Question # 1

In order to maximize profits a monopoly company will produce that quantity at which the.

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Marginal revenue equals average total cost

Price equals marginal revenue

Marginal revenue equals marginal cost

total revenue equals total cost

Government policies that focus on increasing production rather than demand are called.

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Fiscal policies

Monetary policies

Incomes policies

Supply side policies

In a free market the combination of products produced will be determined by.

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Market forces of supply and demand

The government

The law

The public sector

The law of diminishing returns assumes.

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There are not fixed factors of production

There are no variable factors of production

Utility is maximized when marginal product falls.

Some factors of production are fixed

A deflationary policy could include

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Increasing injections

Reducing taxation rates

Reducing interest rates

Reducing government spending

World trade has been increasing due to.

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Increased tariffs

Increased legal barriers

Increased embargoes

Reduced protectionism

If product an inferior good.

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Demand is inversely related to income

Demand is inversely related to price

Demand is directly related to price

Demand is inversely related to the price of substitutes

The marginal propensity to consume in a less Developed Country is likely to be.

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_{Less than 0}

Nearly 0

High

Low

An increase in the marginal propensity to consume will

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Increase the size of the multiplier

Increase the marginal propensity to save

Decrease national income

Reduce injections into the economy

An independent assessment of the impact of firm's activities on society is called a.

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Financial audit

Balance sheet

Profit and uses account

Social audit

A government might use tax to.

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Discourage consumption of positive externalities

Discourage consumption of public goods

Discourage consumption of merit goods

Discourage consumption of negative externalities

Which of the following is not involved with fiscal policy.

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Income tax

National insurance

VAT

Interest rates

A demand switching policy could be.

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Higher interest rates

Higher income tax

Traiffs

Reduced government spending

Resources in an economy

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Are always fixed

Can never decrease

Always increase over time

Are limited at any moment in time

Economic theory assumes that people

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Act in greedy and selfish ways, without regard for the welfare of others.

Act without regard for their own interests.

Are not motivated by self interest

Are motivated by self interest but still might be concerned for the welfare of others.

In land intensive method which mean production is used comparativelymore

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Labour

Land

Capital

Organization

Game theory

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Firm are assumed to act independently

Firms are assumed to cooperate with each other

Firm collude as part of a cartel

Firms consider the actions of others before deciding what to do.

Which of the following is a normative statement in economics.

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More spending by the government reduces poverty

Higher taxes lead to less desire to work

the UK Economy is growing fast relative to other European Union members

The Government should concentrate on reducing unemployment

If firm earn normal profits.

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They will aim to leave the industry

Other firms will join the industry

The revenue equals total costs

No profit is made in accounting terms

The bowed shape of the production possibilities curve illustrtres.

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The law of increasing marginal cost

the production in inefficient

That production is inattainable

The demand is relatively inelastic

If input price adjusted very slowly to output prices, the Phillip's curve would be.

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Downward sloping

Vertical or nearly vertical

Upward sloping

Horizontal or nearly horizontal

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