SPSC Lecturer Economics Past Paper 15-03-2021

21- Suppose the economy is experiencing a recessionary gap. In the long run, the money wage rate ______, unemployment ______ and the price level ______.

A. falling, rises, falls 
B. falls, falls, falls
C. rises, falls, rises 
D. rises, rises, rises

Answer : B. falls, falls, falls

22- The more elastic the demand facing a firm:

A. the lower the value of the Lerner index 
B. the less monopoly power it has
C. the higher its profit 
D. the higher the value of the Lerner index

Answer : B. the less monopoly power it has

23- Marginal utility theory assumes that when Sally must consume less of a good that she likes, her:

A. Marginal utility increases 
B. Total utility increases 
C. Total utility is maximized 
D. Income increases

Answer : A. Marginal utility increases

24- Macroeconomic variables:

A. are those that determine the standard of living 
B. are those that determine the cost of living 
C. Include variables such as the price level and inflation rate
D. None of these

Answer : C. Include variables such as the price level and inflation rate

25- Suppose the discount rate is 10% per year. Which of the following statements is true?

A. The future value of Rs. 1,000 in three years’ time is Rs. 1,300
B. The present value of Rs.1,300 in three years’ time is Rs.1,000
C. The future value of Rs.1,331 in three years’ time is Rs.1,000 
D. The present value of Rs.1,331 in three years’ time is Rs.1,000

Answer : B. The present value of Rs.1,300 in three years’ time is Rs.1,000

26- Complete the idiom “Hell hath no fury like a”?

A. Woman scorned
B. Buried woman 
C. Woman forgotten 
D. Devil’s advocate

Answer : A. Woman scorned

27- Pat’s Pizza Kitchen has a total cost of $6,000 per month when it produces 20 meals. If Pat has total variable cost of $5,000, what is Pat’s total fixed cost?

A. $50
B. $250
C. $1,000
D. $6,000

Answer : C. $1,000

28- If nominal GDP is $5 trillion and the GDP deflator is 125, what is real GDP?

A. $6.25 trillion 
B. $4 trillion 
C. $0.04 trillion 
D. $625 trillion

Answer : B. $4 trillion

29- The ______ shows how real GDP varies as the quantity of labour employed varies, other things remaining the same.

A. Labour demand curve 
B. labour supply curve 
C. short-run aggregate supply curve 
D. production function

Answer : D. production function

30- The Kyoto protocol is a protocol to the United Nations Framework Convention on Climate Change aimed at combating:

A. Global Economic Crises
B. Terrorism
C. Nuclear proliferation 
D. Global warming

Answer : D. Global warming

31- ______ occurs when a foreign firm sells its export at a lower price than it costs to produce the goods.

A. Learning-by-doing
B. A tariff 
C. Comparative advantage 
D. Dumping

Answer : D. Dumping

32- Suppose that nominal GDP per person is $18,800 in 2004. For 1998 GDP deflator is 100, and the 2004 GDP deflator is 110. The approximate real per person GDP in 2004 is:

A. $18,800
B. $19,800
C. $16,364
D. $16,534

Answer : C. $16,364

33- Which of the following characteristics is not a precondition for economic growth:

A. Monetary exchange 
B. Property rights 
C. Markets
D. Active fiscal and monetary policy

Answer : D. Active fiscal and monetary policy

34- Choose the correct answer: In hot countries people wear light clothes ______ cool.

A. For keeping 
B. To keep
C. For to keep 
D. None of these

Answer : B. To keep

35- A profit-maximizing monopolist finds that if it remains open, the best output is 50 a week, but at this output it would make a loss. Under what circumstances should it shut down?

A. If AR at this output is below SAC
B. If AR at this output is below AVC
C. If MR at this output is below SAC 
D. If MR at this output is below AVC

Answer : B. If AR at this output is below AVC

36- The unemployment rate generally ______ during recessions and ______ during expansions.

A. rises; rises 
B. falls; falls 
C. falls; rises 
D. rises; falls

Answer : D. rises; falls

37- Choose the correct answer: Water ______ at a temperature of 0 degree.

A. Be freezing
B. Is freezing
C. Freezes
D. None of these

Answer : C. Freezes

38- When there are two coefficients, the resulting confidence sets are:

A. trapezoids
B. Rectangles
C. Squares
D. Ellipses

Answer : D. Ellipses

39- Alexander Dumas was the author of World Classic ______ .

A. The count of Monte Cristo
B. David Copperfield
C. Germinal
D. A Christmas Carol

Answer : A. The count of Monte Cristo

40- Who won the Nobel Prize for Economics in 2020?

A. Paul R. Milgrom
B. Robert B. Wilson
C. Both A & B
D. None of these

Answer : C. Both A & B

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