PPSC Economics Topic 6 Economics Models

Question # 1

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 # 2

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 # 3

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 # 4

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 # 5

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 # 6

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 # 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

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 # 9

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 # 10

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 # 11

If price is initially above the equilibrium level.

the supply curve will shift rightward A
The supply curve will shift letward B
Excess supply exists C
All firms can sell as much as they want D

Question # 12

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 # 13

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 # 14

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 # 15

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 # 16

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 # 17

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 # 18

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 # 19

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 # 20

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

Sr.#	Question	Answer
1	In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.	A. Workers who wish to work at the minimum wage will have a difficult time finding jobs. B. Firms will hire fewer workers than without the minimum wage law. C. Some workers may lose their jobs as a result D. Nothing will happen to the wage rate or employment
2	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
3	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
4	Equilibrium is defined as a situation in which.	A. Neither buyers nor sellers want to change their behavior B. No government regulations exist C. Demand curves are perfectly horizontal D. suppliers will supply and amount that buyers wish to buy
5	The purpose of making assumptions in economic model building is to.	A. Force the model to yield the correct answer B. Minimize the amount of work an economist must do C. simplify the model while keeping important details. D. Express the relationship mathematically.
6	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
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	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
9	If the price of automobiles were to decrease substantially the demand curve for public transpiration would most likely.	A. shift rightward B. Shift leftward C. Remain unchanged D. Remain unchanged while quantity demanded would change
10	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

Latest Educational News Stories

Pakistan's Largest Database of Colleges and Universities

BS Programs

University Past Papers

University Results

Exam Results 2024

Study Abroad Programs and Opportunities for Pakistani Students

PPSC Economics Topic 6 MCQS Test Preparation

MCQ's Test For PPSC Economics Topic 6 Economics Model

PPSC Economics Topic 6 Economics Model