MCQOPTIONS
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MCQOPTIONS
This section includes 75 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
If a production function exhibits diminishing marginal product the slope of the corresponding total-cost curve ? |
| A. | is liner (a straight line) |
| B. | could be any of these answers |
| C. | becomes steeper as the quantity of output increases |
| D. | become flatter as the quantity of output increases. |
| Answer» D. become flatter as the quantity of output increases. | |
| 52. |
If a production function exhibits diminishing marginal product. its slope ? |
| A. | is linear (a straight line) |
| B. | becomes steeper as the quantity of the input increase |
| C. | could be any of these answers |
| D. | becomes flatter as the quantity of the input increase |
| Answer» E. | |
| 53. |
Housing Benefit is a good example of ? |
| A. | a means tested cash benefit |
| B. | a universal (social insurance based) benefit |
| C. | a benefit in kind |
| D. | none of the above |
| Answer» B. a universal (social insurance based) benefit | |
| 54. |
Horizontal equity holds that ? |
| A. | those with equal ability to pay should bear unequal tax burdends. |
| B. | those who benefits the most from government services should bear the higher tax burden. |
| C. | those who benefit the most from government services should have the greatest voice in determining what gets produced |
| D. | those with equal ability to pay should bear equal tax burdens. |
| Answer» E. | |
| 55. |
Economic profit is equal to total revenue minus ? |
| A. | variable costs |
| B. | implicit costs |
| C. | explicit costs |
| D. | marginal costs |
| Answer» C. explicit costs | |
| 56. |
Economic models are ? |
| A. | Usually made of wood and plastic |
| B. | built with assumptions. |
| C. | useless if they are simple. |
| D. | created to duplicate reality. |
| Answer» C. useless if they are simple. | |
| 57. |
Economic growth is depicted by ? |
| A. | a shift in the production possibilities frontier outward. |
| B. | a movement from inside the curve toward the curve. |
| C. | a shift in the production possibilities frontier inward |
| D. | a movement along a production possibilities frontier toward capital goods. |
| Answer» B. a movement from inside the curve toward the curve. | |
| 58. |
Differences in wages that result from differences in working conditions are known as ? |
| A. | occupational differentials |
| B. | search differentials |
| C. | job differentials. |
| D. | compensating differentials |
| Answer» E. | |
| 59. |
Current anti-poverty programs discourage work because ? |
| A. | benefits are reduced at such a high rate when recipients earn more income that there is little or no incentive to work once one is receiving benefits. |
| B. | in order to be eligible for benefits a recipient cannot have a job |
| C. | they make recipients more comfortable than most middle-class citizens. |
| D. | anti-poverty programs attract naturally lazy people to begin with. |
| Answer» B. in order to be eligible for benefits a recipient cannot have a job | |
| 60. |
Constrained choice is relevant for households ? |
| A. | making spending decision but not labour-supply decision. |
| B. | making both spending and labour-supply decisions |
| C. | considered to be ‘poor’ but not for those who are considered to be ‘rich’ |
| D. | making labour-supply decisions but not spending decisions. |
| Answer» C. considered to be ‘poor’ but not for those who are considered to be ‘rich’ | |
| 61. |
Because people’s income vary other the life cycle and because there are transitory shocks to people’s incomes the standard measures of income distribution ? |
| A. | exaggerate the inequality of living standards |
| B. | could exaggerate or understate the inequality of living standards depending on whether the transitory shocks are positive or negative |
| C. | understate the inequality of living standards |
| D. | accurately represent the true inequality of living standards |
| Answer» B. could exaggerate or understate the inequality of living standards depending on whether the transitory shocks are positive or negative | |
| 62. |
Because in-kind transfers are not accounted for in standard measures of income distribution the standard measures of income distribution ? |
| A. | accurately represent the true inequality of living standards |
| B. | understate the inequality of living standards |
| C. | exaggerate the inequality of living standards |
| D. | could exaggerate of understate the inequality of living standards depending on whether the transfers are goods or services. |
| Answer» D. could exaggerate of understate the inequality of living standards depending on whether the transfers are goods or services. | |
