MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 78 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following statements regarding discrimination is true ? |
| A. | The existence of a wage differential among groups is strong evidence of discrimination in the labour market |
| B. | Discrimination can only persist in a competitive labour market it customers are willing to pay to maintain the discriminatory practice or the governme |
| C. | Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market |
| D. | Discrimination cannot exist in a competitive labor market |
| Answer» C. Bigoted employers are the main source of a persistent discriminatory wage differential in a competitive market | |
| 2. |
Which of the following statements regarding the impact of population growth on productivity is true ? |
| A. | There is no evidence, yet that rapid population growth stretches natural resources to the point that it limits growth in productivity |
| B. | All of these answers |
| C. | Rapid population growth may dilute the capital stock lowering productivity |
| D. | Rapid population growth may promote technological progress increasing productivity. |
| Answer» C. Rapid population growth may dilute the capital stock lowering productivity | |
| 3. |
Which of the following professionals is most likely to be able to generate the income of a superstar ? |
| A. | the best professor |
| B. | the best writer |
| C. | All of these answers participate in markets that could generate a superstar |
| D. | The best accountant |
| E. | the best medical doctor |
| Answer» C. All of these answers participate in markets that could generate a superstar | |
| 4. |
Which of the following is true regarding the earning of attractive versus unattractive workers ? |
| A. | Attractive people tend to earn less because attractive people are viewed as shallow and more self-absorbed and therefore, as less productive |
| B. | Attractive people tend to earn more because they may actually have a larger value of marginal product |
| C. | Attractive people tend to earn more because attractive people usually have greater human capital |
| D. | Attractive people tend to earn less because attractive people usually have less human capital |
| Answer» C. Attractive people tend to earn more because attractive people usually have greater human capital | |
| 5. |
Which of the following is not part of a worker’s human capital ? |
| A. | education |
| B. | experience |
| C. | all of these answers are parts of a worker’s human capital |
| D. | effort |
| E. | on the job training |
| Answer» E. on the job training | |
| 6. |
Which of the following is not a reason why some workers are paid above the equilibrium wage ? |
| A. | minimum-wage laws |
| B. | efficiency wages |
| C. | unions |
| D. | beauty |
| Answer» E. | |
| 7. |
Which of the following is likely to generate a compensating differential ? |
| A. | One employee is more attractive than another |
| B. | One employee is more educated than another |
| C. | All of these answers generated |
| D. | One employee works harder than another |
| E. | One employee is willing to work the nightshift while another is not. |
| Answer» F. | |
| 8. |
Which of the following is an example of foreign portfolio investment ? |
| A. | Toyota builds a new plant in the north of England |
| B. | EDF of France buys shares in Scottish & Southern Energy of the UK, and Scottish & Southern Energy uses the Proceeds to build a new hydro-electric powe |
| C. | Deutsche Bank of Germany buys some new software from UK Supplier |
| D. | JCB builds a new plant near Manchester |
| Answer» C. Deutsche Bank of Germany buys some new software from UK Supplier | |
| 9. |
Which of the following is an example of a public good ? |
| A. | hot dogs at a picnic |
| B. | Whales in the ocean |
| C. | national defense |
| D. | apples on a tree in a public park |
| Answer» D. apples on a tree in a public park | |
| 10. |
Which of the following is an example of a common resource ? |
| A. | a firework displays |
| B. | national defense |
| C. | iron one |
| D. | a national park |
| Answer» E. | |
| 11. |
Which of the following government policies is least likely to increase likely to increase growth in Africa ? |
| A. | increase expenditure on public education |
| B. | eliminate civil war |
| C. | All of these answers would increase growth |
| D. | increase restrictions on the importing of American tractors and electronics |
| Answer» E. | |
| 12. |
Which of the following explanations of wage differentials is not likely to be true ? |
| A. | Men have more human capital than women |
| B. | Employers in competitive markets are bigots |
| C. | Men have more job experience than women |
| D. | None of the above |
| Answer» C. Men have more job experience than women | |
| 13. |
Which of the following expenditures to enhance productivity is most likely to emit a positive externality ? |
| A. | Megabank buys a new computer |
| B. | Naila pays her university tuition fees. |
| C. | OGDC leases a new oil field |
| D. | Indus Motors buys a new drill press |
| Answer» C. OGDC leases a new oil field | |
| 14. |
Which of the following describes an increase in technological knowledge ? |
| A. | A farmer sends his child to agricultural college and the child returns to work on the farm |
| B. | A farmer hires another day laborer |
| C. | A farmer buys another tractor |
| D. | A farmer discovers that it is better to plant in the spring rather than in the fall |
| Answer» E. | |
| 15. |
Which of the following could result in women being paid less than men ? |
| A. | women obtaining less human capital because they don’t plan to work continuously to the age of retirement |
| B. | Women entering and leaving the labour force to care for children |
