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Economics MCQ PDF
Economics MCQ PDF
Economics!
Midterm
!
1. The fact that Human wants cannot be fully satisfied with available resources is called the
problem of!
A. Scarcity!
B. Choices!
C. Opportunity Cost!
!
2. All the following are economic problems except:!
A. What to produce!
B. Where to produce!
C. How to produce!
!
3. Economics is the study of how:!
!
4. Supporter of a capitalistic system claims that the system would do all of the following
except:!
A. Promote efficiency!
B. Stimulate innovation!
!
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5. Which of the following would be studied in microeconomics?!
!
6. In order to save cost, the Milk Industry should use more labour than machines. This
statement refers to:!
A. What to produce!
B. How to produce!
!
7. Which of the following will result in an inward shift in the production possibilities
curve?!
!
8. A point inside the production possibilities curve may indicate!
A. Unemployment!
!
9. A movement along the production possibilities curve indicates!
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B. Productivity has increased!
!
10. Decline in population of a country will shift the production possibilities curve!
C. Outward!
D. Inward!
!
11. Which of the following is NOT a characteristic of a planned (command) economy?!
!
14. Using a production possibilities curve, unemployment is represented by a point
located!
B. On the curve!
!
15. The concept of opportunity cost is based upon the principle of!
A. Need ???!
B. Consumption!
C. Scarcity!
D. Profit!
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16. Along a production possibilities curve, an increase in production of one good can be
accomplished by!
!
17. Given the decreasing opportunity cost, the production possibilities curve is ??!
A. Convex!
B. linear!
C. Concave!
D. Vertical!
!
18. As price falls,!
A. Demand increases!
C. Demand falls!
!
19. Goods for which demand is negatively related to is called !
A. Normal!
B. Substitute!
C. Complement!
D. Inferior!
!
20. In the market for tea, for some consumers!
A. Cola is a complement!
B. Coffee is a substitute!
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C. Sugar is a substitute!
!
21. When the price of demand for a good is more than one, an increase in the price of
the product causes total revenue to !
A. decrease!
B. increase!
C. remain unchanged!
!
22. Movement along the demand curve for high rise apartments will be caused by a
change in !
B. consumers income!
!
23. To determine the relationship between two goods, an economist would estimate!
!
24. Which of the following is NOT a determinant of demand for diesel?!
A. Price of petrol!
B. Price of diesel!
C. Price of automobile!
D. Consumer’s income!
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25. If the elasticity of demand for microwave ovens is 1.5 it means!
!
26. Sugar and honey are substitutes. If the price of sugar rises!
!
28. For any horizontal demand curve, the calculated price elasticity of demand is!
A. Infinity!
B. Zero!
!
29. Raiz bakery observes that when it raises the price of the pie, total revenue from the
pie increases and vice versa. This shows that!
!
30. Suppose the price of the product X rises by 15 percent and the quantity supplied of X
increases by 20 percent. The coefficient of price elasticity of supply for the good is!
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B. positive and therefore a normal good!
!
31. As the price of egg increases, sophies production of cakes will!
A. increase in supply!
C. decrease in supply!
!
32. A shift to either left or right of a supply curve is called!
B. A change in supply!
C. A change in demand!
!
33. The law of supply indicates that!
!
34. All of the following are held to be constant when the supply curve for a product is
drawn. except!
A. Price of product!
B. State of technology!
C. number of producers!
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Friday, September 12, 2014
!
35. Sellers would offer ____ for sale as the price decreases and therefore the supply
curve is _____ sloping!
A. more, upward!
B. more, downward!
C. less, upward!
D. less, downward!
!
36. Indifference curve is!
A. Parallel to x-axis!
!
37. Marginal utility!
!
38. Slope of indifference curve shows!
A. Marginal product!
B. Marginal revenue!
C. Marginal cost!
!
39. Which of the following is not a property of indifference curves?!
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Friday, September 12, 2014
B. They are upsloping!
!
40. When MU is positive, the TU!
A. increases!
B. decreases!
C. at max!
D. 0!
!
41. Law of diminishing MU implies that as a person consumes more and more of a given
good!
C. MU becomes negative!
D. TU will decline!
!
42. When the price of X is 5 and the price of Y is 4, if you have an income of 25, which of
the following bundles is the affordable set?!
A. (0,7)!
B. (3,3)!
C. (3,2)!
D. (2,4)!
!
43. When plotting marginal and average product curves, the _________ product curve
always crosses the ___________ product curve at its ___________!
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D. marginal; average variable; maximum!
!
44. When total product is maximum, marginal product is!
A. Positive!
B. Negative!
C. Zero!
D. Maximum!
!
45. When average product curve is rising, !
!
46. In the short run, product curves have all the following characteristics except!
!
47. It is impossible for the total production to be ______ when the marginal product is
_________!
A. decreasing; positive!
B. increasing; decreasing!
C. increasing; increasing!
D. positive; negative!
!
48. Which of the following is most likely a variable cost?!
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D. Payment for raw materials purchased!
!
49. Assume that in the short run a firm which is producing 100 units of output has
average total costs of RM200 and AVC of RM150. The firms total fixed cost is!
A. RM5000!
B. RM500!
C. RM0.50!
D. RM50!
!
50. As output increases, AFC!
A. Fall!
B. Increase!
C. Remain constant!
!
51. If a firm decides to produce no outputs in the short run, its cost will be____!
A. zero!
D. marginal cost!
!
52. When average cost is equal to marginal cost, !
!
53. Which of the following curves are not U-shaped!
B. AFC!
!
54. Relationship between SRAC and LRAC curves is that!
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A. All of the SRACs are tangent to the LRAC and lie above it
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