PPSC Economics Topic 6 Economics Models

Question # 1

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 # 2

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 # 3

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 # 4

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 # 5

A specific tax on sellers will

shift the demand curve to the right A
Shift the demand curve the left B
Shift the supply curve to the right C
Shift the supply curve to the left D

Question # 6

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 # 7

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 # 8

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 # 9

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 # 10

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 # 11

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 # 12

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 # 13

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 # 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

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 # 16

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 # 17

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 # 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

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 # 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	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
2	For a given positively sloped supply curve the price increase to consumers resulting from a specific tax imposed on sellers will be.	A. Greater the more price elastic demand is B. Greater the less price elastic demand is C. Equal to the entire tax when demand is perfectly elastic D. Equal to half of the tax whenever demand is unit elastic
3	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
4	It is appropriate to use the supply and demand model if in a market.	A. Everyone is a price taker with full information about the price and quantity of the good. B. Firms sell identical products C. Costs of trading are low D. All of the above
5	A Horizontal demand curve for a good could arise because consumers.	A. Are irrational B. Are not sensitive to price changes C. View this good as identical to another good D. Have no equivalent substitutes for this good
6	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
7	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
8	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
9	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
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

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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

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

A competitive equilibrium is described by

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

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

A specific tax on sellers will

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

If price is initially above the equilibrium level.

Most Microeconomic models assume that decision makers wish to.

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

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

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

Economists tend to judge a model based upon

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

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

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

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

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.

Equilibrium is defined as a situation in which.

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

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

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