Question # 1

The marginal propensity to consume is equal to.

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Total spending /total consumption

total consumption/total income

Change in consumption/change in income

Change in consumption/change in savings

If there is a price celling there will be

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Shortages

Surpluses

Equilibrium

None of these

A higher GDP per capita may not mean that the quality of life has really improved because.

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It measures wealth not income

It measures Gross Domestic product

It does not measure the quality of the items produced

it is only measured every five years

The goal of a pure market economy is to best meet the desires of.

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Consumers

Companies

Workers

The government

What makes economics scientific.

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It tests theories against observations and modifies the theories if needed.

It uses numbers to measure things

It involves the use of experiments

It is a description of how thing work

Macro economics deals with

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Only the decisions made by individuals and their results.

Only the decisions made by businesses and their results.

Mostly large scale decisions made by countries and governments, and their results.

Only the decisions made by individuals but not the results.

If the economy grows the government's budget position will automatically

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Worsen

Improve

Stay the same

Increase with inflaction

Which of the following is not a macro economic issue.

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Unempolyment

Inflaction

The wages paid to footballers

Economic growth

The accelerator assumes.

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The marginal propensity to consume is constant

The economy is at full employment

There is a constant relationship between net investment and the rate of change of output

The multiplier is constant

Gross National product equals

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Net National Product adjusted for inflation

Gross domestic product adjusted for inflation

Gross Domestic product plus net property income from abroad

Net National product plus net property income from abroad

In monopolistic competition

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Demand is perfectly elastic

Products are homogeneous

Marginal revenue = pirce

The marginal revenue is below the demand curve and diverges

The free market involves

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The free provision of products

The subsidizing of products by the government

Market forces of supply and demand

All trade via barter

If the price is less than the average cost but higher than the average variable costs.

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The firm is making a loss and will should own in the short term.

The firm is making a profit.

The firm is making a loss but will continue to produce in the short term

The firm is making a loss and is making a negative contribution to fixed costs

A profit maximizing firm will employ labour up to the point where.

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Marginal revenue = Marginal product

Margial cost = Marginal product

Marginal revenue product = Average cost of labour

Marginal revenue product = Marginal cost of labour

The resources in an economy are

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Constantly increasing

Fixed at any moment

Constant decreasing

Able to be transferred easily between industries

A supply curve that starts at the origin has

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A price elasticity of supply greater than one

A price elasticity of supply equal to one

A price elasticity of supply less than one

A positive price elasticity of supply

The socially optimal rate of growth is

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Zero

Negative

Where the marginal social benefit the marginal social cost

total social costs are minimized

In the short run firm in perfect competition will still produce provided.

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The price covers average variable cost

The price covers variable cost

The price covers average fixed cost

The price covers fixed cost

GDP plus net property income from aboard equals what.

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GNP

NNP

Depreciation

Real GDP

Which of the following best defines price discrimination.

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Charging different prices on the basis of race

Charging different prices for goods with different costs of production

Charging different prices based on cost of service differences.

Selling a certain product of given quality and cost per unit at different prices to different buyers

An increase in costs will

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Shift aggregate demand

Shift aggregate supply

Reduce the natural rate of unemployment

Increases the productivity of employees

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