Question # 1

The firms long run output decision will be where.

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Long run average cost a lowest

Marginal revenue equals output

Marginal revenue equals long run marginal cost

Marginal cost equals output

The allocation of resources is not efficient it

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The marginal cost of production does not equal society marginal benefit

The distribution is inequitable

Economic growth is low

Unemployment is high

A profit maximizing firm will hire labor until _______ equal the

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Marginal revenue, marginal cost

Long run marginal revenue, long run marginal cost

Labour output ratio, capital output ratio

Marginal cost of labour, marginal revenue product

Human capital can be described as.

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The tools used by workers to entrances productivity

a persons inherited abilities.

The stock of expertise accumulated by a worker

Education

Normative economics form ______ based on.

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Positive statements facts

Opinions, personal values

Positive statements values

Opinions facts

For a competitive firm its short run supply curve is ________ and its long run supply curve is.

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SMC , LMC

SMC above SAVC, LMC above LAC

SMC below SAVC, LMC above LAC

SMC Below SAVC, LMC below LAC

GDP per head may be an imperfect measure of economic welfare because it excludes.

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The value of leisure

Externalities

Untraded goods

All of the above

In the short run the level of floating exchange rates is determined mainly by.

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Interest rates

Competitiveness

Trade

Speculation

In the UK under a _________ of the labour force belong to a trade union.

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Quarter

Third

Half

Three quarters

The prisoners Dilemma Game demonstrates that.

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Players are better off to act independently

Monopoly is better than competition

People will always cheat

Players are better off if they con operate

Extremality's arise because there is a divergence between ____ and _

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Private costs, private benefits

Private costs, social costs of benefits

Social cost, social benefit

Insiders, outsiders

When capital mobility is perfect, interest rate differentials will tend to be offset by

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Price differences.

Balance of payments differences.

Current account differences.

Expected exchange rate changes

Short run equilibrium output means that aggregate demand _ actual output

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is less than

equals

is greater than

fluctuates around

Real GNP measures income

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Including non market activities

Adjusted for inflation

Including externalities

Including tax evasion

Aggregate demand without a foreign sector is the sum of.

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c+1

C+G

1+G

C+!+G

The neoclassical theory of growth identities the steady state rate of growth as the _________ just sufficient to keep _______ constant while labour grows.

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Saving investment

Capital per person productivity

Labour growth , output

Investment capital per person

Moral Hazard means that the act of insuring __________ that the desired outcome will occur.

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Reduces the likelihood

Increase the likelihood

Guarantees

None of the above

The key issues of macroeconomics are

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Unemployment

Inflation

Economic growth

All of the above

A good example of a public good is.

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Public transport

National defense

The national health service

Rail transport

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

Potential output can be increased by _________ or by_________

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Increasing the use of labour, increasing the use of land

Increasing the use of capital, increasing the use of labour

Increasing the use of land, increasing the use of capital

Increasing the use of all inputs technical advances

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