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Online Tests
PPSC Economics Chapter 1 Basic Economics MCQs With Answers
Question # 1
Which of the following is a characteristic of pure monopoly.
Choose an answer
one seller of the product
Low barriers to entry
Close substitute products
Perfect information
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Question # 2
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
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Question # 3
Laboratory experiments cannot be performed in economics because.
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Of resource scarcity
Economics is a natural science
Of the difficulty of distinguishing between normative and positive statements.
Economics is a social science
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Question # 4
A mixed economy
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Has supply but not demand
Has demand but not supply
Has supply and demant
Has market forces and government intervention
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Question # 5
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
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Question # 6
Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale.
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Purchasing
Technical
Financial
Safety
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Question # 7
The first level of output at which the long run average costs are minimized is called.
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The minimum Efficient Scale
The minimum External scale
The Maximum External scale
The maximum Effective scale.
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Question # 8
An increase in costs will
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Shift aggregate demand
Shift aggregate supply
Reduce the natural rate of unemployment
Increases the productivity of employees
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Question # 9
A cut in the income tax rate designed to encourage household consumption is an example of.
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Expansionary demand side policy
Contractionary demand side policy
Expansionary supply side policy
Contractionary supply side policy
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Question # 10
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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Question # 11
If one car company takes over another car company this is an example of which type of integration.
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Vertical
Horizontal
Conglomerate
Literal
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Question # 12
In a free market the combination of products produced will be determined by.
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Market forces of supply and demand
The government
The law
The public sector
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Question # 13
In the long term a firm will produce provident the revenue covers.
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Fixed costs
Variable cost
Total costs
Revenue
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Question # 14
Free trade is based on the principle of
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Comparative advantage
Comparative scale
Economics of advantage
Production possibility advantage
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Question # 15
Government policies that focus on increasing production rather than demand are called.
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Fiscal policies
Monetary policies
Incomes policies
Supply side policies
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Question # 16
An economy may operate outside the production possibility frontier it.
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It is not utilizing its resources fully
It is being productively efficient
It is a maxed economy
It is trading with other economics
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Question # 17
If the marginal revenue is positive
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Selling another unit will increase total revenue
Selling another unit will increase profits
Selling another unit will increase cost
Selling another unit will increase average revenue
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Question # 18
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
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Question # 19
Lower interest rates are likely to.
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Decrease consumption
Increase cost of borrowing
Encourage saving
Increase spending
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Question # 20
The law of demand states that.
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As the quantity demanded rises, the price rises.
As the price rises the quantity demanded rises
As the price rises, the quantity demanded falls.
As supply rises, the demand rises.
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Question # 21
A public good will
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Be underprovided in the free market
Be overprovided in the free market
Not be provided in the free market
Has no opportunity cost
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