economics MCQs – Page 390

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 Review each marked answer and report any item that may be outdated or unclear.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

7781. If an increase in a consumers income causes the consumer to increase his quantity demand of a good, then the good is ?
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A. a substitute good

B. an inferior good

C. a complementary good

D. a normal good

7782. Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts Also suppose that the consumers income is 100 If the price of a belt is 10 and the price of a pair of socks is 5, the consumer will choose to buy the commodity bundle represented b point ?
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A. Y

B. X

C. the optimal point cannot be determined from this graph

D. Z

7783. Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumers income is 100 A pair of socks is ?
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A. none of these answers

B. an inferior effect

C. a Geffen good

D. a normal good

7784. The consumers optimal purchase of any two goods is the point where ?
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A. the consumer has reached the highest indifference curve

B. the budget constraint crosses the indifference curve

C. the two highest indifference curves cross

D. the consumer reaches the highest indifference curve subject to remaining on the budget constraint

7785. Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ?
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A. could rise or fall depending on the relative prices of the two goods.

B. stays the same

C. falls

D. rises

7786. Which of the following is not true regarding the outcome of a consumers optimization process ?
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A. The consumers indifference curve is tangent to his budget constraint

B. The consumer is indifferent between any two points on his budget constraint

C. The marginal rate of substitution between goods is equal to the ratio of the prices between goods

D. The consumer has reached his highest indifference curve subject to his budget constraint

E. The marginal utility per dollar spent on each good is the same

7787. If an increase in a consumers income causes the consumers to decrease her quantity demanded of a good, then the good is ?
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A. a normal good

B. an inferior good

C. a substitute good

D. a complementary good

7788. A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ?
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A. right shoes and left shoes

B. petrol from BP and petrol from shell

C. kit-Kat chocolate snacks and Twix chocolate snacks

D. coke and Pepsi

7789. Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumers income is 100 Suppose that the price of a pair of socks falls from 5 to 2 The income effect is represented by the movement from point ?
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A. Z to point X

B. X to point Y

C. Y to point X

D. X to point Z

7790. If consumption when young and when old are both normal goods, an increase in the interest rate ?
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A. will always decrease the quantity of saving

B. will increase the quantity of saving if the substitution effect outweighs the income effect

C. will always increase the quantity of saving

D. will increase the quantity of saving if the income effect outweighs the substitution effect

7791. uppose a consumer must choose between the consumption of sandwiches and pizza. If we measure the quantity of pizza on the horizontal axis and the quantity of sandwiches on the vertical axis and if the price of a pizza is Rs10 and the price of a sandwich is Rs5, then the slope of the budget constraint is ?
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A. 10

B. 2

C. 2-Jan

D. 5

7792. If income where to double and prices were to to double the budget line would ?
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A. stay the same

B. rotates outward

C. shift inward in parallel fashion

D. rotate inward

E. shift outward in a parallel fashion

7793. The change in consumption that results when a price change moves the consumer along a given indifference curve is known as the ?
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A. substitution effect

B. income effect

C. inferior effect

D. normal effect

E. complementary effect

7794. Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumers income is 100 Suppose that the price of a pair of socks falls from 5 to 2 The substitution effect is represented by the movement from point ?
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A. X to point Z

B. X to point X

C. Z to point X

D. Y to point X

7795. indifference curves for perfect substitutes are ?
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A. right angles

B. straight lines

C. bowed inward

D. nonexistent

E. bowed outward

7796. In the UK, electricity industry parts are a ____ and other parts are ___ ?
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A. natural monopoly; potentially competitive

B. monopolistic competition duopoly

C. nationalized; privatized

D. cartel; a sellers market

7797. The external benefits of using cars are ____ and the external costs are _____?
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A. high; high

B. low; high

C. low; low

D. high; low

7798. Privatization is the transfer of ?
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A. publicly held stock to private individuals.

B. privately owned businesses to the government sector

C. corporately owned businesses to individuals

D. government businesses to the private sector

7799. De-regulation is where the government ?
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A. removes barriers to entry

B. removes barriers to entry and minimum product quality standards

C. breaks up private sector monopolies.

D. imposes higher standards of conduct

7800. A conglomerate merger is a merger of ?
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A. firms producing unrelated products.

B. firms at various stages in production process.

C. firms producing the same product

D. firm producing complementary products

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