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
4651. The rate at which a firm can substitute capital for labour and hold output constant is the ?
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A. marginal rate of production

B. law of diminishing marginal returns.

C. marginal rate of factor substitution

D. marginal rate of substitution

4652. In contestable markets large oligopolistic firms end up behaving like ?
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A. monopolistically competitive firms

B. perfectly competitive firms

C. a cartel

D. a monopoly.

4653. The costs that depend on output in the short run are ?
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A. total fixed cost only.

B. total variable costs only.

C. both total variable costs and total costs.

D. total costs only

4654. If the total product of two workers is 80 and the total product of 3 workers is 90 then the average product of the third worker is ________ and the marginal product of the third worker is _________?
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A. 160; 270

B. 10; 30

C. 10; 3.33

D. 30; 10
4655. When ________ substitutes exist, a monopolist has ________ power to raise price?
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A. more; less

B. no; infinite

C. more; more

D. fewer; less

4656. A form of industry structure characterized by a few firms, each large enough to influence market price is ?
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A. monopolistic competition

B. perfect competition

C. oligopoly

D. monopoly

4657. An industry that realizes such large economies of scale in producing its product that single-firm production of that good or service is most efficient is called ?
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A. a natural monopoly

B. a government franchise monopoly

C. a fixed cost monopoly

D. a economies of scale monopoly

4658. A graph showing all the combinations of capital and labor that can used to produce a given amount of output is ?
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A. a production functions

B. an isocost line

C. an indifference curves.

D. an isoquant.
4659. In which of the following circumstances would a cartel be most likely to work ?
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A. The fast-food market where there are a large number of producers but the demand for fast food is inelastic

B. The market for copper, where there are very few producers and the product is standardized.

C. The automobile industry, where there are few producers but there is great product differentiation.

D. The coffee market where the product is standardized and there are a large number of coffee growers.

4660. Suppose Handels Ice Cream experiences economies of scale up to a certain point and diseconomies of scale beyond that point. Its long-run average cost curve is most likely to be ?
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A. downward sloping to the right

B. U-shaped

C. upward sloping to the right

D. Horizontal

4661. The cosmetics industry is not considered by economists to be a good example of perfect competition because ?
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A. there are many EU and government health controls on cosmetic products

B. there are a very large number of firms in the industry

C. firms spend a large amount of money on advertising

D. profit margins are very high for both producers and retailers

4662. Engineers for the All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases?
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A. marginal costs to increase

B. average costs to remain constant

C. average costs to increase

D. average costs to decrease

4663. Form societys point of view, society would be better off if a monopolist ?
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A. produced less and charged a higher price

B. produced more and charged a lower price

C. produced more and charged a higher price

D. produced less and charged a lower price.

4664. The short run, as economists use the phrase, is characterized by ?
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A. a period where the law of diminishing returns does not hold.

B. at least one fixed factor of production and firms neither leaving nor entering the industry

C. all inputs being variable

D. no variable inputs that is all of the factors of production are fixed

4665. A price- and quantity-fixing agreement is known as?
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A. game theory,

B. collusion

C. price leadership

D. price concentration

4666. The long-run equilibrium outcomes in monopolistic competition and perfect competition are similar because in both market structures ?
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A. the efficient output level will be produced in the long run

B. firms realize all economies of scale

C. firms will be producing at minimum average cost

D. firms will only earn a normal profit
4667. Economic profits are ?
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A. the opportunity costs of all inputs

B. the difference between total revenue and total costs.

C. a rate of profit that is just sufficient to keep owners and investors satisfied

D. anything greater than the normal opportunity cost of investing
4668. The short run, as economists use the phrase, in characterized by ?
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A. at least one fixed factor of production and firms neither leaving nor entering the industry.

B. a period where the law of diminishing returns does not hold

C. all inputs being variable

D. no variable inputs that is, all of the factors of production are fixed

4669. Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? the monopolist has?
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A. maximized its total revenue

B. maximized the difference between marginal revenue and marginal cost.

C. set price equal to its average cost

D. equated marginal revenue and marginal cost
4670. Which of the following is most likely to be a variable cost for a firm ?
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A. The interest payments made on loans.

B. The franchisers fee that a restaurant must pay to the national restaurant chain

C. The payroll taxes that are paid on employee wages.

D. The monthly rent on office space that it leased for a year

4671. The formula for average fixed costs is ?
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A. Dq/DTFC

B. TFC/q

C. q/TFC

D. TFC q

4672. Marginal revenue is ?
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A. the additional profit the firms earns when it sells an additional unit of output

B. the difference between total revenue and total cost

C. The ratio of total revenue to quantity.

D. the added revenue that a firm takes in when it increases output by one additional unit.
4673. A market is defined as perfectly contestable if ?
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A. entry to it is costly but exit from it is costless

B. entry to it and exit from it are both costless

C. entry to it and exit from it are both costly

D. entry to ti costless but exist from it is costly

4674. Market power is ?
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A. a firms ability to charge any price it likes

B. a firms ability to raise price without losing all demand for its product

C. a firms ability to monopolies a market completely.

D. a firms ability to sell any amount of output it desires at the market-determined price.

4675. An oligopoly with a dominant price leader will produce a level of output ?
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A. between that which would prevail under competition and that which a monopolistic competitor would choose in the same industry.

B. equal to what a monopolist would choose in the same industry

C. that would prevail under competition

D. between that which would prevail under competition and that which a monopolist would choose in the same industry
4676. Profit-maximizing firms want to maximize the difference between ?
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A. marginal revenue and marginal cost.

