introduction to economics MCQs – Page 3

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

introduction to economics Mcqs

41. A demand curve can shift because changing ?
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A. tastes

B. all of the above

C. prices of related goods

D. incomes

42. Time series data show information ?
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A. about different points in time over the same variable

B. about different points in time over different places

C. about different variables over different places

D. about the same point in time over different places

43. Inflation is___________________?
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A. an increase in the overall price level.

B. an increase in the overall level of economic activity.

C. a decrease in the overall level of economics activity

D. a decrease in the overall price level.

44. Foreign trade ?
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A. makes a country more equitable.

B. allows a country to have a greater variety of products at a lower cost than if it tried to produce everything to home.

C. increase the scarcity of resources.

D. None of these

45. In a free market system, the amount of goods and services that any one household gets depends upon its ?
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A. wage and interest income

B. income

C. wealth

D. income and wealth

46. Macroeconomics deals with?
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A. economics aggregates

B. the behavior of the electronics industry

C. the behavior of firms

D. the activities of individual units

47. Raising taxes and increasing welfare payments ?
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A. improves equity at the expense of efficiency.

B. reduces market power

C. improves efficiency at the expense of equity.

D. Proves that there is such a thing as a free lunch

48. A straight-line diagram can be drawn knowing the ________ and ________?
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A. intercept and slope

B. scale and slope

C. intercept and scale

D. vertical axis and horizontal axis

49. A graph showing all the combinations of goods and services that can be produced if all of societys resources are used efficiently is a ?
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A. Circular-flow diagram.

B. Lorenz curve.

C. Production possibility curve.

D. capital consumption frontier.

50. Which of the following statements is true about a market economy ?
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A. Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare

B. With a large enough computer, central planners could guide production more efficiently than markets.

C. Taxes help prices communicate costs and benefits to producers and consumers.

D. The strength of a market system is that it tends to distribute resources evenly across consumers.

51. The public sector includes ?
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A. Market forces of supply and demand

B. Government ownership of assets

C. All trade via barter

D. Investors owning companies

52. Which of the following products would be least capable of producing an externality ?
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A. cigarettes

B. stereo equipment

C. inoculations against disease

D. food

E. education

53. A market can accurately be described as_________________?
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A. a place to sell things

B. a place where buyers and sellers meet

C. a place to buy things

D. the process by which prices adjust to reconcile the allocation of resources

54. Which of the following activities is most likely to produce an externality?
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A. A student reads a novel for pleasure

B. A student eats a hamburger in the student union.

C. A student sits at home and watches T.V

D. A student has a party in her room in the student hall of residence.

55. A rational person does not act unless ?
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A. The action produces marginal costs that exceed marginal benefits.

B. The action produces marginal benefits that exceed marginal costs.

C. the action is ethical

D. The action makes money for the person.

56. The total demand for goods and services in an economy is known as_____________?
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A. gross national product.

B. economy-wide demand

C. aggregate demand

D. national demand.

57. ________ and ___________ do not directly affect the demand curve ?
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A. the costs of production bank opening hours

B. the price of related goods preferences

C. the price of related goods consumer income

D. consumer incomes, tastes

58. Which of the following involves a trade off ?
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A. Going to university

B. Taking a nap

C. Watching a football game on Saturday afternoon

D. All of these answers involve trade-offs

59. If you income during one year is Rs10,000 and the following year it is Rs12,000 then it has grown by ________________?
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A. 2%

B. 12%

C. 16%

D. 20%

60. when a market is in equilibrium ?
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A. Excess demand and excess supply are zero

B. The market is cleared by the equilibrium price

C. quantity demanded equals quantity supplied

D. All of the above

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