Quiz

Economics Quiz For Beginners

10

Total Questions : 100

Scoring System:
Correct Answer    : +4 points
Incorrect Answer  : -1 point
Not Answered      :  0 point

Time Limit:
Each question has a time limit of 10 seconds.

The final result will appear at the end. All The Best...
  
  1. The Opportunity Cost Of Something Is
  2. What you have to give up by not putting the resources necessary to acquire it to their next best alternative use
    The price you paid for it
    Any cost that cannot be recovered
  3. Which Of The Following Best Describes A Technology With Increasing Returns To Scale?
  4. Q(2L, 2K) = 4Q(L, K)
    Q(2L, K) = Q(L, 2K)
    Q(2L, 2K) = Q(L, K)
  5. In Which Of The Following Circumstances A Natural Monopoly Would Likely Arise?
  6. Unit production costs are very high at relatively low output levels
    Entrance of a second firm to the industry would result in losses for the entrant
    Both
  7. The Market Demand Curve Is
  8. Derived by horizontally summing the individual demand curves at each price.
    Derived by vertically summing the individual demand curves at each price.
    Derived by horizontally summing the individual demand curves at each quantity.
  9. Which Of The Following Is True For A Long-Run Equilibrium In A Competitive Industry?
  10. min(ATC) = P
    min(MC) = P
    min(AVC) = P
  11. For A Demand Curve To Slope Upward,
  12. The good must be an inferior good with an income effect that dominates the substitution effect
    Consumers are irrational
    The good must be a normal good with a substitution effect that dominates the income effect
  13. Which Of The Following Combinations Is More Likely To Have Straight-Line Indifference Curve?
  14. Lukoil gasoline and Rosneft gasoline
    Pizza and beer
    Gasoline and automobiles
  15. Which Of The Following Is A Necessary Condition For A Monopoly To Arise?
  16. None
    Superior technology or scale economies
    Production-specific patents
  17. A Monopolist's Marginal Revenue Curve Lies Below Average Revenue, Because:
  18. A monopolist has to decrease price of all goods sold if it wants to expand output
    Marginal magnitudes consider smaller increments than average ones
    Price elasticity of demand decreases as quantity rises
  19. The Market Demand Curve For A Luxury Good:
  20. Is downward sloping
    Is upward sloping
    Has price elasticity greater than unity
  21. Along A Country’s Production Possibilities Curve
  22. There are no idle resources
    The costs of production of the goods that are produced are identical
    Resources are equally well equipped for the production of any good
  23. Which Of The Following Is True For A Long-Run Equilibrium In A Competitive Industry?
  24. min(ATC) = P
    min(MC) = P
    min(AVC) = P
  25. Which Of The Following Is An Example Of A Normative Economic Statement?
  26. The Russian budget deficit has reached alarming levels due to crisis.
    10% of the population in Russia lives below poverty level.
    Moscow had a budget surplus in 2007.
  27. By The Term “Demand Curve” Economists Mean The Curve Describing The Relationship Between Price And Quantity Demanded. The Focus On Price Means That
  28. Economists are assuming that other influences on quantity demanded are constant so that the effect of price can be isolated.
    The model's predictive power is of little value.
    Economists believe price is the only factor that influences quantity demanded.
  29. A Firm Increases The Number Of Hours Its Workers Are Employed From 7,000 To 8,000, And Output Increases From 140,000 Bushels To 155,000 Bushels. The Marginal Product Of An Extra Hour Is
  30. 15
    10
    20
  31. Which Of The Following Is NOT A Defining Feature Of Perfect Competition?
  32. Perfect information
    No barriers to entry
    Heterogeneous product
  33. An Individual Competitive Firm's Short-Run Supply Function Is (Over The Relevant Range Of Prices):
  34. Its MC schedule
    Its AVC schedule
    Its AFC schedule
  35. Which Of The Following Best Describes A Technology With Increasing Returns To Scale?
  36. Q(2L, K) = Q(L, 2K)
    Q(2L, 2K) = Q(L, K)
    Q(2L, 2K) = 4Q(L, K)
