economics MCQs – Page 440

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 Review each marked answer and report any item that may be outdated or unclear.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

8781. The marginal revenue curve in monopoly ?
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A. Lies below and converges with the demand curve

B. Lies below and diverges from the demand curve

C. Equals the demand curve

D. Is parallel with the demand curve

8782. Nicole wants to avoid buying a car that is a lemon. She takes a car she would like to buy to her mechanic before she purchases it. This is known as ?
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A. adverse selection

B. signaling

C. moral hazard

D. screening

8783. Markus is a travelling salesman for an apparel company. In this employment relationship, Markus is the ?
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A. screener

B. principle

C. signaler

D. agent

8784. Refer to Figure 1 What percent of the population vote for A when the choice is between A and B ?
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A. 35 percent

B. 25 percent

C. 40 percent

D. 60 percent

E. 75 percent

8785. Which of the following is a response to Peoples inconsistent behavior over time ?
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A. efficiency wages

B. year-end bonuses

C. all of these answers

D. forced contributions to a retirement plan

8786. Jamils car is in need of repair, so John decides to sell it avoid the repair bill. Unaware of the problem, Shahab buys the car. This is an example of ?
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A. hidden actions

B. adverse selection

C. moral hazard

D. adverse selection

8787. Suppose that 40 percent of the voting population wish to spent Rs1,000 for artwork in City Hall, 25 percent wish to spent Rs20,000 and 35 percent wish to spend Rs 22,000 What is the median preferred outcome, the average preferred outcome and the modal preferred outcome ?
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A. Rs1,000; Rs14,333; Rs1,000

B. Rs1,000; Rs20,000; Rs22,000

C. Rs20,000; Rs20,000; Rs22,000

D. Rs20,000; Rs13,100; Rs1,000

8788. Which of the following must be true about a signal that is used to reveal private information in order for the signal to be effective ?
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A. It must be as seen on TV

B. It must be free to the signaling party

C. It must be costly to the signaling party but less costly to the party with higher-quality product

D. It must be applied to an inexpensive product

8789. Which of the following is not true about how people make decisions ?
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A. People are sometimes too sure of their own abilities

B. People are always rational maximizers

C. All of these answers are actually true statements about how people make decisions.

D. People are reluctant to change their minds in the face of new information

E. people give too much weight to a small number of vivid observations

8790. Which of the following is an example of a signal that is used to reveal private information ?
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A. Josephine earns her MBA from the Harvard Business School

B. Lexus advertises its cars during the football World Cup Final.

C. All of these answers are correct

D. Enzo carefully chooses a special gift for Josephine

8791. Which of the following best demonstrates the problem of moral hazard ?
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A. Josephine doesnt buy health insurance because it is too expensive, and she is healthy

B. A life insurance company forces Enzo to have a medical examination prior to selling him insurance

C. Enzo drives more recklessly after he buys car insurance

D. Fatima chooses to attend a well-respected college

8792. In the ultimatum game, what split would be rational for both the person proposing the split and the person who must accept or reject the split ?
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A. Jan-99

B. 99/1

C. There is no rational solution

D. 50/50

E. 75/25

8793. Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?
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A. They put hidden video cameras in the workplace

B. They pay employees with delayed compensation such as a year-end bonus

C. They pay above equilibrium wages

D. They buy life insurance on their workers

8794. hich of the following is not a property required of a perfect voting system ?
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A. transitivity

B. no dictators

C. independence of irrelevant

D. The median voter always wins

8795. Which of the following is true under pairwise majority rule if people vote for the outcome closest to their most preferred outcome ?
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A. The outcome preferred by the median voter wins

B. The average preferred outcome wins

C. The outcome preferred by the greatest number of voters wins.

D. There is no clear winner due to Arrows Impossibility Theorem.

8796. Which of the following help explain why firms pay bonuses to workers during particularly profitable years to prevent workers from becoming disgruntled ?
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A. people are rational maximizers

B. People are inconsistent over time

C. People care about fairness

D. People are reluctant to change their minds

8797. A life insurance company forces Enzo to have a medical examination prior to selling him insurance ?
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A. impossibility

B. transitivity

C. independence

D. unanimity

8798. Jamils friend dies of a sudden heart attack. Jamil rushes to his doctor for an expensive physical examination. This response demonstrates that ?
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A. People easily change their minds when confronted with new information

B. People give too much weight to a small number of vivid observations

C. People enjoy going to the doctor

D. People tend to plan ahead and follow through on their plans

8799. In a competitive labour market firms will hire labour up to the point where the marginal revenue product of labour equals ?
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A. the price of the product

B. the marginal product

C. total labour cost

D. the wage rate

8800. Housing Benefit is a good example of ?
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A. a benefit in kind

B. a means tested cash benefit

C. none of the above

D. a universal (social insurance based) benefit

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