Question # 1

The opportunity cost of a good is.

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The time lost in finding it

The quantity of other goods sacrificed to get another unit of that good

The expenditure on the good

The loss of interest in using savings

In the short run, the supply of capital is _______ and in the long run iwll depend on.

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Variable technology

Fixed, expectations

Fixed, rental rate of capital

Variable, interest rates.

If the government increase spending and raises taxes by just enough to finance the increase it will.

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Leave output unchagned

Increase output

Reduce output

Increase the MPC

If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of.

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Market imperfection

The law of diminishing returns

The paradox of thriff

Market failure

All of the following represent obstacles to LDC development except.

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Resource scarcity

Low level of investment

Low population

Poor infrastructure

International specialization takes place because of.

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Differences in technology

Differences in factor endowments

Scale economies

All of the above

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

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Primary products

Intermediate products

Manufactured products

Financial services.

A reduction in interest rates, causes an increases in the monetary base that result in an_____ in the availability of consumer credit and a _ in the cost of consumer credit.

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Reduction, increases

reduction,reduction

increase, reduction

increases, increases

A supply curve is directly affected by

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Technology

Input costs

Government regulation

All of the above

We cannot say whether one allocation of resources is better than another allocation because.

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some people cant count

Some people may not be permanent residents

Not all economic activity is legal

We cant make value judgements to compare different people welfare.

Polices to reduce unemployment by reducing union power tax cut reduction is unemployment benefit and investment. subsidies are examples of.

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Keynesian polices

Supply side policies

Monetarist policies

Classical policies

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

The short run Philips curve can shift in response to changes in

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inflationary expectations

Unemployment

The inflation rate

Wage rates

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

When the S/L exchange rate rises the pounds______ and whent he S/L rate falls the pounds.

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depreciates, appreciates

revalues, devalues

appreciates, deprecates

becomes more expensive, becomes cheaper

The multiplier tells us how much __________ chagnes after a shift in.

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Consumption, income

Investment , output

Savings, investment

output, aggregate demand

An increase in consumer income will increase demand for a __________ for decrease demand for a.

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Substitute good interior good

Normal good, interior good

Interior good, normal good.

Normal good, complementary good.

On a graph a positive linear relation ship.

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Moves down to the right

Moves up to the left

Moves up to the right

Modes down to the left

When investment is assumed to autonomous the slope of the AD schedule is determined by the.

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Marginal propensity to invest.

disposable income

Marginal propensity to consume

Average properisity to consume

When we know the quantity of a product that buyers wish to purchases at each possible price we know.

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Demand

Supply

excess demand

Excess supply

In a free market

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Government intervene

Government plan production

Government interfere

Price adjust to reconcile scarcity and desires.

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