economics MCQs – Page 47

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 Review each marked answer and report any item that may be outdated or unclear.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

921. Which of the following statement is NOT true about state owned enterprises (SOEs) ?
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A. Successful performing SOEs in Japan, Singapore and Sweden have greater managerial autonomy and accountability than other SOEs

B. SOEs in South Korea and Sweden generally achieve inferior economic results to those in Ghana

C. SOEs perform better with competition

D. Financial autonomy is a major factor contributing to SOEs managerial effectiveness

922. The ability-to-pay principle of taxation suggests that if a tax system is to be vertically equitable it should be ?
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A. proportional

B. progressive

C. regressive

D. efficient

923. 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 been eliminated by the nations participating in NAFTA

D. have no impact on patterns of international trade

924. The price elasticity of demand is the ?
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A. ratio of the change in quantity demanded to the change in price.

B. ratio of the change in price to the change in quantity demanded.

C. ratio of the percentage change in price to the percentage change in quantity demanded.

D. ratio of the percentage change in quantity demanded to the percentage change in price.

925. A measurement showing how quantity demanded varies with income is the ?
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A. Cross-price elasticity of demand

B. budget elasticity of demand

C. income elasticity of demand

D. Price elasticity of demand

926. Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?
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A. One vase will be sold, and consumer surplus is Rs5.

B. Three vases will be sold, and consumer surplus is Rs80

C. Two vases will be sold, and consumer surplus is Rs5.

D. One vase will be sold, and consumer surplus is Rs30.

E. Three vases will be sold, and consumer surplus is Rs0.

927. _______ represents the difference between what consumer have to pay for a product and what they are willing and able to pay ?
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A. consumer surplus

B. government surplus

C. producer surplus

D. deadweight surplus

928. Refer to Exhibit 4. If a tax is placed on the product in this market tax revenue paid by the buyers is the area ?
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A. A

B. B + C + E + F

C. B

D. B + C

929. An increase in the budget surplus ?
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A. Shifts the demand for loanable funds to the left and reduces the real interest rate

B. Shifts the supply of loanable funds to the left and increase the real interest rate

C. Shift the supply of loanable funds to the right and reduces the real interest rate.

D. Shifts the demand for loanable funds to the right and increases the real interest rate.

930. If a country an imposes an import tariff, its welfare can improve if ?
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A. The tariff enhances the welfare of its trading partners

B. its terms of trade improve enough

C. the country is a small country rather than a larger country

D. Its governments tax revenue increases because of the tariff

931. The effective rate of protection ?
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A. shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms

B. is the minimum level at Which a tariff becomes effective in limiting imports?

C. distinguishes between tariffs that are effective and those that are ineffective

D. shows how effective a tariff is in raising revenue for the government

932. A tax on petrol is likely to ?
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A. cause a greater deadweight loss in the long run when compared to the short run

B. generate a deadweight loss that is unaffected by the time period over which it is measured

C. cause a greater deadweight loss in the short run when compared to the long run.

D. None of these answers

933. An increase in the budget deficit will ?
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A. lower the real interest rate and increase the quantity of loaable funds demanded for investment

B. raise the real interest rate and decrease the quantity of loanable funds demanded for investment

C. lower the real interest rate and decrease the quantity of loanable funds demanded for investment

D. raise the real interest rate and increase the quantity of loandable funds demanded for investment

934. An increase in the price of a complement for product A would ?
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A. Shift demand for Product A outwards

B. Shift supply for product A outwards

C. Shift demand for product A inwards

D. Shift supply for product A inwards

935. If a benevolent social planner chooses to producer less than the equilibrium quantity of a good, then ?
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A. producer surplus is maximized

B. the value placed on the last unit production by buyers exceeds the cost of production.

C. total surplus is maximized

D. the cost of production on the last unit produced exceeds the value placed on it by buyers.

E. consumer surplus is maximized

936. Increase unemployment benefits and less incentive to work would ?
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A. shift aggregate demand to the left

B. shift aggregate demand to the right

C. shift aggregate supply to the right

D. shift aggregate supply to the left

937. Economics assumes that people consume goods and services to achieve ?
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A. Status

B. Self-esteem

C. Utility

D. Prestige

938. If a nation fitting the criteria for the small nation model imposes a 10 percent tariff on imports of autos ?
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A. The price of autos within the nation will rise by less than 10 percent

B. The price of autos within the nation will rise by 10 percent

C. The price of autos within the nation will rise by more than 10 percent

D. The price of autos will not rise because of internal competition

939. The income effect of a price increase of a normal good is to ________ of that good and the substitution effect is to _________ of that good?
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A. reduce quantity demanded, increase quantity demanded

B. increase quantity demanded, reduce quantity demanded

C. reduce quantity demanded, reduce quantity demanded

D. increase quantity demanded, increases quantity demanded

940. Stagflation occurs when the economy experiences ?
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A. rising prices and rising output

B. falling prices and falling output

C. rising prices and falling output

D. falling prices and rising output

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