Economics MCQs

Option A: 6429 Kilometer

Option B: 3344 Kilometer

Option C: 6234 Kilometer

Option D: 6345 Kilometer

Correct Answer: 6429 Kilometer ✔

Option A: Chashma Barrage

Option B: Jinnah Barrage

Option C: Sulmaki Headworks

Option D: Trimmu Headworks

Correct Answer: Chashma Barrage ✔

Option A: Wheat

Option B: red gram

Option C: Cotton

Option D: black gram

Correct Answer: Cotton ✔

Option A: October-May

Option B: May-Aug

Option C: October-June

Option D: January-May

Correct Answer: October-May ✔

Option A: June September

Option B: October-May

Option C: May-October

Option D: Jan-October

Correct Answer: June September ✔

Option A: 12 million acres

Option B: 18 million acres

Option C: 16 million acres

Option D: 14 million acres

Correct Answer: 18 million acres ✔

Option A: 65%

Option B: 70%

Option C: 80%

Option D: 85%

Correct Answer: 70% ✔

Option A: Agriculture

Option B: Banking

Option C: Industry

Option D: Manufacturing

Correct Answer: Agriculture ✔

Option A: textile

Option B: foreign remittances

Option C: agriculture

Option D: manufacturing

Correct Answer: agriculture ✔

Option A: 120 million

Option B: 120.5 million

Option C: 130.5 million

Option D: 122.6 million

Correct Answer: 122.6 million ✔

Option A: 35%

Option B: 45%

Option C: 55%

Option D: 25%

Correct Answer: 25% ✔

Option A: 3.5%

Option B: 4.5%

Option C: 5.5%

Option D: 6.5%

Correct Answer: 4.5% ✔

Option A: 45%

Option B: 40%

Option C: 43%

Option D: 41%

Correct Answer: 45% ✔

Option A: 14 % or 3.4 mha

Option B: 24 % or 5.4 mha

Option C: 34 % or 7.4 mha

Option D: 54 % or 11.4 mha

Correct Answer: 14 % or 3.4 mha ✔

Option A: 54 % or 11.04 mha

Option B: 57 % or 12.00 mha

Option C: 58 % or 12.04 mha

Option D: 59 % or 13.04 mha

Correct Answer: 54 % or 11.04 mha ✔

Option A: 25%

Option B: 55%

Option C: 15%

Option D: 35%

Correct Answer: 25% ✔

Option A: 3.5%

Option B: 4.5%

Option C: 5.5%

Option D: 6.5%

Correct Answer: 4.5% ✔

Option A: Industrial

Option B: Service

Option C: Agriculture

Option D: Trade

Correct Answer: Agriculture ✔

Option A: cope with unforeseen changes

Option B: maximize growth.

Option C: minimize conflict within the firm

Option D: both options one and three

Correct Answer: both options one and three ✔

Option A: To increase competition

Option B: To reduce uncertainty

Option C: To achieve faster growth

Option D: To achieve economies of scale

Correct Answer: To increase competition ✔

Option A: Owners

Option B: Customers

Option C: Employees

Option D: None of the above

Correct Answer: None of the above ✔

Option A: horizontal

Option B: vertical

Option C: homogeneous

Option D: conglomerate

Correct Answer: horizontal ✔

Option A: horizontal

Option B: vertical

Option C: conglomerate

Option D: homogeneous

Correct Answer: vertical ✔

Option A: contestable

Option B: perfectly competitive

Option C: oligopolistic

Option D: export-oriented

Correct Answer: oligopolistic ✔

Option A: managers need to be paid enough to stop them leaving the company

Option B: objectives such as profit are not maximized

Option C: short-run profits are maximized

Option D: long-run profits are maximized

Correct Answer: objectives such as profit are not maximized ✔

Option A: Like other firms in their industry.

Option B: growth maximisers.

Option C: leading firms in their industry

Option D: unlike other firms in their industry

Correct Answer: Like other firms in their industry. ✔

Option A: Williamson’s

Option B: classical economic

Option C: Marxist

Option D: monetarist

Correct Answer: A. Williamson’s ✔

Option A: common; different parts of the firm

Option B: common; mangers

Option C: conflicting; managers

Option D: conflicting; different parts of the firm

Correct Answer: conflicting; different parts of the firm ✔

Option A: growth.

Option B: sales revenue

Option C: managers utility

Option D: profits.

Correct Answer: profits. ✔

Option A: horizontal

Option B: vertical

Option C: conglomerate

Option D: homogeneous

Correct Answer: conglomerate ✔

Option A: sales revenue maximization

Option B: maximization the growth of sales revenue.

