McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Arts in Economics (BA Economics) .
| 301. |
The book ‘Principles of Economics’ was written by: |
| A. | Keynes |
| B. | Marshall |
| C. | Samuelson |
| D. | Pigou |
| Answer» B. Marshall | |
| 302. |
Average revenue is : |
| A. | TR - TC |
| B. | TR / No. of units sold |
| C. | TC / TR |
| D. | MC / AR |
| Answer» B. TR / No. of units sold | |
| 303. |
A hypothesis is a : |
| A. | Statement of facts |
| B. | Statement of observations made by a researcher |
| C. | Statement of expected out of research |
| D. | A proposition the validity of which is to be tested |
| Answer» D. A proposition the validity of which is to be tested | |
| 304. |
In the classical system, the basic economic problems are solved by: |
| A. | Government |
| B. | Price mechanism |
| C. | Economists |
| D. | Central bank |
| Answer» B. Price mechanism | |
| 305. |
Growth definition of economics was concerned with: |
| A. | Scarcity |
| B. | Welfare |
| C. | Wealth |
| D. | Economic growth |
| Answer» D. Economic growth | |
| 306. |
A market: |
| A. | Necessarily refers to a meeting place between buyers and sellers |
| B. | Does not necessarily refer to a meeting place between buyers and sellers |
| C. | Extends over the entire nation |
| D. | Extends over a city. |
| Answer» B. Does not necessarily refer to a meeting place between buyers and sellers | |
| 307. |
The average fixed cost is obtained by : |
| A. | TFC / Q |
| B. | MC / Q |
| C. | TAC / Q |
| D. | AVC / Q |
| Answer» A. TFC / Q | |
| 308. |
Average Revenue curve under monopoly is : |
| A. | Upward slopping |
| B. | Downward slopping |
| C. | Horizontal straight line |
| D. | None of these |
| Answer» B. Downward slopping | |
| 309. |
_______ investigations examine an individual’s relationship with and interaction in society |
| A. | Natural science |
| B. | Physical science |
| C. | Life science |
| D. | Social science |
| Answer» D. Social science | |
| 310. |
In the 19th century _________ argued that ideas pass through three rising stages namely, Theological, Philosophical and Scientific. |
| A. | Auguste Comte |
| B. | B. Plato |
| C. | Aristotle |
| D. | Socrates |
| Answer» A. Auguste Comte | |
| 311. |
_________ is distinctive for much greater use of mathematics than the other social sciences, a development made possible by the development of a concept of utility |
| A. | Sociology |
| B. | Political science |
| C. | Economics |
| D. | Anthropology |
| Answer» C. Economics | |
| 312. |
The most important founder of German sociology, __________ , was keenly interested in maintaining the relationship between economics and sociology. |
| A. | Max Adler |
| B. | Max Weber |
| C. | Karl Marx |
| D. | Joseph W. Eaton |
| Answer» B. Max Weber | |
| 313. |
International Social Science Associations were founded under the auspices of___________ |
| A. | UNESCO |
| B. | World Bank |
| C. | IMF |
| D. | USA |
| Answer» A. UNESCO | |
| 314. |
________ social science discipline deals with the integration of different aspects of the Social Sciences, Humanities, and Human Biology |
| A. | Criminology |
| B. | Demography |
| C. | Geography |
| D. | Anthropology |
| Answer» D. Anthropology | |
| 315. |
Mannheim defines ________as the sum of those methods by which a society tries to influence human behavior to maintain a given order. |
| A. | Social control |
| B. | Constitution |
| C. | Policing |
| D. | Democracy |
| Answer» A. Social control | |
| 316. |
Implicit costs are: |
| A. | Equal to total fixed costs. |
| B. | Comprised entirely of variable costs. |
| C. | "Payments" for self-employed resources. |
| D. | Always greater in the short run than in the long run. |
| Answer» C. "Payments" for self-employed resources. | |
| 317. |
Which would be an implicit cost for a firm? The cost: |
| A. | Of worker wages and salaries for the firm. |
| B. | Paid for leasing a building for the firm. |
| C. | Paid for production supplies for the firm. |
| D. | Of wages foregone by the owner of the firm. |
| Answer» D. Of wages foregone by the owner of the firm. | |
| 318. |
If a firm's revenues just cover all its opportunity costs, then: |
| A. | Normal profit is zero. |
| B. | Economic profit is zero. |
| C. | Total revenues equal its explicit costs. |
| D. | Total revenues equal its implicit costs. |
| Answer» B. Economic profit is zero. | |
| 319. |
Suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it. Which is true? |
| A. | The firm will earn accounting and economic profits. |
| B. | The firm will face accounting and economic losses. |
| C. | The firm will face an accounting loss, but earn economic profits. |
| D. | The firm may earn accounting profits, but will face economic losses. |
| Answer» D. The firm may earn accounting profits, but will face economic losses. | |
| 320. |
The short run is a time period in which: |
| A. | All resources are fixed. |
| B. | The level of output is fixed. |
| C. | The size of the production plant is variable. |
| D. | Some resources are fixed and others are variable. |
| Answer» D. Some resources are fixed and others are variable. | |
| 321. |
When the total product curve is falling, the: |
| A. | Marginal product of labor is zero. |
| B. | Marginal product of labor is negative. |
| C. | Average product of labor is increasing. |
| D. | Average product of labor must be negative |
| Answer» B. Marginal product of labor is negative. | |
| 322. |
When marginal product reaches its maximum, what can be said of total product? |
| A. | Total product must be at its maximum |
| B. | Total product starts to decline even if marginal product is positive |
| C. | Total product is increasing if marginal product is still positive |
| D. | Total product levels off |
| Answer» C. Total product is increasing if marginal product is still positive | |
