SPSC Lecturer Economics Past Paper 29-04-2024

21- If demand function for good X is given by X^d = 1500 - 1.3P_x - 1.8P_y +2I then we know that:

A. Own price elasticity is -1.3 
B. Goods X and Y are substitute to each other 
C. Goods X and Y are complements to each other
D. Income Elasticity of X is -2 (E) Both A and D

Answer : C. Goods X and Y are complements to each other

22- All profit-maximizing firm will hire more labour up to the point where the:

A. Average physical product of labour equals the nominal wage
B. Last unit of labour adds equally to total revenue and total cost
C. Marginal product of Labour is at its maximum value 
D. Value of output most greatly exceeds labour’s marginal factor cost

Answer : B. Last unit of labour adds equally to total revenue and total cost

23- A purely competitive firm will produce where P = MC because this:

A. Is good for society 
B. Is all that is permitted by law 
C. Maximizes profits
D. Allows price adjustment but not quantity adjustment

Answer : C. Maximizes profits

24- What does the term “lender of last resort” refer to in the context of central banking?

A. A central bank providing loans to commercial banks during times of financial crisis
B. A Commercial bank providing loans to the central bank
C. A central bank offering loans to foreign governments
D. A government agency providing loans to individuals and businesses

Answer : A. A central bank providing loans to commercial banks during times of financial crisis

25- The difference between the Gross value added and Net value added is:

A. Investment
B. Value added 
C. Production flow 
D. Depreciation

Answer : D. Depreciation

26- The term “crowding out” refers to:

A. The decrease in private investment that occurs when government borrowing increases
B. The increase in private investment that occurs when government borrowing decreases
C. The increase in government spending that occurs when private investment increases 
D. The increase in government spending that occurs when private investment decreases

Answer : A. The decrease in private investment that occurs when government borrowing increases

27- The period of the business cycle in which real GDP is increasing is called the:

A. Expansion
B. Peak
C. Recession
D. Trough

Answer : A. Expansion

28- If the household consumes along the budget constraint where MU_x/P_x > MU_y/P_y then assuming normal preferences, we are sure that:

A. MU_x > MU_y  
B. Price of X is greater than price of Y 
C. The household could increase his total utility by consuming more of X and less of Y
D. The household could increase his total utility by consuming less of X and more of Y

Answer : C. The household could increase his total utility by consuming more of X and less of Y

29- Choose the Antonym of “Expand” is :

A. Congest
B. Conclude
C. Condense
D. Covert

Answer : C. Condense

30- We gave _____ a meal:

A. At the visitors 
B. For the visitor 
C. To the visitor
D. The visitors

Answer : C. To the visitor

31- Inferior goods are the goods which:

A. Have zero income elasticity 
B. Have negative income elasticity
C. Have less than one but greater than zero income elasticity 
D. People have no preference of consuming

Answer : B. Have negative income elasticity

32- In monopolistic competition, product differentiation refers to:

A. Offering products that are similar but not identical
B. Offering identical products to consumers 
C. Offering unique products with no substitutes 
D. Offering products at the same price as competitors.

Answer : A. Offering products that are similar but not identical

33- In production theory, the short run is a period:

A. Sufficient to adopt new technology
B. Generally less than three years 
C. During which at least one resource is fixed 
D. When only labour can be varied

Answer : C. During which at least one resource is fixed

34- Which of the following could cause the aggregate demand curve to shift to the left?

A. An increase in the money supply 
B. Contractionary demand management policies
C. An increase in government spending 
D. Expansionary demand management policies 

Answer : B. Contractionary demand management policies

35- What is the correct formula for GDP Deflator?

A. Nominal GDP – (minus) Real GDP 
B. Nominal GDP + Real GDP 
C. Nominal GDP / Real GDP
D. Real GDP / Nominal GDP

Answer : C. Nominal GDP / Real GDP

36- The Solow Growth Model predicts that:

A. The rich will get richer and the poor will get poorer
B. Rich nations will grow faster than poor nations 
C. The rich will get poorer and the poor will get richer 
D. Poor nations will grow faster than rich nations

Answer : D. Poor nations will grow faster than rich nations

37- Theory of comparative advantage was presented by:

A. Adam Smith
B. David Ricardo
C. Ohlin
D. Hicks

Answer : B. David Ricardo

38- The standard deviation of a data set tells us:

A. The average distance from the mean 
B. The exact values in the data set
C. How many data points there are
D. The highest and lowest values 

Answer : A. The average distance from the mean

39- What is the similar meaning word of ‘Abhor’ :

A. Love
B. Hate
C. Prefer
D. Admire

Answer : B. Hate

40- What is the similar meaning word of “Virtue”?

A. Vice
B. Appropriate
C. Evil
D. Goodness

Answer : D. Goodness

1

2

3

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to Top