PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 The warfare effect of a quota depend to a considerable extent upon. Who has the quota license The size of the quota Elasticities of domestic demand and supply All of the above
2 Similar to import tariffs, import quotas tend to result in. Higher prices and reduced imports Increasesed government revenue Increased consumer surplus Decrease producer surplus
3 _________ are quotas that lead to a complete abolishment of trade. Embargoes Voluntary export restraints Nontariff beamers Orderly marketing agreements
4 Quotas are government imposed limits on the ________ of goods trade between countries. Prices Quantity Revenue Costs
5 Through the world government tend o auction quota license to their highest bidder. Always Often Seldom Never
6 In the home country government grants a subsidy of a domestically produced good domestic producers tend to. Capture the entire subsidy in the form of higher profits Increase their level of production Reduce wages paid to domestic workers Consider the subsidy as an increase in production cost
7 A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as a Domestic subsidy Export subsidy Import quota Export quota
8 Suppose that the domestic government allows a specific number of goods to be imported each year but it does not spicily from where the product is shipped or who is permitted to import such a trade barrier is known as an import tariff A tariff rate quota A selective quota A global quota
9 In the balcne of payments, travel and tourism are included int he category of. Unilateral transfers Capital account Merchandise account Services account
10 If a country an imposes an import tariff its welfare can improve if The country is a small country's than a larger country. Its terms of trade improve enough The tariff enhances the welfare of its trading partners Its government's tax revenue increase because of the tariff
11 If a small country imposes a tariff on an imported good its terms of trade will Improve Worsen Not change any of the above
12 A tariff can________ raise a country's welfare. Sometimes Never Always None of these
13 ____________ represents the difference between what consumers have to pay for a product and what they are willing and able to pay. Producer surplus Deadweight surplus Government surplus Consumer surplus
14 A tariff that probibits imports ahs only A revenue effect and redislnbution effect Revenue effect and protection effect Consumption effect and production effect Redistribution effect and consumption effect
15 Ad valorem tariffs are collected as Fixed amounts of money per unit traded A percentage of the price of the product A percentage of the quantity of imports All of the above
16 A tax 15 percent per imported item would be an example of a Ad valorem tariff specific tariff Effective tariff Compound tariff
17 A tax of 20 cents per unit of imported cheese would be an example of a Compound tariff Effective traiff Ad valorem tariff Specific tariff
18 According to factor price equalization theorem the ______ factor should oppose free trade policies in any given country. Abundant Scarce Neither Can't tell without more information
19 If tastes are identical between countries than comparative advantage is determined by Supply conditions only Demand conditions only Supply and demand conditions Can't tell without more information.
20 Industrial polices intended to foster comparative advantage for domestic industries could result in the implementation of. Research and development subsidies Loan guarantees Low interest rate loans All of the above
21 The Hocksher Ohlin model rules out the classical model's basis for trade by assuming that. _______ is identical between countries. Factor endowments Factor intensities Technology Opportunity costs
22 That the division of labor is limited by the size of the market best applies to which explanation of trade. Factor endowment theory Product life cycle theory Economies of scale theory Overlapping demand theory
23 the theory of overlapping demands predicts that trade in manufactured goods is unimportant by countries with very different . Tastes and preferences. Expectations of future interest rate levels Per capita income levels Labor productivities.
24 Which trade theory contents that a country that initially develops and exports a new product may eventually become an importer of if ,a nd may no longer manufacture the product. Theory of factor endowments Theory of overlapping demands Economies of scale theory Product life cycle theory.
25 John Stuart Mill was the founder of the Theory of reciprocal demand Theory of absolute advantage Theory of comparative advantage Theory of mercantilism
26 If the autarky price of S were lower in country A than in country B, then if trade were allowed. A would likely exports s to B A would likely import s from B Neither country would want to trade None of the above
27 In autarky when a community maximizes its standard of living its production points is. Below the production possibility frontier On the production possibility frontier Above the production possibility frontier Can't tell without more information.
28 In autarky equilibrium. Production equals consumption Export equal inmprts There is no trade All of the above
29 The term of trade is given by the process. Paid for all goods exported by the home country Received for all goods exported by the home country Received for exports and paid for imports. Of primary product as opposed to manufactured products.
30 If a country has linear production possibilities frontier than production is said to be subject to. constant opportunity costs Decreasing opportunity costs First increasing and the decreasing opportunity costs Increasing opportunity costs.
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