economics Mcqs
1. the national economy2. profit maximizing under perfect competition and monopoly3. application of economics4. the aggregate demand aggregate supply model5. surplus6. money interest rates and output7. average and total cost8. stabilization adjustment reform and privatization9. risks and diversification efficient market hypothesis10. the phillips curve11. supply and demand12. capital formation investment choice information technology and technical progress13. aggregate supply unemployment and inflation14. elasticity15. comparative gdp16. roots of modern macroeconomics17. production factors18. poverty malnutrition and income inequality19. trade regulations and industrial policies20. monetary union21. exchange rate systems and currency crises22. economic development in historical perspective23. exchange rate determination24. monopoly competition25. the balance of payments26. inflation productivity27. macroeconomic issues and analysis28. employment migration and urbanization29. macroeconomic policy tools30. supply side policies31. exchange rate adjustments and the balance of32. miscellaneous33. taxation34. trade policies for the developing nations35. markets efficiency and the public interest36. the external debt and financial crises37. budget deficits and the trade balance38. alternative theories of the firm39. public goods40. the meaning and measurement of economic development41. characteristics and institutions of developing countries42. agriculture irrigation system of pakistan43. education health and human capital44. economic problems of developing countries45. theories of economic development46. basic of economics47. consumer theory vs real consumers48. applied microeconomics49. long term economic growth50. externality internality51. fiscal and monetary policy52. prices wages taxes53. balance of payments aid and foreign investment54. international factor movements and multinational corporations55. entrepreneurship organization and innovation56. the international economy and globalization57. population and development58. non tariff trade barriers59. foundations of modern trade theory60. global economic development61. market62. rural poverty and agricultural transformation63. regional trading arrangements64. foreign exchange65. introduction to economics66. world economy miscellaneous67. sources of comparative advantage68. natural resources and the environment toward sustainable development69. monopoly70. asymmetric information71. income inequality72. labour market73. tariffs74. development planning and policy making the state and the market75. oligopoly76. industrial development77. costs supply and perfect competition78. human capital79. monetary fiscal and incomes policy and inflation80. stocks
6751. Friedmans theory of consumption focuses on ?
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A. Past income

B. Current income

C. permanent income

D. Disposable income

6752. Economics deals with_______________?
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A. consumption of goods and services

B. production of goods and services

C. distribution of goods and services

D. all of the above
6753. Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?
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A. Rs26.67 million

B. Rs 15 million

C. Rs20 million

D. Rs80 million
6754. In Which of the business cycle do firms try to cut stocks in order to save costs ?
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A. The expansion

B. The peeking out

C. The recession

D. The upturn

6755. Injections ?
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A. Always equal savings

B. include investment and export spending

C. Always equal national income

D. Decrease aggregate demand

6756. A case study is most useful when ____________?
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A. events under consideration are rare

B. no hypothesis can be formulated

C. limited research funds are available

D. facts must be established
6757. If the Keynesian consumption function is C = 10 + 0.8 Td when disposable income is Rs1000 the average propensity to consume is what ?
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A. 0.8

B. 800

C. 810

D. 0.81

6758. If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs The opportunity cost of the 5th B is ?
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A. 3As

B. 1A

C. 10As

D. 7As

6759. In the short term a firm will produce provided the revenue ?
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A. covers variable costs

B. covers fixed costs

C. covers revenue

D. covers total costs

6760. The current trend in the social sciences is toward ?
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A. a totally value free approach

B. using the findings of the social sciences to reform society

C. statistical and quantitative ways of investigating human behavior

D. using whatever technique seems best to fit
6761. An increase in national income is ?
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A. Likely to increase spending on imports

B. Likely to decrease investment

C. Likely in increase exports

D. Likely to decrease savings

6762. A sample survey deals with_______________?
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A. a statistically valid section of a population

B. asking people who walk by to fill out naires

C. eating samples at various supermarkets

D. an entire population

6763. An increase in investment is most likely to be caused by ?
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A. Lower interest rates

B. Lower national income

C. An increase in withdrawals

D. A decrease in the marginal propensity to consume
6764. Language____________?
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A. reflects changes in society

