Online MCQ Assignment Answer

QN1: To say that a good is scarce means

a. that at the current market price of that good, the quantity demanded exceeds the quantity supplied
b. the price of the good is too high
c. that the amount that people want exceeds the limited resources available to fulfill those wants
d. the good is unavailable

Answer

Answer: a. that at the current market price of that good, the quantity demanded exceeds the quantity supplied

QN2: Factors of production, such as labor, capital, natural resources and entrepreneurial ability are traded in

a. product markets
b. output markets
c. factor markets
d. competitive markets

Answer

Answer: c. factor markets

QN3: Which of the following is the best example of an activity that would be undertaken by an entrepreneur?

a. running for the position of mayor in your country
b. buying and selling of stocks and bonds
c. starting your own car wash business
d. All of the above are activities undertaken by an entrepreneur

Answer

Answer: c. starting your own car wash business

QN4: The total amount of physical capital available in a country is called

a. capital stock
b. wealth
c. net worth
d. total assets

Answer

Answer: a. capital stock

QN5: When economists say that people act rationally, they mean that

a. people rarely make errors when they are looking out for themselves
b. people select only those activities that minimize their costs
c. people consider only the benefits when making a decision
d. people consider both the relevant costs and relevant benefits of a decision and select actions for which relevant benefit exceeds or at best, equal the relevant

Answer

Answer: a. people rarely make errors when they are looking out for themselves

QN6: Which of the following statements relates to microeconomics?

a. Unemployment rises during a recession and falls during an expansion
b. Excessive growth in money supply may create inflation
c. Government spending tends to increase during an economy-wide recession
d. Sharp increases in labor costs have increased production costs in the steel industry

Answer

Answer: a. Unemployment rises during a recession and falls during an expansion

QN7: Macroeconomics can best be described as the study of

a. the behavior of large firms in the marketplace
b. the behavior of individual decision makers
c. the behavior of the economy as a whole
d. fluctuations in the stock market

Answer

Answer: c. the behavior of the economy as a whole

QN8: An answer to the question “How are goods produced?” determines

a. who receives the goods that are produced
b. how tastes and preferences are determined
c. how resources are combined in the production of goods
d. the types and quantities of goods and services produced

Answer

Answer: c. how resources are combined in the production of goods

QN9: What is the efficiency criterion that describes a situation where goods and services are produced at the lowest possible cost?

a. allocative efficiency
b. productive efficiency
c. normative efficiency
d. positive efficiency

Answer

Answer: b. productive efficiency

QN10: The marginal benefit from consuming another unit of a good

a. is always the same thing as the total benefit received from consuming that unit
b. is the difference between the incremental benefit received and the incremental cost incurred in consuming that unit
c. the additional benefit one gains from consuming that good
d. must always equal the marginal cost of consuming that good.

Answer

Answer: c. the additional benefit one gains from consuming that good

QN11: Demand means

a. desire
b. ability
c. willingness
d. all of above

Answer

Answer: d. all of above

QN12: the shape of ppc is always

a. concave
b. vertical
c. convex
d. horizontal

Answer

Answer: a. concave

QN13: Two indifference curves

a. intersect
b. never intersect
c. equal
d. not equal

Answer

Answer: a. intersect

QN14: Consumer equilibrium is calculated at

a. point of tangency
b. lower indifference curve
c. price line
d. none

Answer

Answer: a. point of tangency

QN15: The demand curve under Monopoly is

a. less elastic
b. more elastic
c. perfectly elastic
d. unitary elastic

Answer

Answer: b. more elastic

QN16: When MC falls, AC

a. rises
b. falls
c. remains same
d. none

Answer

Answer: b. falls

QN17: MC always cuts AC at its

a. highest point
b. Minimum point
c. all
d. none

Answer

Answer: b. Minimum point

QN18: Long Run Costs Curve is an

a. Envelope Curve
b. U shaped curve
c. inverted curve
d. C shaped curve

Answer

Answer: b. U shaped curve

QN***19: Marginal Utility curve is

a. upward sloping curve
b. downward sloping
c. horizontal
d. vertical

QN***20: Consumer equilibrium is calculated at

a. MU=price
b. MU>price
c. MU<price
d. none

QN***21: Income Elasticity of demand means

a. demand is related to Income
b. Demand is related to price
c. demand is related to price of another good
d. demand is related to fashion

