Economics MCQs

Page No. 159

The traditional profit-maximizing theory of the firm has been criticized by some economists because ?


afirms do not know how to maximize profits.


bfirms have other aims


cit does not explain monopolistic competition


dBoth the first and second option



Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?


aNone of these answers


bDisagree because they have different scientific judgments


creally don’t disagree at all. It just appears that they disagree


ddisagree because they have different values



Which of the following issues is related to microeconomics ?


athe impact of oil prices on car production


bThe impact of money on inflation


cThe impact of technology on economics growth


d The impact of the deficit on saving



Positive statements are ?


aMacroeconomic


bMicroeconomics


cstatements of description that can be tested


dStatements of prescription that involve value judgments.



Which of the following statements is normative ?


aLarge government deficits cause an economy to grow more slowly


bPeople work harder if the wage is higher


cThe unemployment rate should be lower


d Printing too much money causes inflation



Which of the following will not shift a country’s production possibilities frontier outward ?


aan advance in technology


ban increase in the labor force


can increase in the capital stock


d a reduction in unemployment



Which of the following statements about microeconomics and macroeconomics is not true ?


aThe study of very large industries is a topic within macroeconomics


bMacroeconomics is concerned with economy-wide phenomena


c Microeconomics is a building block for macroeconomics


d Microeconomics and macroeconomics cannot be entirely separated



Suppose two economists are arguing about policies that deal with unemployment One economist says the government should fight unemployment because it is the greatest social evil The other economist response Nonsense Inflation is the greatest social evil These economists ?


a really don’t disagree at all It just appears that they disagree.


bdisagree because they have different values.


c none of these answers.


d disagree because they have different scientific judgments.



In making which of the following statements is an economist acting more like a scientist ?


a A reduction in unemployment benefits will reduce the unemployment benefits will reduce the unemployment rate.


b The rate of inflation should be reduced because it robs the elderly of their savings.


c The unemployment rate should be reduced because unemployment robs individuals of their dignity.


dThe state should increase subsidies to universities because the future of our country depends on education.



Economic growth is depicted by ?


aa shift in the production possibilities frontier outward.


b a movement from inside the curve toward the curve.


c a shift in the production possibilities frontier inward


da movement along a production possibilities frontier toward capital goods. In making which of the following statements is an economist acting more like a sci



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