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
1401. The use of the word monopoly in the name of the market structure called monopolistic competition refers to the fact that ?
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A. a monopolistically competitive firms faces a downward-sloping demand curve for its differentiated product and so does a monopolist

B. monopolistically competitive markets have free entry and exit just like a monopolistic market

C. monopolistically competitive firms produce beyond their efficient scale and so do monopolists

D. monopolistically competitive firms charge prices equal to their marginal costs just like monopolists

1402. In the Sub-Continent, first census was held in ?
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A. 1869

B. 1881

C. 1858

D. 1901

1403. 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

1404. The green house effect is the phenomenon by which ?
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A. climatic changes occur naturally in the forest

B. the earths atmosphere traps infrared radiation

C. the globes water pollution affects plankton

D. biological diversity is dominant in agricultural production

1405. To reduce imports, suppose that the government of Norways imposes a quota equal to 800 computers, Compared to what occurred under free trade, Norways consumers surplus will ________ and its producer surplus will _______ Can you calculate these amounts? Try plotting the information of this table on a sheet of graph paper ?
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A. increase, increase

B. decrease, decrease

C. decrease, increase

D. increase, decrease

1406. An item designated as money that is intrinsically worthless is ?
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A. barter items

B. fiat money

C. commodity money

D. precious metals

1407. X inefficiency occurs when ?
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A. The price is greater than the marginal cost

B. The price is greater than the average cost

C. There are external cost

D. Costs are higher than they could be due to a lack of competitive pressure
1408. With free trade suppose that the rest of the world can supply computers to Norway at a price of $1,500 Norways imports will now equal. Compared to What occurred in the absence of trade, Norways consumers surplus will _____ and its producer surplus will ____. Can you calculate these amounts? Try plotting the information of this table on a sheet of graph paper ?
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A. 1,200 computers, increase, decrease

B. 1,200 computers, decrease, increase

C. 1,600 computers, decrease, increase

D. 1,600 computers, increase, decrease
1409. A firm whose average total cost continually declines at least to the quantity that could supply the entire market is known as a ?
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A. government monopoly

B. natural monopoly

C. regulated monopoly

D. perfect competitor

1410. The Genuine Progress indicator is ?
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A. resource depletion and environmental cost divided by GDP per capita

B. increasing from 1976 to 2000

C. GDP plus resource depletion and environmental cost

D. also known as index of Sustainable Economic Welfare per capita
1411. GDP plus net property income from abroad equals what ?
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A. NNP

B. Depreciation

C. Real GDP

D. GNP
1412. Keynesians and monetarists differ over how steep the IS and LM curves actually are Monetarists claim that the IS curve must be __________ and the LM curve must be __________?
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A. flat; steep

B. steep; flat

C. flat; flat

D. steep; steep

1413. Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?
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A. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio

B. fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio

C. be unchanged

D. rise by an amount that depends on the banks reserve ratio

E. rise by less than the amount of the deposit

1414. In pure monopoly, what is the relation between the price and the marginal revenue ?
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A. the price is less than the marginal revenue

B. there is no relation

C. the price is greater than the marginal revenue

D. they are equal

1415. If regulators break up a natural monopoly into many smaller firms, the cost of production ?
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A. will remain the same

B. could either rise or fall depending on the elasticity of the monopolists supply curve

C. will rise

D. will fall

1416. What is the share of Sindh in the total population of Pakistan ?
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A. 22%

B. 28%

C. 25%

D. 23%
1417. Firms in oligopoly are likely to ?
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A. Try to be a price maker

B. Invest heavily in branding

C. Try to differentiate its products

D. Act independently of other firms

1418. According to the cost-based definition of dumping, dumping occurs when a firm sells a product abroad at a price that is less than ?
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A. average total cost

B. average fixed cost

C. marginal cost

D. average variable cost

1419. Nontariff trade barriers could include all of the following except ?
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A. health, safety, and environmental standards

B. government procurement policies

C. antidumping/countervailing duties applied to imports

D. domestic content laws

1420. In monopoly when abnormal profits are made ?
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A. The price is less than the average cost

B. The average revenue equals the marginal cost

C. Revenue equals total cost

D. The price set is greater than the marginal cost
1421. Irreversibility refers to ?
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A. natural resource that cannot be reproduced in the future if we fail to preserve them now

B. industrialization replacing agriculture in LDCs

C. obtaining intellectual property rights for products

D. natural extinction of various species in DCs

1422. In a boom ?
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A. Prices are likely to fall

B. Supply will increase immediately to match demand

C. Surpluses are likely to occur:

D. Shortages may occur

1423. ___________ are quotas that lead to a complete abolishment of trade?
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A. embargoes

B. voluntary export restraints

C. orderly marketing agreements

D. nontariff barriers

1424. As the number of sellers in an oligopoly increases ?
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A. the price in the market moves further from marginal cost

B. output in the market tends to fall because each firm must cut back on production

C. collusion is more likely to occur because a larger number of firms can place pressure on any firm that defects

D. The price in the market moves closer to marginal cost
1425. Which of the following is included in broad money, but not included in narrow money ?
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A. Automatic-transfer savings accounts