B. total revenue and total cost

C. total revenue and marginal cost

D. marginal revenue and average cost

4677. Suppose two economists are arguing about policies that deal with unemployment One economist says the government should fight unemployment because it is the greatest social evil The other economist response Nonsense Inflation is the greatest social evil These economists ?
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A. none of these answers.

B. really dont disagree at all It just appears that they disagree.

C. disagree because they have different scientific judgments.

D. disagree because they have different values.
4678. The scientific method requires that ?
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A. The scientific use precision equipment.

B. only theories are tested.

C. the scientist be objective

D. only correct theories are tested

E. the scientist uses test tubes and have clean lab.

4679. Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?
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A. disagree because they have different values

B. Disagree because they have different scientific judgments

C. None of these answers

D. really dont disagree at all. It just appears that they disagree

4680. In making which of the following statements is an economist acting more like a scientist ?
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A. The rate of inflation should be reduced because it robs the elderly of their savings.

B. A reduction in unemployment benefits will reduce the unemployment benefits will reduce the unemployment rate.

C. The unemployment rate should be reduced because unemployment robs individuals of their dignity.

D. The state should increase subsidies to universities because the future of our country depends on education.

4681. Positive statements are ?
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A. Macroeconomic

B. Microeconomics

C. statements of description that can be tested

D. Statements of prescription that involve value judgments.

4682. Which of the following statements regarding the circular-flow diagram is true ?
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A. If BAe Systems sells a military aircraft, the transaction takes place in the market for factors for production

B. None of these

C. The factors of production are owned by households

D. If Susan works for BAe Systems and receives a salary payment, the transaction takes place in the market for good and services.

4683. Which of the following is not a factor of production ?
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A. capital

B. land

C. labor

D. money
4684. Economic growth is depicted by ?
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A. a movement from inside the curve toward the curve.

B. a movement along a production possibilities frontier toward capital goods.

C. a shift in the production possibilities frontier inward

D. a shift in the production possibilities frontier outward.
4685. Which of the following will not shift a countrys production possibilities frontier outward ?
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A. an advance in technology

B. a reduction in unemployment

C. an increase in the capital stock

D. an increase in the labor force

4686. Which of the following statements is normative ?
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A. People work harder if the wage is higher

B. Printing too much money causes inflation

C. The unemployment rate should be lower

D. Large government deficits cause an economy to grow more slowly

4687. Points on the production possibilities frontier are ?
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A. normative

B. unattainable

C. inefficient

D. efficient
4688. In which of the following cases is the assumption most reasonable ?
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A. To model the benefits of trade. an economist assumes that there are two people and two goods

B. To address the impact of money growth on inflation, an economist assumes that money is strictly coins.

C. To address the impact to taxes on income distribution an economist assumes that everyone earns the same income.

D. To estimate the speed at which a beach ball falls, a physicist assumes that if falls in a vacuum.

4689. Economic models are ?
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A. created to duplicate reality.

B. useless if they are simple.

C. Usually made of wood and plastic

D. built with assumptions.
4690. Which of the following issues is related to microeconomics ?
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A. The impact of the deficit on saving

B. the impact of oil prices on car production

C. The impact of money on inflation

D. The impact of technology on economics growth

4691. Which of the following is most likely to produce scientific evidence about a theory ?
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A. An economist employed by the Trades union congress doing research on the impact of trade policy on workers wages

B. An economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses

C. A radio talk show host collecting data from listeners on how capital markets respond to taxation

D. A lawyer employed by Renault addressing the impact of air bags on passenger safety.

4692. Which of the following statements about microeconomics and macroeconomics is not true ?
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A. Microeconomics is a building block for macroeconomics

B. Macroeconomics is concerned with economy-wide phenomena

C. Microeconomics and macroeconomics cannot be entirely separated

D. The study of very large industries is a topic within macroeconomics
4693. Which of the following would not cause a shift in the long-run aggregate supply curve ?
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A. An increase in the available capital

B. An increase in the available labour

C. All of these answers shift the long-run aggregate supply curve

D. An increase in price expectations
4694. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?
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A. Price rise; output rise

B. Price rise; output fall

C. Price fall; output falls

D. Price fall; output rises

4695. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of 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. Price fall; output is unchanged from its initial value

D. Prices rise; output is unchanged from its initial value
4696. Suppose the economy is initially is long run equilibrium Then suppose there is a drought that destroys much of the wheat crop According to the model of aggregate demand and aggregate supply, what happens of prices and output in the short run ?
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A. Price fall; output falls

B. Price rise; output rises

C. Price rise; output falls

D. Price fall; output rises

4697. Policy makers are said to accommodate an adverse supply shock if they ?
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A. fail to respond to the adverse supply shock and allow the economy to adjust on its own.

B. respond to the adverse supply shock by decreasing aggregate demand which lower prices

C. respond to the adverse supply shock by increasing aggregate demand, which further raises prices

D. respond to the adverse supply shock by decreasing short run aggregate supply

4698. The natural rate of output is the amount of real GDP produced ?
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A. When the economy is at the natural rate of aggregate demand

B. When there is no no unemployment

C. When the economy is at the natural rate of investment

D. When the economy is at the natural rate of unemployment
4699. Stagflation occurs when the economy experiences ?
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A. falling prices and falling output

B. falling prices and rising output

C. rising prices and falling output

D. rising prices and rising output

4700. According to the model of aggregate supply and aggregate demand in the long run an increase in the money supply should cause ?
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A. Prices to rise and output to rise

B. prices to rise and output to remain unchanged

C. Price to fall and output to remain unchanged

D. Prices to fall and output to fall