economics MCQs – Page 53

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 Review each marked answer and report any item that may be outdated or unclear.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

1041. A supply curve that starts at the origin has ?
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A. A price elasticity of supply greater than one

B. A positive price elasticity of supply

C. A price elasticity of supply equal to one

D. A price elasticity of supply less than one

1042. If the demand for coffee decreases as income decreases, coffee is ?
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A. a substitute good

B. a complementary good

C. an inferior good

D. a normal good

1043. A fall in price ?
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A. Leads to a higher level of production

B. Will cause an outward shift of supply

C. Will cause an inward shift of demand

D. May be caused by a fall in demand

1044. Suppose that the offshore assembly provisions (OAP) of the United States are granted to finished computers that are imported and produced domestically This policy will tend to ?
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A. cause foreign assemblers of computers to use more computer components that are supplied by countries other than the United States

B. Increase the Production of computers in the United States

C. Increase the production of computer components in the United States

D. Increase the Price of computers to consumers in the United States

1045. Domestic producers gain ________ because on the tariff?
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A. $120,000

B. $150,000

C. $50,000

D. $75,000

1046. A firm that breaks even after all economic costs are paid is earning ?
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A. Normal profit

B. Economic profit

C. Supernormal profit

D. Accounting profit

1047. Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?
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A. Output and the price level are unchanged from their initial values

B. Output falls; prices are unchanged from the initial value

C. Prices fall; output is unchanged from its initial value

D. Output rises; prices are unchanged from the initial value

1048. Which of the following would increase aggregate demand ?
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A. Increasing import spending

B. Increased taxation revenue

C. Increased saving

D. increased investment

1049. Adding up the quantities demanded of a good by different people facing the same price gives us the ?
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A. Supply curve

B. Demand curve

C. Market supply curve

D. Market demand curve

1050. A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work, save and invest. These economists are?
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A. rational-expectations economists.

B. new classical economists.

C. Supply-side economics

D. neo-Keynesian economists

1051. Inferior goods have _________ and luxury goods have _________?
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A. None of the above

B. Positive income elasticities, negative income elasticities

C. income elasticity greater than 1, negative income elasticities

D. negative income elasticity income elasticity greater than 1

1052. Which of the following sets of government policies is the most growth oriented ?
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A. Increase tax on the returns to saving Provide investment tax credits and lower the deficit

B. Lower taxes on the returns to saving, provide investment tax credits and lower the deficit

C. Increase tax on the returns to saving Provide investment tax credits and increase the deficit

D. Lower taxes on the returns to saving Provide investment tax credits and increase the deficit

1053. By reducing the volume of trade transportation costs tend to ?
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A. stop the process of product price equalization and factor price equalization before they are complete:

B. maximize all of the feasible gains from international trade

C. eliminate all of the feasible gains from international trade

D. ensure that the process of product price equalization and factor price equalization are complete

1054. Concerning a governments trade policy, all the following generally apply except ?
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A. When domestic exporting companies are organized, policy tends to favor freer trade

B. Policy tends to favor freer trade in countries whose imports are inputs into critical industries

C. because domestic consumers outnumber domestic producers policy markers usually enact Free-trade policies to satisfy the consumer majority:

D. economic downturn and recession generally result in greater protectionism

1055. If the cross-price elasticity of demand between two goods is negative, then the two goods are ?
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A. normal goods

B. unrelated goods

C. Complements

D. Substitutes.

1056. Refer to Exhibit 4. If there is no tax placed on the produced in this market consumer surplus is the area ?
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A. C + D + F

B. A

C. A + B + E

D. D + C + B

1057. Refer to Exhibit 4. Which of the following is true with regard to the burden of the tax in Exhibit 4 ?
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A. The buyers pay a larger portion of the tax because demand is more inelastic than supply

B. The buyers pay a larger portion of the tax because demand is more elastic then supply

C. The sellers pay a larger portion of the tax because supply is more elastic than demand

D. The sellers pay a larger portion of the tax because supply is more inelastic than demand

1058. Interventionist policies to restore regional imbalance focus on ?
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A. subsidies to encourage firms that moves

B. all of the above

C. tax concessions for firms that move.

D. improved infrastructure

1059. Which of the following is consistent with the law of supply ?
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A. As the price of calculators rise, the supply of calculators increases ceteris paribus.

B. As the price of calculators calls the supply of calculators increases, ceteris paribus.

C. As the price of calculators rise, the quantity supplied of calculators increases, ceteris paribus.

D. As the price of calculators rise, the quantity supplied of calculators decreases, ceteris paribus.

1060. The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?
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A. Economies of large-scale production

B. Research and development expenditures

C. Relative abundance of various resources

D. Relative costs of labor

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