economics MCQs – Page 414

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 Review each marked answer and report any item that may be outdated or unclear.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

8261. If an increase in the price of blue jeans leads to an increase in the demand for tennis shoes, then blue jeans and tennis shoes are ?
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A. Complements

B. normal goods

C. none of these answers

D. inferior goods

E. Substitutes

8262. If the price in a market is fixed by the government below equilibrium ?
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A. There is excess supply

B. There is excess demand

C. There is equilibrium

D. There is excess equilibrium

8263. In Nash equilibrium each player chooses the best strategy ?
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A. that is a credible threat

B. Assuming other players move first

C. dominated by the other players

D. given the strategies of other players

8264. An increase (rightward shift) in the demand for a good will tend to cause ?
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A. an increase in the equilibrium price and quantity

B. a decrease in the equilibrium quantity.

C. an increase in the equilibrium price and a decrease in the equilibrium quantity

D. a decrease in the equilibrium price and quantity.

E. none of these answers

8265. In a free market system rationing occurs when there are increases in ?
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A. quantity

B. supply

C. price

D. demand

8266. A shift in supply will have more effect on price than quantity if ?
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A. The price elasticity of supply is 3

B. The price elasticity of supply is infinity

C. The price elasticity of supply is 0.2

D. The price elasticity of supply is 2

8267. When supply increase in an agricultural market farmers earning might fall because ?
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A. Supply is price elastic

B. Demand is price inelastic

C. All output must be sold at a maximum price

D. The government buys up all the excess production

8268. The social costs of monopoly power arises because ?
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A. price is less than marginal cost

B. marginal cost is set equal to marginal revenue

C. marginal consumer benefit is less than marginal revenue

D. there is too little output at too high a cost

8269. If a government were to fix a minimum wage for adult workers, economists would predict ?
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A. fewer young workers would be employed

B. the costs and prices of firms employing cheap labour would increase

C. there would be more unemployment

D. wages in general would fall as employers tried to hold down costs

8270. All of the following shift the supply of watches to the right except ?
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A. an advance in the technology used to manufacture watches

B. a decrease in the wage of workers employed to manufacture watches

C. All of these answers cause an increase in the supply of watches

D. an increase in the price of watches

8271. Moral hazard means that the act of insuring ____ that the desired outcome will occur?
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A. none of the above

B. increases the likelihood

C. reduces the likelihood

D. guarantees

8272. An example of an indirect tax is ?
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A. income tax

B. inheritance tax

C. VAT

D. a tax on profits

8273. If the price was fixed below the equilibrium price there would be ?
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A. Excess demand

B. Excess supply

C. Downward pressure on prices

D. Equilibrium

8274. If the consumption of good by one person does not reduce the quantity available by others and nobody can be easily excluded from consumption, we are referring to a ?
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A. public good

B. Private good

C. abundant good

D. merit good

8275. Merit goods are ?
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A. Not provided in the free market economy

B. Over provided in the free market economy

C. Provided free

D. Under provided in the free market economy

8276. A public good will ?
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A. Be under provided in the free market

B. Has no opportunity cost

C. Not be provided in the free market

D. Be over provided in the free market

8277. When a market is contestable, incumbent firms must __________ to avoid the entry of new competitors?
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A. practice price discrimination

B. behave like competitive firms

C. agree to act together

D. differentiate their products

8278. Economics say that there has to be some from of rationing whenever ?
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A. merit goods are produced

B. inflation occurs

C. there are externalities

D. there is excess demand

8279. Markets sometimes fail to exist because of________?
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A. a and c

B. the free-rider problem

C. externalities

D. a and b

8280. The problem posed by a natural monopoly is that it faces a _____ This means that _______?
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A. decreasing average cost curve, marginal cost lies below average cost

B. decreasing average cost curve marginal cost lies above average cost

C. increasing average cost curve, marginal cost lies above average cost

D. increasing average cost curve, marginal cost lies below average cost

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