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
851. Policy makers are said to accommodate an adverse supply shock if they ?
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A. respond to the adverse supply shock by increasing aggregate demand, which further raises prices

B. respond to the adverse supply shock by decreasing short run aggregate supply

C. fail to respond to the adverse supply shock and allow the economy to adjust on its own.

D. respond to the adverse supply shock by decreasing aggregate demand which lower prices

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

B. marginal tax rates are low.

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

D. higher income taxpayers pay a greater percentage of their income in taxes than do lower income taxpayers.
853. If a buyers willingness to pay for a new Honda is Rs20,000 and she is able to actually buy it for Rs18,000 her consumer surplus is ?
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A. Rs2,000

B. Rs20,000

C. Rs0.

D. Rs18,000

854. If a firm wage costs increase this will cause __________ and __________?
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A. average cost will rise output will increase ____ output and an upward shift in marginal revenue ____ output

B. marginal revenue to increase output to fall

C. marginal cost to increase, output to fall

D. opportunity cost to increase the firm will close

855. A tax of 15 percent per imported item would be an example of a (an) ?
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A. Specific tariff

B. Effective tariff

C. Compound tariff

D. Ad valorem tariff
856. 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. none of these answers

D. Henry George curve.

E. Keynesian curve

857. If a market is efficient then_______?
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A. the market allocates output to the buyers that value it the most

B. the market allocates buyers to the sellers who can produce the good at least cost

C. none of these answers

D. the quantity produced in the market maximizes the sum of consumer and producer surplus

E. all these answers
858. The appropriate tax rate to consider judging the vertical equity of a tax system is the ?
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A. average tax rate

B. proportional tax rate

C. horizontal tax rate

D. marginal tax rate

859. Ad valorem tariffs are collected as ?
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A. All of the above

B. a percentage of the price of the product

C. a percentage of the quantity of imports

D. fixed amounts of money per unit traded

860. With free trade the total value of imports would equal ?
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A. $600,000 units

B. $400,000 units

C. $100,000 units

D. $800,000 units

861. A shift in aggregate supply is likely to ?
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A. Reduce the general price level and increase national income

B. Increase the general price level and reduce national income

C. Reduce the general price level and reduce national income

D. Increase the general price level and increase national income

862. The price of computer chips used in the manufacture of personal computers has fallen. This will lead to _________ personal computer?
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A. an increase in the quantity supplied of

B. an increase in the supply of

C. a decrease in the supply of

D. a decrease in the quantity supplied of

863. Countries with chronic balance of payments deficits eventually need to borrow abroad often from the ________ as the lender of last resort?
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A. IMF

B. OPEC

C. U.S

D. OECD

864. Privatization refers to a range of policies including ?
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A. franchising or contracting public services or leasing public assets to the Private sector

B. Liberalization of entry into activities previously restricted to the public sector

C. changing part of a public enterpriss ownership to the private sector

D. . two infant industries merging into a monopoly

865. 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 benefits principle

D. the deadweight has demonstrated

E. The administrative burden of a tax.

866. An increase in price all other things unchanged leads to ?
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A. A shift in supply outwards

B. A shift in supply inwards

C. A contraction of supply

D. An extension of supply
867. Investment is ?
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A. The purchase of stocks and bonds

B. The purchase of capital equipment and structures

C. When we place our saving in the bank

D. The purchase of goods and services

868. If a product is a vablen good ?
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A. Demand is inversely related to the price of substitutes

B. Demand is directly related to price

C. Demand is inversely related to income

D. Demand is inversely related to price

869. If buyers are rational and there is no market failure ?
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A. free market solutions are efficient

B. free market solutions are efficient and free market solutions maximize total surplus

C. free market solutions maximize total surplus

D. all of these answers

E. free market solutions are equitable

870. Which of the following is an example of equity finance ?
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A. Company shares

B. All of these answers are equity finance

C. Government bonds

D. Corporate bonds

871. 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 + B + C + D+ E +F

B. A + B + C + D

C. A + D

D. B + C + E + F

872. If the price elasticity of demand is unit then a fall in price ?
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A. Leaves revenue unchanged

B. Reduces costs

C. Reduces revenue

D. Increase revenue

873. If GDP = Rs1,000 Consumption = Rs 600 taxes = Rs 100, and government purchases = Rs200, how much is saving and investment ?
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A. Saving = Rs 100 investment = Rs 200

B. Saving = Rs 0 investment = Rs 0

C. Saving = Rs 200 investment = Rs 100

D. Saving = Rs 300 investment = Rs 300

874. If an increase in the budget deficit reduces national saving and investment we have witnessed a demonstration of ?
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A. the investment fund effect

B. intermediation

C. crowding out

D. equity finance

875. If a nation fitting the criteria for the large nation model imposes an import tariff ?
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A. None of the above

