Question # 1

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

In monopolistic competition if firms are making abnormal profit other firms will enter and

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The marginal cost will shift outwards

the demand curve will shift inwards

The average cost will shift downwards

The average variable cost will increase

Human wants are

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Always fixed

Limited

Unlimited

Likely to decrease over time

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

In perfect price discrimination

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Consumer surplus is maximized

Produce surplus is zero

Community surplus is maximized

Consumer surplus is zero

Economics given can be shown by

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An inward shift of the production possibility frontier

A movement down the production possibility frontier

An outward shift of the production possibility frontier

A movement up the production possibility frontier

Why is the law of diminishing marginal returns true.

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specialization and division of labor

Spreading the average fixed cost

Limited capital

All factors being variable in the long run

A significant increase in the government budget deficit is likely to.

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Reduce injections into the economy

Reduce national income

Move the economy away from full employment

Boost aggregate demand

Which of the following is a policy instrument .as opposed to a government objective.

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Lower interest rates

A better balance of trade position

Faster economic growth

Lower un employment

The natural rate of unemployment is likely to tall if

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Unemployment benefits increase

Income tax increases

More training is available for the unemployed

Geographical immobility increases

An increase in aggregate demand is more likely to lead to demand pull inflation if.

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Aggregate supply is perfectly elastic

Aggregate supply is perfectly inelastic

Aggregate supply is unit elastic

Aggregate supply is relatively elastic

In monopoly in long run equilibrium.

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The firm is productively effieient

The firm is allocatively inefficient

The firm produces where marginal cost is less than marginal revenue

The firm produces at the sociality optimal level

The hypothesis that people know the true model of the economy and that they use this model and al available information to form their expectations of the future is the

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Relational expectations hypothesis.

Active expectations hypothesis

Static expectations hypothesis

Adeptive expectations hypothesis

Equilibrium in the market for good A obtains.

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When there is no surplus or shortage prevailing in the market

Where the demand and supply curves for A intersect

When all of what is produced of A is consumed

All of the above

Laboratory experiments cannot be performed in economics because.

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Of resource scarcity

Economics is a natural science

Of the difficulty of distinguishing between normative and positive statements.

Economics is a social science

Globalization is made more difficult by

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The actions of the World Trade Organization

The removal of protectionist measures

Exchange rate instability

More free trade agreements

An increase in productivity should.

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Lead to a contraction of supply

Lead to an expansion of supply

Lead to a shift in supply outwards

Lead to higher equilibrium and lower equilibrium quantity.

Which of the following rights be a scarce good.

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Love

faith

Self control

All of above

Firms in perfect competition face a

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Perfectly elastic demand curve

Perfectly inelastic demand curve

Perfectly elastic supply curve

Perfectly inelastic supply curve

A study of how increase in the minimum wage rate will effect the national unemployment rate is an example of.

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Descriptive economics

Normative economics

Macro economics

Micro economics

Improved training of employees would.

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Shift aggregate supply to the right

Shift aggregate supply to the left

Shift aggregate demand to the right

Shift aggregate demand to the left

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