Economics.....................…

[norwyn]

Question No: 1 - Please choose one
Scarcity can be avoided by making:

Needs unlimited.

Wants unlimited.

Resources limited.

Wants and needs limited.
Question No: 2 - Please choose one
If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for:

Coke will decrease.

Coke and 7-Up will increase.

7-Up will decrease.

Coke and 7-Up will decrease.
Question No: 3 - Please choose one
An increase in price will result in an increase in total revenue if:

The percentage change in quantity demanded is less than the percentage change in price.

The percentage change in quantity demanded is greater than the percentage change in price.

Demand is elastic.

The consumer is operating along a linear demand curve at a point at which the price is very high and the quantity demanded is very low.
Question No: 4 - Please choose one
Which of the following is NOT a characteristic of a “price taker”?

TR = P x Q

Negatively-sloped demand.

AR = Price

Marginal Revenue = Price
Question No: 5 - Please choose one
The competitive firm maximizes profit when it produces output up to the point where:

Price equals average variable cost.

Marginal revenue equals average revenue.

Marginal cost equals total revenue.

Marginal cost equals marginal revenue.
Question No: 6 - Please choose one
Karachi Electric Supply Corporation (KESC) is an example of which type of market structure?

Perfect competition

Monopoly

Oligopoly

Monopolistic competition
Question No: 7 - Please choose one
The demand curve for the product sold by a firm in a perfectly competitive market
is:

Downward sloping

Upward sloping

Vertical

Horizontal
Question No: 8 - Please choose one
Under monopoly,

Price is equal to marginal revenue.

Price is greater than marginal revenue.

Price is less than marginal revenue.

Price is equal to marginal cost.
Question No: 9 - Please choose one
Street lights and footpaths are examples of:

Normal goods

Inferior goods

Giffen goods

Public goods
Question No: 10 - Please choose one
“Inflation is always and everywhere a monetary phenomenon” is the notion of:

Classical school of thought

Keynesian school of thought

Monetarists school of thought

Rational expectations school of thought
Question No: 11 - Please choose one
-------------------- states that all the people who are identical in terms of their economic conditions should be taxed identically.

Horizontal equity

Progressive taxation

Vertical equity

Regressive taxation
Question No: 12 - Please choose one
Gross National Product = Gross Domestic Product + -----------------------.

Depreciation

Inflation

Net factor incomes from abroad

Factor cost
Question No: 13 - Please choose one
Gross Domestic Product can be measured by which of the following methods?

Value added approach

Expenditure approach

Factor income approach

All of the given options
Question No: 14 - Please choose one
Price of one unit of foreign currency in terms of domestic currency is known as:

Inflation rate

Interest rate

Exchange rate

Discount rate
Question No: 15 - Please choose one
A “quota” can best be described as:

A law which limits the quantity of a good that can be imported.

A government payment to producers of an exportable good.

A tax imposed on an imported good.

A tax imposed on an exported good.
Question No: 16 - Please choose one
If the supply curve is vertical, it means that price elasticity of supply is infinity.

True

False
Question No: 17 - Please choose one
The optimal consumption decision will be made at the point where:
MRS = - PX
PY
Where, MRS = Marginal Rate of Substitution, PX = Price of good X, PY = Price of good Y

True

False
Question No: 18 - Please choose one
“Supply creates its own demand” is the notion of Keynesian economics.

True

False
Question No: 19 - Please choose one
As the income of a person increases, the proportionate amount of tax also increases. This is known as progressive taxation.

True

False
Question No: 20 - Please choose one
In the IS-LM framework, monetary policy would be more effective if LM curve is flatter.

True

False
Question No: 21 ( Marks: 1 )
If cross price elasticity of two goods is +2, it means that the two goods are ---------------------.
Question No: ( Marks: 1 )
Q = AK? L1-? is --------------------------- production function.
Question No: 23
--------------------------economics is the branch of economics which deals with the normative issues of the economy.
Question No: 24
Construction of houses is an example of ------------------------------ investment.
Question No: 25
People who are not working at their full potential are known as ------------------------

[bellden]

ANSWERS

Question No: 1 Scarcity can be avoided by making wants and needs limited.
Question No: 2 - If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for Coke and 7-Up will decrease.
Question No: 3 - An increase in price will result in an increase in total revenue if the percentage change in quantity demanded is greater than the percentage change in price.
Question No: 4 - Please choose one. Which of the following is NOT a characteristic of a “price taker”? Negatively-sloped demand.
Question No: 5 - Please choose one. The competitive firm maximizes profit when it produces output up to the point where marginal cost equals marginal revenue.
Question No: 6 - Please choose one
Karachi Electric Supply Corporation (KESC) is an example of which type of market structure?
Monopoly
Question No: 7 - Please choose one
The demand curve for the product sold by a firm in a perfectly competitive market
is horizontal
Question No: 8 - Please choose one
Under monopoly, price is greater than marginal revenue.
Question No: 9 - Please choose one
Street lights and footpaths are examples of public goods.
Question No: 10 - Please choose one
“Inflation is always and everywhere a monetary phenomenon” is the notion of monetarists school of thought.

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