Economics objective type....

In economics the central problem is:      scarcity.    consumption.    money.    allocation.    production.

	Indicate below what is NOT a factor of production.      Land.    A bank loan.    Labour.    Capital.

	Macroeconomics deals with:      the behaviour of the electronics industry.    economic aggregates.    the activities of individual units.    the behaviour of firms.

	Microeconomics is not concerned with the behaviour of:      aggregate demand.    consumers.    industries.    firms.

	The study of inflation is part of :      descriptive economics.    macroeconomics.    microeconomics.    normative economics.

	Aggregate supply is the total amount:      of products produced by a given industry.    of labour supplied by all households.    of goods and services produced in an economy.    produced by the government.

	The total demand for goods and services in an economy is known as:      national demand.    aggregate demand.    gross national product.    economy-wide demand.

	Inflation is:      an increase in the overall price level.    a decrease in the overall level of economic activity.    a decrease in the overall price level.    an increase in the overall level of economic activity.

	A recession is:      a period of declining unemployment.    a period of declining prices.    a period during which aggregate output declines.    a period of very rapidly declining prices.

	Unemployment means that:      there is excess demand in the labour market.    there are some people who will not work at the going wage rate.    at the going wage rate, there are people who want to work but cannot find work.    people are not willing to work at the going wage rate.

	If marginal benefit is greater than marginal cost, a rational choice involves:      no more of the activity.    more or less, depending on the benefits of other activities.    more of the activity.    less of the activity.

	A student chooses to study because the marginal benefit is greater than the ________ cost.      expected    total    average    marginal

	The concept of opportunity cost:      suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.    is relevant only for a capitalist economy like the United States.    would be irrelevant if we eliminated poverty.    suggests all our wants can be achieved.

	Opportunity cost is      a cost that cannot be avoided, regardless of what is done in the future.    the cost incurred in the past before we make a decision about what to do in the future.    that which we forgo, or give up, when we make a choice or a decision.    the additional benefit of buying an additional unit of a product.

	A graph showing all the combinations of goods and services that can be produced if all of society's resources are used efficiently is a:      circular-flow diagram.    capital consumption frontier.    production possibility curve.    Lorenz curve.

	Periods of less than full employment correspond to:      points inside the production possibility curve.    either points inside or outside the production possibility curve.    points outside the production possibility curve.    points on the production possibility curve.

	The circular flow of goods and incomes shows the relationship between:      firms and households.    wages and salaries.    goods and services.    income and money.

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

	In a planned or command economy, all the economic decisions are taken by the:      consumers.    government.    voters.    workers.

	Which one of the following is a normative statement?     Inflation is rising.   Inequality in the distribution of income is a more serious problem than unemployment.   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 per cent.   The proportion of people's income paid in taxes is higher under this government than under the previous one.

Trade and development
Multiple Choice Quiz
1
International specialization takes place because of __________
A) differences in technology
B) differences in factor endowments
C) scale economies
D) all of the above
2
International differences in opportunity costs lead to countries acquiring __________
A) comparative advantage
B) high exchange rates
C) trade barriers
D) trade quotas
3
If a country does not have an absolute cost advantage in the production of a any good, there is no incentive to trade
A) TRUE
B) FALSE
4
The main cause of different relative costs between countries are ___________
A) relative factor competition
B) relative factor mobility
C) relative factor substitution
D) relative factor endowments
5
The level of the equilibrium exchange rate offsets international differences in ____________
A) comparative advantage
B) absolute advantage
C) opportunity cost
D) relative costs
6
International trade can never hurt any people
A) TRUE
B) FALSE
7
The imposition of a tariff causes consumption to _________ and imports to ________
A) rise, rise
B) fall, rise
C) fall, fall
D) rise, fall
8
A tariff causes domestic firms to __________ and consumers to __________
A) overproduce, underconsume
B) overproduce, overconsume
C) underproduce, underconsume
D) underproduce, overconsume
9
Tariffs always distort trade and are never justified.
A) TRUE
B) FALSE
10
An optimal tariff is one which reduces imports to the level at which _________ equals _______
A) imports, exports
B) the balance of trade, zero
C) the demand for currency, the supply of currency
D) social marginal cost, social marginal benefit
11
If goods are exported for less than society's marginal production cost and the marginal benefit to domestic consumers, it is likely that theybenefit from ___________
A) an import subsidy
B) a quota
C) comparative advantage
D) an export subsidy
12
Export subsidies do not involve waste
A) TRUE
B) FALSE.
13
Economic transition involves high inflation because ____________ and ___________
A) high monetary growth, high wages
B) high budget deficits, devaluation
C) high monetary growth, devaluation
D) prices surge from an artificiallylow level to their equilibrium level, the inflation tax is required as source of government revenue
14
Output fell sharply in the transition economies because
A) banks were unable to function
B) there was little corporate control
C) vital infrastructure was missing
D) all of the above
15
Most transition economies are seeking membership of the EU
A) TRUE
B) FALSE
16
All of the following represent obstacles to LDC development except
A) resource scarcity
B) low levels of investment
C) low population
D) poor infrastructure
E) poor human capital
17
LDCs often have a comparative advantage in the production of ___________
A) primary products
B) intermediate products
C) manufactured products
D) financial services.