Economics MCQs

Page No. 441

The opportunity cost of a good is______________?


athe time lost in finding it


bthe quantity of other goods sacrificed to get another unit of that good


cthe expenditure on the good


d the loss of interest in using savings



Productivity can be increased by ?


aimproving the education of workers


b raising union wages.


c raising minimum wages.


drestricting trade with foreign countries.



You are planning to run a hot dog stand during a forthcoming fair. You originally estimated that you will generated sales revenue of Rs 2000 and you have already spent Rs 1000 building the hot dog stand. The hot dog stand is nearly completed but now you estimate total sales to be only Rs 800 because the fair clashes with a major music festival in a nearby location. You can complete the hot dog stand for another Rs 300 Your decision rule should be to complete the hot dog stand as long as the cost to complete the stand is less than ?


aRs 300


bRs 1000


c Rs 500


dRs 800


View Answer Rs 800

The Phillips curve shows that ?


athe business cycle has been eliminated


ban increase in inflation temporarily increases unemployment


c inflation and unemployment are unrelated in the short run.


da decrease in inflation temporarily increases unemployment.



Workers in Western Europe enjoy a high standard of living because ?


a the countries of Western Europe have set high minimum wage rates.


bUnions in Western Europe keep the wage high


c none of these answers.


dThe countries of Western Europe have protected their industries from foreign corporation



Which of the following situations describes the greatest market power ?


aSubaru’s impact on the price f cars


ba farmer’s impact on the price of corn


cMicrosoft’s impact on the price of desktop operating systems


d a student’s impact on college tuition



Which of the following activities is most likely to produce an externality?


aA student eats a hamburger in the student union.


bA student reads a novel for pleasure


cA student sits at home and watches T.V


dA student has a party in her room in the student hall of residence.



Foreign trade ?


a. increase the scarcity of resources


bmakes a country more equitable


callows a country to have a greater variety of products at a lower cost than if it tried to produce everything to home.


d None of these



Raising taxes and increasing welfare payments ?


a reduces market power


bProves that there is such a thing as a free lunch


c improves efficiency at the expense of equity.


dimproves equity at the expense of efficiency.



Which of the following involves a trade – off ?


a Taking a nap


bAll of these answers involve trade-offs


c Watching a football game on Saturday afternoon


d Going to university



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