| 63. |
Assuming that leisure is a normal good. if an individual’s labour supply curve is backward bending then the ? |
| A. | income effect is zero |
| B. | substitution effect outweighs the income effect |
| C. | income effect outweighs the substitution effect |
| D. | income effect and the substitution effects are equal |
| Answer» D. income effect and the substitution effects are equal | |
| 64. |
Assuming leisure is a normal good, if the income effect is greater than the substitution effect a wage increase ? |
| A. | will have no effect on labour supply |
| B. | will decreases labour supply |
| C. | could cause either an increases or a decrease in labour supply |
| D. | will increase labour supply. |
| Answer» C. could cause either an increases or a decrease in labour supply | |
| 65. |
As the wage rate per hour increases, the opportunity cost of leisure ? |
| A. | remains constant |
| B. | increases since the cost of forgoing one hour of work increases |
| C. | decreases since the customer now has more income to spend |
| D. | may increase of decrease depending on the individual’s preferences. |
| Answer» C. decreases since the customer now has more income to spend | |
| 66. |
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 ? |
| A. | the Rs500 weekly salary that he has forgone to search for another job |
| B. | The Rs500 weekly salary that he has forgone and the monetary costs incurred by continuing to search |
| C. | Rs difference between the weekly salary he finally accepts and the Rs500 weekly salary that he has forgone |
| D. | Rs0, since he is currently unemployed |
| Answer» C. Rs difference between the weekly salary he finally accepts and the Rs500 weekly salary that he has forgone | |
| 67. |
An increase in the minimum wage will cause a relatively large increase in unemployment among ? |
| A. | unskilled workers if the demand for labour is relatively inelastic |
| B. | unskilled workers if the demand for labour is relatively elastic |
| C. | skilled workers if the demand for labour is relatively elastic |
| D. | skilled workers if the demand for labour is relatively inelastic |
| Answer» C. skilled workers if the demand for labour is relatively elastic | |
| 68. |
An example of an indirect tax is ? |
| A. | income tax |
| B. | VAT |
| C. | a tax on profits. |
| D. | inheritance tax |
| Answer» C. a tax on profits. | |
| 69. |
Accounting profit is equal to total revenue minus ? |
| A. | implicit costs |
| B. | variable costs |
| C. | the sum of implicit and explicit costs. |
| D. | explicit costs. |
| E. | marginal costs |
| Answer» E. marginal costs | |
| 70. |
A tax whose burden is the same proportion of income for all households is ? |
| A. | an equal tax |
| B. | a proportional tax |
| C. | a progressive tax |
| D. | a regressive tax |
| Answer» C. a progressive tax | |
| 71. |
A tax whose burden expressed as a percentage of income, falls as income increases is a ? |
| A. | benefits received tax |
| B. | progressive tax |
| C. | regressive tax |
| D. | proportional tax |
| Answer» D. proportional tax | |
| 72. |
A progressive income tax means that those with a higher income pay ? |
| A. | a higher percentage of their income in taxes then low income people |
| B. | a lower percentage of their income in taxes than low income people |
| C. | the same percentage of their income in taxes as low income people all the taxes in the economy. |
| D. | all the taxes in the economy |
| Answer» B. a lower percentage of their income in taxes than low income people | |
| 73. |
A period of unemployment due to recession will ? |
| A. | increase a worker’s current income and permanent income |
| B. | reduce a worker’s current income but not necessarily their permanent income |
| C. | affect neither the current nor the permanent income of a worker |
| D. | reduce a worker’s permanent income but not their current income |
| Answer» C. affect neither the current nor the permanent income of a worker | |
| 74. |
A Gini coefficient of zero means that the ? |
| A. | the income is split equally between the top 20% and the rest of the distribution |
| B. | one person has all the income and every one else has nothing |
| C. | all the income is received by the top 20% of the income distribution |
| D. | income is equally distributed |
| Answer» D. income is equally distributed | |
| 75. |
A Gini coefficient of one means that ? |
| A. | all the income is received by the top 20% of the income distribution |
| B. | income is distributed equally |
| C. | the income is split equally between the top 20% and the rest of the distribution. |
| D. | one family has all the income and every one else has nothing. |
| Answer» E. | |