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
901. Structural economists from the United Nations Economic Commission for Latin America (ECLA) emphasized ?
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A. currency devaluation

B. long-run institutional and structural economic change

C. contractionary monetary and fiscal policies

D. short term-adjustment with a human face

902. New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning used was that this would ?
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A. help small businesses

B. weaken the power of trade unions

C. reduce poverty

D. reduce unemployment
903. A contraction in supply occurs when ?
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A. The quantity supplied falls when the price falls

B. Demand shifts outwards

C. The supply curve shifts inwards

D. The supply curve shifts outwards

904. A firm that makes profit in addition to normal profit is making ?
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A. supernormal profit

B. Accounting profit

C. Economic profit

D. Normal profit

905. An increase in the costs of production will ?
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A. Shift demand outwards

B. Shift demand inwards

C. Shift supply inwards

D. Shift supply outwards so more is supplied at each and every price, all other things unchanged

906. Consumer surplus is the area ?
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A. below the demand curve and above the price.

B. above the supply curve and below the price.

C. below the demand curve and above the supply curve

D. above the demand curve and below the price.

E. below the supply curve and above the price.

907. According to the factor endowment model of Heckscher and Ohlin, countries heavily endowed with land will ?
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A. Devote excessive amounts of resources to agricultural production

B. Import products that are land-intensive

C. Devote insufficient amounts of resources to agricultural production

D. Export products that are land-intensive
908. If we consider the impact on both consumers and producers, then protection of the steel industry is ?
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A. Not in the interest of the U.S as a whole, nor in the interest of the state of Pennsylvania

B. Not in the interest of the U.S as a whole, but it might be in the interest of the state of Pennsylvania

C. In the interest of the U.S as a whole and in the interest of the state of Pennsylvania

D. In the interest of the U.S as a whole but not in the interest of the state of Pennsylvania where steel mills are located

909. Increased levels of spending on imports ?
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A. shift aggregate supply to the right

B. shift aggregate supply to the left

C. shift aggregate demand to the left

D. shift aggregate demand to the right

910. If a small country imposes a tariff on an imported good, its terms of trade will ?
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A. not change

B. improve

C. worsen

D. any of these

911. Positive cross elasticities suggest that goods are ____ and negative cross-elasticities that goods are ?
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A. normal, complements

B. substitutes complements

C. substitutes inferior

D. normal, inferior

912. The comparative advantage model of Ricardo was based on ?
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A. demand conditions underlying specialization and trade

B. intraindustry specialization and trade

C. interindustry specialization and trade

D. income conditions underlying specialization and trade

913. The Setrite Corporation produce chairs. An economist working for the firm predicts that if peoples incomes rise next year, then the demand for our chairs will for our chairs will increase ceteris paribus The accuracy of the economists prediction depends on whether the chairs Setrite Produce ?
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A. have few complementary goods.

B. are normal goods

C. have many complementary goods.

D. have few substitutes.

914. According to the trade theory of Staffan Linder trade tends to be most pronounced in manufactured goods when trading countries have ?
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A. similar endowments of natural resources

B. similar wage levels

C. similar levels of technology

D. similar per-capita incomes
915. The price elasticity of supply is +4 The price increases by 15% sales were originally 200 units What will they be now ?
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A. 120 units

B. 320 units

C. 60 units

D. 80 units

916. The price elasticity of demand is a negative number this means ?
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A. Demand is price elastic

B. Demand is price inelastic

C. An increase in income will reduce the quantity demanded

D. The demand curve is downward sloping
917. Countries facing a persistent external deficit can ?
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A. borrow overseas

B. Undertake expenditure-reducing policies

C. increase trade restrictions and exchange controls

D. . undertake expansionary monetary and fiscal policies

918. In general, if a benevolent social planner wanted to maximize the total benefits received by buyers and sellers in a market, the planner should?
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A. choose a price above the market equilibrium price

B. Choose any price the planner wants because the losses to the sellers (buyers) from any change in price are exactly offset by the gains to the buyers (sellers).

C. choose a price below the market equilibrium price

D. allow the market to seek equilibrium on its own.
919. When the decrease in the price of one good causes the demand for another good to decrease, the goods are_________?
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A. complements

B. nromal

C. substitutes

D. inferior

920. Average income increase from Rs20,000 p.a to Rs 22,000 p.a Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ?
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A. Income elasticity is -2

B. The good is inferior

C. Demand is price inelastic

D. The product is normal
921. Which of the following statement is NOT true about state owned enterprises (SOEs) ?
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A. Successful performing SOEs in Japan, Singapore and Sweden have greater managerial autonomy and accountability than other SOEs

B. SOEs in South Korea and Sweden generally achieve inferior economic results to those in Ghana

C. SOEs perform better with competition

D. Financial autonomy is a major factor contributing to SOEs managerial effectiveness

922. 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. proportional

B. progressive

C. regressive

D. efficient

923. Difference in environmental standards or other government regulations among nations ?
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A. have tended to make U.S steel companies more competitive internationally

B. can affect production costs and thus alter comparative advantages and trade patterns

C. have been eliminated by the nations participating in NAFTA

D. have no impact on patterns of international trade

924. The price elasticity of demand is the ?
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A. ratio of the change in quantity demanded to the change in price.

