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
1251. If the total product of two workers is 80 and the total product of 3 workers is 90 then the average product of the third worker is ________ and the marginal product of the third worker is _________?
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A. 10; 3.33

B. 160; 270

C. 30; 10

D. 10; 30

1252. Which of the following is not true with regard to workers who have a high value of marginal product? These workers ?
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A. are usually highly paid

B. have skills that are in relatively scarce supply

C. produce output for which there is great demand

D. usually have little capital with which to work
1253. Most empirical studies show that firms cost curves ?
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A. slope down to the right and then level off.

B. slope up to the right

C. slope down to the right

D. are U-shaped

1254. The economists who emphasised wage flexibility as a solution for unemployment were ?
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A. classical economists.

B. new-Keynesian.

C. Keynesian.

D. post-Keynesian.

1255. Peer borrowing groups of five or so people with joit liability approve loans to other members as a substitute for the banks screening process The above statement applies to ?
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A. the Association for Development of Microenterprice

B. Indonesias Badan Kredit Kecamatan (BKK)

C. the Enterprice credit program in Kolkata

D. Bangladeshs Grameen Bank

1256. The highest population density rate in Pakistan is in ?
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A. Sindh

B. Islamabad

C. Punjab

D. FATA

1257. An increase in the demand for a firms output ?
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A. decrease the prosperity of the firm but increases the prosperity of the factors hired by the firm

B. decreases the prosperity of both the firms and the factors hired by the firm.

C. increases the prosperity of both the firm and the factors hired by the firm.

D. increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm.

1258. It is difficult to determine if the velocity of money is constant over time because ?
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A. it is difficult to measure the demand for money over time

B. there has been very little fluctuation in the money supply over time.

C. it is difficult to measure the value of nominal GDP over time

D. whether velocity is constant or not may depend on how the money supply is measure.
1259. The Human Development Report 2003, which assumes that poverty is multidimensional calculates a human poverty index based on which of the following measures of deprivation ?
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A. adult illiteracy rate

B. #NAME?

C. probability at birth of not surviving to age 40

D. lack of a decent standard of living

1260. A price- and quantity-fixing agreement is known as?
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A. price concentration

B. game theory,

C. price leadership

D. collusion
1261. As of 2002, the ________ became the official currency union of the European Monetary System ?
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A. euro

B. mark

C. dollar

D. franc

1262. According to the factor price equalization theorem, the ________ factor should oppose free. trade policies in any given country?
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A. scarce

B. cant tell without more information

C. neither

D. abundant

1263. Leontiefs result were considered paradoxical because the United Stated was believed to be ?
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A. All of the above

B. labor abundant relative to the rest of the world

C. technologically efficient relative to the rest of the world

D. capital abundant relative to the rest of the world
1264. People are said to have rational expectations if they ?
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A. merely guess at the inflation rate.

B. Use all available information in forming their expectations.

C. assume that this years inflation rate will be the same as last years inflation rate

D. assume that this years inflation rate will be equal to the average inflation rate over the past 10 years

1265. A normal rate of profit ?
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A. is zero in a perfectly competitive industry.

B. Is the rate of return on investments over the interest rate on risk-free government bonds.

C. is the rate that is just sufficient to keep owners or investors satisfied.

D. is the difference between total revenue and total costs

1266. A firm will shut down in the short run if ?
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A. fixed costs exceed revenues.

B. total costs exceed revenues

C. variable costs exceed revenues

D. it is suffering a loss.

1267. Julian simon ?
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A. assumed that population growth causes technological progress

B. assumed the classical view of technological change 6

C. supported the Club of Romes Limits to Growth for estimating technical change

D. used the second law of thermodynamics to assume that technological progress is costless

1268. If you were running a firm in a perfectly competitive industry, you would be spending your time making decisions on ?
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A. how much to spend on advertising?

B. What price to charge

C. how much of each input to use?

D. none of these

1269. If people are risk averse, then ?
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A. All of these answers are true

B. None of these answers are true

C. The utility they would lose from losing a Rs50 bet would exceed the utility they would gain from winning a Rs 50 bet

D. ir utility function exhibit the property of diminishing marginal utility of wealth

E. They dislike bad things more than the like comparable good things

1270. The density of population per sq. Km in FATA is ?
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A. 170

B. 230

C. 190

D. 115
1271. A decrease in the supply of farm tractors will cause all but which of the following ?
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A. an increase in the wage of farm workers

B. a decrease in the rental rate of farmland

C. an increase in the rental rate for tractor

D. a decrease in the value of the marginal product of tractors

1272. If firms can neither enter nor leaves an industry, the relevant time period is the ?
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A. long run

B. short run

C. intermediate run

D. immediate run

1273. Economic profits are ?
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A. the difference between total revenue and total costs.

B. the opportunity costs of all inputs

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
1274. A positive, dynamic effect of economic integration is illustrated by ?
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A. economy-of-scale effect

B. decrease customs costs

C. trade diversion effect

D. increased monopoly power of firms

1275. The quantity theory of money implies that a given percentage change in the money supply will cause ?
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A. an equal percentage change in nominal DGP.