B. the domestic price of the product will increase by more than the tariff itself

C. The domestic price of the product will increase by the same amount as the tariff

D. The domestic price of the product will increase by less than the tariff
876. 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. B + C

B. B + C + E + F

C. A + B + C + D

D. E + F
877. The price elasticity of demand measures ?
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A. a change in quantity demanded

B. The responsiveness of quantity demanded to a change in price

C. a change in price

D. How far a demand curve shifts

878. 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
879. If the public consumes Rs 100 billion less and the government purchases Rs100 billion more (other things unchanging), Which of the following statement is true ?
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A. There is a decrease in saving and the economy should grow more slowly

B. There is not enough information to determine what will happen to saving

C. Saving is unchanged

D. There is an increased in saving and the economy should grow more quickly

880. If both marginal cost and marginal revenue increase, a firm ?
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A. will require further information on how to respond

B. Should increase output

C. Should not change output

D. Should reduce output

881. Profits are maximized when ?
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A. average cost is less than average revenue

B. revenue is maximized

C. costs are minimized

D. marginal cost equals marginal revenue
882. The reduction of tax ?
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A. will have no impact on tax revenue.

B. will always reduce tax revenue regardless of the prior size of the tax

C. causes a market to become less efficient

D. could increase tax revenue if the tax had been extremely high
883. Aggregate demand will increase if ?
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A. investment falls

B. imports fall

C. Exports fall

D. consumption falls

884. The Heckscher-Ohlin theorem states that a country will have comparative advantage in the good whose production in relatively intensive in the with which the country is relatively abundant ?
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A. tastes

B. technology

C. opportunity cost

D. factor/resource
885. The analyzes the income distribution effects of trade in the short run when resources are immobile among industries ?
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A. specific factors theory

B. factor endowment theory

C. Stolpher-Samuelson theory

D. overlapping demand theory

886. The sellers cost of production is ?
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A. the sellers consumer surplus

B. the minimum amount the seller is willing to accept for a good

C. the sellers producer surplus

D. the maximum amount the seller is willing to accept for a good

E. none of these answers.

887. Concerning import tariffs of the United States empirical studies tend to conclude that these tariffs are ?
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A. Progressive and thus bear down on the wealthy

B. regressive and thus bear down on the poor

C. proportional and thus bear down on all consumers in the same manner

D. deflationary and thus result in reductions in the price of imports

888. With the tariff the government collects?
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A. $100,000

B. $125,000

C. $150,000

D. $75,000

889. 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. generated no tax revenue

B. increased efficiency

C. decreased equity

D. caused a deadweight loss
890. The difference between what consumers have to pay for a particular and what they are willing to pay is known as ?
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A. consumer surplus

B. deadweight costs

C. deadweight surplus

D. producer surplus

891. An efficient tax ?
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A. minimizes the administrative burden form the tax

B. minimize the deadweight loss from the tax.

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

D. does all the things describe in these answers
892. The success of regional and urban policies has been limited by ?
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A. bad luck

B. poor communications

C. the low level of government grants and by the fact that some projects would have gone ahead anyway

D. bureaucracy

893. Which best describes a supply curve ?
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A. The quantity consumers would like to buy in an ideal world

B. The quantity producers are willing and able to sell at each and every price all other things unchanged

C. The quantity producers are willing and able to sell at each and every point in time all other things unchanged

D. The quantity producers are willing and able to sell at each and every income all other things unchanged

894. Suppose the demand for good Z goes up when the price of good Y goes down. We can say that goods Z and Y are ?
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A. substitutes.

B. perfect substitutes

C. unrelated goods.

D. complements
895. Total surplus is the area_______________?
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A. above the demand curve and below the price

B. above the supply curve and below the price

C. below the supply curve and above the price

D. below the demand curve and above the supply curve

E. below the demand curve and above the price

896. For advanced countries such as the United States, tariffs on imported raw materials tend to be ?
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A. equals to tariffs on imported manufactured goods

B. The highest of all tariffs

C. lower than tariffs on imported manufactured goods

D. higher than tariffs on imported manufactured goods

897. Boeing aircraft company was able to over its production costs of the first jumbo jetll in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates ?
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A. How a natural monopoly is forced to behave less competitively with international trade

B. How a natural monopoly is forced to behave more competitively with international trade

C. How economies of scale make possible a larger variety of products in international trade

D. A transfer of wealth from domestic consumer to domestic producer as the result of trade

898. Which of the following is not a reason why the aggregate demand curve slopes downward ?
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A. The exchange-rate effect

B. The wealth effect

C. The classical dichotomy/monetary neutrality effect

D. The interest-rate effect

899. Before the 1978 reforms China had a(n) ?
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A. agricultural bank only

B. mono bank system

C. urban credit cooperatives

D. housing savings banks

900. The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different ?
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A. Per-capita income levels

B. Tastes and preferences

C. Expectations of future interest rate levels

D. Labor productivities