economics MCQs – Page 234

Practise multiple-choice questions from economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

economics Mcqs

1. the national economy 2. profit maximizing under perfect competition and monopoly 3. application of economics 4. the aggregate demand aggregate supply model 5. surplus 6. money interest rates and output 7. average and total cost 8. stabilization adjustment reform and privatization 9. risks and diversification efficient market hypothesis 10. the phillips curve 11. supply and demand 12. capital formation investment choice information technology and technical progress 13. aggregate supply unemployment and inflation 14. elasticity 15. comparative gdp 16. roots of modern macroeconomics 17. production factors 18. poverty malnutrition and income inequality 19. trade regulations and industrial policies 20. monetary union 21. exchange rate systems and currency crises 22. economic development in historical perspective 23. exchange rate determination 24. monopoly competition 25. the balance of payments 26. inflation productivity 27. macroeconomic issues and analysis 28. employment migration and urbanization 29. macroeconomic policy tools 30. supply side policies 31. exchange rate adjustments and the balance of 32. miscellaneous 33. taxation 34. trade policies for the developing nations 35. markets efficiency and the public interest 36. the external debt and financial crises 37. budget deficits and the trade balance 38. alternative theories of the firm 39. public goods 40. the meaning and measurement of economic development 41. characteristics and institutions of developing countries 42. agriculture irrigation system of pakistan 43. education health and human capital 44. economic problems of developing countries 45. theories of economic development 46. basic of economics 47. consumer theory vs real consumers 48. applied microeconomics 49. long term economic growth 50. externality internality 51. fiscal and monetary policy 52. prices wages taxes 53. balance of payments aid and foreign investment 54. international factor movements and multinational corporations 55. entrepreneurship organization and innovation 56. the international economy and globalization 57. population and development 58. non tariff trade barriers 59. foundations of modern trade theory 60. global economic development 61. market 62. rural poverty and agricultural transformation 63. regional trading arrangements 64. foreign exchange 65. introduction to economics 66. world economy miscellaneous 67. sources of comparative advantage 68. natural resources and the environment toward sustainable development 69. monopoly 70. asymmetric information 71. income inequality 72. labour market 73. tariffs 74. development planning and policy making the state and the market 75. oligopoly 76. industrial development 77. costs supply and perfect competition 78. human capital 79. monetary fiscal and incomes policy and inflation 80. stocks

4661. The cosmetics industry is not considered by economists to be a good example of perfect competition because ?
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A. there are many EU and government health controls on cosmetic products

B. there are a very large number of firms in the industry

C. firms spend a large amount of money on advertising

D. profit margins are very high for both producers and retailers

4662. Engineers for the All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases?
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A. marginal costs to increase

B. average costs to remain constant

C. average costs to increase

D. average costs to decrease

4663. Form societys point of view, society would be better off if a monopolist ?
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A. produced less and charged a higher price

B. produced more and charged a lower price

C. produced more and charged a higher price

D. produced less and charged a lower price.

4664. 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. at least one fixed factor of production and firms neither leaving nor entering the industry

C. all inputs being variable

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

4665. A price- and quantity-fixing agreement is known as?
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A. game theory,

B. collusion

C. price leadership

D. price concentration

4666. The long-run equilibrium outcomes in monopolistic competition and perfect competition are similar because in both market structures ?
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A. the efficient output level will be produced in the long run

B. firms realize all economies of scale

C. firms will be producing at minimum average cost

D. firms will only earn a normal profit

4667. Economic profits are ?
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A. the opportunity costs of all inputs

B. the difference between total revenue and total costs.

C. a rate of profit that is just sufficient to keep owners and investors satisfied

D. anything greater than the normal opportunity cost of investing

4668. The short run, as economists use the phrase, in characterized by ?
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A. at least one fixed factor of production and firms neither leaving nor entering the industry.

B. a period where the law of diminishing returns does not hold

C. all inputs being variable

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

4669. Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? the monopolist has?
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A. maximized its total revenue

B. maximized the difference between marginal revenue and marginal cost.

C. set price equal to its average cost

D. equated marginal revenue and marginal cost

4670. Which of the following is most likely to be a variable cost for a firm ?
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A. The interest payments made on loans.

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

C. The payroll taxes that are paid on employee wages.

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

4671. The formula for average fixed costs is ?
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A. Dq/DTFC

B. TFC/q

C. q/TFC

D. TFC q

4672. Marginal revenue is ?
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A. the additional profit the firms earns when it sells an additional unit of output

B. the difference between total revenue and total cost

C. The ratio of total revenue to quantity.

D. the added revenue that a firm takes in when it increases output by one additional unit.

4673. 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

4674. Market power is ?
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A. a firms ability to charge any price it likes

B. a firms ability to raise price without losing all demand for its product

C. a firms ability to monopolies a market completely.

D. a firms ability to sell any amount of output it desires at the market-determined price.

4675. An oligopoly with a dominant price leader will produce a level of output ?
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A. between that which would prevail under competition and that which a monopolistic competitor would choose in the same industry.

B. equal to what a monopolist would choose in the same industry

C. that would prevail under competition

D. between that which would prevail under competition and that which a monopolist would choose in the same industry

4676. Profit-maximizing firms want to maximize the difference between ?
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A. marginal revenue and marginal cost.

B. total revenue and total cost

C. total revenue and marginal cost

D. marginal revenue and average cost

4677. Suppose two economists are arguing about policies that deal with unemployment One economist says the government should fight unemployment because it is the greatest social evil The other economist response Nonsense Inflation is the greatest social evil These economists ?
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A. none of these answers.

B. really dont disagree at all It just appears that they disagree.

C. disagree because they have different scientific judgments.

D. disagree because they have different values.

4678. The scientific method requires that ?
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A. The scientific use precision equipment.

B. only theories are tested.

C. the scientist be objective

D. only correct theories are tested

E. the scientist uses test tubes and have clean lab.

4679. Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?
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A. disagree because they have different values

B. Disagree because they have different scientific judgments

C. None of these answers

D. really dont disagree at all. It just appears that they disagree

4680. In making which of the following statements is an economist acting more like a scientist ?
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A. The rate of inflation should be reduced because it robs the elderly of their savings.

B. A reduction in unemployment benefits will reduce the unemployment benefits will reduce the unemployment rate.

C. The unemployment rate should be reduced because unemployment robs individuals of their dignity.

D. The state should increase subsidies to universities because the future of our country depends on education.

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