PPSC Economics Chapter 1 Basic Economics With Answers

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PPSC Economics Chapter 1 Basic Economics

Sr. # Questions Answers Choice
1 A subsidy paid to producers. Shifts the supply curve Shifts the demand curve Leads to a contractional supply Leads to an extension of supply
2 A movement along the demand curve may be caused by A change in income A change en the number of buyers A change in advertising A shift in supply
3 If the price was fixed below the equilibrium price there would be. Excess supply Excess demand Equilibrium Down ward pressure on prices
4 Assuming a downward sloping demand curve and upward sloping supply curve a higher equilibrium price may be caused by. An fall in demand An increase in supply Improvements in production technology An increase in demand
5 A shift in supply will have a bigger effect on price than output if demand is. Income elastic Income inelastic Price elastic Price inelastic
6 A reduction in the costs of production will Lead to a movement along the supply curve Shift the demand curve Shift the supply curve Lead to an extension of supply
7 An increase income will Lead to a movement along the demand curve Shift the supply curve Shift the demand curve Lead to an extension of demand
8 If demand increase in a market this will usually lead to. A higher equilibrium price and output a lower equilibrium price and higher output A lower equilibrium price and output. A higher equilibrium price and lower output
9 An increase in productivity should. Lead to a contraction of supply Lead to an expansion of supply Lead to a shift in supply outwards Lead to higher equilibrium and lower equilibrium quantity.
10 An increase in price all other things unchanged leads to. A shift in supply out wards A shift in supply in wards A contraction of supply An extension of supply
11 An increase in the costs of production will Shift demand out wards Shift demand in wards Shift supply out wards so more is supplied at each and every price all other things unchanged. Shift supply inwards
12 A contraction in supply occurs when Demand shifts out wards The supply curve shifts inwards The quantity supplied falls when the price falls The supply curve shifts outwards
13 A supply curve that starts at the origin has A price elasticity of supply greater than one A price elasticity of supply equal to one A price elasticity of supply less than one A positive price elasticity of supply
14 Supply is likely to be more price elastic. In the short run rather than the long run If factors of production are relatively immobile between industries. If there are very few producers If it is easy to expand output
15 If demand is price inelastic. An increase in price must raise profits An increase in price decreases revenue An increase in price increase revenue A decrease in price reduces sales.
16 The bowed shape of the production possibilities curve illustrtres. The law of increasing marginal cost the production in inefficient That production is inattainable The demand is relatively inelastic
17 If product an inferior good. Demand is inversely related to income Demand is inversely related to price Demand is directly related to price Demand is inversely related to the price of substitutes
18 An increase in price all other, things unchanged leads to. Shift demand outwards Shift demand inward A contraction of demand An extension of demand
19 An increase in the price of a complement or produce.A would. Shift demand for product a out wants Shift demand for product A inwards shift supply for product A out wards Shift supply for product A inwards
20 If marginal utility is zero. Total utility is zero An additional unit of consumption will decrease total utility An additional unit of consumption will increase total utility Total utility is maximized
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