Question # 1

The neoclassical theory of growth identities the steady state rate of growth as the _________ just sufficient to keep _______ constant while labour grows.

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Saving investment

Capital per person productivity

Labour growth , output

Investment capital per person

If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of.

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Market imperfection

The law of diminishing returns

The paradox of thriff

Market failure

Normative economics form ______ based on.

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Positive statements facts

Opinions, personal values

Positive statements values

Opinions facts

In linear consumption function with a positive slope less that on means that if income increase, consumption will.

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Fall

Not change

Fluctuate

Increase

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

On a graph a positive linear relation ship.

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Moves down to the right

Moves up to the left

Moves up to the right

Modes down to the left

Land will be allocated between competing uses so that.

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Housing gets priority

Industry gets priority

Faming gets priority

The equilibrium rental rate equilibrium total demand with supply

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

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Quarter

Third

Half

Three quarters

The long run Philips curve is _________ at the ______

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Horizontal natural rate of inflation

Horizontal , natural rate of unemployment

Vertical , natural rte of inflation

Vertical , equilibrium rate of unemployment.

Extremality's arise because there is a divergence between ____ and _

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Private costs, private benefits

Private costs, social costs of benefits

Social cost, social benefit

Insiders, outsiders

In the classical model, potential output can not be increased by

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Monetary growth

Better technology

More capital

higher labour supply

A supply curve is directly affected by

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Technology

Input costs

Government regulation

All of the above

If the income tax rate changes from 30% to 40% on incomes over L 30,000 and a person's income is l 31,000 then her marginal tax rate is.

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30%

10%

70%

40%

Economics assumes that people consume goods and services to achieve.

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Status

Prestige

Utility

Self esteem

If my neighbor burns garden waste causing my house to fil with smoke this is an example of.

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A production extremality

A second best solution

Transaction costs

A consumption externality

In the short run the level of floating exchange rates is determined mainly by.

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Interest rates

Competitiveness

Trade

Speculation

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

Leakages from the circular flow are____ and _____

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Investment savings, government expenditure

Saving , taxes net of subsidies, imports

Consumption, investment , government expenditure.

Consumption, taxes, impports

When investment is assumed to autonomous the slope of the AD schedule is determined by the.

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Marginal propensity to invest.

disposable income

Marginal propensity to consume

Average properisity to consume

The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve.

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At their lowest points

When they are declining

When they are increasing.

When marginal revenue is zero

The value of an asset depends upon

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Its scrap value

Its depreciation

The present value of the failure stream of income it can earn.

the cost of loans

The firms long run output decision will be where.

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Long run average cost a lowest

Marginal revenue equals output

Marginal revenue equals long run marginal cost

Marginal cost equals output

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