Introduction To Economics MCQs

Option A: technology

Option B: input costs

Option C: government regulation

Option D: all of the above

Correct Answer: all of the above ✔

Option A: quantity demanded equals quantity supplied

Option B: Excess demand and excess supply are zero

Option C: The market is cleared by the equilibrium price

Option D: All of the above

Correct Answer: All of the above ✔

Option A: a nonlinear relationship

Option B: a positive linear relationship

Option C: a scatter diagrams

Option D: a negative linear relationship

Correct Answer: a negative linear relationship ✔

Option A: vertical axis and horizontal axis

Option B: intercept and slope

Option C: scale and slope

Option D: intercept and scale

Correct Answer: scale and slope ✔

Option A: adjusting for changes over time

Option B: adjusting for data collection errors

Option C: adjusting for population changes

Option D: adjusting or changes in prices

Correct Answer: adjusting or changes in prices ✔

Option A: about the same point in time over different places

Option B: about different points in time over the same variable

Option C: about different variables over different places

Option D: about different points in time over different places

Correct Answer: about different points in time over the same variable ✔

Option A: individual building blocks in the economy

Option B: the relationship between different sectors on the economy

Option C: household purchase decisions

Option D: the economy as a whole

Correct Answer: the economy as a whole ✔

Option A: economics problems are solved by the government and market

Option B: economic decisions are made by the private sector and free market

Option C: economic allocation is achieved by the invisible hand

Option D: economics s is solved by government departments

Correct Answer: economics problems are solved by the government and market ✔

Option A: a place to buy things

Option B: a place to sell things

Option C: the process by which prices adjust to reconcile the allocation of resources

Option D: a place where buyers and sellers meet

Correct Answer: the process by which prices adjust to reconcile the allocation of resources ✔

Option A: Production technology

Option B: Consumption decisions

Option C: how society decides what how and for whom to produce

Option D: the best way to run society

Correct Answer: how society decides what how and for whom to produce ✔

Option A: The money you spent on a theater show

Option B: The money you could have made if you had stayed at home and worked

Option C: The money you spend on airline tickets

Option D: the money you spent on food

Correct Answer: the money you spent on food ✔

Option A: provides no information because prices in a market system are managed by planning boards.

Option B: tells consumers to buy less pork

Option C: tells producers to produce more beef.

Option D: tells consumers to buy more beef.

Correct Answer: tells producers to produce more beef. ✔

Option A: unions increasing wages too much

Option B: OPEC raising the price of oil too much

Option C: governments increasing the quantity of money too much

Option D: regulations raising the cost of production too much

Correct Answer: unions increasing wages too much ✔

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

Option B: Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare

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

Option D: Taxes help prices communicate costs and benefits to producers and consumers.

Correct Answer: Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare ✔

Option A: inoculations against disease

Option B: cigarettes

Option C: food

Option D: education

Correct Answer: food ✔

Option A: Fewer students will take degree courses in education and more will take accounting courses.

Option B: fewer students will take degree courses in education and more will take accounting courses

Option C: fewer students will attend university

Option D: None of these

Correct Answer: fewer students will take degree courses in education and more will take accounting courses ✔

Option A: nothing because you found the money.

Option B: Rs20 (because you found the money Rs 20 to buy other things) plus the value of your time spent at the game.

Option C: Rs 20 (because you could have used the Rs 20 to buy other things) plus the value of your time spent at the game plus the cost of the dinner you purchased at the game.

Option D: Rs20 (because you could have used the Rs20 to buy other ghings)

Correct Answer: Rs20 (because you found the money Rs 20 to buy other things) plus the value of your time spent at the game. ✔

Option A: the action is ethical

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

Option C: The action produces marginal benefits that exceed marginal costs.

Option D: The action makes money for the person.

Correct Answer: The action produces marginal benefits that exceed marginal costs. ✔

Option A: economical

Option B: unlimited

Option C: Efficient

Option D: Scarce

Correct Answer: Scarce ✔

Option A: 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

Option B: Inflation is rising

Option C: The proportion of people’s income paid in taxes is higher under this government than under the previous one.

Option D: Inequality in the distribution of income is a more serious problem than unemployment

Correct Answer: Inequality in the distribution of income is a more serious problem than unemployment ✔

Option A: income

Option B: income and wealth

Option C: wealth

Option D: wage and interest income

Correct Answer: income ✔

Option A: points outside the production possibility curve

Option B: either points inside or outside the production possibility curve.

Option C: points on the production possibility curve

Option D: points inside the production possibility curve.

Correct Answer: points inside the production possibility curve. ✔

Option A: the cost incurred in the past before we make a decision about what to do in the future.

