MCQOPTIONS
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MCQOPTIONS
This section includes 179 Mcqs, each offering curated multiple-choice questions to sharpen your Economics (CBCS) knowledge and support exam preparation. Choose a topic below to get started.
| 151. |
A monopolist maximizes profit by producing the quantity at which |
| A. | marginal revenue equals marginal cost. |
| B. | marginal revenue equals price. |
| C. | marginal cost equals price. |
| D. | marginal cost equals demand. |
| Answer» B. marginal revenue equals price. | |
| 152. |
Which of the following is a determinant of trade? |
| A. | Tastes |
| B. | Per capita income |
| C. | Technological change |
| D. | All of the above |
| Answer» E. | |
| 153. |
David Ricardo's trading principle emphasis the: |
| A. | Demand side of the market |
| B. | supply side of the market |
| C. | role of comparative costs |
| D. | role of absolute costs |
| Answer» D. role of absolute costs | |
| 154. |
The first classical theory of International Trade is given by |
| A. | Friedman |
| B. | Keynes |
| C. | Adam Smith |
| D. | Heckscher-Ohlin |
| Answer» D. Heckscher-Ohlin | |
| 155. |
Factor prices are determined in the factor market under the forces of |
| A. | Marginal productivity |
| B. | Elasticity of demand |
| C. | Elasticity of supply |
| D. | Demand and supply |
| Answer» E. | |
| 156. |
The producer s demand for a factor of production is governed by the ___ of that factor. |
| A. | Price |
| B. | Marginal Productivity |
| C. | Availability |
| D. | Profitability |
| Answer» C. Availability | |
| 157. |
In classical theory of International Trade, the exchange of goods and services takes on the basis of .. system? |
| A. | Barter |
| B. | Money |
| C. | Labour |
| D. | Capital |
| Answer» B. Money | |
| 158. |
Infant industry argument in international trade is given in support of: |
| A. | Granting Protection |
| B. | Free trade |
| C. | Curbing export |
| D. | None of the above |
| Answer» B. Free trade | |
| 159. |
The Heckscher-Ohlin approach to international trade provides important insights, in |
| A. | Gains from trade |
| B. | Effect of trade on production and consumption |
| C. | Effect of trade on the incomes of production factors |
| D. | All of the above |
| Answer» E. | |
| 160. |
Which of the following is not a benefit of international trade? |
| A. | High wage levels for all domestic workers |
| B. | Lower domestic prices |
| C. | Development of more efficient methods and new products. |
| D. | A greater range of consumption choices. |
| Answer» B. Lower domestic prices | |
| 161. |
Under Heckscher-Ohlin Model, international trade can lead to increases in: |
| A. | Consumer welfare only if output of both products is increased |
| B. | Output of both products and consumer welfare in both countries |
| C. | Total production of both products, but not consumer welfare in both countries |
| D. | Consumer welfare in both countries, but not toal production of both products. |
| Answer» C. Total production of both products, but not consumer welfare in both countries | |
| 162. |
The basis of trade between countries lies in the |
| A. | The difference in factor endowment |
| B. | The difference in money standard |
| C. | Difference in political system |
| D. | All of the above |
| Answer» E. | |
| 163. |
In Heckscher Ohlin theory, what is assumed to be same across the countries? |
| A. | Capital |
| B. | Labour |
| C. | Transportation cost |
| D. | Technology |
| Answer» E. | |
| 164. |
Equilibrium in the factor market achieved at the factor price and factor quantity is given by |
| A. | The intersection of the factor demand curve and the factor supply curve |
| B. | The sum total of the elasticities of demand and supply |
| C. | The product of the elasticities of demand and supply |
| D. | none |
| Answer» B. The sum total of the elasticities of demand and supply | |
| 165. |
Which of the following trade policies limits specified quantity of goods to be imported at one tariff rate. |
| A. | Quota |
| B. | Import tariff |
| C. | Specific tariff |
| D. | All of the above |
| Answer» B. Import tariff | |
| 166. |
Who benefits from tariff protection? |
| A. | Domestic consumers on the good produced |
| B. | Domestic producers of the good produced |
| C. | Foreign producers of the good produced |
| D. | Foreign consumers of the good produced. |
| Answer» C. Foreign producers of the good produced | |
| 167. |
If a nation has a comparative advantage in the production of a good, |
| A. | it can produce that good at a lower opportunity cost than its trading partner |
| B. | it can benefit by restricting imports of that good |
| C. | it can produce that good using fewer resources than its trading partner. |
| D. | it must be the only country with the ability to produce that good |
| Answer» B. it can benefit by restricting imports of that good | |
| 168. |
Adam Smith propounded the theory of |
| A. | Comparative cost |
| B. | Opportunity cost |
| C. | Absolute advantage in international trade |
| D. | None of the above |
| Answer» D. None of the above | |
| 169. |
Trade between nations occur due to |
| A. | Difference in monetary |
| B. | Difference in resource endowment |
| C. | Difference in political status |
| D. | Difference in population |
| Answer» C. Difference in political status | |
| 170. |
In Heckscher-Ohlin model, factor abundance have been defined in two terms. Those are |
| A. | Price and location criteria |
| B. | Physical and location criteria |
| C. | Price and physical criteria |
| D. | None of the above |
| Answer» D. None of the above | |
| 171. |
David Ricardo propounded theory of |
| A. | Law of reciprocal demand |
| B. | Absolute theory of international trade |
| C. | Comparative theory of international trade |
| D. | None of the above |
| Answer» D. None of the above | |
| 172. |
Trade among different regions within the same country is known as |
| A. | International trade |
| B. | Interregional trade |
| C. | Bilateral trade |
| D. | Trilateral trade |
| Answer» C. Bilateral trade | |
| 173. |
The absolute advantage theory of international trade is associated with |
| A. | David Ricardo |
| B. | Adam Smith |
| C. | Alfred Marshall |
| D. | Heckscher-Ohlin |
| Answer» C. Alfred Marshall | |
| 174. |
Heckscher-Ohlin theory of international trade is based on |
| A. | Factor price equalization |
| B. | Absolute advantage |
| C. | Factor endowment differentials |
| D. | Labour productivity |
| Answer» D. Labour productivity | |
| 175. |
According to Heckscher-Ohlin theory as a result of international trade, the difference in factor price between nations |
| A. | diminishes |
| B. | increases |
| C. | is constant |
| D. | All of the above |
| Answer» B. increases | |
| 176. |
The main objective of international trade is |
| A. | To maximize production |
| B. | To remove political bondage |
| C. | To establish world bank |
| D. | To remove poverty |
| Answer» B. To remove political bondage | |
| 177. |
Import quota implies |
| A. | Physical limitation of quantities of goods traded to other countries |
| B. | Physical limitation of quantities of goods traded from other countries |
| C. | A duty imposed by the government upon the goods traded |
| D. | All of the above |
| Answer» C. A duty imposed by the government upon the goods traded | |
| 178. |
The imposition of an import tariff by a nation usually |
| A. | improves the nation s terms of trade and increases the volume of trade |
| B. | worsens the nation s terms of trade but increases the volume of trade |
| C. | improves the nation s terms of trade but reduces the volume of trade |
| D. | None of the above |
| Answer» D. None of the above | |
| 179. |
Social welfare increases when transfer of real income from the rich to poor increases is a statement given by |
| A. | Kaldor-Hicks |
| B. | A. C. Pigou |
| C. | Pareto |
| D. | Prof. Bergson |
| Answer» C. Pareto | |