B. an equal percentage change in real GDP

C. a smaller percentage change in nominal

D. a larger percentage change in nominal GDP

1276. A firm in perfectly competitive industry is producing 50 units, its profit-maximising quantity. Industry price is 2 and total fixed costs and total variable cost are 25 and 40 respectively. The firms economic profit is ?
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A. 15

B. 60

C. 30

D. 35
1277. 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

1278. A firm in a monopolistically competitive industry ?
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A. sells a fixed amount of output regardless of price.

B. must raise price to sell more output

C. must lower price to sell more output.

D. can sell an infinite amount of output at the market-determined price

1279. The slope of marginal revenue curve is ?
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A. twice as steep as the demand curve

B. always equal to one.

C. half as steep as the demand curve

D. the same as the slope of the demand curve

1280. The normal rate of profit for relatively risk-free firms will be _________ the interest rate on risk-free government bonds?
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A. smaller than

B. approximately one-half

C. larger than

D. approximately equal to
1281. When ________ substitutes exist, a monopolist has ________ power to raise price?
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A. fewer; less

B. more; less

C. more; more

D. no; infinite

1282. It is difficult for an actively managed investment fund to outperform an index fund because ?
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A. index funds are able to buy undervalued stocks

B. stock markets tend to be inefficient

C. all of these answers

D. actively managed funds trade more often and charge fees for their alleged expertise
1283. If A forms a customs union with B, A will import ?
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A. 200 units from each

B. 400 units from B

C. 200 units from C

D. 400 units from B and 200 units from C

1284. Malthuss theory was that population ?
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A. increased disproportionately surpassing agricultural production

B. increased proportionally to economic growth

C. increased stagnantly with food supply and economic development

D. increased geometrically, outstripping food supply which grew arithmetically
1285. The European Monetary Union is an example of a ?
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A. customs union

B. monetary union

C. free trade area

D. reciprocal trade agreement

1286. Organized family-planning programs and the demand for birth control resulting from urbanization, modernization, economic development and increased education have contributed to ?
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A. an increase in the dependency ratio

B. increases in the ratio of labor to capital

C. a decline in fertility

D. The demographic transition from stage 3 to stage 2

1287. Which of the following is not a possible cost of high fertility rates and rapid population growth ?
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A. a higher labor force growth rate and higher unemployment

B. a working population that must support a large number of dependents

C. increasing returns to natural resources with a direct impact on average food consumption

D. increased urbanization and congestion

1288. The nation that the government can establish the macroeconomic is known as ?
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A. microeconomics foundations of macroeconomics

B. the classical model

C. fine tuning

D. monestarism

1289. Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?
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A. relatively low ; relatively large

B. relatively low ; relatively small

C. relatively high; relatively large

D. relatively high; relatively small

1290. What is the ratio of Agriculturist by profession in Pakistan in (mid 2007) ?
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A. 55%

B. 45%

C. 65%

D. 70%

1291. In a monopoly, marginal revenue is ?
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A. less than price at low levels of output and greater than price at high levels of output

B. always greater than price

C. lower than price for all units other than the first

D. always equal to price

1292. What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ?
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A. increase the demand for fishing boats and increase rental rates on fishing boats

B. increase the demand for fishing boats and decrease rental rates on fishing boats

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

D. decreases the demand for fishing boats and increase rental rates on fishing boats.

1293. The factor endowment model of international trade was developed by ?
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A. John Stuart Mill

B. David Ricardo

C. Adam Smith

D. Eli Heckscher and Bertil Ohlin
1294. When a tax is collected from the buyers in a market, ?
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A. the tax burden on the buyers and sellers in the same as an equivalent tax collected from the sellers

B. the buyers bear the burden of the tax

C. the sellers bear the burden of the tax

D. the tax burden falls most heavily on the buyers.

1295. If the ABC Typing Service is earning a rate of return greater than the return necessary for the business to continue operations, then ?
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A. normal profit is zero

B. total costs exceed total revenue

C. the firm is earning are economic profit

D. total costs exceed normal profit

1296. 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. no variable inputs that is, all of the factors of production are fixed

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

D. all inputs being variable

1297. A ____ is a regional trading bloc in Which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not member ?
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A. common market

B. monetary union

C. customs union

D. free trade area
1298. The burden of a tax falls more heavily on the sellers in a market when ?
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A. both supply and demand are elastic

B. both supply and demand are inelastic

C. demand is inelastic and supply in elastic

D. demand is elastic, and supply is inelastic
1299. Profit-maximizing firms want to maximize the difference between ?
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A. total revenue and marginal cost

B. marginal revenue and marginal cost.

C. marginal revenue and average cost

D. total revenue and total cost
1300. The regarding the new classical macroeconomics is hoe realistic is the assumption ?
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A. that markets do not clear quickly

B. of rational expectations.

C. that monetary policy affects aggregates demand

D. that fiscal policy affects aggregate demand