Question # 1

International trade forces domestic firms to become more competitive in terms of.

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The introduction of new products

Product design and quantity

Product price

All of the above

Because a monopoly hires workers up to the point where their marginal revenue product equals the wage rate the monopoly will.

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Pay less than the going wage rate

Pay a wage equal to the value of the marginal product of labor

Pay less than the value of the marginal product of labor

Pay workers what they are worth to society

In the Keynesian cross diagram an increasing investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to rise and the IS curve to shift to the

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up ; right

up ; left

down ;left

down ; right

To move from point E to point E1 is consistent with.

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Expectations of a constant price level

Adaptive expectations that have no adjustment for the period immediately following a change in the actual price

Rational expectations and NCM

A and B

If the production function is Q = 8 KL the marginal rate of technical substitution of labor for capital is.

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8

K/L

L/K

B/KL

in 1950s following sector was ignored

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Agriculture sector

industrial sector

import sector

Services sector

W.W. Rostow considered that the economic development period consist of.

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Two stages

Three stages

Four stages

Five stages

If two firms doing the same thing in the same industry join together this is known as a.

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vertical merger

Horizontal merger

Conglomerate merger

Hostile takeover

A reduction in government spending causes the equilibrium level of aggregate output to ___________ at any given interest rate and shifts the ________ curve to the.

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fall ;LM; right

fall ;IS; Left

fall ;LM; Left

rise ;LM; Rifht

Demand pull inflation may be caused by

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An increase in costs

A reduction in interest rate

A reduction in government spending

An outward shift in aggregate supply

An injection of funds into a less developed country might set off the

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Multiplier

Marginal propensity to save

Average propensity to consume

The Laffer effect

Which of the following is a reason for misuse of statistics.

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data can be manipulated

Figures are convincing

Figures can be used to mislead readers

All of the above

As income increases.

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the average propensity to consume gets nearer in value to the marginal propensity to consume

the average propensity to consume diverges in value from the marginal propensity to consume

the average propensity to consume falls

The averge propensity to consume always approaches 0

The most widely traded currency in the foreign exchange market is the.

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Euro

Chinses yuan

British pound

U.S. Dollar

According to the________ the export of the product that embodies large amounts of the relatively cheap, abundant resorce results in an increase in its price and income of the resource used intensively in the import competing product decrease as its demand falls.

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Ricardian equivalence theorem

Smithian equivalence theorem

Stolpher Samuelson theorem

Bemanke Greenspan theorem

When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firms in the market we have.

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A cartel

The perfect competitive outcome

The Nash equilibrium

Monopolistic competition

When the value of output exceeds planned spending .

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There is unsold output, and the level of income will fall

there is unsold output and the level of income will rise

There is unsold output, and the level of income does not change.

All of the above

An increase labor supply would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

Shift up and to the right only if people face borrowing constraints

The goal of a pure market economy is to best meet the desires of

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Consumers

Companies

Workers

The government

A main advantage of specialization results from

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Economics of large scale production

The specializing country behaving as a monoploidy.

smaller production runs resulting in lower unit costs

High wages paid to foreign workers

Union of A and the universal set is

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A

A'

Universal set

None of these

The study which wants to determine the frequency of occurrence of an event of its association with something.

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Descriptive

Explorative

Formulate

Diagnostic

Duopoly is a market situation when there is

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Single seller

Many seller

Two seller

Few seller

The theory of ___________ suggests that government can assist domestic competitors.

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International dumping

Countervailing duties

Strategic trade policy

Export promotion policy

A Six year development plan was prepared on the recommendation of Colombo consultation Committee from _____ to.

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1951 -57

1952-58

1953-59

None of the above

During inflation.

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Lenders lose borrowers gain.

Borrowers lose , lenders gain

The real interest rate rises

Borrowers and lenders both lose.

To be productively efficient a firm must produce where

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Marginal costs are maximized

Marginal costs are minimized

Average costs are minimized

Average revenue is maximized

The production function will be affected by changes in the prices of.

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Inputs

Outputs

Neither

All of the above

Keynesian economists think general equilibrium is not attained quickly because.

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The real interest rate adjusts slowly

The level of output adjusts slowly

The real wage rate adjusts slowly

The price level adjusts quickly

"Null set is proper subset of all the non nul sets" this statement is.

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Always true

sometimes true

Never true

True subject to some conditions

In order to maximize profits a monopoly company will produce that quantity at which the.

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Marginal revenue equals average total cost

Price equals marginal revenue

Marginal revenue equals marginal cost

total revenue equals total cost

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