Option B: a cost that cannot be avoided. regardless of what is done in the future

Option C: that which we forgo, or give up, when we make a choice or a decision.

Option D: the additional benefit of buying an additional unit of a product

Correct Answer: that which we forgo, or give up, when we make a choice or a decision. ✔

Option A: average

Option B: expected

Option C: total

Option D: marginal

Correct Answer: marginal ✔

Option A: there is excess demand in the labour market

Option B: there are some people who will not work at the going wage rate.

Option C: people are not willing to work at the going wage rate.

Option D: at the going wage rate, there are people who want to work but cannot find work.

Correct Answer: at the going wage rate, there are people who want to work but cannot find work. ✔

Option A: a decrease in the overall price level.

Option B: an increase in the overall price level.

Option C: an increase in the overall level of economic activity.

Option D: a decrease in the overall level of economics activity

Correct Answer: an increase in the overall price level. ✔

Option A: of labor supplied by all households.

Option B: Produced by the government.

Option C: of goods and services produced in an economy.

Option D: of products produced by a given industry.

Correct Answer: of goods and services produced in an economy. ✔

Option A: aggregate demand

Option B: firms

Option C: Consumers

Option D: industries.

Correct Answer: aggregate demand ✔

Option A: Scarcity

Option B: Money

Option C: Consumption

Option D: Allocation

Correct Answer: Scarcity ✔

Option A: Investors owning companies

Option B: Government ownership of assets

Option C: Market forces of supply and demand

Option D: All trade via barter

Correct Answer: All trade via barter ✔

Option A: Has supply but not demand

Option B: Has demand but not supply

Option C: Has supply and demand

Option D: Has market forces and government intervention

Correct Answer: Has market forces and government intervention ✔

Option A: Market forces

Option B: Government intervention

Option C: A mixture of government intervention and the free market

Option D: The creation of unlimited resources

Correct Answer: The creation of unlimited resources ✔

Option A: substitute good, inferior good

Option B: normal good inferior good

Option C: inferior good normal good

Option D: normal good, complementary good

Correct Answer: normal good inferior good ✔

Option A: substitute good

Option B: complementary good

Option C: bargain

Option D: inferior good

Correct Answer: substitute good ✔

Option A: incomes

Option B: prices of related goods

Option C: tastes

Option D: all of the above

Correct Answer: all of the above ✔

Option A: the price of related goods consumer income

Option B: consumer incomes, tastes

Option C: the costs of production bank opening hours

Option D: the price of related goods preferences

Correct Answer: the costs of production bank opening hours ✔

Option A: Everything is sold

Option B: Buyers spend all their money

Option C: Quantity demanded equal quality supplied

Option D: Excess demanded equals quantity

Correct Answer: C and D ✔

Option A: Demand

Option B: Supply

Option C: Excess demand

Option D: Excess supply

Correct Answer: Demand ✔

Option A: moves down to the right

Option B: moves up to the left

Option C: moves up to the right

Option D: moves down to the left

Correct Answer: moves up to the right ✔

Option A: 20%

Option B: 2%

Option C: 12%

Option D: 16%

Correct Answer: 20% ✔

Option A: construct price lists

Option B: compare shop prices

Option C: measure changes in the cost of living

Option D: None of the above

Correct Answer: measure changes in the cost of living ✔

Option A: they suggest relationships for explanation, allow testing of hypotheses

Option B: they can be used for tables, they can be graphed

Option C: they can be used in computers governments use them

Option D: they provide interesting information can be summarized

Correct Answer: they suggest relationships for explanation, allow testing of hypotheses ✔

Option A: no more of the activity.

Option B: less of the activity

Option C: more of the activity

Option D: more or less, depending on the benefits of other activities

Correct Answer: more of the activity ✔

Option A: positive statements, facts

Option B: opinions personal facts

Option C: positive statements values

Option D: opinions facts

Correct Answer: positive statements, facts ✔

Option A: government intervenes

Option B: government plan production

Option C: government interferes

Option D: Prices adjust to reconcile scarcity and desires

Correct Answer: Prices adjust to reconcile scarcity and desires ✔

Option A: the time lost in finding it

Option B: the quantity of other goods sacrificed to get another unit of that good

Option C: the expenditure on the good

Option D: the loss of interest in using savings

Correct Answer: the quantity of other goods sacrificed to get another unit of that good ✔

Option A: improving the education of workers

Option B: raising union wages.

Option C: raising minimum wages.

Option D: restricting trade with foreign countries.

