Question # 1

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

Economists use the term utility to mean

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The value of a product before it has been advertised

The satisfaction a consumer obtains from a good or service

any characteristic of a good or service which cannot be measured

The contribution a good or service makes to social welfare

World trade has been increasing due to.

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Increased tariffs

Increased legal barriers

Increased embargoes

Reduced protectionism

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

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Consumers

Companies

Workers

The government

If people are made unemployed because of a fall in aggregate demand this is known as.

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Frictional unemployment

Seasonal unemployment

Cyclical unemployment

Structural unemployment

Japan's low interest rates in the mid 80's were due to.

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High rates of domestic savings.

A decrease in Japan's exports

Increases in the U.S. deficit

High rates of domestic spending in Japan

An increase in interest rates.

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Is likely to reduce savings

Is likely to reduce the external value of the currency

Leads to a shift in the MEC schedule

Leads to a movement along the MEC schedule

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

Normal profit occurs when

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Average revenue equals average variable cost

Marginal revenue equals marginal cost

Average revenue equals marginal cost

Average revenue equals average cost

Which of the following is not one of the four Ps in marketing.

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Product

Price

Place

Presence

The profit per scale is a measure of.

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Profit

Profitability

Feasibility

Realism

Free trade is based on the principle of

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Comparative advantage

Comparative scale

Economics of advantage

Production possibility advantage

The sacrifice involved when you choose a particular course of action is called the

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Alterative

Opportunity cost

Consumer cost

Producer cost

In a recession, GDP.

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Grows negatively

Grows by 0%

Grows slowly

Grows rapidly

If there is a price celling which of the following is NOT likely to occur.

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Rationing by first come first served

Black markets

Gray markets

Sellers providing goods for free that were formerly not free

What lies is at the heart of the allocation of goods and services in a free market economy.

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Concerns of equity or equal distribution among individuals.

The order or command of the ruling government or dictator

The wishes of consumers in the market

The price mechanism

A profit maximizing firm in perfect competition produces where

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Total revenue is maximized

Marginal revenue equals zero

Marginal revenue equals marginal cost

Marginal revenue equals average cost

Which of the following is the government most likely to subsidies.

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Negative externalities

Positive externalities

Monopolies

O ligopojies

Which of the following is not an argument for protectionism.

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To protect infant industries

To increase the level of imports

To protect strategic industries

To improve the balance of payments

Any combination of products inside the production possibility frontier is

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Allocatively inefficient

X inefficient

Consumer inefficient

Productively inefficient

As the MPS increases, the multiplier will

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Increase

Either increase or decrease depending on the size of the change in investment

Remain constant

Decrease

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