PPSC Economics Topic 6 Economics Models

Question # 1

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 # 2

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 # 3

Consumers and firms are known as price takers only it

No market exists to determine the equilibrium price A
they can set the market price B
They cannot effect the market price C
Excess demand exists D

Question # 4

An increases in the demand curve for orange juice would be illustrated as a.

Leftward shift of the demand curve A
Right ward shift of the demand curve B
Movement up along the demand curve C
Movement down along the demand curve D

Question # 5

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 # 6

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 # 7

Economists tend to judge a model based upon

the realty of its assumptions A
The accuracy of its predications B
Its simplicity C
Its complexity D

Question # 8

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 # 9

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 # 10

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 # 11

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 # 12

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 # 13

It is appropriate to use the supply and demand model if in a market.

Everyone is a price taker with full information about the price and quantity of the good. A
Firms sell identical products B
Costs of trading are low C
All of the above D

Question # 14

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 # 15

A vertical demand curve results in.

No change in quantity when the supply curve shifts. A
No change in price when the supply curve shifts B
No change in the supply curve being possible C
No change in quantity when the demand curve shifts. D

Question # 16

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

Question # 17

As the price of a good increases, the change in the quantity demanded can be shown by

Shifting the demand curve leftward A
Shifting the demand curve rightward B
Moving down along the same demand curve C
Moving up long the same demand curve D

Question # 18

If government regulations prohibit the production of a particular good the demand curve for that good will most likely.

Shift leftward A
Shift rightward B
Remain unchanged C
Disappear D

Question # 19

When two goods are substitutes a shock that raises the price of one good causes the price of the other goods to.

Remain unchanged A
Decrease B
Increase C
Change in an unpredictable manner D

Question # 20

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

Sr.#	Question	Answer
1	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.
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	As the price of a good increases, the change in the quantity demanded can be shown by	A. Shifting the demand curve leftward B. Shifting the demand curve rightward C. Moving down along the same demand curve D. Moving up long the same demand curve
4	Consumers and firms are known as price takers only it	A. No market exists to determine the equilibrium price B. they can set the market price C. They cannot effect the market price D. Excess demand exists
5	When two goods are substitutes a shock that raises the price of one good causes the price of the other goods to.	A. Remain unchanged B. Decrease C. Increase D. Change in an unpredictable manner
6	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. A rightward shift of the supply curve B. An increase in quantity supplied C. A leftward shift of the supply curve D. A leftward movement along the supply curve
7	If price is initially above the equilibrium level.	A. the supply curve will shift rightward B. The supply curve will shift letward C. Excess supply exists D. All firms can sell as much as they want
8	An increases in the demand curve for orange juice would be illustrated as a.	A. Leftward shift of the demand curve B. Right ward shift of the demand curve C. Movement up along the demand curve D. Movement down along the demand curve
9	Holding all other factors constant consumers demand more of a good the	A. Higher its price B. Lower its price C. Steeper the downward slope of the demand curve D. Steeper the upward slope of the demand curve
10	The expression increase in quantity supplied is illustrated graphically as a.	A. Leftward shift in the supply curve B. Rightward shift in the supply curve C. Movement up long the supply curve D. Movement down along the supply curve

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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

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

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

Consumers and firms are known as price takers only it

An increases in the demand curve for orange juice would be illustrated as a.

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.

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

Economists tend to judge a model based upon

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

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

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

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.

It is appropriate to use the supply and demand model if in a market.

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 vertical demand curve results in.

Equilibrium is defined as a situation in which.

As the price of a good increases, the change in the quantity demanded can be shown by

If government regulations prohibit the production of a particular good the demand curve for that good will most likely.

When two goods are substitutes a shock that raises the price of one good causes the price of the other goods to.

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

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