introduction to economics MCQs – Page 2

Practise focused introduction to economics questions with marked answers for exam preparation and subject revision.

introduction to economics Mcqs

21. The free market involves ?
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A. All trade via barter

B. Market forces of supply and demand

C. The Subsidizing of products by the government

D. The free provision of products

22. The basic economic problems will not be solved by ?
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A. Government intervention

B. The creation of unlimited resources

C. Market forces

D. A mixture of government intervention and the free market

23. The concept of opportunity cost ?
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A. Would be relevant if we eliminated poverty

B. is relevant only for a capitalist economy like the United States.

C. Suggests a major increase in public health care spending means an expansion in other areas will be harder to achieve.

D. Suggests all our wants can be achieved.

24. A supply curve is directly affected by ?
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A. technology

B. government regulation

C. input costs

D. all of the above

25. An increase in consumer income will increase demand for a _________ but decrease demand for a?
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A. substitute good, inferior good

B. inferior good normal good

C. normal good inferior good

D. normal good, complementary good

26. The Phillips curve shows that ?
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A. none of these

B. inflation and unemployment are unrelated in the short run.

C. a decrease in inflation temporarily increases unemployment.

D. an increase in inflation temporarily increases unemployment.

E. the business cycle has been eliminated

27. Microeconomics is not concerned with the behavior of ?
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A. Consumers

B. firms

C. aggregate demand

D. industries.

28. High and persistent inflation is caused by ?
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A. OPEC raising the price of oil too much

B. regulations raising the cost of production too much

C. governments increasing the quantity of money too much

D. unions increasing wages too much

29. The equilibrium price clears the market it is the price at which _________________?
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A. Buyers spend all their money

B. Everything is sold

C. Excess demanded equals quantity

D. C and D

E. Quantity demanded equal quality supplied

30. Which one of the following is a normative statement ?
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A. Inequality in the distribution of income is a more serious problem than unemployment

B. Inflation is rising

C. The richest 10 per cent of the population has had a bigger percentage increase in incomes over the past 10 years than the poorest 10 percent

D. The proportion of peoples income paid in taxes is higher under this government than under the previous one.

31. The retail price index is used to__________________?
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A. compare shop prices

B. None of the above

C. construct price lists

D. measure changes in the cost of living

32. When we know the quantity of a product that buyers wish to purchase at each possible price we know_____________?
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A. Excess supply

B. Supply

C. Demand

D. Excess demand

33. Data are important in economics because _________ and ____________?
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A. they can be used in computers governments use them

B. they provide interesting information can be summarized

C. they suggest relationships for explanation, allow testing of hypotheses

D. they can be used for tables, they can be graphed

34. In the mixed economy________________?
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A. economics s is solved by government departments

B. economics problems are solved by the government and market

C. economic decisions are made by the private sector and free market

D. economic allocation is achieved by the invisible hand

35. The economics the central problem is ?
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A. Scarcity

B. Consumption

C. Money

D. Allocation

36. Economics is the study of ?
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A. Consumption decisions

B. the best way to run society

C. how society decides what how and for whom to produce

D. Production technology

37. Productivity can be increased by ?
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A. improving the education of workers

B. restricting trade with foreign countries.

C. raising minimum wages.

D. raising union wages.

38. Macroeconomics is the study of ?
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A. the economy as a whole

B. household purchase decisions

C. the relationship between different sectors on the economy

D. individual building blocks in the economy

39. -7-+47-+45-+-+Since people respond to incentives, we would expect that if the average salary of accountants increases by 50% while the average salary of teachers increase by 20% then ?
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A. Fewer students will take degree courses in education and more will take accounting courses.

B. fewer students will attend university

C. None of these

D. fewer students will take degree courses in education and more will take accounting courses

40. In a planned or command economy, all the economics decisions are taken by the ?
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A. voters

B. Consumers

C. government

D. Workers

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