Economics MCQs

Page No. 160

Points on the production possibilities frontier are ?


ainefficient

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bnormative

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cunattainable

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defficient

✓


View Answer efficient

Which of the following is not a factor of production ?


alabor

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b land

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cmoney

✓


dcapital

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View Answer money

Which of the following is most likely to produce scientific evidence about a theory ?


a A lawyer employed by Renault addressing the impact of air bags on passenger safety.

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bAn economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses

✓


cAn economist employed by the Trades union congress doing research on the impact of trade policy on workers’ wages

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dA radio talk show host collecting data from listeners on how capital markets respond to taxation

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In which of the following cases is the assumption most reasonable ?


a To address the impact to taxes on income distribution an economist assumes that everyone earns the same income.

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bTo address the impact of money growth on inflation, an economist assumes that money is strictly coins.

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cTo model the benefits of trade. an economist assumes that there are two people and two goods

✓


dTo estimate the speed at which a beach ball falls, a physicist assumes that if falls in a vacuum.

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Economic models are ?


aUsually made of wood and plastic

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bbuilt with assumptions.

✓


cuseless if they are simple.

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dcreated to duplicate reality.

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Which of the following statements regarding the circular-flow diagram is true ?


aIf Susan works for BAe Systems and receives a salary payment, the transaction takes place in the market for good and services.

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bf BAe Systems sells a military aircraft, the transaction takes place in the market for factors for production

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cNone of these

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dThe factors of production are owned by households

✓



The scientific method requires that ?


athe scientist be objective

✓


bThe scientific use precision equipment.

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conly correct theories are tested

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donly theories are tested.

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The theory of the second best suggests that in the absence of perfect competition a privatized industry should charge a price of ?


a p = Z

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b P = MC + Z

✓


c p = MC

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dP = MC – Z

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View Answer P = MC + Z

Antimonopoly legislation is undertaken to ____ competition and market regulation is undertaken to ____ competition ?


arestrict; promote

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brestrict; restrict

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cpromote; promote

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dpromote; restrict

✓


View Answer promote; restrict

In the UK, electricity industry parts are a ____ and other parts are ___ ?


anationalized; privatized

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bnatural monopoly; potentially competitive

✓


ccartel; a sellers’ market

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dmonopolistic competition duopoly

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