B. passes on knowledge from generation to generation

C. helps humans to cooperate

D. all of the above
6765. The ability-to-pay principle of taxation suggests that if a tax system is to be vertically equitable it should be ?
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A. regressive

B. proportional

C. progressive

D. efficient

6766. The graph that shows the relationship between the size of a tax and the tax revenue collected by the government is known as a ?
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A. Laffer curve

B. Reagan curve

C. Keynesian curve

D. Henry George curve.

E. none of these answers

6767. The reduction of tax ?
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A. will always reduce tax revenue regardless of the prior size of the tax

B. causes a market to become less efficient

C. will have no impact on tax revenue.

D. could increase tax revenue if the tax had been extremely high
6768. Sana values a pair of blue jeans at Rs400. If the price is Rs350 Sana buys the jeans and generates consumer surplus of Rs50 Suppose a tax is placed on blue jeans that causes the price of blue jeans to rise to Rs450 Now sana chooses not to buy a pair of?
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A. the ability-to-pay principle

B. horizontal equity

C. the deadweight has demonstrated

D. the benefits principle

E. The administrative burden of a tax.

6769. Refer to Exhibit 4. If there is no tax placed on the product in this market, producer surplus is the area ?
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A. C + F

B. A + B + E

C. D

D. C + D + F
6770. An efficient tax ?
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A. minimize the deadweight loss from the tax.

B. does all the things describe in these answers

C. raises revenue at the smallest possible cost to taxpayers.

D. minimizes the administrative burden form the tax

6771. A tax system is regarded as horizontally equitable if ?
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A. all taxpayers pay the same amount of tax

B. the system comprises only lump sum taxes

C. taxes are as low as possible

D. taxpayers with similar abilities to pay taxes pay the same amount

E. taxes on all goods are levied at the same rate

6772. Refer to Exhibit 4. If a tax is placed on the product in this market consumer surplus is the area ?
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A. A

B. A + B + E

C. D

D. A + B +C + D

6773. A tax on petrol is likely to ?
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A. cause a greater deadweight loss in the short run when compared to the long run.

B. generate a deadweight loss that is unaffected by the time period over which it is measured

C. cause a greater deadweight loss in the long run when compared to the short run

D. None of these answers

6774. When a tax distorts incentives to buyers and sellers so that fewer goods are produced and sold than otherwise the tax has ?
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A. decreased equity

B. increased efficiency

C. generated no tax revenue

D. caused a deadweight loss
6775. The average tax rate is ?
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A. the extra taxes paid on an additional dollar or income.

B. total income divided by total taxes paid

C. the taxes paid by the marginal worker

D. total taxes paid divided by total income
6776. Deadweight loss is greatest when ?
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A. supply is elastic, and demand is perfectly inelastic

B. demand is elastic, and demand is perfectly inelastic

C. both supply and demand are relatively inelastic

D. both supply and demand are relatively elastic
6777. Refer to Exhibit 4. If a tax is placed on the product in this market. deadweight loss is the area ?
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A. E + F

B. B + C + E + F

C. B + C

D. A + B + C + D

6778. The marginal tax rate is ?
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A. the extra taxes paid on an additional unit of income

B. total taxes paid divided by total income

C. total income divided by total taxes paid

D. the taxes paid by the marginal worker

6779. If the Pakistani government runs a budget surplus there is ?
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A. an excess of government spending over government receipts.

B. a surplus of government workers.

C. an equality of government spending and receipts.

D. an excess of government receipts over government spending.
6780. Refer to Exhibit 4. If there is no tax placed on the product in this market total surplus is the area ?
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A. E + F

B. B + C + E + F

C. A + B + C + D + E + F

D. A + B + C + D

6781. The appropriate tax rate to consider gauging how much the tax system distorts incentives and decision making is the ?
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A. marginal tax rate

B. average tax rate

C. horizontal tax rate

D. vertical tax rate

E. Proportional tax rate

6782. Refer to Exhibit 4. If there is no tax placed on the produced in this market consumer surplus is the area ?
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A. C + D + F

B. A + B + E

C. D + C + B

D. A

6783. If a tax on a good is doubled the deadweight loss from the tax ?
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A. could rise or fall

