1- Which of the following statements about a fixed input is true?
A. Its price is fixed
B. The quantity of it that a firm can use in the short run is fixed
C. The quantity of output that the firm can produce with it is fixed
D. None of these
View Answer
Answer : B. The quantity of it that a firm can use in the short run is fixed
Description
2- The demand for labour curve:
A. Is vertical
B. is horizontal
C. Slopes upward
D. Slopes downward
View Answer
Answer : D. Slopes downward
Description
3- Which of the following statements about economic growth is false?
A. Economic growth solves the economic problem
B. Economic growth can be helped by having new technology
C. Economic growth can be helped with more education
D. Economic growth can be helped by using total power
View Answer
Answer : A. Economic growth solves the economic problem
Description
4- Each of the following statements includes two terms, in the form of "the term mean
the same as each other" to which case do the two terms not mean the same
as each other?
A. Nominal GDP and GDP at current prices
B. Real GDP and GDP at constant prices
C. The base period and the reference period
D. Change in real GDP and the GDP at factor cost
View Answer
Answer : D. Change in real GDP and the GDP at factor cost
Description
5- Lame maximizes her total utility when she allocates all of her available income such
that the marginal utility per dollar spent on each goods:
A. Is the same
B. Is increasing
C. Is maximised
D. Is diminishing
View Answer
Answer : A. Is the same
Description
6- A binary variable is often called a ______.
A. Dummy variable
B. Residual
C. Dependent variable
D. Power of a test
View Answer
Answer : A. Dummy variable
Description
7- Patents are ______ barriers to entry and public franchises are ______ barriers to
entry.
A. natural; natural
B. natural; legal
C. legal; natural
D. legal; legal
View Answer
Answer : D. legal; legal
Description
8- If a competitive firm faces a competitive labour market, it will hire labour until:
A. w = MPL
B. w = p
C. MPL = p
D. w = MPL * p
View Answer
Answer : D. w = MPL * p
Description
9- When the demand for a good decrease, its equilibrium price ______ and equilibrium
quantity ______.
A. falls; decreases
B. falls; increases
C. rises; increases
D. rises; decreases
View Answer
Answer : A. falls; decreases
Description
10- Choose the correct answer: Doctors hope that the spread of the virus will slow down
______ the summer.
A. in
B. at
C. on
D. None of these
View Answer
Answer : A. in
Description
11- Cost-push inflation can start with:
A. A decrease in investment
B. A decrease in the quantity of money
C. An increase in oil prices
D. An increase in Government purchases
View Answer
Answer : C. An increase in oil prices
Description
12- Money market mutual funds invest in:
A. Commercial real estate
B. Highly liquid assets
C. Residential mortgages
D. Long-term Government securities
View Answer
Answer : B. Highly liquid assets
Description
13- The regression R² is a measure of:
A. Whether or not ESS=TSS.
B. The goodness of fit of your regression line.
C. Whether or not X causes Y.
D. The square of the determinant of R.
View Answer
Answer : B. The goodness of fit of your regression line.
Description
14- The sellers pay the entire sales tax levied on a good when demand is perfectly
______ or supply is perfectly ______.
A. elastic; inelastic
B. inelastic; elastic
C. inelastic; inelastic
D. elastic; elastic
View Answer
Answer : A. elastic; inelastic
Description
15- Which of the following is NOT a function of money?
A. Unit of account
B. Medium of exchange
C. Dater
D. Store of value
View Answer
Answer : C. Dater
Description
16- Which of the following methods of intervention in the money market has not been used in PAKISTAN since the 1980s?
A. Monetary base control
B. Interest rate control
C. A change in the regulations about banks’ reserve ratios
D. None of these
View Answer
Answer : B. Interest rate control
Description
17- In a perfectly competitive resource market the Marginal Revenue Product Curve is:
A. Downward sloping
B. Vertical
C. Upward sloping
D. Horizontal
View Answer
Answer : A. Downward sloping
Description
18- The actual budget deficit is equal to the:
A. Structural deficit
B. Structural deficit plus the cyclical deficit
C. Cyclical deficit
D. Structural deficit minus the cyclical deficit
View Answer
Answer : B. Structural deficit plus the cyclical deficit
Description
19- In a four-sector economy, which of the following is assumed always to increase when
GDP increases?
A. I
B. G
C. M
D. X
View Answer
Answer : C. M
Description
20- Suppose the marginal product of labour equals 10/L. If the firm can sell its output for
$10 per unit, and the wage is $1 per unit, how many units of labour will the firm hire?