  37. Which Of The Following Will NOT Entail An Outward Shift Of The Production Possibilities Curve?
  38. An upgrading of the quality of a nation's human resources
    The reduction of unemployment
    An increase in the quantity of a society's labour force
  39. Which Of The Following Is A Necessary Condition For A Monopoly To Arise?
  40. Superior technology or scale economies
    Production-specific patents
    None
  41. A Typical Shop In Bavaria Would Offer About A Hundred Brands Of Local Beer. The Local Beer Industry In Bavaria Would Likely Constitute:
  42. An oligopoly
    A monopolistic competition
    A natural monopoly
  43. Vasya Is An Accountant. He Receives $200 Per Hour Doing Tax Returns. He Can Type 12,000 Characters Per Hour Into Spreadsheets. He Can Hire An Assistant Who Types 3,000 Characters Per Hour Into Spreadsheets. Which Of The Following Statements Is True?
  44. Vasya should hire the assistant as long as he pays the assistant less than $50 per hour.
    Vasya should hire the assistant as long as he pays the assistant less than $100 per hour.
    Vasya should hire the assistant as long as he pays the assistant less than $200 per hour.
  45. Creation Of A Trade Union Will Typically Lead To:
  46. A loss of jobs by insiders
    An increase in labour market efficiency
    A rise in economic rent of insiders
  47. Consider A Small Town Build Around A Coal Mine Which Is Perfectly Competitive In Its Product Market And Is The Sole Employer In The Town. Suppose That Employment Is Controlled By A Trade Union Seeking To Maximize The Total Wage Bill Of Its Members. Then Wages Will Be Determined By:
  48. MRPL = MCL
    MVPL = MCL
    None
  49. Cournot Oligopoly Is Characterized By:
  50. Easy adjustment of prices, thus strategic choice of output
    Easy adjustment of output, thus strategic choice of prices
    Sequential decision-making
  51. The Net Result Of The Prisoner's Dilemma, When Applied To A Situation Involving Two Oligopolists, Is That
  52. Prices will be above the level implied by joint profit maximization
    Neither firm makes a profit and both leave the industry
    Prices will be below the level implied by joint profit maximization
  53. A Profit-Maximizing Monopolist Practicing Price Discrimination Will Charge The Lowest Price In The Market Where Demand
  54. Is least price-elastic
    Is most price-elastic
    has unit price-elasticity
  55. A Monopolist's Marginal Revenue Curve Lies Below Average Revenue, Because:
  56. Marginal magnitudes consider smaller increments than average ones
    A monopolist has to decrease price of all goods sold if it wants to expand output
    A monopolist typically has to pay high taxes
  57. Which Of The Following Could Constitute A Case Of Strategic Entry Deterrence?
  58. The incumbent forgoes some of the current profit in favour of better opportunities in case of possible a price war
    The incumbent invests into production to make more profit before its market share is contested by an entrant
    The incumbent accounts for the expected moves of the entrant and uses that information to maximize own profits
  59. Which Of The Following Is A Necessary Condition For A Monopoly To Arise?
  60. Superior technology or scale economies
    Production-specific patents
    None
  61. Elasticity In Economics Is:
  62. A measure of responsiveness.
    The relative difference in price and marginal cost.
    An index used to measure market competitiveness.
  63. Two Points On The Same Indifference Curve Represent The Same
  64. Utility level
    Capital level
    Price level
  65. Which Of The Following Industries Is Most Prone To The Occurrence Of Natural Monopolies?
  66. Utility
    Computer software
    Agriculture
  67. Which Of The Following Is Not A Characteristic Of A Perfectly Competitive Industry?
  68. Producers set the price of their products freely.
    The industry consists of many small firms producing similar products.
    There is no government intervention in the industry.
  69. The Invisible Hand Refers To:
  70. Adam Smith’s description of the workings of market economies.
    David Ricardo’s depiction of global gains from international trade.
    Paul Krugman’s interpretation of the events preceding the financial crisis of 2007-08.