QN***22: Law of Supply means

a. when supply increases with price
b. when supply decreases with rise in prise
c. when supply remains the same with change in price
d. none

QN***23: Which of the following is an example of a normative statement?

a. If the price of a good decreases, quantity demanded of that good increases
b. Reducing tax rates on the wealthy would be good for the country
c. Increases in productivity are a source of economic growth
d. One source of inflation is an excessive growth rate in money supply

QN***24: An example of a positive statement is

a. The rate of unemployment is 4 percent
b. A high rate of economic growth is a must for any country
c. Everyone in the country should have access to health insurance
d. Movie stars should not be paid higher salaries than the president of the United States

QN***25: An economic theory is tested by

a. assessing how realistic its assumptions are
b. assessing how simple its equations are
c. comparing its complexity with the real world.
d. comparing its predictions with real-world data

QN***26: The process of developing models, testing hypotheses and revising models is often referred to as

a. the scientific method of analysis
b. the positive method of analysis
c. the normative method of analysis
d. the ceteris paribus method of analysis

QN***27: A market is

a. a physical building where trade takes place
b. an institutional arrangement that brings together buyers and sellers
c. a place where people congregate to discuss economic policies
d. All of the above

QN***28: In a mixed economy, economic decisions are made by private individuals and by

a. the government
b. the military
c. the wealthy
d. the working class

QN29: When Pakistan builds a dam in Chittagong using few machines and a great deal of labor, it is answering the ___ question

a. “what to produce”
b. “who to produce for
c. “where to produce”
d. “how to produce”

Answer

Answer: d. “how to produce”

QN30: “how to produce”

a. profit.
b. net revenue
c. net cost
d. opportunity cost

Answer

Answer: a. profit.

QN31: The statement that there is a positive relationship between X and Y means that

a. X and Y move in the same direction
b. X causes Y
c. Y causes X
d. either Y causes X or X causes Y

Answer

Answer: a. X and Y move in the same direction

QN32: Which of the following graphs or charts must add up to one hundred percent?

a. a pie chart
b. a bar graph
c. a time-series graph
d. all of the above

Answer

Answer: a. a pie chart

QN33: An output combination is technically efficient if

a. it is possible to produce more of all goods
b. it is possible to produce more of one good without producing less of another
c. it is not possible to produce more of one good without producing less of another
d. it is not possible to produce more of one good at any cost

Answer

Answer: c. it is not possible to produce more of one good without producing less of another

QN34: A country that produces a maximum possible combination of two goods using all of the resources available in the economy

a. is operating on its production possibilities frontier.
b. is maximizing its opportunity cost
c. has eliminated scarcity
d. has achieved all of the above

Answer

Answer: d. has achieved all of the above

QN35: Consumer goods and services such as automobiles and haircuts are traded in

a. Factor markets
b. Product markets.
c. Labor markets
d. Commerce markets

Answer

Answer: d. Commerce markets

QN36: The net factor income earned within the domestic territory of a country must be equal to —

a. Net Domestic Product at factor cost
b. Net Domestic Product at market price
c. Net National product at factor cost
d. Personal income

Answer

Answer: a. Net Domestic Product at factor cost

QN37: A circular flow diagram

a. illustrates the concept of scarcity
b. illustrates how money circulates in the economy.
c. shows the interaction between the private sector and the public sector.
d. explains how the economy is organized in terms of its two critical economic activities: production and consumption

Answer

Answer: a. illustrates the concept of scarcity

QN38: Which of the following is not a determinant of demand?

a. price of a substitute good
b. tastes and preferences
c. income
d. expectations of suppliers

Answer

Answer: a. price of a substitute good

QN39: The difference between the maximum price a person is willing to pay for a good and the price actually paid for the good is called

a. consumer surplus
b. producer surplus
c. the substitution effect
d. the income effect

Answer

Answer: a. consumer surplus

QN40: Amrin goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Cameron’s consumer surplus from the purchase is

a. 325
b. 200
c. 125
d. 75

Answer

Answer: d. 75