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
1051. Inferior goods have _________ and luxury goods have _________?
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A. None of the above

B. Positive income elasticities, negative income elasticities

C. income elasticity greater than 1, negative income elasticities

D. negative income elasticity income elasticity greater than 1
1052. Which of the following sets of government policies is the most growth oriented ?
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A. Increase tax on the returns to saving Provide investment tax credits and lower the deficit

B. Lower taxes on the returns to saving, provide investment tax credits and lower the deficit

C. Increase tax on the returns to saving Provide investment tax credits and increase the deficit

D. Lower taxes on the returns to saving Provide investment tax credits and increase the deficit

1053. By reducing the volume of trade transportation costs tend to ?
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A. stop the process of product price equalization and factor price equalization before they are complete:

B. maximize all of the feasible gains from international trade

C. eliminate all of the feasible gains from international trade

D. ensure that the process of product price equalization and factor price equalization are complete

1054. Concerning a governments trade policy, all the following generally apply except ?
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A. When domestic exporting companies are organized, policy tends to favor freer trade

B. Policy tends to favor freer trade in countries whose imports are inputs into critical industries

C. because domestic consumers outnumber domestic producers policy markers usually enact Free-trade policies to satisfy the consumer majority:

D. economic downturn and recession generally result in greater protectionism

1055. If the cross-price elasticity of demand between two goods is negative, then the two goods are ?
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A. normal goods

B. unrelated goods

C. Complements

D. Substitutes.

1056. 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

C. A + B + E

D. D + C + B

1057. 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 buyers pay a larger portion of the tax because demand is more inelastic than supply

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

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

D. The sellers pay a larger portion of the tax because supply is more inelastic than demand
1058. Interventionist policies to restore regional imbalance focus on ?
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A. subsidies to encourage firms that moves

B. all of the above

C. tax concessions for firms that move.

D. improved infrastructure

1059. Which of the following is consistent with the law of supply ?
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A. As the price of calculators rise, the supply of calculators increases ceteris paribus.

B. As the price of calculators calls the supply of calculators increases, ceteris paribus.

C. As the price of calculators rise, the quantity supplied of calculators increases, ceteris paribus.

D. As the price of calculators rise, the quantity supplied of calculators decreases, ceteris paribus.

1060. The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?
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A. Economies of large-scale production

B. Research and development expenditures

C. Relative abundance of various resources

D. Relative costs of labor

1061. Producer surplus is the area ?
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A. below the supply curve and above the price

B. below the demand curve and above the supply curve

C. above the supply curve and below the price

D. above the demand curve and below the price

E. below the demand curve and above the price

1062. An increase in income should ?
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A. shift demand for an inferior product inward

B. Shift demand for an inferior product outward

C. shift supply for an inferior product outward

D. Shift supply for an inferior product inward

1063. 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. all the things described in these answers.

B. workers to work fewer hours

C. the elderly to retire early.

D. second earners to stay home.

E. the unscrupulous to enter the underground economy

1064. Which of the following would decease aggregate demand ?
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A. increased taxation revenue

B. increasing export revenue

C. increased investment

D. increase consumption

1065. Which of the following statements supports deregulation of industries ?
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A. Technological change has made it possible for many industries to become more competitive

B. Because few real natural monopolies exist, there is rarely a reason for government regulation.

C. All of the above

D. Many instances of government regulation have succeeded in reducing competition in industries where competition may be beneficial

1066. According to the law of diminishing utility ?
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A. Total utility will rise at a falling rate as more units are consumed

B. Marginal product will fall as more units are consumed

C. Utility is at a maximum with the first unit

D. Increasing units of consumption increase the marginal utility

1067. For a normal good ?
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A. The price elasticity of demand is positive; the income elasticity of demand is positive

B. The price elasticity of demand is positive the income elasticity of demand is negative

C. The price elasticity of demand is negative the income elasticity of demand is positive

D. The price elasticity of demand is negative the income elasticity of demand is negative

1068. 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. Progressive income taxes used to pay for national defense

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

D. Petrol taxes used to pay for roads

1069. if demand is price inelastic ?
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A. An increase in price must raise profits

B. An increase in price increase revenue

C. A decrease in price reduces sales

D. An increase in price decrease revenue

1070. In 1979-80 China first created _____ for foreigners to set up enterprises hire labor and import duty-free goods for processing and re-exporting ?
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A. special economic zones

B. Communist free trade areas

C. Economic Union zones

D. liberalized trade monopoly zones

1071. If a market generates a side effect or externlity then free market solutions ?
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A. are efficient

B. maximize producer surplus

C. are equitable

D. are inefficient
1072. When the world Bank or IMF requires improved external balance in the short run the agency may condition its loan on expenditure switching that is ?
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A. increase government spending

B. switching spending from domestic to foreign sources

C. devaluing local currencies

D. increase trade restrictions by imposing quota

1073. If a 4% increase in price leads to a increase in the quantity supplied of 8% ?
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A. Price elasticity of supply is -2

B. Price elasticity of demand is -2

C. Supply is price elastic

D. Supply is income elastic

1074. A way helping depressed regions by having wage subsidies lower business taxes and capital subsidies has been suggested as ?
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A. interventionist policies.