Option C: Sales maximization

Option D: long-run profit maximization.

Correct Answer: maximization the growth of sales revenue. ✔

Option A: AR minus AC is maximized

Option B: MC = MR

Option C: quantity sold is maximized

Option D: sales revenue is maximized

Correct Answer: sales revenue is maximized ✔

Option A: profit myopia

Option B: principal-agent problem.

Option C: merger mania.

Option D: moral hazard

Correct Answer: principal-agent problem. ✔

Option A: respect of other managers.

Option B: maximum profits.

Option C: job security

Option D: a large number of subordinates

Correct Answer: maximum profits. ✔

Option A: does not know its MC and MR

Option B: has too much information

Option C: has too little information

Option D: The first and third option

Correct Answer: The first and third option ✔

Option A: sole proprietors

Option B: partnerships

Option C: public limited companies

Option D: monopolies

Correct Answer: public limited companies ✔

Option A: they are afraid of encouraging takeovers.

Option B: shareholders have little control over managers.

Option C: shareholders want higher dividends.

Option D: both the first and third option.

Correct Answer: shareholders have little control over managers. ✔

Option A: firms do not know how to maximize profits.

Option B: firms have other aims

Option C: it does not explain monopolistic competition

Option D: Both the first and second option

Correct Answer: Both the first and second option ✔

Option A: None of these answers

Option B: Disagree because they have different scientific judgments

Option C: really don’t disagree at all. It just appears that they disagree

Option D: disagree because they have different values

Correct Answer: Disagree because they have different scientific judgments ✔

Option A: the impact of oil prices on car production

Option B: The impact of money on inflation

Option C: The impact of technology on economics growth

Option D: The impact of the deficit on saving

Correct Answer: the impact of oil prices on car production ✔

Option A: Macroeconomic

Option B: Microeconomics

Option C: statements of description that can be tested

Option D: Statements of prescription that involve value judgments.

Correct Answer: statements of description that can be tested ✔

Option A: Large government deficits cause an economy to grow more slowly

Option B: People work harder if the wage is higher

Option C: The unemployment rate should be lower

Option D: Printing too much money causes inflation

Correct Answer: The unemployment rate should be lower ✔

Option A: an advance in technology

Option B: an increase in the labor force

Option C: an increase in the capital stock

Option D: a reduction in unemployment

Correct Answer: a reduction in unemployment ✔

Option A: The study of very large industries is a topic within macroeconomics

Option B: Macroeconomics is concerned with economy-wide phenomena

Option C: Microeconomics is a building block for macroeconomics

Option D: Microeconomics and macroeconomics cannot be entirely separated

Correct Answer: The study of very large industries is a topic within macroeconomics ✔

Option A: really don’t disagree at all It just appears that they disagree.

Option B: disagree because they have different values.

Option C: none of these answers.

Option D: disagree because they have different scientific judgments.

Correct Answer: disagree because they have different values. ✔

Option A: A reduction in unemployment benefits will reduce the unemployment benefits will reduce the unemployment rate.

Option B: The rate of inflation should be reduced because it robs the elderly of their savings.

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

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

Correct Answer: A reduction in unemployment benefits will reduce the unemployment benefits will reduce the unemployment rate. ✔

Option A: a shift in the production possibilities frontier outward.

Option B: a movement from inside the curve toward the curve.

Option C: a shift in the production possibilities frontier inward

Option D: a movement along a production possibilities frontier toward capital goods.

Correct Answer: a shift in the production possibilities frontier outward. ✔

Option A: inefficient

Option B: normative

Option C: unattainable

Option D: efficient

Correct Answer: efficient ✔

Option A: labor

Option B: land

Option C: money

Option D: capital

Correct Answer: money ✔

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

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

Option C: An economist employed by the Trades union congress doing research on the impact of trade policy on workers’ wages

Option D: A radio talk show host collecting data from listeners on how capital markets respond to taxation

Correct Answer: An economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses ✔

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

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

Option C: To model the benefits of trade. an economist assumes that there are two people and two goods

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

Correct Answer: To model the benefits of trade. an economist assumes that there are two people and two goods ✔

Option A: Usually made of wood and plastic

Option B: built with assumptions.

Option C: useless if they are simple.

Option D: created to duplicate reality.

Correct Answer: built with assumptions. ✔

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

Option B: If BAe Systems sells a military aircraft, the transaction takes place in the market for factors for production

Option C: None of these

Option D: The factors of production are owned by households

Correct Answer: The factors of production are owned by households ✔

Option A: the scientist be objective

Option B: The scientific use precision equipment.