  71. Which Of The Following Changes Would Most Likely Increase The Price Of Music CDs?
  72. A decrease in the popularity of online music streaming services
    A decrease in the cost of CD production
    An increase in the price of cheese
  73. The Demand Curve For Cigarettes Is Steep Because:
  74. The quantity of cigarettes demanded does not vary much with price.
    When the price increases quantity of cigarettes supplied increases rapidly.
    The cigarette market is competitive.
  75. When The Planting Of A Beautiful Garden In One Home Increases The Happiness Of The Neighbors Who Also Have A View Of The Garden, The Garden Is Said To Create A
  76. Positive externality
    Positive marginal cost
    Human factor of production
  77. According To British Economist David Ricardo, The Gains From International Trade Depend On:
  78. Comparative advantage in production
    The restrictions placed by the government on trade transactions
    The possession of natural resources
  79. Which Of The Following Would Be An Opportunity Cost Of Going To College?
  80. Four years of foregone earnings in the labor market
    The student debt accumulated during college
    The tuition cost of college
  81. Which Of The Following Is A Basic Characteristic Of 'Oligopoly'?
  82. Few sellers, many buyers
    Few sellers, few buyers
    Many sellers, many buyers
  83. What Effect Will A Decrease In Demand And An Increase In Supply Have On Equilibrium Price?
  84. Equilibrium price will fall
    Equilibrium price will be constant
    Equilibrium price will rise
  85. In India, Inflation Measured By The -
  86. Wholesale Price Index Number
    National Income Deflator
    Consumer Price Index for urban non-manual workers
  87. Which Of The Following Statements Is NOT Correct About The Factors That Gave Rise To The Consumer Movement In India?
  88. Tax on soft beverages
    Hoarding and Black Marketing
    Frequent food shortages
  89. One Of The Essential Conditions Of "Perfect Competition" Is
  90. same price for same things at one time
    product differentiation
    many sellers and a few buyers
  91. Zero Price Elasticity Of Demand Means
  92. whatever the change in price, there is absolutely no change in demand
    for a small change in price, there is a large change in demand
    for a large change in price, there is a small change in demand
  93. Which Of The Following Is The Most Close To The Definition Of Oligopoly?
  94. The cigarette industry
    The welding shop
    Wheat growing farmers
  95. Duopoly Is The Special Case Of Which Type Of Market Structure?
  96. Oligopoly
    Monopsony
    Monopoly
  97. Which Of The Following Correctly Describes The Nature Of India’s Economy?
  98. Mixed Economy
    Socialist Economy
    Capitalist Economy
  99. In Economic Terms, Globalization Is The Process Of Rapid ______ Between Countries.
  100. Integration
    Investment
    Competition
  101. A Good For Which Demand Decreases With Increase In Income Of Consumer Is Called
  102. Inferior good
    Giffen good
    Public good
  103. The Law Of Demand Implies That The Demand Curve
  104. slopes down
    first slopes up and then slopes down
    slopes up
  105. Which Of The Following Is Not Correct With Respect To Consumer Price Index?
  106. CPI-U is the Consumer Price Index for Rural Consumers.
    It measures the average change in prices of a basket of goods
    It is the most widely used measure of inflation
  107. Which Of The Following Is NOT Related To Microeconomics?
  108. Unemployment
    Labor Economics
    Demand, Supply, and Equilibrium
  109. Which Of The Following Is Measured By The Lorenz Curve?
  110. Inequality of Income
    Unemployment
    Population growth rate
  111. The Condition In Which Market Supply Matches Market Demand Is Called
  112. Equilibrium
    Normalisation
    Equalisation
  113. The Statement "Supply Creates Its Own Demand" Is Given By
  114. J.B. Say
    Thomas Jefferson
    James Madison
  115. Zero Price Elasticity Of Demand Means
  116. whatever the change in price, there is absolutely no change in demand
    for a large change in price, there is a small change in demand
    for a small change in price, there is a large change in demand
  117. The Law Of Demand States That:
  118. as the price rises, the demand falls
    as the price rises, the demand rises
    as the demand rises, the price rises