B. monetarists.

C. Left wing theorists

D. New classical economists.

1075. 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
1076. If Pakistani citizens become more thrifty we would expect ?
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A. The demand for loandable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to fall

B. The supply of loanable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to fall.

C. The supply of loandable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to rise

D. The demand for loanable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to rise

1077. Price increases from 10 to 12 pence and the price elasticity of demand is -0.5 The quantity demanded was 500 units. What will it be now ?
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A. 450 units

B. 500 units

C. 550 units

D. 490 units

1078. According to the Brandt report the IMFs insistence on drastic measures in short time periods ?
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A. reduces basis-needs attainment

B. contributes to low-income countries recovery quickly

C. #NAME?

D. may lead to the downfall of governments

1079. According to the _____ argument for protection, tariffs can shield new industries from import competition until they have grown strong and efficient enough to withstand the competition by foreign producers ?
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A. infant industry argument

B. foreign dumping argument

C. beggar they neighbor argument

D. scientific tariff argument

1080. Demand for a normal product may shift outwards if ?
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A. income falls

B. Price decreases

C. The price of a complement rises

D. The price of a substitute falls
1081. What effect is working when the price of a good falls and consumers tend to buy it instead of other goods ?
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A. The ceteris paribus effect

B. The income effect

C. The substitution effect

D. The diminishing marginal utility effect.

1082. The quantity demanded of Pepsi has decreased. The best explanation for this is that ?
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A. Pepsis advertising is not as effective as in the past .

B. The price of Pepsi increased

C. The price of Coca Cola has increased,

D. Pepsi consumers had an increase in income.

1083. With the tariff, the quantity of imports falls to ?
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A. 12,000 units

B. 42,000 units

C. 30,000 units

D. 20,000 units
1084. The average tax rate is ?
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A. total taxes paid divided by total income

B. the extra taxes paid on an additional dollar or income.

C. total income divided by total taxes paid

D. the taxes paid by the marginal worker

1085. Supply is likely to be more price elastic ?
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A. If factors of production are relatively immobile between industries

B. If it is easy to expand output

C. In the short run rather than the long run

D. If there are very few producers

1086. Market equilibrium exists when _________ at the prevailing price?
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A. quantity demanded equals quantity supplied

B. quantity demanded is greater than quantity supplied

C. quantity supplied is greater than quantity demanded

D. quantity demanded is less than quantity supplied

1087. If a benevolent social planner chooses to produce more than the equilibrium quantity of a good, then ?
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A. the cost of production on the last unit produced exceeds the value placed on it by buyers.

B. producer surplus is maximized

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

D. total surplus is maximized

E. consumer surplus is maximized

1088. For an inferior good ?
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A. The price elasticity of demand is negative: the income elasticity of demand is negative

B. The price elasticity of demand is positive the income elasticity of demand is negative

C. The price elasticity of demand is positive the income elasticity of demand is positive

D. The price elasticity of demand is negative the income elasticity of demand is positive

1089. If a tax on a good is doubled the deadweight loss from the tax ?
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A. stays the same

B. increase by a factor of four.

C. doubles

D. could rise or fall

1090. Since the supply of undeveloped land is relatively inelastic a tax on undeveloped land would generate ?
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A. a large deadweight loss and the burden of the tax would fall on the landlora

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

C. a small deadweight loss and the burden of the tax would fall on the landlord

D. a small deadweight loss and the burden of the tax would fall on the renter

1091. A tariff of ________ would be prohibitive causing imports to fall to zero?
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A. $15

B. $25

C. $10

D. $20

1092. A market is defined as perfectly contestable if ?
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A. entry to it is costly but exit from it is costless

B. entry to it and exit from it are both costless

C. entry to it and exit from it are both costly

D. entry to ti costless but exist from it is costly

1093. The European Union has achieved all of the following except ?
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A. disbanded all tariffs between its member countries

B. adopted a common fiscal policy for member nations

C. established a common system of agricultural price supports

D. levied common tariffs on products imported from nonmembers

1094. The short run, as economists use the phrase, is characterized by ?
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A. a period where the law of diminishing returns does not hold.

B. all inputs being variable

C. no variable inputs that is all of the factors of production are fixed

D. at least one fixed factor of production and firms neither leaving nor entering the industry
1095. A stationary population is when population growth is ?
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A. decreasing

B. zero

C. increasing at an increasing rate

D. 100%

1096. The trade model of the Swedish economies Heckscher and Ohlin maintains that ?
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A. A country exports goods for which its resource endowments are most suited

B. Absolute advantage determines the distribution of the gains from trade

C. Comparative advantage determines the distribution of the gains from trade

D. The division of labor is limited by the size of the world market

1097. Which of the following is most likely to be a variable cost for a firm ?
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A. The payroll taxes that are paid on employee wages.

B. The monthly rent on office space that it leased for a year

C. The interest payments made on loans.

D. The franchisers fee that a restaurant must pay to the national restaurant chain

1098. In which part of Pakistan the rate of increasing population is fastest ?
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A. Sindh

B. FATA

C. Islamabad

D. Punjab

1099. Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?
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A. wages should rise and rents should fall in Country A

B. wages and rents should rise in Country A

C. wages and rents should fall in Country A

D. wages should fall and rents should raise in Country A

1100. What is the share of Pakistan population in the total population of world?
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A. 2.80%

B. 2.60%

C. 2.3%

D. 2.70%