B. doubles

C. increase by a factor of four.

D. stays the same

6784. Refer to Exhibit 4. If a tax is placed on the product in this market total surplus is the area ?
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A. A + D

B. B + C + E + F

C. A + B + C + D

D. A + B + C + D+ E +F

6785. Which of the following taxes can be supported by the benefits principle of taxation ?
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A. All these answers can be supported by the benefits principle of taxation

B. property taxes used to pay for policies and the court system

C. Petrol taxes used to pay for roads

D. Progressive income taxes used to pay for national defense

6786. Refer to Exhibit 4. Which of the following is true with regard to the burden of the tax in Exhibit 4 ?
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A. The sellers pay a larger portion of the tax because supply is more inelastic than demand

B. The buyers pay a larger portion of the tax because demand is more inelastic than supply

C. The buyers pay a larger portion of the tax because demand is more elastic then supply

D. The sellers pay a larger portion of the tax because supply is more elastic than demand

6787. A progressive tax system is one where ?
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A. marginal tax rates are high.

B. higher income taxpayers pay more taxes than do lower income taxpayers.

C. marginal tax rates are low.

D. higher income taxpayers pay a greater percentage of their income in taxes than do lower income taxpayers.
6788. Which of the following would likely cause the greatest deadweight loss ?
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A. a tax on cruise line tickets

B. a tax on salt

C. a tax on petrol

D. a tax on cigarettes

6789. Refer to Exhibit 4. If a tax is placed on the product in this market, producer surplus is the area?
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A. A + B + C + D

B. A

C. A + B + E

D. D
6790. Since the supply of undeveloped land is relatively inelastic a tax on undeveloped land would generate ?
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A. a small deadweight loss and the burden of the tax would fall on the renter

B. a large deadweight loss and the burden of the tax would fall on the renter.

C. a large deadweight loss and the burden of the tax would fall on the landlora

D. a small deadweight loss and the burden of the tax would fall on the landlord
6791. Refer to Exhibit 4. If a tax is placed on the product in this market tax revenue paid by the buyers is the area ?
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A. B + C

B. B + C + E + F

C. A

D. B
6792. When a tax on a good start small and is gradually increased tax revenue ?
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A. will fall

B. will first fall and then rise

C. will first rise and then fall

D. will rise

6793. A tax for which high income taxpayers pay a smaller fraction of their income than do low income taxpayers is known as ?
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A. a regressive tax

B. a proportional tax

C. an equitable tax

D. a progressive tax

6794. Refer to Exhibit 4. If a tax is placed on the product in this market tax revenue paid by the sellers is the area ?
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A. C + F

B. B

C. A

D. C
6795. The appropriate tax rate to consider judging the vertical equity of a tax system is the ?
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A. proportional tax rate

B. marginal tax rate

C. average tax rate

D. horizontal tax rate

6796. Which of the following is true with regard to a tax on labor income? Taxes on labor income tend to encourage ?
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A. second earners to stay home.

B. the elderly to retire early.

C. all the things described in these answers.

D. the unscrupulous to enter the underground economy

E. workers to work fewer hours

6797. Hong Kong and South Korea are examples of developing nations that have recently pursued ________ industrialization policies?
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A. commercial dumping

B. import substitution

C. multilateral contract

D. export promotion
6798. Concerning the hypothesis that there has occurred a long run deterioration in the developing countries terms of trade empirical studies provide ?
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A. overwhelming support for the deterioration hypothesis

B. mixed evidence that does not substantiate the deterioration hypothesis

C. overwhelming opposition to the deterioration hypothesis

D. None of the above

6799. Tariff levels in advanced countries tend to be __________ tariff levels in developing countries?
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A. lower than

B. there is no general pattern

C. higher than

D. equal to

6800. In the Px = export price index, Pm = import price index, Qx = export quantity index,and Qm = import quantity index. Developing countries tend to maintain that their commodity term of trade have declined over the long run suggesting that _________ has declined?
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A. Pm/Px

B. (Pm/Px)Qm

C. Px/Pm

D. (Px/Pm)Qx