  119. A Situation Where The Expenditure Of The Government Exceeds Its Revenue Is Called ______.
  120. Budget Deficit
    Default Financing
    Deficit Revenue
  121. Which Of The Following Is A Basic Characteristic Of 'Oligopoly'?
  122. Many sellers, many buyers
    Few sellers, many buyers
    Few sellers, few buyers
  123. What Effect Will A Decrease In Demand And An Increase In Supply Have On Equilibrium Price?
  124. Equilibrium price will rise
    Equilibrium price will be constant
    Equilibrium price will fall
  125. In India, Inflation Measured By The -
  126. Wholesale Price Index Number
    National Income Deflator
    Consumer Price Index for urban non-manual workers
  127. Which Of The Following Statements Is NOT Correct About The Factors That Gave Rise To The Consumer Movement In India?
  128. Adulteration of food
    Tax on soft beverages
    Frequent food shortages
  129. One Of The Essential Conditions Of "Perfect Competition" Is
  130. product differentiation
    many sellers and a few buyers
    same price for same things at one time
  131. Zero Price Elasticity Of Demand Means
  132. whatever the change in price, there is absolutely no change in demand
    for a small change in price, there is a large change in demand
    for a large change in price, there is a small change in demand
  133. Which Of The Following Is The Most Close To The Definition Of Oligopoly?
  134. The cigarette industry
    The welding shop
    The barber shop
  135. Duopoly Is The Special Case Of Which Type Of Market Structure?
  136. Monopoly
    Oligopoly
    Imperfect Competition
  137. Which Of The Following Correctly Describes The Nature Of India’s Economy?
  138. Capitalist Economy
    Mixed Economy
    Socialist Economy
  139. In Economic Terms, Globalization Is The Process Of Rapid ______ Between Countries.
  140. Integration
    Competition
    Change
  141. A Good For Which Demand Decreases With Increase In Income Of Consumer Is Called
  142. Inferior good
    Complementry good
    Public good
  143. The Law Of Demand Implies That The Demand Curve
  144. no regular pattern
    slopes up
    slopes down
  145. Which Of The Following Is Not Correct With Respect To Consumer Price Index?
  146. It measures the average change in prices of a basket of goods
    CPI-U is the Consumer Price Index for Rural Consumers.
    It cover professionals, self-employed, poor, unemployed and retired people in the country
  147. Which Of The Following Is NOT Related To Microeconomics ?
  148. Demand, Supply, and Equilibrium
    Unemployment
    Behaviour of individual economic units
  149. Which Of The Following Is Measured By The Lorenz Curve?
  150. Inequality of Income
    Unemployment
    Illiteracy
  151. The Condition In Which Market Supply Matches Market Demand Is Called
  152. Normalisation
    Equalisation
    Equilibrium
  153. The Statement "Supply Creates Its Own Demand" Is Given By
  154. J.B. Say
    Thomas Jefferson
    David Ricardo
  155. Zero Price Elasticity Of Demand Means
  156. for a small change in price, there is a small change in demand
    whatever the change in price, there is absolutely no change in demand
    for a large change in price, there is a small change in demand
  157. The Law Of Demand States That:
  158. as the demand rises, the price rises
    as the price rises, the demand rises
    as the price rises, the demand falls
  159. A Situation Where The Expenditure Of The Government Exceeds Its Revenue Is Called ______.
  160. Default Revenue
    Budget Deficit
    Default Financing
  161. Jevan Compares The Unit Price Of Chocolate Bars In Order To Get The "Best Buy". This Represents Using Money As
  162. a store of value.
    a unit of account.
    a unit of deferred payment.
  163. The Real Demand For Money Is
  164. the nominal demand for money divided by the price level.
    equal to the nominal demand for money as long as inflation is fully anticipated.
    equal to the supply of money at all times.
  165. Monetary Validation
  166. causes a supply shock.
    increases unemployment.
    can perpetuate inflation.
  167. Under A System Of Flexible Exchange Rates, A Nation Which Uses A Tight Money Policy During A Period Of Worldwide Inflation Would Be Likely To Experience
  168. an appreciation of its currency.
    a loss in international reserves.
    a fall in the value of its currency.
