Question # 1

There are three fundamental questions every society must answer Which of the following is one of these questions.

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What goods and services are to be produced.

How are the good and services to be produced.

Who will get the goods and services what are produced.

All of the above

The diamond water paradox can be explained by suggesting that the price of a product is determined by.

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Consumer incomes

Its marginal utility

Consumer surplus

Diminishing marginal utility

The accelerator assumes.

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The marginal propensity to consume is constant

The economy is at full employment

There is a constant relationship between net investment and the rate of change of output

The multiplier is constant

If the price is less than the average cost but higher than the average variable costs.

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The firm is making a loss and will should own in the short term.

The firm is making a profit.

The firm is making a loss but will continue to produce in the short term

The firm is making a loss and is making a negative contribution to fixed costs

In a command economy

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The price mechanism acts as an incentive

Resources are allocated by market forces

Individual firms make decisions for themselves about what to produce and how to produce it.

The public sector is large

Aggregate demand will increase if

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Consumption falls

Investment falls

Exports fall

imports fall

What does ceteris paribus mean.

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"Scientific method"

"Rational thinking"

"Other things remaining the same"

"There is no such thing as a free lunc"

Improved training of employees would.

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Shift aggregate supply to the right

Shift aggregate supply to the left

Shift aggregate demand to the right

Shift aggregate demand to the left

A government might use tax to.

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Discourage consumption of positive externalities

Discourage consumption of public goods

Discourage consumption of merit goods

Discourage consumption of negative externalities

The marginal rate of tax paid is.

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The total tax paid /total income

Total income/total tax paid

Change in the tax paid/change in income

Change in income/change in tax paid

A reflationary policy

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Increases aggregate supply

Increases aggregate demand

Decreases the price level

Increase full employment

A movement along the supply curve may be caused by

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A change in technology

A change in the number of producers

A shift in demand

A change in costs

An increase in productivity should.

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Lead to a contraction of supply

Lead to an expansion of supply

Lead to a shift in supply outwards

Lead to higher equilibrium and lower equilibrium quantity.

The difference between gross investment and net investment is.

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Depreciation

Acceleration

Deceleration

Capital investment

If the economy grows the government's budget position will automatically

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Worsen

Improve

Stay the same

Increase with inflaction

The marginal revenue curve in monopoly

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Equals the demand curve

Is a parallel with the demand curve

Lies below and converges with the demand curve

Lies below and diverges from the demeaned curve

Tariffs.

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Decrease the domestic price of a product.

Increase government earnings from tax

Increase the quantity of imports

Decrease domestic production

An injection of funds into a less developed country might set off the

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Multiplier

Marginal propensity to save

Average propensity to consume

The Laffer effect

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

In a recession

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Unemployment is likely to be low

prices are likely to increase

Growth is negative

Growth is slow

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