PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 Which of the following is not likely to be a government objective. Increasing employment Increasing economic growth Increasing government spending Increasing the level of exports
2 Which of the following is a possible government objective as opposed to a policy. Lower interest rates Lower taxation rates Lower government spending Lower inflection
3 Which of the following is a policy instrument .as opposed to a government objective. Lower interest rates A better balance of trade position Faster economic growth Lower un employment
4 Which of the following can the government not use directly to control the economy. Pay rates within the privates sector Pay rates in the public sector Investment in education Benefits available for the un employed and sick
5 Which of the following is not a macro economic issue. Unempolyment Inflaction The wages paid to footballers Economic growth
6 Which does the government not control directly. Spending on health spending on defense Firm's investment decisions spending on education
7 Which of the following is not involved with fiscal policy. Income tax National insurance VAT Interest rates
8 If employees cannot accept a job because of the costs of moving this is known as. Occupational immobility Cyclical unemployment Structural immobility Geographical immobility
9 In a perfectly competitive labour market firms are wage takers and the marginal cost of labour equals. the average cost of labour The marginal product The marginal revenue The total cost of labour
10 A profit maximizing firm will employ labour up to the point where. Marginal revenue = Marginal product Margial cost = Marginal product Marginal revenue product = Average cost of labour Marginal revenue product = Marginal cost of labour
11 Demand for labour is more likely to be wage inelastic if. Wages are a small proportion of total costs Demand for the final product is price elastic It is easy to replace labour Capital is a good substitute forlabour
12 The marginal Revenue product is. Upward sloping due to the law of demand Upward sloping due to the law of marginal utility Downward sloping due to the law of diminishing returns. Downward sloping due to the law of supply
13 An increase in the wage rate. Will usually lead to more people employed Will decrease total earnings if the demand for labour is wage elastic Is illegal in a free market Will cause a shift in the demand for labour
14 An independent assessment of the impact of firm's activities on society is called a. Financial audit Balance sheet Profit and uses account Social audit
15 Companies in the private sector are owned by The government Shareholders Employees The community
16 If the marginal revenue is positive Selling another unit will increase total revenue Selling another unit will increase profits Selling another unit will increase cost Selling another unit will increase average revenue
17 Normal profit occurs when Average revenue equals average variable cost Marginal revenue equals marginal cost Average revenue equals marginal cost Average revenue equals average cost
18 To be productively efficient a firm must produce where Marginal costs are maximized Marginal costs are minimized Average costs are minimized Average revenue is maximized
19 To be allocatively efficient ta firm must produce where the total cost equals demand the average revenue equals the marginal revenue The price equals the average cost The price equals the marginal cost
20 When marginal revenue equals marginal cost Total revenue equal total cost There is the biggest positive difference between total revenue and total cost there is the biggest negative difference between total revenue and total cost. Profits are zero
21 Profit is measured by Revenue - Fixed costs Fixed cost + revenue Revenue - sales Revenues - total costs
22 To maximize sales revenue a firm should produce where Marginal cost is zero Marginal revenue is maximized Marginal revenue is zero Marginal revenue equals marginal cost
23 If firms join together to set prices and quantities this is known as what. Interaction Conglomerate Collusion Integration
24 Unfair competition does not include Price cutting predatory pricing Cartels Price fixing
25 Acquisition and merger are examples of. Internal growth External growth Organic growth Underlying growth
26 Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale. Purchasing Technical Financial Safety
27 If one car company takes over another car company this is an example of which type of integration. Vertical Horizontal Conglomerate Literal
28 If the price elasticity is -0.3 this means. Demand is upward sloping Demand is price elastic A price fall would increase revenue Demand is price inelastic
29 A benefit to consumers of price discrimination is that Some products are produced that would not other wise be produced Producer surplus increases Consumer surplus decreases Firms profits increase
30 In perfect price discrimination Consumer surplus is maximized Produce surplus is zero Community surplus is maximized Consumer surplus is zero
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