  169. If The Economy Is Currently In Monetary Equilibrium, An Increase In The Money Supply Will
  170. cause a reduction in the demand for money, leading to a higher rate of interest.
    lead to a movement down the money demand curve to a lower rate of interest.
    cause an increase in the demand for money, leading to a lower rate of interest.
  171. Stable Growth In The Money Supply Rule Will Contribute To
  172. increased ability for the Bank of Canada to "fine tune" the economy.
    stability of the price level.
    destabilization if the demand for money fluctuates.
  173. With Respect To The Balance Of Payments,
  174. if the current account is in deficit, the capital account must also be in deficit.
    total payments must equal total receipts.
    the current account balance must be zero.
  175. Suppose That In Canada We Experience A Rise In The Canadian Dollar Price Of Foreign Exchange. In This Circumstance, The Dollar Will Have ________ And The Exchange Rate Will Have ________.
  176. appreciated; risen
    depreciated; fallen
    depreciated; risen
  177. The Difference Between The Government's Debt And Deficit Is That The Debt Is The
  178. amount the government pays interest payments whereas the deficit has not yet incurred interest charges.
    accumulation of past deficits minus surpluses whereas the deficit is the annual shortfall between revenues and disbursements.
    amount owed by the Bank of Canada to the commercial banks where as the deficit is the amount owed by the Government of Canada to the Bank of Canada.
  179. In The Case Of Frictional Unemployment,
  180. the unemployed workers and the employers with available job vacancies have not yet found each other.
    there is a mismatch between the needs of employers with job vacancies and the unemployed workers.
    the only possible cure comes from shifting the aggregate demand curve to the left.
  181. A Decrease In The Money Supply Is Most Likely To
  182. raise interest rates, lower investment, and lower aggregate expenditures.
    lower interest rates, investment, and aggregate expenditures.
    raise interest rates and investment, and lower aggregate expenditures.
  183. When The Price Level Increases It Causes Households And Business Firms To Try To
  184. reduce money balances, which drives interest rates up.
    reduce money balances, which drives national income up.
    increase money balances, which drives interest rates up.
  185. When Metal Coins, Such As Gold And Silver Were Used As Money, A Technique Which Made Them Easy To Recognize And Which Did Not Reduce Their Value Was
  186. re-minting.
    sweating.
    milling
  187. The Main Cause Of Cyclical Unemployment Is That
  188. workers often voluntarily quit a job to look for a better job.
    the level of overall economic activity fluctuates.
    some individuals skills do not have marketable skills for the jobs that do exist.
  189. "Foreign Exchange" Refers To
  190. the actual transaction that occurs as currencies are traded.
    foreign currency or various claims on it.
    the price at which purchases and sales of foreign goods take place.
  191. Publicly Subsidized Education And Retraining Schemes Are
  192. aimed at reducing structural unemployment.
    ways of resisting adjustment to technological change.
    aimed at reducing cyclical unemployment.
  193. Which One Of The Following Statements Correctly Describes The Transmission Mechanism?
  194. An increase in personal consumption leads to an upward shift in the AE curve and thereby increases real GDP.
    An decrease in imports causes the AE curve to shift upwards, leading to a higher interest rate.
    An increase in the money supply leads to a lower interest rate, higher investment, an upward shift in the AE curve and a higher GDP.
  195. If All The Banks In The Banking System Collectively Have $20 Million In Cash Reserves And Have A Desired Reserve Ratio Of 20 Percent, The Maximum Amount Of Demand Deposits The Banking System Can Support Is
  196. $40 million.
    $80 million.
    $100 million.
  197. One Implication Of An Increase In The Cash Drain To The Public Is That The
  198. banking system's ability to create new money following a new deposit is reduced.
    desired ratio is reduced.
    desired reserve ratio is increased.
  199. A Rise In The Price Level, Given No Change In The Supply Of Money, Will
  200. decrease the demand for money and decrease aggregate demand.
    increase the demand for money and decrease aggregate expenditure.
    increase the demand for money and increase aggregate expenditure.