economics MCQs – Page 435

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 Review each marked answer and report any item that may be outdated or unclear.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 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
8681. By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect ?
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A. specialization to stop when the production costs of the trading partners equalize

B. The gains from trade to be greater than when there are no transportation costs

C. The prices of trade goods to be lower than when there are no transportation costs

D. The volume of trade to be less than when there are no transportation costs
8682. Wassily Leontiefs results can be interpreted as ?
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A. support for the Ricardian model

B. support for the Heckcher Ohlin model

C. evidence against the Heckscher-Ohl in model

D. evidence against the Ricardi an model

8683. That the division of labor is limited by the size of the market best applies to which explanation of trade ?
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A. Economies of scale theory

B. Overlapping demand theory

C. Factor endowment theory

D. Product life cycle theory

8684. _____ 1954 study of U.S trade patterns showed that U.S exports were labor-intensive compared with U.S imports, even though the United States was widely regarded as a relatively capital-abundant nation ?
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A. Wassily Leontiefs

B. Wolfgang Stolphers

C. Staffan Linders

D. Paul Samuelsons

8685. According to the Heckscher-Ohlin model the source of comparative advantage is a countrys ?
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A. technology

B. advertising

C. factor endowments

D. both (a) and (c)

8686. Difference in environmental standards or other government regulations among nations ?
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A. have tended to make U.S steel companies more competitive internationally

B. can affect production costs and thus alter comparative advantages and trade patterns

C. have no impact on patterns of international trade

D. have been eliminated by the nations participating in NAFTA

8687. 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
8688. For the United States empirical studies indicate that over the past two hundred years the cost of international transportation relative to the value of U.S imports has ?
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A. increased

B. Decreased

C. Any of the above

D. Not changed

8689. The factor endowment theory was pioneered by ?
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A. Eli Heckscher and Bertil Ohlin

B. Adam smith

C. David Ricardo

D. Wassily Leontief

8690. The Heckscher-Ohlin theorem states that a country will have comparative advantage in the good whose production in relatively intensive in the with which the country is relatively abundant ?
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A. opportunity cost

B. tastes

C. factor/resource

D. technology

8691. 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. increase interest rates on loans made to firms in import-competing industries

C. grant subsidies to firms offering potential comparative advantage

D. provide loans to domestic workers in exporting industries

8692. A product will be traded only if the pre-trade price difference between the two countries ?
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A. more information in needed to answer this

B. equals the cost of transporting it between them

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
8693. Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of ?
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A. loan guarantees

B. low interest rate loans

C. All of the above

D. research and development subsidies

8694. Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?
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A. wages should fall and rents should raise in Country A

B. wages should rise and rents should fall in Country A

C. wages and rents should rise in Country A

D. wages and rents should fall in Country A

8695. Dynamic comparative advantage theory ?
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A. Is another name for Ricardos comparative advantage theory?

B. None of the above

C. helps explain why some nations use industrial policy to support potentially competitive new firms

D. cannot explain strategic competition between firms such as Boeing and Airbus

8696. The product cycle theory of trade is essentially a ?
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A. static, short run trade theory

B. negative-sum theory of trade

C. dynamic long run trade theory

D. zero-sum theory of trade

8697. 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. neither

C. cant tell without more information

D. abundant

8698. The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?
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A. Research and development expenditures

B. Economies of large-scale production

C. Relative costs of labor

D. Relative abundance of various resources
8699. According to the factor endowment model of Heckscher and Ohlin, countries heavily endowed with land will ?
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A. Import products that are land-intensive

B. Export products that are land-intensive

C. Devote insufficient amounts of resources to agricultural production

D. Devote excessive amounts of resources to agricultural production

8700. The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different ?
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A. Expectations of future interest rate levels

B. Tastes and preferences

C. Per-capita income levels

D. Labor productivities