PPSC Economics Chapter 1 Basic Economics With Answers

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PPSC Economics Chapter 1 Basic Economics

Sr. # Questions Answers Choice
1 An increase in the wage rate. Will usually lead to more people employed Will decrease total earnings if the demand for labour is wage elastic Is illegal in a free market Will cause a shift in the demand for labour
2 An independent assessment of the impact of firm's activities on society is called a. Financial audit Balance sheet Profit and uses account Social audit
3 Companies in the private sector are owned by The government Shareholders Employees The community
4 If the marginal revenue is positive 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
5 Normal profit occurs when Average revenue equals average variable cost Marginal revenue equals marginal cost Average revenue equals marginal cost Average revenue equals average cost
6 To be productively efficient a firm must produce where Marginal costs are maximized Marginal costs are minimized Average costs are minimized Average revenue is maximized
7 To be allocatively efficient ta firm must produce where the total cost equals demand the average revenue equals the marginal revenue The price equals the average cost The price equals the marginal cost
8 When marginal revenue equals marginal cost Total revenue equal total cost There is the biggest positive difference between total revenue and total cost there is the biggest negative difference between total revenue and total cost. Profits are zero
9 Profit is measured by Revenue - Fixed costs Fixed cost + revenue Revenue - sales Revenues - total costs
10 To maximize sales revenue a firm should produce where Marginal cost is zero Marginal revenue is maximized Marginal revenue is zero Marginal revenue equals marginal cost
11 If firms join together to set prices and quantities this is known as what. Interaction Conglomerate Collusion Integration
12 Unfair competition does not include Price cutting predatory pricing Cartels Price fixing
13 Acquisition and merger are examples of. Internal growth External growth Organic growth Underlying growth
14 Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale. Purchasing Technical Financial Safety
15 If one car company takes over another car company this is an example of which type of integration. Vertical Horizontal Conglomerate Literal
16 If the price elasticity is -0.3 this means. Demand is upward sloping Demand is price elastic A price fall would increase revenue Demand is price inelastic
17 A benefit to consumers of price discrimination is that Some products are produced that would not other wise be produced Producer surplus increases Consumer surplus decreases Firms profits increase
18 In perfect price discrimination Consumer surplus is maximized Produce surplus is zero Community surplus is maximized Consumer surplus is zero
19 If the price elasticity of demand for a product in market A is -0.2 and in market B is -3 a price discriminator will charge. The higher price in market A The higher price in market B The same price in both markets There are many sellers
20 In marketing "USP " Stand for Unique selling proposition Underlying sales pitch Unit sales point Under sales procedure
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