Economics Fundamentals Test
At a
given price, the demand for a certain commodity is 1000 units, whereas the
quantity supplied is 2000 units. What happens to the price?
a. It
increases.
b. It
decreases.
c. It
remains unchanged.
d. None
of the above.
_____________
is a market structure in which many sellers sell differentiated products.
a. Monopolistic
competition
b. Pure
competition
c. Oligopoly
d. All
of the above
_____________
is a situation in which different sectors of an economy experience simultaneous
and coordinated expansion.
a. Deflation
b. Economic
efficiency
c. Opportunity
cost
d. Balanced
Growth
The
optimum tariff of a country is the highest when the elasticity of the offer
curve of the opposite country is:
a. More
than one
b. One
c. Less
than one
d. Infinite
The
supply of the capital goods in the economy:
a. Is
fixed except if there is a change in the government's tax policies.
b. Is
fixed once and for all because capital goods are irreproducible economic goods.
c. Is
fixed in the very short run only. The reason being if the capital is allowed to
wear out, its supply decreases, while whenever there is a new investment, its
supply increases.
d. Can
vary in the short run depending on factors like their frequency of use in a
week, the intensity with they are used, etc.
An
economy in which two distinct economic systems marked by varying levels of
technological advancement and development co-exist is known as a:
a. Sectoral
economy
b. Dual
economy
c. Pluralistic
economy
d. Regional
economy
_____________
is a deliberate downward adjustment in the official exchange rates of a country
relative to a foreign reference currency.
a. Devaluation
b. Depreciation
c. Revaluation
d. Redenomination
When
in an economy, all decisions relating to what goods and services to produce,
how to produce, and what quantities to produce are made by a central authority,
it is known as:
a. Centralized
planning
b. Decentralized
planning
c. Fiscal
planning
d. Financial
planning
The
vertical distance between the average total cost curve and the average variable
cost curves tends to _____________ as the production increases beyond a point.
a. Diminish
b. Increase
c. Remain
constant
There
are _____________ approaches to analyze devaluation.
a. Four
b. Six
c. Two
d. Three
What
would be the National Product at market prices for a certain year, if the
National Product at factor cost is 4 billion USD, Indirect taxes are $1 billion
USD and subsidies are $0.25 billion USD?
a. $5.50
billion USD
b. $5.25
billion USD
c. $4.75
billion USD
d. $2.50
billion USD
Fixed
and variable costs are distinguished from each other in terms of:
a. Whether
it is possible to change the costs during the life of the plant.
b. Whether
the costs are contracted legally or not.
c. Whether
the costs are taken into account or not when calculating the total costs.
d. Whether
the costs vary or remain unchanged with the quantity or output produced in the
short run.
If
the supply of labour and capital of a country grow in the same proportion as
before but the technology remains the same, the production possibility curve of
the country would shift outwards:
a. Evenly
along its entire length.
b. More
along the axis measuring the Labour-intensive commodity.
c. More
along the axis measuring the Capital-intensive commodity.
d. Any
of the above.
From
where does the demand for funds arise according to the loanable fund theory?
a. Business
b. Consumer
c. Government
d. All
of the above
Indices
of the physical volume of production are NOT widely used to measure development
because:
a. It
is not possible to measure physical volumes.
b. They
do not allow for quality improvements.
c. It
is not possible to compare physical volumes.
d. None
of the above.
Isoquant
maps _____________:
a. Do
not depend on input prices.
b. Depend
on the inputs prices.
c. Do
not depend on the quantity of the inputs.
d. None
of the above.
Which
of the four equations given below is INCORRECT?
a. National
income = Consumption + Investment
b. National
income = Effective demand consumption + Savings
c. National
income = Consumption + Savings
d. National
income = Gross National Product
Economics
can be defined as:
a. A
branch of knowledge concerned with the production, distribution, and
consumption of goods and services.
b. The
study of the processes, principles, and structure of government, and of
political institutions.
c. The
study of the mind and behavior.
d. The
analysis and interpretation of the past that enables us to study continuity and
change over time.
_____________
refers to the change in the output of a firm or industry in the long run, when
all inputs are increased or decreased simultaneously in the same ratio.
a. Returns
to scale
b. Constant
returns to scale
c. Decreasing
returns to scale
d. None
of the above
Which
of the following represents the marginal propensity to import?
a. ΔM /
ΔX
b. ΔX /
ΔY
c. ΔM/
ΔY
d. ΔM
/Y
Why
are intermediate goods used to make final goods NOT included in the Net
National Product?
a. To
avoid double counting.
b. To
avoid the inclusion of inferior goods.
c. To
avoid cheating of the consumer.
d. None
of the above.
Per
Capita Real Income is calculated by dividing:
a. Real
National Income by the Working Population
b. Real
National Income by the Total Population
c. Real
National Income by the Number of Workers
d. None
of these.
The
main area of application implementation of the Cobb-Douglas production function
is:
a. Agriculture
b. Industries
c. Experiments
in agricultural institutions
d. None
of the above
In
response to an increase in the demand for its goods, a firm takes a bank
overdraft, buys raw materials with the money so raised, and increases
production. The firm can be said to have resorted to:
a. A
financial adjustment.
b. A
long-term adjustment.
c. A
short-term adjustment.
d. None
of the above.
Which
of the following would you include when calculating the GNP?
a. Roof
repair work done by the owner of a house himself.
b. Household
work done by a housewife.
c. Vegetables
grown by a farmer for his personal consumption.
d. A
surgery carried out at a hospital.