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
1201. A product will be traded only if the pre-trade price difference between the two countries ?
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A. equals the cost of transporting it between them

B. more information in needed to answer this

C. is less than the cost of transporting it between them

D. is greater than the cost of transporting it between them equals the cost of transporting it between them
1202. Market power is ?
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A. a firms ability to monopolies a market completely.

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

C. a firms ability to charge any price it likes

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

1203. Within the supply and demand model, a tax collected from the buyers of a good shifts the ?
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A. demand curve upward by the size of the tax per unit.

B. Supply curve upward by the size of the tax per unit

C. demand curve downward by the size of the tax per unit

D. supply curve downward by the size of the tax per unit.

1204. Advocates of industrial policy maintain that government should ?
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A. pursue free trade as a policy that leads to maximum global efficiency

B. provide loans to domestic workers in exporting industries

C. grant subsidies to firms offering potential comparative advantage

D. increase interest rates on loans made to firms in import-competing industries

1205. For which of the following products would the burden of a tax likely fall more heavily on the sellers ?
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A. housing

B. Clothing

C. food

D. entertainment
1206. Which of the following is not among the most advanced global food chain cluster with headquarters in the US ?
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A. Procter & Gamble

B. Novartis/ADM

C. ConAgra

D. cargil/Monsanto

1207. Members of the EU find that trade creation|| is fostered when their economies are ?
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A. geographically distant

B. highly competitive

C. small in economic importance

D. highly noncompetitive

1208. The Heckshcer-Ohl assumes that are indentical between countries?
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A. tastes and preferences

B. technology levels

C. factor indowments

D. Both A and B
1209. The rate at which a firm can substitute capital for labour and hold output constant is the ?
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A. marginal rate of substitution

B. marginal rate of production

C. marginal rate of factor substitution

D. law of diminishing marginal returns.

1210. The population pf Pakistan according to 1998 Census is ?
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A. 145.4 million

B. 148.5 million

C. 142.5 million

D. 151.0 million

1211. When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?
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A. trade creation

B. trade diversion

C. comprehensive welfare effects

D. dynamic welfare effects

1212. Which of the following takes place when a tax is placed a good ?
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A. a decrease in the price buyers pay, an increase in the price sellers receive, and a decrease in the quantity sold

B. an increase in the price buyers pay a decrease in the price sellers receive and a decrease in the quantity sold

C. an increase in the price buyers pay a decrease in the price sellers receive, and an increase in the quantity sold

D. a decrease in the price buyers pay, an increase in the price sellers receive and an increase in the quantity sold

1213. Which factor of production in the United States is most likely to be made worse off (its factor payment will decrease) because of the North American Free Trade Agreement ?
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A. land

B. Capital

C. skilled labor

D. unskilled labor
1214. Compared to a portfolio composed entirely of shares a portfolio that is 50 percent government bonds and 50 percent shares will have a ?
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A. lower return and a lower level or risk

B. lower return and a higher level of risk

C. higher return and a higher level of risk

D. higher return and a lower level or risk

1215. ________ is said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries in favor of member countries ?
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A. trade creation

B. trade distortion

C. trade diversion

D. trade exclusion

1216. The formula for average fixed costs is ?
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A. TFC q

B. TFC/q

C. Dq/DTFC

D. q/TFC

1217. Maximum profit can be shown on a diagram using ?
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A. the AC and AR curves

B. the AC and MC curves

C. the MR and AR curves

D. the MR and MC curves

1218. A group of modern economists who believe that institutional factors and confidence strongly influence business behaviour and that expanding demand will usually increase output rather than prices are the ?
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A. post-keynesians

B. new classical school

C. monetarists.

D. keynesians

1219. What is the density of population in Pakistan total population of Pakistan ?
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A. 42.60%

B. 32.5%

C. 38.60%

D. 41.00%

1220. In 2003, the UN Development Program estimated that a 1-percent LDC per capita consumption growth, with income inequality unchanging, would reduce the poverty percentage by _________ percent yearly?
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A. 0

B. 6

C. 2

D. 0.5

1221. If A forms a customs union with C, the value of trade diversion will be ?
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A. $0

B. $20,000

C. $40,000

D. $10,000

1222. JCB (Which makes agricultural and construction equipment) has the opportunity to purchase a new factory today that will provide them with a Rs50 million return four years from now If prevailing interest rates are 6 percent, what is the maximum that the project can cost for JCB to be willing to undertake the project ?
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A. Rs 34,538,902

B. Rs 39,604,682

C. Rs 53,406,002

D. Rs 43,456,838

1223. Trade creation takes place when ?
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A. economic integration results in a movement in product origin to a lower-cost member country

B. economic integration results in a shift in product origin from a lower cost nonmember country to a member country having higher costs

C. a movement to a customs union reduces the cost of trade through standardization

D. a country moves from autarky to free trade

1224. Which of the following does not help reduce the risk that people face ?
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A. All of these answers help reduce risk

B. buying insurance

C. diversifying their portfolio

D. increasing the rate of return within their portfolio
1225. Prototypes of international agricultural research centers are the ?
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A. Center for International Agricultural production Control (CIAPC)

B. International Rice Research Institute (IRRI)

C. international Center for the Improvement of Maize and Wheat (CIMMYT)

D. #NAME?

1226. The elasticity of propoor growth is ?
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A. the percentage increase in the consumption growth of the poor divided by percentage increase in the consumption growth of the nonpoor