B. ratio of the change in price to the change in quantity demanded.

C. ratio of the percentage change in price to the percentage change in quantity demanded.

D. ratio of the percentage change in quantity demanded to the percentage change in price.
925. A measurement showing how quantity demanded varies with income is the ?
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A. Cross-price elasticity of demand

B. budget elasticity of demand

C. income elasticity of demand

D. Price elasticity of demand

926. Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?
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A. One vase will be sold, and consumer surplus is Rs5.

B. Three vases will be sold, and consumer surplus is Rs80

C. Two vases will be sold, and consumer surplus is Rs5.

D. One vase will be sold, and consumer surplus is Rs30.

E. Three vases will be sold, and consumer surplus is Rs0.

927. _______ represents the difference between what consumer have to pay for a product and what they are willing and able to pay ?
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A. consumer surplus

B. government surplus

C. producer surplus

D. deadweight surplus

928. 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. A

B. B + C + E + F

C. B

D. B + C

929. An increase in the budget surplus ?
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A. Shifts the demand for loanable funds to the left and reduces the real interest rate

B. Shifts the supply of loanable funds to the left and increase the real interest rate

C. Shift the supply of loanable funds to the right and reduces the real interest rate.

D. Shifts the demand for loanable funds to the right and increases the real interest rate.

930. If a country an imposes an import tariff, its welfare can improve if ?
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A. The tariff enhances the welfare of its trading partners

B. its terms of trade improve enough

C. the country is a small country rather than a larger country

D. Its governments tax revenue increases because of the tariff

931. The effective rate of protection ?
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A. shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms

B. is the minimum level at Which a tariff becomes effective in limiting imports?

C. distinguishes between tariffs that are effective and those that are ineffective

D. shows how effective a tariff is in raising revenue for the government

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

D. None of these answers

933. An increase in the budget deficit will ?
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A. lower the real interest rate and increase the quantity of loaable funds demanded for investment

B. raise the real interest rate and decrease the quantity of loanable funds demanded for investment

C. lower the real interest rate and decrease the quantity of loanable funds demanded for investment

D. raise the real interest rate and increase the quantity of loandable funds demanded for investment

934. An increase in the price of a complement for product A would ?
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A. Shift demand for Product A outwards

B. Shift supply for product A outwards

C. Shift demand for product A inwards

D. Shift supply for product A inwards

935. If a benevolent social planner chooses to producer less than the equilibrium quantity of a good, then ?
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A. producer surplus is maximized

B. the value placed on the last unit production by buyers exceeds the cost of production.

C. total surplus is maximized

D. the cost of production on the last unit produced exceeds the value placed on it by buyers.

E. consumer surplus is maximized

936. Increase unemployment benefits and less incentive to work would ?
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A. shift aggregate demand to the left

B. shift aggregate demand to the right

C. shift aggregate supply to the right

D. shift aggregate supply to the left

937. Economics assumes that people consume goods and services to achieve ?
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A. Status

B. Self-esteem

C. Utility

D. Prestige

938. If a nation fitting the criteria for the small nation model imposes a 10 percent tariff on imports of autos ?
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A. The price of autos within the nation will rise by less than 10 percent

B. The price of autos within the nation will rise by 10 percent

C. The price of autos within the nation will rise by more than 10 percent

D. The price of autos will not rise because of internal competition

939. The income effect of a price increase of a normal good is to ________ of that good and the substitution effect is to _________ of that good?
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A. reduce quantity demanded, increase quantity demanded

B. increase quantity demanded, reduce quantity demanded

C. reduce quantity demanded, reduce quantity demanded

D. increase quantity demanded, increases quantity demanded

940. Stagflation occurs when the economy experiences ?
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A. rising prices and rising output

B. falling prices and falling output

C. rising prices and falling output

D. falling prices and rising output

941. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?
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A. Price fall; output rises

B. Price rise; output fall

C. Price rise; output rise

D. Price fall; output falls

942. A movement along the demand curve to the left may be caused by ?
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A. a rise in the price of inputs

B. a fall in the number of substitute goods

C. a decrease in supply.

D. a rise in income

943. When the market operates without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as ?
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A. Quantity setting

B. price fixing

C. price rationing

D. quantity adjustment.

944. The price of burgers increase by 22% and the quantity of burgers demanded falls by 25% This indicates that demand for burgers is ____________?
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A. inelastic.

B. unitarily elastic

C. perfectly elastic

D. elastic
945. If the world price of steel is $500 a ton a specific tariff $50 is equivalent to an ad valorem tariff of______________?
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A. 5 percent

B. 15 percent

C. 10 percent

D. 20 percent

946. Credit risk refers to a bonds ?
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A. Probability of default

B. dividend

C. Price-earnings ratio

D. tax treatment

947. Wassily Leontief used an input output table in order to test the ?
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A. Ricardian theory of comparative advantage

B. Linder theory of overlapping demand

C. All of the above

D. Heckscher Ohl in theory of comparative advantage
948. Which of the following will NOT cause a shift in the demand curve for compact discs ?
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A. A change in the price of compact discs

B. A change in income.

C. A change in wealth

D. hange in the price of pre-recorded cassette tapes

949. 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 + E

B. D

C. A + B + C + D

D. A

950. Which of the following may constitute the International Monetary Funds conditionality for borrowing?
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A. limiting credit creation and liberalizing trade

B. restraining public sector employment and wage rates

C. government reducing budget deficts

D. . achieving market-clearing price