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
8201. All of the following are types of imperfect competition except ?
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A. monopoly

B. unfair competition

C. oligopoly

D. monopolistic competition

8202. Tax shifting ?
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A. occurs when house hold can alter their behaviour and do something to avoid paying a tax.

B. occurs when taxes cause prices to increase but wages to fall

C. is the ultimate distribution of a taxs burden

D. is the way in which a tax is structured

8203. Market failure may arise because of ?
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A. all of the above

B. taxation

C. imperfect competition

D. externalities

E. missing markets

8204. A dominant strategy is ?
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A. a players best strategy whatever the strategies adopted by rivals

B. a players best strategy when moving first

C. a losing strategy

D. a wining strategy

8205. The allocation of resources is not efficient if ?
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A. unemployment is high

B. the marginal cost of production does not equal societys marginal benefit

C. the distribution is inequitable

D. economic growth is low

8206. Which of the following statements is true about the impact of an increase in the price of lettuce ?
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A. Both the demand for lettuce will decrease and the equilibrium price and quantity of salad dressing will fall

B. The supply of lettuce will decrease

C. The demand for lettuce will decrease

D. The equilibrium price and quantity of salad dressing will fall

E. The equilibrium price and quantity of salad dressing will rise

8207. A reduction in the costs of production will ?
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A. Shift the supply curve

B. Lead to an extension of supply

C. Lead to a movement along the supply curve

D. Shift the demand curve

8208. In the insurance industry, high-risk customers are more likely to take out insurance. This is an example of ?
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A. risk aversion

B. adverse selection

C. moral hazard

D. a poor gamble

8209. Nationalisation occurs when ?
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A. The government taxes a product to a raise its price

B. The government sells assets to a the private sector

C. The government bans a product

D. The government takes control of an industry
8210. An increase in demand for a product should ?
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A. Increase equilibrium price and decrease quantity

B. Increase equilibrium price and quantity

C. Decrease equilibrium price and quantity

D. Decrease equilibrium price and increase quantity
8211. Which best describes consumer surplus ?
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A. The profits made by a firm

B. The cost of providing a unit

C. The price consumers are willing to pray for a unit

D. The difference the price a consumer pays for an item and the price he/she is willing to pay
8212. Where a tax can be shifted, the incidence depends on ?
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A. how many producers there are:

B. who is legally obliged to pay the tax

C. Whether there is perfect or imperfect information

D. elasticities of demand and supply
8213. Income inequality can be high in the free market and should be reduced This is an example of What ?
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A. Normative economic statement

B. Formative economic statement

C. Positive economic statement

D. Judicial economic statement

8214. If the price in a market is fixed by the government above equilibrium ?
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A. There is excess demand

B. There is excess supply

C. There is excess equilibrium

D. There is equilibrium

8215. If a maximum price is set below equilibrium there will be ?
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A. Excess demand

B. A price increase

C. Excess supply

D. A price fall

8216. The law of supply states that an increase in the price of a good ?
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A. increases the quantity supplied of that good

B. decrease the quantity demanded for that good

C. decrease the demand for the good

D. increase the supply of that good

E. none of these answers

8217. If the price of good is below the equilibrium price ?
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A. the quantity demanded is equal to the quantity supplied and the price remains unchanged

B. there is a surplus and the price will rise

C. there is a shortage and the price will rise

D. there is a shortage and the price will fall

8218. Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today ?
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A. The impact on both price and quantity is ambiguous

B. Price will decrease, quantity is ambiguous.

C. price will increase, quantity will decrease

D. price will increase, quantity is ambiguous.

E. Price will increase, quantity will increase

8219. An allocation is Pareto-efficient if no reallocation of resources would make some people _______ without making others ________?
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A. equal, unequal

B. better off; worse off

C. worse off; worse off

D. better off; better off

8220. A positive externality occurs when ?
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A. The social marginal benefits are higher than the private marginal benefits

B. A product is not provided in the free market

C. The social marginal costs are higher than the private marginals costs

D. The social marginal cost equal the social marginal benefit

8221. A competitive equilibrium is Pareto-efficient because ?
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A. All of the above

B. Producers are price takers

C. marginal costs and benefits are equal

D. prices equal marginal cost and benefit

E. consumers and producers face the same prices

8222. Which of the following is the government most likely to subsidies ?
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A. Monopolies

B. Negative externalies

C. Oligopolies

D. Positive externalities
8223. The price mechanism does not act as a ?
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A. Signal

B. Indicator of income

C. Rationing device

D. Incentive

8224. VAT is a good example of which kind of tax ?
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A. Exercise duty

B. Direct

C. Specific

D. Ad valorem
8225. The law of demand states that an increases in the price of a good ?
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A. increases the quantity supplied of that good

B. decreases the quantity supplied of that good

C. None of these answers

D. decreases the quantity demanded for that good

8226. A shift in demand will have more effect on price than quantity if ?
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A. The price elasticity of supply is + 3

B. The price elasticity of supply is + 0.2

C. The price elasticity of supply is + 2

D. The price elasticity of supply is infinity

8227. Except for taxes to offset ______ taxes are ______?
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A. externalities , distortionary

B. poor health, unnecessary

C. imperfect competition popular

D. inequality , a first best option

8228. A shift in supply will have a bigger effect on price than output if demand is ?
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A. income elastic

B. income inelastic

C. Price elastic

D. Price inelastic
8229. Suppose consumer tastes shift toward the consumption of apples Which of the following statements is an accurate description of the impact of this event on the market for apples ?
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A. There is an increase in the demand and supply of apples.

