economics MCQs – Page 237

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 Review each marked answer and report any item that may be outdated or unclear.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

4721. If a benevolent social planner chooses to produce more than the equilibrium quantity of a good, then ?
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A. the value placed on the last unit of production by buyers exceeds the cost of production

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

C. producer surplus is maximized

D. consumer surplus is maximized

E. total surplus is maximized

4722. If buyers are rational and there is no market failure ?
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A. free market solutions are efficient

B. all of these answers

C. free market solutions maximize total surplus

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

E. free market solutions are equitable

4723. 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 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).

B. allow the market to seek equilibrium on its own.

C. choose a price below the market equilibrium price

D. choose a price above the market equilibrium price

4724. Suppose that the price of a new bicycle is Rs300 Natalie values a new bicycle at Rs 400 it costs Rs200 for the seller to produce the new bicycle. What is the value of total surplus if Natalie buys a new bike ?
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A. Rs200

B. Rs400

C. Rs300

D. Rs500

4725. If a benevolent social planner chooses to producer less than the equilibrium quantity of a good, then ?
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A. the value placed on the last unit production by buyers exceeds the cost of production.

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

C. producer surplus is maximized

D. total surplus is maximized

E. consumer surplus is maximized

4726. An increase in the price of a good along a stationary demand curve ?
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A. decrease consumer surplus

B. improves market efficiency.

C. improves the material welfare of the buyers.

D. increase consumer surplus.

4727. Producer surplus is the area ?
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A. below the demand curve and above the supply curve

B. above the supply curve and below the price

C. below the demand curve and above the price

D. above the demand curve and below the price

E. below the supply curve and above the price

4728. If a market is efficient then_______?
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A. the market allocates buyers to the sellers who can produce the good at least cost

B. the market allocates output to the buyers that value it the most

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

D. none of these answers

E. all these answers

4729. If a market generates a side effect or externlity then free market solutions ?
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A. are equitable

B. are inefficient

C. are efficient

D. maximize producer surplus

4730. Consumer surplus is the area ?
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A. above the demand curve and below the price.

B. below the supply curve and above the price.

C. below the demand curve and above the supply curve

D. below the demand curve and above the price.

E. above the supply curve and below the price.

4731. 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. Rs18,000

D. Rs0.

4732. 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 Rs30.

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

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

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

E. One vase will be sold, and consumer surplus is Rs5.

4733. For the Central bank to keep the interest rat unchanged as the government increase spending, the Central Bank must continue to ?
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A. decrease the money supply

B. decrease the demand for money

C. increase the demand for money

D. increase the money supply

4734. The refinancing rate is ?
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A. The interest rate the European Central Bank pays on reserves

B. He interests rate banks pay on the publics deposits

C. The interest rates the European Central Bank charges on loans to banks

D. The interest rate at Which commercial banks lend to and borrow from each other

E. The interest rates the public pays when borrowing from banks

4735. Money that a government has required has required to be accepted in settlement of debts is ?
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A. legal tender

B. commodity money

C. barter money

D. currency value

4736. The interest rate is determined in ?
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A. the money markets

B. the money and labor markets

C. the goods and labor markets

D. the goods market

4737. Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerards action ?
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A. Rs 10,00

B. Rs 0

C. Rs 1,000

D. Rs 9,000

4738. Commodity money ?
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A. is used exclusively in the economies of western Europe and north America

B. has intrinsic value

C. has no intrinsic value

D. is used as reserves to back fiat money

4739. The way in which government spending is supposed to reduce investment is by increasing ?
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A. imports

B. interest rates

C. overseas investment

D. incomes

4740. Which of the following is not a function of money ?
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A. unit of account

B. hedge against inflation

C. Store of value

D. Medium of exchange

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