B. Travelers checks

C. savings accounts

D. Currency held outside banks

1426. Which of the following products is least likely to be sold in a monopolistically competitive market ?
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A. cotton

B. beer

C. video games

D. breakfast

1427. When firms enter a monopolistically competitive market and the business-stealing externality is larger than the product-variety externality then ?
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A. there are too many firms in the market and market efficiency could be increased if firms exited the market

B. the number of firms in the market is optimal and the market is efficient

C. The only way to improve efficiency in this market is for the government to regulate it like a natural monopoly.

D. There are too few firms in the market and market efficiency could be be increased with additional entry

1428. In the short run, if the price is above average total cost in a monopolistically competitive market, the firm makes ?
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A. losses and firms exit the market

B. profits and firms enter the market

C. profits and firms exit the market

D. losses and firms enter the market

1429. The monopolists supply curve ?
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A. is the marginal cost curve above average variable cost?

B. is the upward-sloping portion of the average total cost curve

C. is the marginal cost curve above average total cost

D. does not exist

E. The upward-sloping portion of the average variable cost

1430. According to Coases theorem when property rights are well defined and legally enforceable and transactions costs are not prohibitive ?
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A. violence displacement erosion and poverty are minimized

B. individuals overuse of the biosphere is curtailed

C. population growth leads to rigid land rights

D. participants will organize their transactions
1431. Which of the following would be excluded from UK GDP fro 2005? The sale of ?
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A. All of things mentioned in these answers should be counted in 2005 GDP.

B. the value of a lawyers services

C. a haircut

D. a 2005 Honda made in Swindon

1432. Which of the following events will lead to an increase in the demand for money ?
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A. An increase in the interest rate

B. An increase in the supply of money

C. A decrease in the price level

D. An increase in the level of aggregate output
1433. Which of the following policy actions by a central bank is likely to increase the money supply ?
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A. All of these will increase the money supply

B. Increasing the refinancing rate

C. Increasing reserve requirements

D. Buying government bonds in open market operations
1434. In price discrimination, which section of the market is charged the higher price ?
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A. The section with the richest people

B. The section with the oldest people

C. The section with the most elastic demand

D. The section with the most inelastic demand
1435. The money supply is ?
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A. Cheques + money + bank cards + credit cards

B. State Bank of Pakistan Issue Department

C. Currency in circulation plus bank deposits

D. Money + bank cards + credit cards

1436. The interest rate is determined in ?
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A. the money markets

B. the goods market

C. the money and labor markets

D. the goods and labor markets

1437. Compared to a perfectly competitive market a monopoly market will usually generate ?
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A. lower prices and higher output

B. higher prices and higher output

C. lower prices and lower output

D. higher prices and lower output
1438. Which of the following is not a function of money ?
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A. Store of value

B. Medium of exchange

C. hedge against inflation

D. unit of account

1439. Which of the following is an example of tragedy of commons ?
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A. smoking in a public place

B. excessive rain

C. common use of public toilets

D. over fishing
1440. The way in which government spending is supposed to reduce investment is by increasing ?
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A. imports

B. incomes

C. overseas investment

D. interest rates
1441. Many environmental resources are public goods, which are characterized by ?
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A. rivalry but nonexclusion in production

B. rivalry and exclusion in consumption

C. nonrivalry and nonexclusion in consumption

D. nonrivalry but exclusion in usage

1442. Collusion is difficult for an oligopoly to maintain ?
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A. all of these answers

B. if additional firms enter of the oligopoly

C. because antitrust laws (also known as competition laws) make collusion illegal

D. because, in the case of oligopoly self-interest is in conflict with cooperation.

1443. In the kinked Demand Curve theory it is assumed that ?
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A. An increase in price by the firm is followed by others

B. An increase in price by the firm is not followed by others

C. A decrease in price by the firm is followed by others

D. Firms collude to fix the price

1444. A checking deposit in a bank in considered _________ of that bank?
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A. a liability

B. capital

C. an asset

D. net worth

1445. Similar to import tariffs import quotas tend to result in ?
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A. increased consumer surplus

B. increased government revenue

C. decrease producer surplus

D. higher prices and reduced imports
1446. If the central bank increases the money supply at the same time as the government increasing spending, it is suggested that investment will ?
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A. be replaced by foreign investment

B. not be reduced as much as it would have been

C. be replaced by consumer spending

D. Suffer even more

1447. If the home country government grants a subsidy on a domestically produced good domestic producers tend to ?
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A. consider the subsidy as a increase in production cost

B. reduce wages paid to domestic workers

C. Increase their level of production

D. Capture the entire subsidy in the form of higher profits

1448. This monopolist should produce ?
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A. 3

B. 1

C. 2

D. 5

E. 4

1449. Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ?
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A. marginal revenue and then use the demand curve to determine the price consistent with this quantity

B. marginal revenue and then use the supply curve to determine the price consistent with this quantity

C. average total cost and then use the demand curve to determine the price consistent with this quantity

D. average total cost and then use the supply curve to determine the price consistent with this quantity

1450. In cartels ?
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A. The industry as a whole is loss making

B. There is no need to police agreements

C. Each individual firm profit maximizes

D. There may be an incentive to cheat