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
8751. Barriers to entry do not include ?
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A. High investment costs

B. Internal economies of scale

C. Mobility of resources

D. Patents

8752. Compared to a perfectly competitive market a monopoly market will usually generate ?
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A. lower prices and lower output

B. higher prices and lower output

C. higher prices and higher output

D. lower prices and higher output

8753. In the UK the government ?
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A. Bans monopolies

B. Fines all monopolies

C. Prevents firms acquiring more than 25% of the market

D. Has the right to investigate monopolies and will assess each one on its own merits
8754. In monopoly when abnormal profits are made ?
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A. The average revenue equals the marginal cost

B. Revenue equals total cost

C. The price set is greater than the marginal cost

D. The price is less than the average cost

8755. Which of the follow statements about price discrimination is not true ?
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A. Price discrimination increases a monopolists profits.

B. Perfect price discrimination generates a deadweight loss

C. For a monopolist to engage in price discrimination buyers must be unable to engage in arbitrage.

D. Price discrimination can raise economic welfare.

E. price discrimination requires that seller be able to separate buyers according to their willingness to pay.

8756. In order to practice price discrimination which of the following is needed ?
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A. an ability to separate the market

B. all of the above

C. some degree of monopoly power

D. an ability to prevent reselling

8757. According to Schumpeter ?
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A. Monopolies are productively efficient

B. Monopolies are alocatively efficient

C. Monopolies are inefficient

D. Monopoly profits ac as an incentive for innovation
8758. Public ownership of natural monopolies ?
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A. creates synergies between the newly acquired firm and other government-owned companies.

B. tends to be inefficient.

C. usually lowers the cost of production dramatically.

D. does none of the things described in these answers

8759. This monopolist should produce ?
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A. 2

B. 1

C. 4

D. 5

E. 3
8760. In monopoly in long run equilibrium ?
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A. The firm produces at the socially optimal level

B. The firm is allocatively inefficient

C. The firm is Productively efficient

D. The firm produces where marginal cost is less than marginal revenue

8761. X inefficiency occurs when ?
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A. The price is greater than the average cost

B. Costs are higher than they could be due to a lack of competitive pressure

C. There are external cost

D. The price is greater than the marginal cost

8762. A welfare loss occurs in monopoly where ?
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A. The price is greater than the average revenue

B. The price is greater than the marginal benefit

C. The price is greater than the marginal cost

D. The price is greater than the marginal revenue

8763. Compared to the case of perfect competition, a monopolist is more likely to ?
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A. produce a lower quantity of the product

B. make a greater amount of economic profit

C. all of the above

D. charge a higher price

8764. Which of the following statements about price and marginal cost in competitive and monopolized markets is true ?
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A. In competitive markets price equals marginal cost, in monopolized markets price equals marginal cost

B. In competitive markets price exceeds marginal cost in monopolized markets price equals marginal cost

C. In competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost.

D. In competitive markets price exceeds marginal cost, in monopolized markets price exceeds marginal cost

8765. In order to maximize profits, a monopoly company will produce that quantity at which the ?
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A. Price equals marginal revenue

B. total revenue equals total cost

C. marginal revenue equals average total cost

D. marginal revenue equals marginal cost
8766. Using government regulations to force a natural monopoly to charge a price equal to his marginal cost will ?
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A. raise the price of good

B. Cause the monopolist to exit the market

C. attract additional firms to enter the market

D. improve efficieny

8767. In a monopoly which of the following is not true ?
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A. There is freedom of entry and exit into the industry in the long run

B. There is one main sellers

C. Products are differentiated

D. The firm is a price taker

8768. Which of the following is a characteristic of pure monopoly ?
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A. One seller of the product

B. close substitute products

C. perfect information

D. low barriers to entry

8769. If regulators break up a natural monopoly into many smaller firms, the cost of production ?
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A. will remain the same

B. will rise

C. will fall

D. could either rise or fall depending on the elasticity of the monopolists supply curve

8770. Which of the following is necessary for a natural monopoly ?
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A. a high proportion of the total cost in the cost of capital goods

B. economies of scale

C. the market is very small

D. all of the above
8771. The inefficiency associated with monopoly is due to ?
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A. underproduction of the good

B. the monopolys profits

C. the monopolys losses

D. overproduction of the good

8772. The purpose of antitrust (also known as competition) laws is to ?
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A. create public ownership of natural monopolies

B. increase merger activity to help generate synergies that reduce costs and raise efficiency.

C. regulate the prices charged by a monopoly

D. all of these answers

E. Increase competition in an industry by preventing mergers and breaking up large firms.
8773. A firm whose average total cost continually declines at least to the quantity that could supply the entire market is known as a ?
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A. government monopoly

B. regulated monopoly

C. natural monopoly

D. perfect competitor

8774. In monopoly which of the following is true ?
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A. The actions of one firm do not affect the market price and quantity

B. There are many buyers and sellers

C. There is one main buyer

D. There is one main seller
8775. In pure monopoly, what is the relation between the price and the marginal revenue ?
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A. the price is less than the marginal revenue

B. they are equal

C. the price is greater than the marginal revenue

D. there is no relation

8776. A monopolist maximizes profit by producing the quantity at which ?
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A. marginal cost equals price

B. marginal revenue equals marginal cost

C. none of these answers

D. marginal revenue equals price

E. marginal cost equals demand

8777. Which of the following best defines price discrimination ?
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A. selling a certain product of given quality and cost per unit at different prices to different buyers

B. charging different prices for goods with different costs of production

C. charging different prices based on cost-of-service differences

D. charging different prices on the basis of race

8778. Which of the following is not a barrier to entry in a monopolized market ?
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A. The government gives a single firm the exclusive right to produce some good

B. A key resource is owned by a single firm

C. The costs of production make a single producer more efficient than a large number of productions

D. A single firm is very large
8779. Thomas is a monopolist in the production of your textbook because ?
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A. Thomson owns a key resource in the production of textbooks.

