close substitute in the standard textbook sense.
Question 25
Monopolistic competition is characterised by:
many sellers and product differentiation
one seller only
homogeneous product only
absence of selling cost
Monopolistic competition has many sellers but products are differentiated.
Question 26
In oligopoly, the number of sellers is:
one
very large
few
none
Oligopoly means a market dominated by a few sellers.
Question 27
Which of the following is not a classification of market on the basis of area?
local market
regulated market
regional market
international market
Regulated market is a classification based on regulation, not geographical area.
Question 28
Which of the following pairs is correctly matched?
spot market - future delivery only
retail market - sale in bulk only
monopoly - many sellers
perfect competition - many buyers and many sellers
Perfect competition is correctly identified by the presence of many buyers and sellers.
Question 29
Which market classification is most closely related to quantity traded?
wholesale and retail
local and national
spot and future
perfect and monopoly
Wholesale and retail classification depends on the volume of business.
Question 30
Which statement is most accurate from the economist’s point of view?
market always means a physical place
market exists only where wholesalers meet
market means the whole set of conditions for buying and selling of a commodity
market can exist without any commodity being exchanged
This is the standard economics meaning of market used in CA Foundation theory questions.
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MCQ Test · Chapter 4 · Unit 1 · Meaning and Types of Markets