B. There is an increase in the demand for apples and an increase in the quantity supplied of apples.

C. There is an increase in the demand for apples and a decrease in the supply of apples

D. There is an increase in the quantity demanded of apples and in the supply for apples

E. There is a decrease in the quantity demanded of apples and an increase in the supply for apples

8230. A movement along the demand curve may be caused by ?
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A. A change in advertising

B. A change in income

C. A change in the number of buyers

D. A shift in supply
8231. We cannot say whether one allocation of resources is better than another allocation because ?
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A. some people cant count

B. some people may not be permanent resident

C. We cant make value judgments to compare different peoples welfare

D. not all economic activity is legal

8232. Tax incidence is the ?
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A. measure of the impact the tax has on employment and output

B. behaviour of shifting the tax to another party.

C. ultimate distribution of a taxs burden.

D. structure of the tax

8233. The reason for the kinked demand curve is that ?
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A. The oligopolist believes that competitors will match price increase but not output increase

B. The oligopolist believes that competitors will match price increase but not output reduction

C. The oligopolist believers that competitors will match price cuts but not price rises

D. The oligopolist believes that competitors will match output increase but not output reduction

8234. Comparing a monopoly and competitive firm, the monopolist will ?
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A. produce less at a lower price

B. produce more at a lower price

C. produce less at a lower price

D. produce less at a higher price
8235. A subsidy paid to producers ?
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A. shifts the demand curve

B. Shifts the supply curve

C. Leads to a contractions in supply

D. Leads to an extension of supply

8236. The price mechanism cannot ?
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A. Act as a signal

B. Act as a incentive

C. Act as a rationing device

D. shift the demand curve
8237. Suppose there is an increase in the both the supply and demand for personal computers Further, suppose the supply of personal computer increase more than demand for personal computers In the market for personal computers i the market for personal computers, we would expect ?
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A. the equilibrium quantity to rise and the equilibrium price to rise

B. the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous

C. the equilibrium quantity to rise and the equilibrium price to remain constant

D. the equilibrium quantity to rise and the equilibrium price to fall

E. the change in the equilibrium quantity to be ambiguous and the equilibrium price to fall.

8238. It is necessary to ration a good whenever ?
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A. supply exceeds demand

B. a surplus exists

C. demand exceeds supply

D. there is perfectly inelastic demand for the good

8239. Assuming a downward sloping demand curve and upward sloping supply curve a higher equilibrium price may be caused by ?
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A. An increase in supply

B. An increase in demand

C. improvements in production technology

D. An fall in demand

8240. The government is considering placing a tax on cigarettes to raise revenue to finance health-care benefits. The demand for cigarettes is price inelastic Which of the following statements is True ?
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A. This tax will not raise much revenue either in the short term or the long term since demand is price inelastic

B. The tax on cigarettes may not raise as much revenue as anticipated in the years to com because the demand for cigarettes is likely to become more elastic over time.

C. This a very good way to raise revenue both in the short term and in the long term, because there are no substitutes for cigarettes.

D. No tax revenue can be raised in this way because sellers of cigarette will just lower their price by the amount of the tax and therefore, the price of cigarettes to consumers will not change

8241. A monopoly may be self-perpetuating because profits may be used for ?
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A. cost-saving

B. research

C. technical advance

D. all of the above
8242. Which of the following shifts the demand for watches to the right ?
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A. a decrease in the wage of workers employed to manufacture watches

B. none of these answers

C. an increase in the price of watches

D. a decrease in consumer incomes if watches are a normal good

E. a decrease in the price of watch batteries if watch batteries and watches are complements

8243. A price ceiling is ?
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A. a minimum price that consumers are willing to pay for a good.

B. a minimum price usually set by government that sellers must charge for a good

C. a maximum price usually set by government that sellers may charge for a good

D. the different between the initial equilibrium price and the equilibrium price after a decrease in supply

8244. A decrease (leftward shift) in the supply for a good will tend to cause ?
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A. none of these answers

B. a decrease in the equilibrium price and an increase in the equilibrium quantity

C. a decrease in the equilibrium price and quantity.

D. an increase in the equilibrium price and a decrease in the equilibrium quantity

E. an increase in the equilibrium price and quantity
8245. With a positive externality ?
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A. There is over consumption in the free market

B. There is under-consumption in the free market

C. Society could be made off it less was produced

D. The government may tax to decrease production

8246. Suppose a frost destroys much of the Florida orange crop. At the same time, suppose consumer tastes shift toward orange juice, What would we expect to happen to the equilibrium price and quantity in the market for orange juice ?
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A. price will decrease, quantity is ambiguous

B. The impact on both price and quantity is ambiguous.

C. Price will increase, quantity will increase

D. price will increase, quantity will decrease

E. price will increase, quantity is ambiguous.
8247. Agricultural prices tend to be unstable because ?
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A. Supply is price elastic

B. Supply is stable

C. Demand is price elastic

D. Demand and supply are price inelastic
8248. Satellite television subscription and television detection devices are ways in which broadcasting companies address the ________ problem?
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A. externality

B. deadweight burden

C. free rider

D. market imperfection

8249. A natural monopoly has a declining _______ over a large range of output?
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A. long run marginal cost

B. long run marginal cost

C. short run marginal cost

D. long run average cost
8250. A good example of a public good is ?
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A. the national health service

B. public transport

C. rail transport

D. national defence