Question # 1

A set totality of elements from all possible sets is called.

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Union set

Intersection set

Universal set

Unit set

In Production of goods and services tradeoffs exist becasue.

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Buyers and sellers often negotiate prices

Society has only a limited amount of productive resources

Not all production is efficient

Human wants and needs are limited at a particular point in time

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

Which of the following best describes the selling of a production license to another firm.

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Hands over all rights to its products

Sells its products abroad

Sells the right to produce to another business

Sells the business to another business

A linear homogenous production function would reveal.

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Constant returns to scale

Increasing returns to scale

Decreasing return to scale

Doubling all inputs would more than double output

Which of the following is not a supply side measure.

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Increased training

Providing more information

Helping individuals to move location to find work

Increasing spending on existing industries.

If a nation has an open economy it means that the nation.

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Allows private ownership of capital

Has flexible exchange rates

Has fixed exchange rates

Conducts trade with other countries

A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the.

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Real interest rate

Productivity relation

Production function

Marginal product

An increase in demand for a product should.

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Increase equilibrium price and quantity.

Decrease equilibrium price and quantity.

Increase equilibrium price and decrease quantity.

Decrease equilibrium price and increase quantity.

Real GNP is a crude measure of national welfare because it excludes.

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Consumption

Investment

Export's

work in the home

The central bank and the government are working against each other if as the government cuts taxes the central bank

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Sells government bonds

Lowers the discount rate

Increase the money supply

Decrease the legal reserve requirements

A rise in the price of bond causes the yield of the bond to.

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Rise

Fall

Remain unchanged

Rise uf ut's a short term bond, fall if it's a long term bond

Supply is likely to be more price elastic.

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In the short run rather than the long run

If factors of production are relatively immobile between industries.

If there are very few producers

If it is easy to expand output

The through of a business cycle occurs when ______ hits its lowest point.

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Inflation

The money supply

Aggregate economic activity

The unemployment rate

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

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Monetary growth

Better technology

More capital

higher labour supply

An increase in the wage rate.

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Will usually lead to more people employed

Will decrease total earnings if the demand for labour is wage elastic

Is illegal in a free market

Will cause a shift in the demand for labour

Foreign direct investment is made on

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Friendly basis

social basis

Commercial basis

Humanitarian basis

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are.

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Market prices

Sticky prices

Fixed prices

Regulatory prices

If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.

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Money demand declines first then rises when inflation increases

Money demand rises

The overall effect its ambiguous

Money demand declines

If the autarky price of S were lower in country A than in country B, then if trade were allowed.

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A would likely exports s to B

A would likely import s from B

Neither country would want to trade

None of the above

Nearly _______ of land is cultivated through tube wells, ponds and rain water.

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25%

45%

15%

35%

Perfect price discrimination means that every customer.

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Buys the same amount

Pays the same price

Pays what she thinks the product is worth

Contributes the same revenue.

The law of diminishing marginal returns to a factor of production is.

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Not applicable

Another explanation of economies of scale

A principle of scales

None of these

Short run contractionary Fiscal policy would result in.

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Aggregate demand moving to the right

Aggregate supply moving to the right

Aggregate demand moving to the left

Aggregate supply moving to the left

In a pure market economy which of the following is a function of the price.

i - provide information to sellers and buyers

ii- Provide incentives to sellers and buyers

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I only

ii Only

both i and ii

Neither i nor ii

Menu costs in relation to inflation refer to

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Costs of finding better rates of return

Costs of altering price lists

Costs of money increasing its value

Costs of revaluing the currency

Real business cycle theory suggests that __________ not important in explaining short term fluctuations around actual output.

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aggregate supply is

aggregate demand is

Potential output is

Real variables are

Which kind economics deals with issues such as unemployment inflation, and economic growth.

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Macro economics

Micro economics

Growth economics

Political economics

Given the saving equation S = - 50 + 0, 20 Y, where s is saving and Y is income.

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The break even level of income is 240

Dissaving takes place if income is 300

Consumption expenditures and saving are equal at an income level of 500

The MPS is constant for all levels of income

"Economics is what economists do " It has been supported by.

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Richard jones

Comte

Gunnar Myrdal

All of the above

A monopolist who is charging high price operates on.

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inelastic part of demand curve

Elastic demand of part curve

Ignore elasticity

More elastic demand of part curve

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