MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 62 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
Arguments for free trade are sometimes disregarded by politicians because ? |
| A. | Maximizing domestic efficiency is not considered imports |
| B. | Maximizing consumer welfare may not be a chief priority |
| C. | There exist sound economic reasons for keeping one’s economy isolated from other economies |
| D. | Economists tend to favor high protected domestic markets |
| Answer» C. There exist sound economic reasons for keeping one’s economy isolated from other economies | |
| 52. |
An optimal tariff is one which reduces imports to the level at which ____ equals ____? |
| A. | imports, exports |
| B. | the balance of trade, zero |
| C. | The demand for currency the supply of currency |
| D. | social marginal cost, social marginal benefit |
| Answer» E. | |
| 53. |
All of the following represent obstacles to LDC development except ? |
| A. | resource scarcity |
| B. | low levels of investment |
| C. | low population |
| D. | poor infrastructure |
| E. | poor human capital |
| Answer» D. poor infrastructure | |
| 54. |
A tariff causes domestic firms to ________ and consumers to? |
| A. | overproduce, under consume |
| B. | Overproduce, overconsume |
| C. | underproduce, under consume |
| D. | underproduce, overconsume |
| Answer» B. Overproduce, overconsume | |
| 55. |
A sudden shift from import tariffs to free trade may induce short-term unemployment in ? |
| A. | Import-competing industries |
| B. | Industries that are only exporters |
| C. | Industries that sell domestically as well as export |
| D. | industries that neither import nor export |
| Answer» B. Industries that are only exporters | |
| 56. |
A significant portion of actual world trade patterns results from ? |
| A. | The industrial policies of governments |
| B. | different sizes of the countries |
| C. | different factor endowment between countries |
| D. | the different tastes and preferences of people in different countries |
| Answer» D. the different tastes and preferences of people in different countries | |
| 57. |
A reduced share of the world export market for the United States would be attributed to? |
| A. | Decreased productivity in U.S manufacturing |
| B. | High incomes of American households |
| C. | Relatively low interest rates in the United States |
| D. | High levels of investment by American corporations |
| Answer» B. High incomes of American households | |
| 58. |
A primary reason why nations conduct international trade is because ? |
| A. | Some nations prefer to produce one thing while others produce another |
| B. | Resources are not equally distributed to all trading nations |
| C. | Trade enhances opportunities to accumulate profits |
| D. | interest rates are not identical in all trading nations |
| Answer» C. Trade enhances opportunities to accumulate profits | |
| 59. |
A main advantage of specialization results from ? |
| A. | Economies of large-scale production |
| B. | The specializing country behaving as a monopoly |
| C. | Smaller production runs resulting in lower unit costs |
| D. | High wages paid to foreign workers |
| Answer» B. The specializing country behaving as a monopoly | |
| 60. |
A feasible effect of international trade is that a (an) ? |
| A. | Monopoly in the home market becomes an oligopoly in the world market |
| B. | Oligopoly in the home market becomes a monopoly in the world market |
| C. | Purely competitive firm in the home market becomes an oligopolist |
| D. | purely competitive firm in the home market becomes a monopolist |
| Answer» B. Oligopoly in the home market becomes a monopoly in the world market | |
| 61. |
A demand switching policy could be ? |
| A. | Higher interest rates |
| B. | Higher income tax |
| C. | Tariffs |
| D. | Reduced government spending |
| Answer» D. Reduced government spending | |
| 62. |
A country has a comparative advantage in the production of a product if the good’s _____ cost in different from the good’s _____ cost in another country ? |
| A. | resource; resource |
| B. | foreign exchange money |
| C. | opportunity; opportunity |
| D. | money; opportunity |
| Answer» D. money; opportunity | |