Question # 1

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

John Stuart Mill was the founder of the

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Theory of reciprocal demand

Theory of absolute advantage

Theory of comparative advantage

Theory of mercantilism

There is positive relationship between multiplier and.

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Marginal propensity to consume

Marginal propensity to save

Marginal efficiency of capital

all of these

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

Monopoly market is characteristics by

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A large number of sellers

Only one seller

Thousand of seller

All of these

Which of the following the most elastic demand the extra revenue a firm receives from the services of an additional unit of a factor of production.

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Total revenue

Marginal physical product

Marginal revenues product

Marginal revenue.

Which of the following IS a function of money.

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Medium of exchange

Store of value

Unit of accounting

All of the above

Devaluation leads to.

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Increase in imports

Increase in exports

Decline in imports

None of the above

The term of trade is given by the process.

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Paid for all goods exported by the home country

Received for all goods exported by the home country

Received for exports and paid for imports.

Of primary product as opposed to manufactured products.

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

Industrial polices intended to foster comparative advantage for domestic industries could result in the implementation of.

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Research and development subsidies

Loan guarantees

Low interest rate loans

All of the above

According to factor price equalization theorem the ______ factor should oppose free trade policies in any given country.

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Abundant

Scarce

Neither

Can't tell without more information

In the home country government grants a subsidy of a domestically produced good domestic producers tend to.

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Capture the entire subsidy in the form of higher profits

Increase their level of production

Reduce wages paid to domestic workers

Consider the subsidy as an increase in production cost

A tax 15 percent per imported item would be an example of a

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Ad valorem tariff

specific tariff

Effective tariff

Compound tariff

Which industrialization policy have developing countries used which places emphasis on the comparative advantage principle as agued rto resource allocation.

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Export promotion

Import substitution

International commodity agreements

Multiateral contracts

With no government and foreign trade sectors savings always equals.

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Intended investment

Realized investment

Botha a and b

None of these

Indirect taxes are

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Direct taxes - subsidies

Subsidies

Sales taxes

Income taxes

The central bank of a country plays a significant role in her macroeconomics performance by regulating the.

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Money supply

Supply credit

Interest rate

All of these

When unintended investment is positive

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Output tends to rise

Output tends to fall

Output is in equilibrium

None of these

Absolute advantage is determined by.,

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Actual difference in labor productivity between countries.

Relative difference in labor productivity between countries.

Both a and b

neither a and b

A stable equilibrium requires that the marginal propensity to consume is.

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Less than zero

Zero

One

None of these

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