Question # 1

According to the cost based definition of dumping dumping occurs when a firm sets a product abroad at a price that is less than

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Average total cost

Average variable cost

Average foxed cost

Marginal cost

In the theory of the firm profit maximization is always synonymous with.

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Profitability

Economic profit making

maximization of the sales revenue

None of these

In the short run an increase in the quantity of money ______ real GDP and _ the price level.

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increases ; raises

does not change ; lowers

decreases ; raises

decrease ; lowers

Saving means

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Part of income for investment

Income for boarding

Non consumption of income in the current period

None of the above

Guid up of foreign exchange reserves leads to.

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Decrease in money supply

increase in money supply

contraction in money supply

None of the above

In the circular flow diagram firms.

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Receive revenue and supply resources in the resource market

Incur costs and demand resources in the resource market.

Receive revenue and demand resources in the product market.

Incur costs and supply goods and services in the product market.

International trade in goods and services is sometimes used as a substitute for all of the following except.

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International movements of capital

International movement of labor

International movement of technology

Domestics production of different goods and services

Health of a country's economy is indicated by

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Number of doctors per 1,000 population

Per capital income

Literacy rate

None of the above

If there is a price celling, there will be.

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Shortages

surpluses

Equilibrium

None of these

Two commodities are considered to be perfect substitutes for each other if the elasticity of substitution is

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Positive

Negative

Infinite

None of these

Ad valorem tariffs are collected as

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Fixed amounts of money per unit traded

A percentage of the price of the product

A percentage of the quantity of imports

All of the above

If tastes are identical between countries than comparative advantage is determined by

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Supply conditions only

Demand conditions only

Supply and demand conditions

Can't tell without more information.

The nominal interest rate is 5% and the inflation rate is 2% the real interest rate is.

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2%

3%

7%

4%

Compared to the case of perfect competition.

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Monopolist is more likely to

Charge a higher price

Produce a lower quantity of the product

All of the above

Public utilities tend to be

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Inefficient

Natural monopolies

subject to increasing costs

None of these

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

The monetary base is composed of.

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Gold and silver

Currency and reserves

Currency only

Currency and checkable deposits

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

Which of the following is often considered to be inconsistent with the notion of perfect competition.

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Large number of firms

Free entry

Complete mobility

None of these

A pure number by which change in investment is multiplied to change in income is called

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Multiplier

Accelerator

Stabilizer

All of these

Why is the law of diminishing marginal returns ture.

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Specialization and division of labor

Spreading the average fixed cost

Limited capital

All factors being variable in the long run

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