Question # 1

GDP per head may be an imperfect measure of economic welfare because it excludes.

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The value of leisure

Externalities

Untraded goods

All of the above

Monetarists believe that a reduction in _____ can be achieved by reducing.

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Unemployment, prices

Inflation, wages

Unemployment, wages

Inflation, the quantity of nominal money

A production technique is technically efficient if.

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Output is maximized

Input are minimized

there is no way to make a given output using less of one input and no more of the other inputs.

costs are minimized

Short run average total costs are equal to the sum of _______ and______

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Short run opportunity costs, profit

Short run average variable costs, profit

short run average variable costs, profit.

Short run average variable costs short run average fixed costs

The business cycle is not transmitted from one country to another through.

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Private sector imports and exports

Economic policy

The duration of compulsory education

Labour supply changes

The retail price index is used to.

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Construct price lists

Compare shop prices

Measure changes in the cost of living

None of the above

International difference in opportunity costs lead to countries acquiring.

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Comparative advantage

High exchange rates

Trade exchange rates

Trade barriers

The short run Philips curve can shift in response to changes in

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inflationary expectations

Unemployment

The inflation rate

Wage rates

If a long average cost rises, output rises from left to right this is an example of.

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Increasing returns to scale

Decreasing returns to scale.

Constant returns to scale

the minimum efficient scale

In the UK under a _________ of the labour force belong to a trade union.

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Quarter

Third

Half

Three quarters

If two firms doing the same thing in the same industry join together this is known as a.

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vertical merger

Horizontal merger

Conglomerate merger

Hostile takeover

If one country, with floating exchange states, has higher inflation than its competitors, we would expect its exchange rate to.

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Appreciate

Depreciate

Revalue

be in short supply

When capital mobility is perfect, interest rate differentials will tend to be offset by

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Price differences.

Balance of payments differences.

Current account differences.

Expected exchange rate changes

In a competitive industry each buyer and seller.

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Is a price taker

Produce different products

Believes that can influence price

Prevents the entry of competitors

Adding up the quantities demanded of a good by different people facing the same price gives us the.

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Supply curve

Market demand curve

Demand curve

Market supply curve

The increase in total cost when one more units is produced is known as.

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Marginal cost

Opportunity cost

Limited cost

Average cost

Economics is the study of

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Production technology

Consumption decisions

How society decides what how and for whom to produce

The best way to run society

The key issues of macroeconomics are

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Unemployment

Inflation

Economic growth

All of the above

If British Residents want more French francs to purchases more fresh wine, other things equal than the equilibrium value of the pound against the French farce will.

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Rise

fall

not changes

fluctuate

In the absence of international capital controls, central banks set ______ to provide the correct incentive for speculators

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Money supply targets

Income policy

Interest rates

Inflation targets

In the economy when a steel producer sells steel to car producer it is regarded as.

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A final good

An intermediate good

an injection

a leakage

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