Correct Answer: improving the education of workers ✔

Option A: Rs 300

Option B: Rs 1000

Option C: Rs 500

Option D: Rs 800

Correct Answer: Rs 800 ✔

Option A: the business cycle has been eliminated

Option B: an increase in inflation temporarily increases unemployment.

Option C: inflation and unemployment are unrelated in the short run.

Option D: a decrease in inflation temporarily increases unemployment.

Correct Answer: a decrease in inflation temporarily increases unemployment. ✔

Option A: the countries of Western Europe have set high minimum wage rates.

Option B: Unions in Western Europe keep the wage high

Option C: none of these answers.

Option D: The countries of Western Europe have protected their industries from foreign corporation

Correct Answer: none of these answers. ✔

Option A: Subaru’s impact on the price f cars

Option B: a farmer’s impact on the price of corn

Option C: Microsoft’s impact on the price of desktop operating systems

Option D: a student’s impact on college tuition

Correct Answer: C. Microsoft’s impact on the price of desktop operating systems ✔

Option A: A student eats a hamburger in the student union.

Option B: A student reads a novel for pleasure

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

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

Correct Answer: A student has a party in her room in the student hall of residence. ✔

Option A: increase the scarcity of resources.

Option B: makes a country more equitable.

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

Option D: None of these

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

Option A: reduces market power

Option B: Proves that there is such a thing as a free lunch

Option C: improves efficiency at the expense of equity.

Option D: improves equity at the expense of efficiency.

Correct Answer: improves equity at the expense of efficiency. ✔

Option A: how society manages its unlimited resource

Option B: how to reduce our wants until we are satisfied.

Option C: how to fully satisfy our unlimited wants

Option D: how to avoid having to make trade-offs

Correct Answer: how to reduce our wants until we are satisfied. ✔

Option A: Taking a nap

Option B: All of these answers involve trade-offs

Option C: Watching a football game on Saturday afternoon

Option D: Going to university

Correct Answer: All of these answers involve trade-offs ✔

Option A: Consumers

Option B: voters

Option C: government

Option D: Workers

Correct Answer: government ✔

A. Wages and salaries.
B. income and money
C. goods and services.
firms and households

Correct Answer: income and money ✔

Option A: capital consumption frontier.

Option B: Lorenz curve.

Option C: Circular-flow diagram.

Option D: Production possibility curve.

Correct Answer: Production possibility curve. ✔

Option A: is relevant only for a capitalist economy like the United States.

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

Option C: Suggests all our wants can be achieved.

Option D: Would be relevant if we eliminated poverty

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

Option A: a period of declining prices.

Option B: a period of declining unemployment

Option C: a period during which aggregate output declines.

Option D: a period of very rapidly declining prices.

Correct Answer: a period during which aggregate output declines. ✔

Option A: gross national product.

Option B: national demand.

Option C: economy-wide demand

Option D: aggregate demand

Correct Answer: aggregate demand ✔

Option A: descriptive economics

Option B: normative economics

Option C: macroeconomics.

Option D: microeconomics

Correct Answer: macroeconomics. ✔

Option A: the behavior of the electronics industry

Option B: the behavior of firms

Option C: economics aggregates

Option D: the activities of individual units

Correct Answer: economics aggregates ✔

Option A: More spending by the government reduces poverty

Option B: Higher taxes lead to less desire to work

Option C: The Pakistan’s economy is growing fast relative to other SAARC members

Option D: The government should concentrate on reducing unemployment

Correct Answer: The government should concentrate on reducing unemployment ✔

Option A: The price mechanism acts as an incentive

Option B: Resources are allocated by market forces

Option C: Individual firms make decisions for themselves about what to produce and how to produce it

Option D: The public sector is large

Correct Answer: Resources are allocated by market forces ✔

Option A: The free provision of products

Option B: The Subsidizing of products by the government

Option C: Market forces of supply and demand

Option D: All trade via barter

Correct Answer: Market forces of supply and demand ✔

Option A: What to produce

Option B: Who to produce for

Option C: How to produce

Option D: How to maximize economic growth

Correct Answer: How to maximize economic growth ✔

Option A: Always fixed

Option B: Limited

Option C: Unlimited

Option D: Likely to decrease over time

Correct Answer: Unlimited ✔

Option A: Alternative

Option B: Opportunity cost

Option C: Consumer cost

Option D: Producer cost

Correct Answer: Opportunity cost ✔

Option A: Alternative

Option B: Opportunity cost

Option C: Consumer cost

Option D: Producer cost

Correct Answer: Opportunity cost ✔

Option A: Are always found

Option B: Can never decease

Option C: Always increase over time

Option D: Are limited at any moment in time

Correct Answer: Are limited at any moment in time ✔