Economics Mcqs Subcategories

Economics Mcqs

Once a country is wealthy ?

A. it no longer needs any human capital
B. capital becomes more productive due to the “catch-up- effect”
C. none of these answers
D. it may be harder for it to grow quickly because of the diminishing returns to capital

If buyers are rational and there is no market failure ?

A. free market solutions are efficient
B. free market solutions maximize total surplus
C. all of these answers
D. free market solutions are equitable

Which of the following issues is related to microeconomics ?

A. the impact of oil prices on car production
B. The impact of money on inflation
C. The impact of technology on economics growth
D. The impact of the deficit on saving

If a production function exhibits diminishing marginal product. its slope ?

A. is linear (a straight line)
B. becomes steeper as the quantity of the input increase
C. could be any of these answers
D. becomes flatter as the quantity of the input increase

A grocery store should close at night if the ?

A. variable costs of staying open are less than the total revenue due to staying open.
B. total costs of staying open are less than the total revenue due to staying open
C. variable costs of staying open are greater than the total revenue due to staying open
D. total costs of staying open are greater than the total revenue due to staying open

According to the Coase theorem, private parties can solve the problem of externalities if ?

A. there are no transaction costs.
B. each affected party has equal power in the negotiations.
C. the party affected by the externality has the initial property right to be left alone.
D. There are a large number of affected parties.

Which of the following statements is normative ?

A. Large government deficits cause an economy to grow more slowly
B. People work harder if the wage is higher
C. The unemployment rate should be lower
D. Printing too much money causes inflation

The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different ?

A. Tastes and preferences
B. Expectations of future interest rate levels
C. Per-capita income levels
D. Labor productivities

Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is ?

A. 2 francs per dollar
B. 1 franc per dollar
C. $2 per franc
D. $3 per franc

When firms enter a monopolistically competitive market and the business-stealing externality is larger than the product-variety externality then ?

A. there are too many firms in the market and market efficiency could be increased if firms exited the market
B. the number of firms in the market is optimal and the market is efficient
C. There are too few firms in the market and market efficiency could be be increased with additional entry
D. The only way to improve efficiency in this market is for the government to regulate it like a natural monopoly.