Option C: only correct theories are tested

Option D: only theories are tested.

Correct Answer: the scientist be objective ✔

Option A: p = Z

Option B: P = MC + Z

Option C: p = MC

Option D: P = MC – Z

Correct Answer: P = MC + Z ✔

Option A: restrict; promote

Option B: restrict; restrict

Option C: promote; promote

Option D: promote; restrict

Correct Answer: promote; restrict ✔

Option A: nationalized; privatized

Option B: natural monopoly; potentially competitive

Option C: cartel; a sellers’ market

Option D: monopolistic competition duopoly

Correct Answer: natural monopoly; potentially competitive ✔

Option A: extended warranties offer value for money.

Option B: the cost of repair will usually exceed the cost of the warranty

Option C: they are paid commission on each extended warranty they sell.

Option D: They are concerned about customer satisfaction.

Correct Answer: they are paid commission on each extended warranty they sell. ✔

Option A: firms producing the same product

Option B: firms at various stages in production process.

Option C: firm producing complementary products

Option D: firms producing unrelated products.

Correct Answer: firms producing unrelated products. ✔

Option A: increasing market power is the best way to achieve efficiency.

Option B: competition is the best way to achieve efficiency.

Option C: public ownership is the best way to achieve efficiency

Option D: regulation is the best way to achieve efficiency.

Correct Answer: competition is the best way to achieve efficiency. ✔

Option A: low; low

Option B: high; high

Option C: low; high

Option D: high; low

Correct Answer: low; high ✔

Option A: Spain

Option B: Belgium

Option C: USA

Option D: UK

Correct Answer: USA ✔

Option A: Persuade the regulator to operate in the industry’s interests

Option B: Persuade the regulator to act in the firms interests.

Option C: Bribe the regulator.

Option D: Persuade the government to change the regulatory regime.

Correct Answer: A. Persuade the regulator to operate in the industry’s interests ✔

Option A: deregulation

Option B: making markets contestable

Option C: natural monopoly.

Option D: cross-subsidization.

Correct Answer: making markets contestable ✔

Option A: removes barriers to entry

Option B: imposes higher standards of conduct

Option C: removes barriers to entry and minimum product quality standards

Option D: breaks up private sector monopolies.

Correct Answer: removes barriers to entry ✔

Option A: corporately owned businesses to individuals

Option B: publicly held stock to private individuals.

Option C: government businesses to the private sector

Option D: privately owned businesses to the government sector

Correct Answer: government businesses to the private sector ✔

Option A: Competitive pricing.

Option B: Price discrimination

Option C: price discounting.

Option D: price fixing.

Correct Answer: Price discrimination ✔

Option A: production merger

Option B: vertical merger

Option C: conglomerate merger.

Option D: horizontal merger

Correct Answer: vertical merger ✔

Option A: a conglomerate merger.

Option B: a horizontal merger

Option C: a complementary products merger.

Option D: a vertical merger

Correct Answer: a vertical merger ✔

Option A: firms producing unrelated products

Option B: firms producing complementary products

Option C: firms at various stages in a production process.

Option D: firms producing the same product

Correct Answer: firms producing the same product ✔

Option A: is that if encourages firms to engage in research which leads to new products

Option B: is the revenue generated from the fines paid by those individuals who are found guilty of antitrust violation?

Option C: Is that this policy serves to deter firms from engaging in such practices as collusion, price-fixing and deceptive advertising

Option D: is that it forces firms to produce efficiently.

Correct Answer: Is that this policy serves to deter firms from engaging in such practices as collusion, price-fixing and deceptive advertising ✔

Option A: Car licenses are very expensive vehicle entry to the city center is very restricted road pricing is being introduced and modern cheap rail transport is being expanded.

Option B: London

Option C: Athens

Option D: Singapore

Correct Answer: Singapore ✔

Option A: absolutely inelastic

Option B: Unitarily elastic

Option C: Elastic

Option D: inelastic

Correct Answer: Unitarily elastic ✔

Option A: Environmentally damaging

Option B: an inferior good

Option C: a potential public good

Option D: a superior good

Correct Answer: a superior good ✔

Option A: people are rational maximizers

Option B: People are reluctant to change their minds

Option C: People are inconsistent over time

Option D: People care about fairness

Correct Answer: People care about fairness ✔

Option A: people give too much weight to a small number of vivid observations

Option B: People are sometimes too sure of their own abilities

Option C: All of these answers are actually true statements about how people make decisions.