B. the percentage increase in the poor people in the Urban divided by percentage increase in the nonpoor in the urban

C. the percentage increase in the poverty of the poor divided by percentage increase in the poverty of the nonpoor

D. the percentage increase in the poor times percentage increase in the nonpoor

1227. According to the Heckscher-Ohlin model ?
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A. The gainers from trade outnumber the losers from trade

B. The scarce factor necessarily gains from trade

C. None of the above

D. everyone automatically gains from trade

1228. Which index combines measures of calorie availability (in relation to requirement) the growth of per capita daily energy supply food production food staples self-sufficiency, and variability of food production and consumption ?
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A. food sufficiency index

B. food security index

C. food growth index

D. food self-intake index

1229. Which of the following statements about the burden of a tax is correct ?
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A. The tax burden falls most heavily on the side of the market (buyers and sellers) that is most willing to leave the market when price movements are unfavorable to them.

B. The tax burden generated from a tax placed on a good consumer perceive to be a necessity will fall most heavily on the sellers of the good

C. The burden of a tax falls on the side of the market (buyers or sellers) from which it is collected

D. The distribution of the burden of a tax is determined by the relative elasticities of determined by legislation.
1230. A binding price ceiling creates?
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A. a shortage or a surplus depending on whether the price ceiling is set above or below the equilibrium price

B. an equilibrium

C. a shortage

D. a surplus

1231. Rapid increase in the price level during periods of recession of high unemployment are known as ?
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A. slump

B. inflation

C. stagnation

D. stagflation
1232. According to Human Development Report 2003, about ________ countries were poorer in 2003 than in 1990?
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A. 50

B. 5

C. 1000

D. 100

1233. The density of population in Punjab is ?
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A. 270 per sq. Km

B. 353 per sq. Km

C. 211 per sq. Km

D. 305 per sq. Km

1234. Which of the following NOT a cause of food insecurity, according to Nic Maunder, a specialist on Ethiopia ?
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A. Corruption and mismanagement

B. Aid from developed nations

C. Poor roads

D. War and bad governance

1235. A form of industry structure characterized by a few firms, each large enough to influence market price is ?
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A. monopolistic competition

B. oligopoly

C. monopoly

D. perfect competition

1236. The persistence of a phenomenon such as unemployment, even then its causes have been removed is called ?
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A. hysteresis.

B. ceteris paribus

C. negative entropy.

D. the fallacy of composition

1237. Amartya K. Sen emphasizes that having enough to eat depends on ?
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A. an egalitarian income distribution

B. societys high Gini concentration

C. societys system of entitlement

D. low poverty rates

1238. A major weakness of the kinked demand curve model of oligopoly is that ?
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A. it fails to explain how a firm arrived at its price and output decision initially

B. The model cannot be tested empirically.

C. Real-world pricing strategies are more simple than those assumed in this model

D. it assumes that firms believe that their rivals will not respond to any price change they initiate

1239. Speculative bubbles may occur in the shares market ?
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A. only when people are irrational

B. because rational people may buy an overvalued share if they think they can sell it to someone for even more at a later date

C. during periods of extreme pessimism because so many stocks become undervalued

D. when stocks are fairly valued
1240. A competitive profit-maximizing firm should hire workers up to the point where ?
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A. the marginal product of labor equals zero and the production function is maximized

B. the marginal product of labor equals the wage

C. the value of the marginal product of labor equals the wage

D. the wage, the rental price of capital and the rental price of land are all equal

1241. Sens welfare theory relies on ?
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A. individuals capabilities

B. individuals education

C. individuals accomplishments

D. individuals wealth

1242. _________ is said to exist when the formation of a regional trading group leads to an expansion of trade above pregroup levels ?
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A. trade creation

B. trade distortion

C. trade exclusion

D. trade diversion

1243. Most of Latin America has been characterized by ______ large land-grand estates owned by the few and ________ small poor holdings that rarely provide adequate employment for a family ?
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A. grameen, repetto

B. multitudinous latitudinous

C. latifundios, minifundios

D. feudum, nocere

1244. Which of the following statements about a binding price ceiling is true ?
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A. The shortage created by the price ceiling is greater in the short ran than in the long run.

B. The surplus created by the price ceiling is greater in the short run than in the long run

C. The surplus created by the price ceiling is greater in the long run than in the short run

D. The shortage created by the price ceiling is greater in the long run than in the short run
1245. A decrease in the demand or fish ?
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A. increase the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry

B. increase the value of the marginal product of fishermen increase their wage, and increase employment in the fishing industry.

C. decrease the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

D. decrease the value of the marginal product of fishermen reduces their wage, and reduces employment in the fishing industry

1246. If a depositor puts Rs100 in a bank amount that earns 4 percent interest compounded annually, how much will be in the account after five years ?
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A. Rs 104.00

B. Rs 121.67

C. Rs400.00

D. Rs 123.98

1247. The European Union is an example of a/an ?
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A. economic union

B. free trade area

C. common market

D. customs union

1248. If a factor exhibits diminishing marginal product, hiring additional units of the factor will ?
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A. generate ever smaller amounts of output

B. cause a reduction is output

C. have no effect on output

D. increase the marginal product of the factor

1249. The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?
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A. Rational-expectations hypothesis

B. lagged-expectations hypothesis.

C. adaptive expectations hypothesis

D. Passive-expectations hypothesis

1250. In which sector the largest labour force is attached in Pakistan ?
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A. Agriculture

B. Mines

C. Industry

D. Trade