Question # 1

An increase in aggregate demand is more likely to lead to demand pull inflation if.

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Aggregate supply is perfectly elastic

Aggregate supply is perfectly inelastic

Aggregate supply is unit elastic

Aggregate supply is relatively elastic

Market is called father of economics

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Marshall

Robbins

Keynes

Friedman

Economists use the term marginal utility to mean.

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Additional satisfaction gained divided by additional cost of the last unit.

Additional satisfaction gained by the consumption of one more unit of a good

Total satisfaction gained when consuming a given number of units.

The process of comparing marginal units of all goods which could be purchased

Capital, as economists use the term.

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Is the money the firm spends to hire resources

Is money the firm raises from selling stock

Refers to the process by which resources are transformed into useful forms

Refers to things that have already been produced that are in turn used to produce other goods and services.

If product an inferior good.

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Demand is inversely related to income

Demand is inversely related to price

Demand is directly related to price

Demand is inversely related to the price of substitutes

A supply curve that starts at the origin has

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A price elasticity of supply greater than one

A price elasticity of supply equal to one

A price elasticity of supply less than one

A positive price elasticity of supply

Globalization is likely to increase with

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More protectionism

An increase in tariffs

More trade within countries

Greater trade flows between countries

What makes economics scientific.

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It tests theories against observations and modifies the theories if needed.

It uses numbers to measure things

It involves the use of experiments

It is a description of how thing work

If the price elasticity is -0.3 this means.

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Demand is upward sloping

Demand is price elastic

A price fall would increase revenue

Demand is price inelastic

A profit maximizing firm will employ labour up to the point where.

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Marginal revenue = Marginal product

Margial cost = Marginal product

Marginal revenue product = Average cost of labour

Marginal revenue product = Marginal cost of labour

If the marginal revenue is less than the marginal cost then to profit maximize a firm should.

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Reduce output

Increase output

Leave output where it is.

Increase costs

Japan's low interest rates in the mid 80's were due to.

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High rates of domestic savings.

A decrease in Japan's exports

Increases in the U.S. deficit

High rates of domestic spending in Japan

Developing economies usually

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Have large industrialized sectors

Are dependent on primary products

Have high levels of wealth

Earn more from exports than is spent on imports

A public good

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Is provided by the government

Is free

Has the properties of being non excludable and non diminishable

Has external costs

The resources in the economy do not include.

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Demand

Land

Labor

Capital

A depreciation of currency occur when

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The value of the currency falls

The value of the currency increases

Inflation falls

The balance of payments improves

In a recession

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Unemployment is likely to be low

prices are likely to increase

Growth is negative

Growth is slow

Equilibrium in the market for good A obtains.

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When there is no surplus or shortage prevailing in the market

Where the demand and supply curves for A intersect

When all of what is produced of A is consumed

All of the above

The price mechanism does not act as a

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Signal

Incentive

Rationing device

Indicator of income

If the fprice in a market is fixed by the government below equilibrium.

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There is excess equilibrium

There is excess supply

There is excess demand

There is equilibrium

An independent assessment of the impact of firm's activities on society is called a.

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Financial audit

Balance sheet

Profit and uses account

Social audit

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