PPSC Economics Topic 6 Economics Models

Question # 1

If the price of orange juice rises 10% and as a result the quantity demanded falls by 8% the price elastic of demand for orange juice is.

-1.25 A
Inelastic B
Both a and b C
Neither A nor B above D

Question # 2

In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.

Workers who wish to work at the minimum wage will have a difficult time finding jobs. A
Firms will hire fewer workers than without the minimum wage law. B
Some workers may lose their jobs as a result C
Nothing will happen to the wage rate or employment D

Question # 3

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase this increase in the price of the good results in.

A rightward shift of the supply curve A
An increase in quantity supplied B
A leftward shift of the supply curve C
A leftward movement along the supply curve D

Question # 4

The purpose of making assumptions in economic model building is to.

Force the model to yield the correct answer A
Minimize the amount of work an economist must do B
simplify the model while keeping important details. C
Express the relationship mathematically. D

Question # 5

A vertical demand curve for a particular good implies that consumers are.

Sensitive to changes in the price of that good A
Not sensitive to changes in the price of that good. B
Irrational C
Not interested in that good D

Question # 6

A competitive equilibrium is described by

A price only A
A quantity only B
The excess supply minus the exceess demand. C
A price and a quantity D

Question # 7

Most Microeconomic models assume that decision makers wish to.

Make themselves as well off as possible A
Act selfishly B
Not cooperate with others C
None of the above D

Question # 8

To determine the total demand for all consumers sum the quantity each consumer demands.

At a given price A
At all prices and then sum this amount across all consumers B
Both a and b will generate the same total demand C
None of the above D

Question # 9

A Horizontal demand curve for a good could arise because consumers.

Are irrational A
Are not sensitive to price changes B
View this good as identical to another good C
Have no equivalent substitutes for this good D

Question # 10

The percentage change in the quantity demanded in response to a percentage change in the price is known as the.

slope of the demand curve A
Excess demand B
Price elasticity of demand C
All of the above D

Question # 11

If the price of automobiles were to decrease substantially the demand curve for public transpiration would most likely.

shift rightward A
Shift leftward B
Remain unchanged C
Remain unchanged while quantity demanded would change D

Question # 12

Which of the following is an example of a normative statement.

Since this good is bad for you, you should not consume it. A
this good is bad for you B
If you consume this good you will get sick C
People usually get sick after consuming this good D

Question # 13

If the demand curve for a good is horizontal and the price is positive then a leftward shift of the supply curve results in.

a price of zero A
An increase in price B
A decrease in price C
No change in price D

Question # 14

Holding all other factors constant consumers demand more of a good the

Higher its price A
Lower its price B
Steeper the downward slope of the demand curve C
Steeper the upward slope of the demand curve D

Question # 15

If the price of automobile were to decrease substantially the demand curve for automobiles would most likely.

shift rightward A
Shift left eard B
Remain unchanged C
Become steeper D

Question # 16

The expression increase in quantity supplied is illustrated graphically as a.

Leftward shift in the supply curve A
Rightward shift in the supply curve B
Movement up long the supply curve C
Movement down along the supply curve D

Question # 17

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

Shift leftward A
Shift right ward B
Become flatter C
Become steeper D

Question # 18

If a government imposed price celling causes the observed price in a market to be below the equilibrium price.

There will be excess demand A
There will be excess supply B
The curves will shift to make a new equilibrium at the regulated price C
None of the above D

Question # 19

For a given positively sloped supply curve the price increase to consumers resulting from a specific tax imposed on sellers will be.

Greater the more price elastic demand is A
Greater the less price elastic demand is B
Equal to the entire tax when demand is perfectly elastic C
Equal to half of the tax whenever demand is unit elastic D

Question # 20

Equilibrium is defined as a situation in which.

Neither buyers nor sellers want to change their behavior A
No government regulations exist B
Demand curves are perfectly horizontal C
suppliers will supply and amount that buyers wish to buy D

Sr.#	Question	Answer
1	If the price of automobile were to decrease substantially the demand curve for automobiles would most likely.	A. shift rightward B. Shift left eard C. Remain unchanged D. Become steeper
2	A vertical demand curve for a particular good implies that consumers are.	A. Sensitive to changes in the price of that good B. Not sensitive to changes in the price of that good. C. Irrational D. Not interested in that good
3	A specific tax on sellers will	A. shift the demand curve to the right B. Shift the demand curve the left C. Shift the supply curve to the right D. Shift the supply curve to the left
4	If the demand curve for a good is horizontal and the price is positive then a leftward shift of the supply curve results in.	A. a price of zero B. An increase in price C. A decrease in price D. No change in price
5	A vertical demand curve results in.	A. No change in quantity when the supply curve shifts. B. No change in price when the supply curve shifts C. No change in the supply curve being possible D. No change in quantity when the demand curve shifts.
6	The percentage change in the quantity demanded in response to a percentage change in the price is known as the.	A. slope of the demand curve B. Excess demand C. Price elasticity of demand D. All of the above
7	Economists tend to judge a model based upon	A. the realty of its assumptions B. The accuracy of its predications C. Its simplicity D. Its complexity
8	Which of the following is an example of a normative statement.	A. Since this good is bad for you, you should not consume it. B. this good is bad for you C. If you consume this good you will get sick D. People usually get sick after consuming this good
9	If a government imposed price celling causes the observed price in a market to be below the equilibrium price.	A. There will be excess demand B. There will be excess supply C. The curves will shift to make a new equilibrium at the regulated price D. None of the above
10	If government regulations prohibit the production of a particular good the demand curve for that good will most likely.	A. Shift leftward B. Shift rightward C. Remain unchanged D. Disappear

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PPSC Economics Topic 6 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 6 Economics Model

PPSC Economics Topic 6 Economics Model

If the price of orange juice rises 10% and as a result the quantity demanded falls by 8% the price elastic of demand for orange juice is.

In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase this increase in the price of the good results in.

The purpose of making assumptions in economic model building is to.

A vertical demand curve for a particular good implies that consumers are.

A competitive equilibrium is described by

Most Microeconomic models assume that decision makers wish to.

To determine the total demand for all consumers sum the quantity each consumer demands.

A Horizontal demand curve for a good could arise because consumers.

The percentage change in the quantity demanded in response to a percentage change in the price is known as the.

If the price of automobiles were to decrease substantially the demand curve for public transpiration would most likely.

Which of the following is an example of a normative statement.

If the demand curve for a good is horizontal and the price is positive then a leftward shift of the supply curve results in.

Holding all other factors constant consumers demand more of a good the

If the price of automobile were to decrease substantially the demand curve for automobiles would most likely.

The expression increase in quantity supplied is illustrated graphically as a.

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

If a government imposed price celling causes the observed price in a market to be below the equilibrium price.

For a given positively sloped supply curve the price increase to consumers resulting from a specific tax imposed on sellers will be.

Equilibrium is defined as a situation in which.

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