Option D: People are always rational maximizers

Correct Answer: People are always rational maximizers ✔

Option A: Rs20,000; Rs20,000; Rs22,000

Option B: Rs1,000; Rs14,333; Rs1,000

Option C: Rs20,000; Rs13,100; Rs1,000

Option D: Rs1,000; Rs20,000; Rs22,000

Correct Answer: Rs20,000; Rs13,100; Rs1,000 ✔

Option A: Josephine doesn’t buy health insurance because it is too expensive, and she is healthy

Option B: A life insurance company forces Enzo to have a medical examination prior to selling him insurance

Option C: Enzo drives more recklessly after he buys car insurance

Option D: Fatima chooses to attend a well-respected college

Correct Answer: Enzo drives more recklessly after he buys car insurance ✔

Option A: It must be “as seen on TV”

Option B: It must be free to the signaling party

Option C: It must be costly to the signaling party but less costly to the party with higher-quality product

Option D: It must be applied to an inexpensive product

Correct Answer: It must be costly to the signaling party but less costly to the party with higher-quality product ✔

Option A: screening

Option B: signaling

Option C: moral hazard

Option D: adverse selection

Correct Answer: screening ✔

Option A: all of these answers

Option B: forced contributions to a retirement plan

Option C: year-end bonuses

Option D: efficiency wages

Correct Answer: forced contributions to a retirement plan ✔

Option A: People give too much weight to a small number of vivid observations

Option B: People easily change their minds when confronted with new information

Option C: People enjoy going to the doctor

Option D: People tend to plan ahead and follow through on their plans

Correct Answer: People give too much weight to a small number of vivid observations ✔

Option A: There is no rational solution

Option B: 75/25

Option C: 99/1

Option D: 1/99

Correct Answer: 99/1 ✔

Option A: The average preferred outcome wins

Option B: There is no clear winner due to Arrow’s Impossibility Theorem.

Option C: The outcome preferred by the median voter wins

Option D: The outcome preferred by the greatest number of voters wins.

Correct Answer: The outcome preferred by the median voter wins ✔

Option A: The median voter always wins

Option B: no dictators

Option C: independence of irrelevant

Option D: transitivity

Correct Answer: The median voter always wins ✔

Option A: 75 percent

Option B: 35 percent

Option C: 60 percent

Option D: 40 percent

Correct Answer: 60 percent ✔

Option A: transitivity

Option B: impossibility

Option C: independence

Option D: unanimity

Correct Answer: transitivity ✔

Option A: They pay employees with delayed compensation such as a year-end bonus

Option B: They buy life insurance on their workers

Option C: They pay above equilibrium wages

Option D: They put hidden video cameras in the workplace

Correct Answer: They buy life insurance on their workers ✔

Option A: Enzo carefully chooses a special gift for Josephine

Option B: Josephine earns her MBA from the Harvard Business School

Option C: Lexus advertises its cars during the football World Cup Final.

Option D: All of these answers are correct

Correct Answer: All of these answers are correct ✔

Option A: agent

Option B: principle

Option C: screener

Option D: signaler

Correct Answer: agent ✔

Option A: hidden actions

Option B: adverse selection

Option C: moral hazard

Option D: adverse selection

Correct Answer: hidden actions ✔

Option A: be flat (horizontal)

Option B: slope upward

Option C: slope downward

Option D: be U-shaped.

Correct Answer: be U-shaped. ✔

Option A: average fixed cost is rising

Option B: average total cost is falling

Option C: average total cost is raising

Option D: average total cost is minimized

Correct Answer: average total cost is falling ✔

Option A: All costs are fixed in the short run.

Option B: All costs are variable in the long run

Option C: All costs are variable in the short run

Option D: All costs are fixed in the long run

Correct Answer: All costs are variable in the long run ✔

Option A: is linear (a straight line)

Option B: becomes steeper as the quantity of the input increase

Option C: could be any of these answers

Option D: becomes flatter as the quantity of the input increase

Correct Answer: becomes flatter as the quantity of the input increase ✔

Option A: Rs80,000

Option B: Rs30,000

Option C: Rs75,000

Option D: Rs70,000

Correct Answer: Rs30,000 ✔

Option A: variable costs

Option B: implicit costs

Option C: explicit costs

Option D: marginal costs

Correct Answer: implicit costs ✔

Option A: average fixed cost

Option B: average total cost

Option C: average variable cost

Option D: marginal cost

Correct Answer: average total cost ✔

Option A: an increase in average total costs

Option B: diseconomies of scale

Option C: economies of scale

Option D: constant returns to scale

Correct Answer: economies of scale ✔

Option A: average total cost is falling

Option B: average total cost is raising

Option C: average total cost is maximized

Option D: average total cost is minimized

Correct Answer: average total cost is minimized ✔