| C. | customers preferring to deal with men |
| D. | women preferring to work in pleasant clean safe work places |
| E. | all of these answers |
| Answer» F. | |
| 16. |
Which of the following best describes the rate of growth in productivity in the United states over the last fifty years ? |
| A. | Productivity growth has been steady over the last 50 years |
| B. | Productivity has been growing more slowly every decade since world War II |
| C. | Productivity grew quickly in the 1950s and 1960s more slowly from the early 1970s through 1995 and then quickly again |
| D. | Productivity grew slowly from the 1950s through the 1970s and then began to accelerate probably due to advances in computer technology |
| Answer» D. Productivity grew slowly from the 1950s through the 1970s and then began to accelerate probably due to advances in computer technology | |
| 17. |
Which of the following are potential solutions to the problem of air pollution? |
| A. | Grant right of the clean air to citizens so that firms must purchase the right to pollute |
| B. | Auctions off pollution permits. |
| C. | Regulate the amount of pollutants that firms can put in the air |
| D. | all of these answers |
| Answer» E. | |
| 18. |
When markets fail to allocate resources efficiently, the ultimate source of the problem is usually ? |
| A. | government regulation |
| B. | that prices are not low enough so firms over produce |
| C. | that prices are not high enough, so people overconsume |
| D. | that property rights have not been well established |
| Answer» E. | |
| 19. |
When government employ cost-benefit analysis to help them decide whether to provide a public good, measuring benefits is difficult because ? |
| A. | there are no benefits to the public since a public good is not excludable |
| B. | the benefits are infinite because a public good is not rival and an infinite amount of people can consume it at the same time |
| C. | one can never place a value on human life or the environment |
| D. | respondents to naires have little incentive to tell the truth. |
| Answer» E. | |
| 20. |
When a national has very little GDP per person ? |
| A. | it is doomed to being relatively poor forever |
| B. | none of these answers |
| C. | an increase in capital will likely have little impact on output |
| D. | it has the potential to grow relatively quickly due to the “catch-up-effect” |
| E. | It must be a small nation. |
| Answer» E. It must be a small nation. | |
| 21. |
Unions achieve a higher wage differential the more _____ and the more ______? |
| A. | inelastic the demand for labour, they can restrict the supply of labour |
| B. | members they have, aggressive they behave |
| C. | the economy is growing, people prefer leisure |
| D. | the productivity is growing vacancies exist |
| Answer» B. members they have, aggressive they behave | |
| 22. |
Top footballers tend to earn more than lecturers because ? |
| A. | footballers give more entertainment |
| B. | lecturers are lazy |
| C. | the labor markets are imperfect |
| D. | top footballers are relatively scarce in relation to lecturers |
| Answer» E. | |
| 23. |
To increase growth, governments should do all of the following except ? |
| A. | encourage foreigners to investment in your country |
| B. | encourage saving and investment |
| C. | nationalize major industries |
| D. | encourage research and development |
| E. | Promote free trade |
| Answer» D. encourage research and development | |
| 24. |
Thomas Malthus argued that ? |
| A. | none of these answers |
| B. | an ever-increasing population is constrained only by the food supply resulting in chronic faminies |
| C. | technological progress will continuously generate improvement in productivity and living standards. |
| D. | labor is the only true factor of production |
| Answer» C. technological progress will continuously generate improvement in productivity and living standards. | |
| 25. |
The value of an asset depends upon ? |
| A. | its scrap values |
| B. | its depreciation |
| C. | the present value of the future stream of income it can earn |
| D. | the cost of loans |
| Answer» D. the cost of loans | |
| 26. |
The Tragedy of the Commons is a parable that illustrates why? |
| A. | common resources are overconsumed |
| B. | public goods are underproduced |
| C. | private goods are under consumed |
| D. | natural monopolies overproduce goods. |
| Answer» B. public goods are underproduced | |
| 27. |
The substitution effect of a rise in the price of labour will ____ the quantity of labour and the output, effect will ____ it |
| A. | increase; increase |
| B. | increase; reduce |
| C. | reduce; reduce |
| D. | reduce; increase |
| Answer» D. reduce; increase | |
| 28. |
The participation rate in the labour force is affected by ? |
| A. | higher real wages |
| B. | lower fixed costs of working |
| C. | lower non-labour income |
| D. | changes in tastes between leisure and work |
| E. | all of the above |
| Answer» F. | |
| 29. |
The opportunity cost of acquiring education is ? |
| A. | course fees |
| B. | course fees and living expenses |
| C. | the earnings foregone |
| D. | Course fees living expenses and textbook |
| Answer» D. Course fees living expenses and textbook | |
| 30. |
The opportunity cost of growth is ? |
| A. | a reduction in current investment |
| B. | a reduction in current consumption |
| C. | a reduction in taxes |
| D. | a reduction in current saving |
| Answer» C. a reduction in taxes | |
| 31. |
The most important source of wage differentials are ? |
| A. | regional variation |
| B. | unionization |
| C. | relative danger |
| D. | skills |
| Answer» E. | |
| 32. |
The marginal revenue product of capital is the ? |
| A. | change in a company’s balance sheet when it acquires new plant |
