Question # 1

The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve.

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At their lowest points

When they are declining

When they are increasing.

When marginal revenue is zero

In the classical model, potential output can not be increased by

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Monetary growth

Better technology

More capital

higher labour supply

A monopoly may be self perpetuating because profits may be used for

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research

Cost saving

Technical advance

All of the above

If both Marginal cost and marginal revenue increase, a firm.

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Should increase output

Should reduce output

Will require further information on how to respond

should not change output

Short run average total costs are equal to the sum of _______ and______

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Short run opportunity costs, profit

Short run average variable costs, profit

short run average variable costs, profit.

Short run average variable costs short run average fixed costs

In the neoclassical theory of growth a higher saving rate leads to.

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A higher growth rate

A fluctuating growth rate

A lower growth rate

No change in the growth rate

All of the following are type of monetary policy except

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A nominal money stock target

A balances budget

An inflation target

The pursuit of a target real interest rate

If my neighbor burns garden waste causing my house to fil with smoke this is an example of.

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A production extremality

A second best solution

Transaction costs

A consumption externality

If goods are exported for less than society's marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from.

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An import subsidy

A quota

Comparative advantage

An export subsidy

Efficiency wages are_______ that raise

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Low wages , employment

High wages, labor supply

High wages, productivity

High wages, employment

Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.

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Exceed

Fall below

Fluclaute around

Remain equal to.

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.

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Sun spect theory

Multiplier accelerator model

Solow theory

New classical theory

A production technique is technically efficient if.

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Output is maximized

Input are minimized

there is no way to make a given output using less of one input and no more of the other inputs.

costs are minimized

The key issues of macroeconomics are

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Unemployment

Inflation

Economic growth

All of the above

Normative economics form ______ based on.

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Positive statements facts

Opinions, personal values

Positive statements values

Opinions facts

A fall in investment demand can result from

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Higher interest rates

Lower expected future profits

More expensive capital goods

All of the above

The opportunity cost of acquiring education is.

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Course fees

Course fees and living expenses

The earning foregone

Course fees, living expenses and textbooks

Economics assumes that people consume goods and services to achieve.

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Status

Prestige

Utility

Self esteem

If banks and the private sector decide to hold less cash the money multiplier will be.

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Unchanged

Larger

Smaller

unstable

LDC's often have a comparative advantage in the production of.

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Primary products

Intermediate products

Manufactured products

Financial services.

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