Deck 2

Question 1

In the ….. , the perfectly competitive firm will react to profits by?
A. Short run; increasing quality of products.
B. Long run; tailoring their quality controls
C. Short run; reducing its labour inputs
D. Long run ; increasing it’s production

Answer 1

D. Long run; increasing its production

Question 2

A firm that holds a monopoly position in the market place is?
A. A price maker
B. A price taker
C. Monopolistically competition
D. Subject to infinite market forces

Answer 2

A. A price maker

Question 3

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to?
A. Match prince increases , but not price cuts
B. Stand at opposite ends of the competition spectrum
C. Match price cuts but not price increases
D. Stand at the high point of the competition spectrum

Answer 3

C. Match price cuts , but not price increases

Question 4

Shopping malls typically lease retail space to a large number of clothing stores. When this group of retailers competes to sell similar but not identical products they engage in?
A. A cartel
B. Collusion
C. Monopolistic competition
D. Perfect competition

Answer 4

C. Monopolistic competition

Question 5

In competitive settings profits will lead firms to …. And losses will lead firms …. So the incentives for producing at low costs and coming up with new ways of pleasing customers are strong.
A. Privatise ; nationalise
B. Enter the market ; to exit
C. Monoplize ; to lower costs
D. Reduce output ; increase price

Answer 5

B. Enter the market ; to exit

Question 6

Economic functions of the government are all of the following except to ……..
A. Control the price level of public goods
B. Create a stable economic environment
C. To increase the level of education
D. Distribute income and wealth

Answer 6

C. To increase the level of education

Question 7

Petrol income tax and stamp duties are two examples if government revenue what type of revenue are they?
A. Non tax revenue
B. Indirect taxes
C. Direct taxes
D. Non revenue reciepts

Answer 7

C. Direct taxes

Question 8

Which of the following is included in gdp?
A. Revenue from the sale to a three year old car
B. The fees charged for a stock brokers service
C. The receipts from a sale of land
D. The value of lawn care service provided by a 16 year old as part of his weekly chores

Answer 8

B. The fees charged for a stock brokers services

Question 9

Business spending on a physical capital, new homes and inventories is counted in which component of GDP?
A. Consumption
B. Investment
C. Government spending
D. Imports- exports

Answer 9

B. Investment

Question 10

In 1980 Denmark had a GDP of £70 billion and a population of 5.1 million. In 2000, Denmark had a GDP of £160 billion and a population of 5.3 million. By what percentage did Denmarks GDP per capita rise between 1980 and 2000?
A. 45.4%
B 219%
C. 128%
D. 120%

Answer 10

D. 120%

Question 11

A nation can achieve higher economic growth if:
A. It devotes more resources to research and development
B. The productivity of Labour declines
C. Taxes are imposed on investment in capital
D. More resources are allocated to consumption goods

Answer 11

A. It devoted more resources into research and development.

Question 12

Which of the following is unlikely to affect the rate of economic growth?
A. The quality of available resources
B. The quantity of available resources
C. The level of government spending
D. Technological change

Answer 12

C. The level of government spending

Question 13

Which of the government policies below is most unlikely to encourage per capita economic growth?
A. High taxes in on companies that spend a lot on capital formation
B. The use of tax revenues for investment and capital formation
C. Special subsidies for capital - intensive forms of production
D. Promotion of education and training programs for workers

Answer 13

B. The use of tax revenues for investment and capital formation

Question 14

If the budget deficit is lower than it was last year we could say that.
A. Cetris paribus , the level of aggregate demand will be lower than it was last year
B, cetris paribus , the level of aggregate demand will be higher than it was last year
C. The government must have an expansionary fiscal stance
D. The governments fiscal stance must be contractionary

Answer 14

A

Question 15

If the number of employed persons in a country equals 24 milllion , the number of unemployed persons equals 8 million and the number of persons over age 16 in the population equals 40 million the unemployment rate equals:
A. 32%
B. 25%
C.20%
D. 8%

Answer 15

B.25%

Question 16

In the early 1990 extremely high inflation rates of 2500% were common in Russia. During that time, we can say that Russia was experiencing……….?
A. Perpetual inflation
B. Ultra inflation
C. Hypo inflation
D. Hyperinflation

Answer 16

D.hyperinflation

Question 17

A country’s current account balance refers to a broad measure of the balance of trade that includes:
A. Merchandise, services and foreign capital investment
B. Goods , foreign capital investments , exported domestic services
C. Goods and services , international flows of income and foreign aid.
D. Merchandise, foreign aid and imported domestic services

Answer 17

C. Goods and services , international flows of income and foreign aid

Question 18

When other factors such as health and illiteracy rates are added to a global comparison of GDP and population which of the following is likely to be revealed?
A. Tough comparisons between regions as data are not available
B. Very wide differences in the standard of living
C. 2% of the world GDP comes from agriculture in low income countries
D. The similarity in the low degree of urbanisation

Answer 18

B. Very wide differences in the standard of living

Question 19

When the US is in economic recession, this will affect China who exports goods to the US and cause an economic recession in China as Americans are buying fewer goods. This relationship between China and the US is called?
A. Outsourcing
B. Economic interdependence
C. Multinational cooperation
D. Isolationism

Answer 19

B. Economic interdependence