PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 The allocation of resources is not efficient it The marginal cost of production does not equal society marginal benefit The distribution is inequitable Economic growth is low Unemployment is high
2 A competitive equilibrium is Pareto efficient because. Producers are price takers Consumers and producer's face the same prices Marginal costs and benefits are equal All of the above
3 We cannot say whether one allocation of resources is better than another allocation because. some people cant count Some people may not be permanent residents Not all economic activity is legal We cant make value judgements to compare different people welfare.
4 An allocation is Pareto efficient if no reallocation of resources would make some people_______ whiteout making others Worse off, worse off better off, better off better off, worse off equal , unequal
5 Moral Hazard means that the act of insuring __________ that the desired outcome will occur. Reduces the likelihood Increase the likelihood Guarantees None of the above
6 Land will be allocated between competing uses so that. Housing gets priority Industry gets priority Faming gets priority The equilibrium rental rate equilibrium total demand with supply
7 In the short run, the supply of capital is _______ and in the long run iwll depend on. Variable technology Fixed, expectations Fixed, rental rate of capital Variable, interest rates.
8 The value of an asset depends upon Its scrap value Its depreciation The present value of the failure stream of income it can earn. the cost of loans
9 The cost of using capital services is the wage rate of capital Interest charges Marginal capital cost Rental rate for capital
10 Efficiency wages are_______ that raise Low wages , employment High wages, labor supply High wages, productivity High wages, employment
11 In the UK in recent years, union membership has ______ and days of work lost because of strikes has. Grown, declined declined, declined declined, grown grown , grown
12 Women and non whiles on average receive lower comes than white men because. They tend to work in relatively unskilled jobs Educational disadvantage Firms are reluctant to invest in training All of the above
13 In the UK under a _________ of the labour force belong to a trade union. Quarter Third Half Three quarters
14 By restricting labour supply a trade union can _________ and_______ Increase the wage, increase employment Maintain the wage, increase employment Increase the wage lower employment Maintain the wage, lower employment
15 The opportunity cost of acquiring education is. Course fees Course fees and living expenses The earning foregone Course fees, living expenses and textbooks
16 Skilled labour is relatively scarce because. There are too few teachers Too few student places in higher education It is costly to acquire human capital Teachers salaries are too low
17 The most important source of wage differentiate are. Reginal variation Unionization Relative danger Skills
18 Human capital can be described as. The tools used by workers to entrances productivity a persons inherited abilities. The stock of expertise accumulated by a worker Education
19 Top footballers land to earn more than lecturers because. Footballers give more entertainment Lecturers are lazy The labour markets are imperfect Top footballers are relatively scarce in relation to lecturers
20 The participation rate in the labour force is affected by Higher real wages Lower fixed costs of working Lower non labor income All of the above
21 A profit maximizing firm will hire labor until _______ equal the Marginal revenue, marginal cost Long run marginal revenue, long run marginal cost Labour output ratio, capital output ratio Marginal cost of labour, marginal revenue product
22 A dominant strategy is. A winning strategy A losing strategy A players best strategy when moving fist a player's best strategy whatever the strategies adopted by rivals
23 In Nash equilibrium each player chooses the best strategy. Assuming other players move first. Dominated by the other players Given the strategies of other players That is a credible threat
24 The prisoners Dilemma Game demonstrates that. Players are better off to act independently Monopoly is better than competition People will always cheat Players are better off if they con operate
25 When a market is contestable , incumbent firms must.________ to avoid the entry of new competitors. Behave like competitive firms Agree to act together Differentiate their products Practice price discrimination
26 A natural monopoly has a declining ________ over a large range of output. Long run marginal cost Short run marginal cost Long run average cost Long run marginal cost
27 All of the following are types of imperfect competition except Monopolistic competition Oligopoly Monopoly Unfair competition
28 A monopoly may be self perpetuating because profits may be used for research Cost saving Technical advance All of the above
29 Perfect price discrimination means that every customer. Buys the same amount Pays the same price Pays what she thinks the product is worth Contributes the same revenue.
30 Comparing a monopoly and a competitive firm the monopolist will. Produce less at a lower price Produce more at a lower price Produce less at a higher price Produce less at a lower price
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