MCQOPTIONS
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MCQOPTIONS
This section includes 16 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ? |
| A. | supply curve of capital |
| B. | demand curve for capital |
| C. | production function |
| D. | marginal cost curve |
| Answer» C. production function | |
| 2. |
An increase in the price of automobiles shifts the demand for autoworkers to the ? |
| A. | left and decreases the wage |
| B. | right and decreases the wage |
| C. | right and increases the wage |
| D. | left and increases the wage |
| Answer» D. left and increases the wage | |
| 3. |
An individual firm’s demand for a factor of production ? |
| A. | Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby red |
| B. | Slopes downward due to the factor’s diminishing marginal product |
| C. | slopes upward due to the factor’s increasing marginal product |
| D. | is perfectly elastic (horizontal) if the factor market is perfectly competitive |
| Answer» C. slopes upward due to the factor’s increasing marginal product | |
| 4. |
Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ? |
| A. | Wages rise, and rental rates fall |
| B. | Wages rise, and rental rates rise |
| C. | Wages fall, and rental rates rise |
| D. | Wages fall, and rental rates fall |
| Answer» B. Wages rise, and rental rates rise | |
| 5. |
A competitive profit-maximizing firm should hire workers up to the point where ? |
| A. | the wage, the rental price of capital and the rental price of land are all equal |
| B. | the marginal product of labor equals zero and the production function is maximized |
| C. | the value of the marginal product of labor equals the wage |
| D. | the marginal product of labor equals the wage |
| Answer» D. the marginal product of labor equals the wage | |
| 6. |
A decrease in the supply of farm tractors will cause all but which of the following ? |
| A. | an increase in the rental rate for tractor |
| B. | a decrease in the rental rate of farmland |
| C. | a decrease in the value of the marginal product of tractors |
| D. | an increase in the wage of farm workers |
| Answer» E. | |
| 7. |
When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ? |
| A. | interest |
| B. | dividends |
| C. | increases in stocks of goods |
| D. | retained earnings |
| Answer» D. retained earnings | |
| 8. |
What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ? |
| A. | increase the demand for fishing boats and decrease rental rates on fishing boats |
| B. | decreases the demand for fishing boats and increase rental rates on fishing boats. |
| C. | decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry |
| D. | increase the demand for fishing boats and increase rental rates on fishing boats |
| Answer» D. increase the demand for fishing boats and increase rental rates on fishing boats | |
| 9. |
If a factor exhibits diminishing marginal product, hiring additional units of the factor will ? |
| A. | cause a reduction is output |
| B. | have no effect on output |
| C. | increase the marginal product of the factor |
| D. | generate ever smaller amounts of output |
| Answer» E. | |
| 10. |
If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns ? |
| A. | an amount equal to the price of output times total output |
| B. | the amount allocated by the political process |
| C. | an equal share of output |
| D. | the value of its marginal product |
| Answer» E. | |
| 11. |
A decrease in the demand or fish ? |
| A. | decrease the value of the marginal product of fishermen reduces their wage, and reduces employment in the fishing industry |
| B. | increase the value of the marginal product of fishermen increase their wage, and increase employment in the fishing industry. |
| C. | decrease the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry |
| D. | increase the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry |
| Answer» D. increase the value of the marginal product of fishermen increase their wage and decreases employment in the fishing industry | |
| 12. |
An increase in the demand for a firm’s output ? |
| A. | decrease the prosperity of the firm but increases the prosperity of the factors hired by the firm |
| B. | decreases the prosperity of both the firms and the factors hired by the firm. |
| C. | increases the prosperity of both the firm and the factors hired by the firm. |
| D. | increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm. |
| Answer» D. increases the prosperity of the firm but decreases the prosperity of the factors hired by the firm. | |
| 13. |
The most important factors of production are ? |
| A. | labor, land, and capital |
| B. | water, earth and knowledge |
| C. | money, stocks and bonds. |
| D. | management finance and marketing |
| Answer» B. water, earth and knowledge | |
| 14. |
The value of the marginal product of labor is ? |
| A. | the price of the output times wage of labor |
| B. | the price of the output times the marginal product of labor |
| C. | none of these answers |
| D. | the wage of labor times the quantity of labor |
| E. | the wage of labor times the marginal product of labor |
| Answer» C. none of these answers | |
| 15. |
An increase in the demand for apples will cause all but which of the following ? |
| A. | a decrease in the number of apple pickers employed |
| B. | an increase in the value of the marginal product of apple pickers |
| C. | an increase in the price of apples |
| D. | an increase in the wage of apple pickers |
| Answer» B. an increase in the value of the marginal product of apple pickers | |
| 16. |
Which of the following is not true with regard to workers who have a high value of marginal product? These workers ? |
| A. | have skills that are in relatively scarce supply |
| B. | produce output for which there is great demand |
| C. | usually have little capital with which to work |
| D. | are usually highly paid |
| Answer» D. are usually highly paid | |