Economics MCQs

Page No. 222

A Gini coefficient of one means that ?


aall the income is received by the top 20% of the income distribution

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b income is distributed equally

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cthe income is split equally between the top 20% and the rest of the distribution.

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done family has all the income and every one else has nothing.

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The Gini coefficient is ?


athe ratio of the percentage of total income received by the top 20% of families to the percentage of total income received by by the bottom 20% of families

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b the most common way of representing the income distribution graphically

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ca commonly used measure of the degree of inequality in an income distribution

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da commonly used measure of the degree of inequity in an income distribution

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The term ‘rent’ as it is used by economists. refers to ?


a the return to any factor of production that is in fixed supply

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bthe profit earned by the owner of any housing unit.

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cthe amount paid each year by a tenant for an apartment

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dany profit earned by stockholders when they sell their stock

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If labour market discrimination crowds women into a limited number of occupations so that the number of occupations available to men increases, then ?


awages of men will be higher but the marginal productivity of men will be lower than it otherwise would be

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bthe wages of men will be lower but the marginal productivity of men will be higher than it otherwise would be

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cboth the wages and the marginal productivity of men will be lower than they otherwise would be

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dboth the wages and the marginal productivity of men will be higher than they otherwise would be

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An unemployed salesperson has been offered a job paying Rs500 a week. He turns that job down and continues to search for another job that pays more. The cost of this continued search is ?


athe Rs500 weekly salary that he has forgone to search for another job

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bThe Rs500 weekly salary that he has forgone and the monetary costs incurred by continuing to search

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c Rs difference between the weekly salary he finally accepts and the Rs500 weekly salary that he has forgone

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dRs0, since he is currently unemployed

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The formula for the marginal revenue product of labour (L is for labour, X is the product) is ?


aMPL + PX

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b(MPL) (PX)

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c PX/MPL

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dMPL/PX

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View Answer PX/MPL

In a competitive labour market firms will hire labour up to the point where the marginal revenue product of labour equals ?


atotal labour cost

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bthe marginal product

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cthe price of the product

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d the wage rate

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View Answer the marginal product

Differences in wages that result from differences in working conditions are known as ?


a occupational differentials

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b search differentials

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cjob differentials.

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d compensating differentials

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View Answer job differentials.

If the income effect is smaller than the substitution effect, higher net wages will ?


areduce the supply of labour.

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bincrease the demand for labour

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cincrease the supply of labour

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d have no effect on the supply of labour

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The substitution effect of higher wages suggests that as the wage rate increases ?


aleisure becomes less expensive and households buy more of it

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b leisure becomes more expensive and households buy more of it

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c leisure becomes more expensive and households buy less of it

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dleisure becomes less expensive and households buy less of it.

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