| B. | additional value of output from using more capital |
| C. | change in company’s share price |
| D. | changing value of the capital stock |
| Answer» C. change in company’s share price | |
| 33. |
The functional distribution of income shows how national income is divided between ? |
| A. | employees |
| B. | the population |
| C. | the factors of production |
| D. | the working population |
| Answer» D. the working population | |
| 34. |
The downward sloping marginal physical product of labor is the firm’s ? |
| A. | Supply of labor |
| B. | Short-run demand curve for labor |
| C. | marginal cost of labour |
| D. | marginal revenue product of labor |
| Answer» C. marginal cost of labour | |
| 35. |
The difference between gross investment and net investment is ? |
| A. | depreciation of the existing capital stock |
| B. | productive investment |
| C. | dwellings |
| D. | inventories |
| Answer» B. productive investment | |
| 36. |
the cost of using capital services is the ? |
| A. | wage rate of capital |
| B. | interest charges |
| C. | marginal capital cost |
| D. | rental rate for capital |
| Answer» E. | |
| 37. |
Public goods are difficult for a private market to provide due to ? |
| A. | the rivalness problem |
| B. | the public goods problem |
| C. | the Tragedy of the Commons. |
| D. | The free-rider problem. |
| Answer» E. | |
| 38. |
Our standards of living is most closely related to ? |
| A. | how hard we work: |
| B. | our supply of capital because everything of value is produced by machinery |
| C. | our productivity because our income is equal to what we produce |
| D. | our supply of natural resources because they limit production |
| Answer» D. our supply of natural resources because they limit production | |
| 39. |
Once a country is wealthy ? |
| A. | it no longer needs any human capital |
| B. | capital becomes more productive due to the “catch-up- effect” |
| C. | none of these answers |
| D. | it may be harder for it to grow quickly because of the diminishing returns to capital |
| Answer» E. | |
| 40. |
Many East Asian countries are growing very quickly because ? |
| A. | They save and invest an unusually high percentage of their GDP |
| B. | They have always been wealthy and will continue to be wealthy, which is known as the “snowball effect” |
| C. | They are imperialists and have collected wealth from previous victories in war |
| D. | They have enormous natural resources. |
| Answer» B. They have always been wealthy and will continue to be wealthy, which is known as the “snowball effect” | |
| 41. |
Land will be allocated between competing uses so that ? |
| A. | housing gets priority |
| B. | industry gets priority |
| C. | farming gets priority |
| D. | the equilibrium rental rate equilibrium total demand with supply |
| Answer» E. | |
| 42. |
It is not considered discrimination when an employer offers different opportunities to individuals that differ only by them ? |
| A. | productivity |
| B. | age |
| C. | sex |
| D. | race |
| Answer» B. age | |
| 43. |
Involuntary unemployment exists if workers ? |
| A. | will not work at the offered wage |
| B. | would work at the going wage but can’t find jobs |
| C. | will not work because the hours are anti-social |
| D. | Are not prepared to move house to get the job |
| Answer» C. will not work because the hours are anti-social | |
| 44. |
In the West Women and non-whites on average receive lower incomes than white men because ? |
| A. | they tend to work in relatively unskilled jobs |
| B. | educational disadvantage |
| C. | firms are reluctant to invest in training |
| D. | all of the above |
| Answer» E. | |
| 45. |
In the short run, the supply of capital is ________ and in the long run will depend on _______? |
| A. | variable, technology |
| B. | fixed, expectations |
| C. | fixed, rental rate of capital |
| D. | variable, interest rates |
| Answer» D. variable, interest rates | |
| 46. |
In order for a market to support superstars it must have which of the following characteristics ? |
| A. | It must be involved in professional athletics |
| B. | Every customer must be indifferent to the price they pay, and the seller must be a competitor in the market for the product |
| C. | Every customer must be willing to pay an enormous amount for the product and the product must be a necessity |
| D. | Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low co |
| Answer» E. | |
| 47. |
In a competitive market, which of the following is least, likely to be the source of a persistent discriminatory wage differential ? |
| A. | All of these answers could be source of a persistent discriminatory wage differential |
| B. | the customer |
| C. | the government |
| D. | the employer |
| Answer» E. | |
| 48. |
If workers get a real wage increase this will likely ____ and _____? |
| A. | encourage the use of more capital in the long run, reduce demand for all inputs |
| B. | encourage the use of more capital increase demand for all inputs |
| C. | encourage the use of less capital reduce demand for all inputs |
| D. | encourage the use of less capital, reduce demand for all inputs |
| Answer» D. encourage the use of less capital, reduce demand for all inputs | |
| 49. |
If two jobs require the same amount of skills and experience the job that pays the most is most likely to be the one that is ? |
| A. | unpleasant |
| B. | all these answers |
| C. | safe |
| D. | fun |
| E. | easy |
| Answer» B. all these answers | |
| 50. |
If Toyota builds a new plant in the north of England ? |
| A. | None of these answers |
| B. | There has been an increase in foreign portfolio investment in the UK |
| C. | Once the plant starts producing cars UK GDP will rise less than UK GNP |
| D. | once the plant starts producing cars UK GDP will rise more than UK GNP |
| Answer» E. | |