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PPSC Economics Chapter 1 Basic Economics MCQs With Answers
Question # 1
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
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Question # 2
Which of the following is not one of the four Ps in marketing.
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Product
Price
Place
Presence
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Question # 3
Finding a partner to work with abroad is called a.
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Takeover
Merger
Acquisition
Joint venture
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Question # 4
The average variable cost curve.
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Is derived from the average fixed costs
Converges with the average cost as output increases
Equals revenue minum profits
Equal the total costs divided by the output
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Question # 5
If an economy is productively efficient.
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Everyone is wealthy
Resources are unemployed
More of one product can only be produced if less of another product is produced.
The distribution of income is equal
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Question # 6
Game theory
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Firm are assumed to act independently
Firms are assumed to cooperate with each other
Firm collude as part of a cartel
Firms consider the actions of others before deciding what to do.
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Question # 7
Effective branding will tend to make
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Demand mover price inelastic
Supply more price inelastic
Demand more income elastic
Supply more income elastic
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Question # 8
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
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Question # 9
Which of the following is not an obvious or direct determinant of a country's imports.
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Real exchange rate
Income
Tariff rates
Interest rate
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Question # 10
If a maximum price is set below equilibrium there will be.
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A price fall
A price increase
Excess supply
Excess demand
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Question # 11
Price equal to.
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Total revenue -quantity
Total revenue/quantity sold
total quantity sold * quantity sold
Total revenue/total cost
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Question # 12
Increase un employment benefits and less incentive to work 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
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Question # 13
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 # 14
In monopoly in long run equilibrium.
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The firm is productively effieient
The firm is allocatively inefficient
The firm produces where marginal cost is less than marginal revenue
The firm produces at the sociality optimal level
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Question # 15
If the price was fixed below the equilibrium price there would be.
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Excess supply
Excess demand
Equilibrium
Down ward pressure on prices
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Question # 16
Which does the government not control directly.
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Spending on health
spending on defense
Firm's investment decisions
spending on education
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Question # 17
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 # 18
If the price in a market is fixed by the government above equilibrium.
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There is excess equilibrium
There is excess supply
There is excess demand
There is equilibrium
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Question # 19
Which of the following would increase aggregate demand.
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Increasing saving
Increasing import spending
Increasing taxation revenue
increased investment
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Question # 20
Exchange rates that are determined by the unregulated forces of supply and demand are.
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Floating exchange rates
Pegged exchange rates
Fixed exchange rate
Managed exchange rates
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Question # 21
In monopoly when abnormal profits are made.
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The prize set is greater than the marginal cost
The price is less than the average cost
The average revenue equals the marginal cost
Revenue wquals total cost
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