B. Thomson is a very large company

C. Thomson is a natural monopoly,

D. Thomson has a legally protected exclusive right to produce this textbook
8780. If a marginal revenue exceeds marginal cost, a monopolists should?
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A. decrease output

B. increase should

C. keep output the same because profits are maximized when marginal revenue exceeds marginal cost

D. raise the price

8781. The marginal revenue curve in monopoly ?
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A. Lies below and converges with the demand curve

B. Lies below and diverges from the demand curve

C. Equals the demand curve

D. Is parallel with the demand curve

8782. Nicole wants to avoid buying a car that is a lemon. She takes a car she would like to buy to her mechanic before she purchases it. This is known as ?
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A. adverse selection

B. signaling

C. moral hazard

D. screening
8783. Markus is a travelling salesman for an apparel company. In this employment relationship, Markus is the ?
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A. screener

B. principle

C. signaler

D. agent
8784. Refer to Figure 1 What percent of the population vote for A when the choice is between A and B ?
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A. 35 percent

B. 25 percent

C. 40 percent

D. 60 percent

E. 75 percent

8785. Which of the following is a response to Peoples inconsistent behavior over time ?
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A. efficiency wages

B. year-end bonuses

C. all of these answers

D. forced contributions to a retirement plan
8786. Jamils car is in need of repair, so John decides to sell it avoid the repair bill. Unaware of the problem, Shahab buys the car. This is an example of ?
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A. hidden actions

B. adverse selection

C. moral hazard

D. adverse selection

8787. Suppose that 40 percent of the voting population wish to spent Rs1,000 for artwork in City Hall, 25 percent wish to spent Rs20,000 and 35 percent wish to spend Rs 22,000 What is the median preferred outcome, the average preferred outcome and the modal preferred outcome ?
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A. Rs1,000; Rs14,333; Rs1,000

B. Rs1,000; Rs20,000; Rs22,000

C. Rs20,000; Rs20,000; Rs22,000

D. Rs20,000; Rs13,100; Rs1,000
8788. Which of the following must be true about a signal that is used to reveal private information in order for the signal to be effective ?
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A. It must be as seen on TV

B. It must be free to the signaling party

C. It must be costly to the signaling party but less costly to the party with higher-quality product

D. It must be applied to an inexpensive product

8789. Which of the following is not true about how people make decisions ?
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A. People are sometimes too sure of their own abilities

B. People are always rational maximizers

C. All of these answers are actually true statements about how people make decisions.

D. People are reluctant to change their minds in the face of new information

E. people give too much weight to a small number of vivid observations

8790. Which of the following is an example of a signal that is used to reveal private information ?
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A. Josephine earns her MBA from the Harvard Business School

B. Lexus advertises its cars during the football World Cup Final.

C. All of these answers are correct

D. Enzo carefully chooses a special gift for Josephine

8791. Which of the following best demonstrates the problem of moral hazard ?
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A. Josephine doesnt buy health insurance because it is too expensive, and she is healthy

B. A life insurance company forces Enzo to have a medical examination prior to selling him insurance

C. Enzo drives more recklessly after he buys car insurance

D. Fatima chooses to attend a well-respected college

8792. In the ultimatum game, what split would be rational for both the person proposing the split and the person who must accept or reject the split ?
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A. Jan-99

B. 99/1

C. There is no rational solution

D. 50/50

E. 75/25

8793. Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?
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A. They put hidden video cameras in the workplace

B. They pay employees with delayed compensation such as a year-end bonus

C. They pay above equilibrium wages

D. They buy life insurance on their workers
8794. hich of the following is not a property required of a perfect voting system ?
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A. transitivity

B. no dictators

C. independence of irrelevant

D. The median voter always wins
8795. Which of the following is true under pairwise majority rule if people vote for the outcome closest to their most preferred outcome ?
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A. The outcome preferred by the median voter wins

B. The average preferred outcome wins

C. The outcome preferred by the greatest number of voters wins.

D. There is no clear winner due to Arrows Impossibility Theorem.

8796. Which of the following help explain why firms pay bonuses to workers during particularly profitable years to prevent workers from becoming disgruntled ?
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A. people are rational maximizers

B. People are inconsistent over time

C. People care about fairness

D. People are reluctant to change their minds

8797. A life insurance company forces Enzo to have a medical examination prior to selling him insurance ?
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A. impossibility

B. transitivity

C. independence

D. unanimity

8798. Jamils friend dies of a sudden heart attack. Jamil rushes to his doctor for an expensive physical examination. This response demonstrates that ?
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A. People easily change their minds when confronted with new information

B. People give too much weight to a small number of vivid observations

C. People enjoy going to the doctor

D. People tend to plan ahead and follow through on their plans

8799. In a competitive labour market firms will hire labour up to the point where the marginal revenue product of labour equals ?
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A. the price of the product

B. the marginal product

C. total labour cost

D. the wage rate

8800. Housing Benefit is a good example of ?
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A. a benefit in kind

B. a means tested cash benefit

C. none of the above

D. a universal (social insurance based) benefit