economics MCQs – Page 54

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 Review each marked answer and report any item that may be outdated or unclear.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
1061. Producer surplus is the area ?
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A. below the supply curve and above the price

B. below the demand curve and above the supply curve

C. above the supply curve and below the price

D. above the demand curve and below the price

E. below the demand curve and above the price

1062. An increase in income should ?
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A. shift demand for an inferior product inward

B. Shift demand for an inferior product outward

C. shift supply for an inferior product outward

D. Shift supply for an inferior product inward

1063. Which of the following is true with regard to a tax on labor income? Taxes on labor income tend to encourage ?
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A. all the things described in these answers.

B. workers to work fewer hours

C. the elderly to retire early.

D. second earners to stay home.

E. the unscrupulous to enter the underground economy

1064. Which of the following would decease aggregate demand ?
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A. increased taxation revenue

B. increasing export revenue

C. increased investment

D. increase consumption

1065. Which of the following statements supports deregulation of industries ?
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A. Technological change has made it possible for many industries to become more competitive

B. Because few real natural monopolies exist, there is rarely a reason for government regulation.

C. All of the above

D. Many instances of government regulation have succeeded in reducing competition in industries where competition may be beneficial

1066. According to the law of diminishing utility ?
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A. Total utility will rise at a falling rate as more units are consumed

B. Marginal product will fall as more units are consumed

C. Utility is at a maximum with the first unit

D. Increasing units of consumption increase the marginal utility

1067. For a normal good ?
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A. The price elasticity of demand is positive; the income elasticity of demand is positive

B. The price elasticity of demand is positive the income elasticity of demand is negative

C. The price elasticity of demand is negative the income elasticity of demand is positive

D. The price elasticity of demand is negative the income elasticity of demand is negative

1068. Which of the following taxes can be supported by the benefits principle of taxation ?
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A. All these answers can be supported by the benefits principle of taxation

B. Progressive income taxes used to pay for national defense

C. property taxes used to pay for policies and the court system

D. Petrol taxes used to pay for roads

1069. if demand is price inelastic ?
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A. An increase in price must raise profits

B. An increase in price increase revenue

C. A decrease in price reduces sales

D. An increase in price decrease revenue

1070. In 1979-80 China first created _____ for foreigners to set up enterprises hire labor and import duty-free goods for processing and re-exporting ?
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A. special economic zones

B. Communist free trade areas

C. Economic Union zones

D. liberalized trade monopoly zones

1071. If a market generates a side effect or externlity then free market solutions ?
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A. are efficient

B. maximize producer surplus

C. are equitable

D. are inefficient
1072. When the world Bank or IMF requires improved external balance in the short run the agency may condition its loan on expenditure switching that is ?
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A. increase government spending

B. switching spending from domestic to foreign sources

C. devaluing local currencies

D. increase trade restrictions by imposing quota

1073. If a 4% increase in price leads to a increase in the quantity supplied of 8% ?
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A. Price elasticity of supply is -2

B. Price elasticity of demand is -2

C. Supply is price elastic

D. Supply is income elastic

1074. A way helping depressed regions by having wage subsidies lower business taxes and capital subsidies has been suggested as ?
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A. interventionist policies.

B. monetarists.

C. Left wing theorists

D. New classical economists.

1075. Deadweight loss is greatest when ?
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A. supply is elastic, and demand is perfectly inelastic

B. demand is elastic, and demand is perfectly inelastic

C. both supply and demand are relatively inelastic

D. both supply and demand are relatively elastic
1076. If Pakistani citizens become more thrifty we would expect ?
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A. The demand for loandable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to fall

B. The supply of loanable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to fall.

C. The supply of loandable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to rise

D. The demand for loanable funds in the Pakistan loanable funds market to shift to the right and the real interest rate to rise

1077. Price increases from 10 to 12 pence and the price elasticity of demand is -0.5 The quantity demanded was 500 units. What will it be now ?
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A. 450 units

B. 500 units

C. 550 units

D. 490 units

1078. According to the Brandt report the IMFs insistence on drastic measures in short time periods ?
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A. reduces basis-needs attainment

B. contributes to low-income countries recovery quickly

C. #NAME?

D. may lead to the downfall of governments

1079. According to the _____ argument for protection, tariffs can shield new industries from import competition until they have grown strong and efficient enough to withstand the competition by foreign producers ?
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A. infant industry argument

B. foreign dumping argument

C. beggar they neighbor argument

D. scientific tariff argument

1080. Demand for a normal product may shift outwards if ?
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A. income falls

B. Price decreases

C. The price of a complement rises

D. The price of a substitute falls