| 323. |
Variable costs are: |
| A. | Sunk costs. |
| B. | Multiplied by fixed costs. |
| C. | Costs that change with the level of production. |
| D. | Defined as the change in total cost resulting from the production of an |
| Answer» C. Costs that change with the level of production. | |
| 324. |
Which is not a fixed cost? |
| A. | Monthly rent of Rs. 1,000 contractually specified in a one-year lease |
| B. | An insurance premium of Rs. 50 per year, paid last month |
| C. | An attorney\s retainer of Rs. 50,000 per year |
| D. | A worker\s wage of Rs. 15 per hour |
| Answer» D. A worker\s wage of Rs. 15 per hour | |
| 325. |
If you know that with 8 units of output, average fixed cost is Rs. 12.50 and average variable cost is Rs. 81.25, then total cost at this output level is: |
| A. | Rs. 93.75. |
| B. | Rs. 97.78. |
| C. | Rs. 750. |
| D. | Rs. 880. |
| Answer» C. Rs. 750. | |
| 326. |
With fixed costs of Rs. 400, a firm has average total costs of Rs. 3 and average variable costs of Rs. 2.50. Its output is: |
| A. | 200 units. |
| B. | 400 units. |
| C. | 800 units. |
| D. | 1,600 units. |
| Answer» C. 800 units. | |
| 327. |
The reason the marginal cost curve eventually increases as output increases for the typical firm is because: |
| A. | Of diseconomies of scale. |
| B. | Of minimum efficient scale. |
| C. | Of the law of diminishing returns. |
| D. | Normal profit exceeds economic profit. |
| Answer» C. Of the law of diminishing returns. | |
| 328. |
If the short-run average variable costs of production for a firm are rising, then this indicates that: |
| A. | Average total costs are at a maximum. |
| B. | Average fixed costs are constant. |
| C. | Marginal costs are above average variable costs. |
| D. | Average variable costs are below average fixed costs. |
| Answer» C. Marginal costs are above average variable costs. | |
| 329. |
If a more efficient technology was discovered by a firm, there would be: |
| A. | An upward shift in the AVC curve. |
| B. | An upward shift in the AFC curve. |
| C. | A downward shift in the AFC curve. |
| D. | A downward shift in the MC curve. |
| Answer» D. A downward shift in the MC curve. | |
| 330. |
A firm encountering economies of scale over some range of output will have a: |
| A. | Rising long-run average cost curve. |
| B. | Falling long-run average cost curve. |
| C. | Constant long-run average cost curve. |
| D. | Rising, then falling, then rising long-run average cost curve. |
| Answer» B. Falling long-run average cost curve. | |
| 331. |
When a firm doubles its inputs and finds that its output has more than doubled, this is known as: |
| A. | Economies of scale. |
| B. | Constant returns to scale. |
| C. | Diseconomies of scale. |
| D. | A violation of the law of diminishing returns. |
| Answer» A. Economies of scale. | |
| 332. |
The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of: |
| A. | Economies of scale. |
| B. | Normative economies. |
| C. | Diminishing marginal returns. |
| D. | An increasing marginal product of labour. |
| Answer» A. Economies of scale. | |
| 333. |
If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be: |
| A. | Economies of scale. |
| B. | Diseconomies of scale. |
| C. | Constant returns to scale. |
| D. | Increasing average total costs. |
| Answer» C. Constant returns to scale. | |
| 334. |
Which of the following statements describes the presence of diminishing returns. Holding at least one factor constant ….... |
| A. | The marginal product of a factor is positive and rising. |
| B. | The marginal product of a factor is positive but falling. |
| C. | The marginal product of a factor is falling and negative. |
| D. | The marginal product of a factor is constant. |
| Answer» B. The marginal product of a factor is positive but falling. | |
| 335. |
Which of the following statements describes increasing returns to scale: |
| A. | Doubling the inputs used leads to double the output. |
| B. | Increasing the inputs by 50% leads to a 25% increase in output. |
| C. | Increasing inputs by 1/4 leads to an increase in output of 1/3. |
| D. | None of the above. |
| Answer» C. Increasing inputs by 1/4 leads to an increase in output of 1/3. | |
| 336. |
Economies of scale exist if: |
| A. | As the amount of capital increases, the cost of producing per unit rises |
| B. | As the amount of capital increases, the cost of producing per unit falls |
| C. | As the amount of capital increases, the marginal cost rises |
| D. | As the amount of capital increases, the marginal physical product falls |
| Answer» B. As the amount of capital increases, the cost of producing per unit falls | |
| 337. |
Whenever marginal product is declining with increasing use of an input, |
| A. | Total product is declining as input increases. |
| B. | Average product is declining as input use increases |
| C. | Marginal product is greater than average product |
| D. | Total product is increasing at a decreasing rate as input use increases. |
| Answer» D. Total product is increasing at a decreasing rate as input use increases. | |
| 338. |
Whenever marginal product is increasing with increasing use of an input, |
| A. | Total product is increasing at a decreasing rate |
| B. | Total product is increasing at an increasing rate |
| C. | Marginal product is less than average product |
| D. | Average product is decreasing. |
| Answer» B. Total product is increasing at an increasing rate | |
| 339. |
When average product is at a maximum, marginal product is |
| A. | Zero |
| B. | Increasing |
| C. | Equal to average product |
| D. | Greater than average product |
| Answer» C. Equal to average product | |
| 340. |
Whenever average product is declining, with increases in input usage, |
| A. | Marginal product is less than average product |
| B. | Total product is declining with increases in input |
| C. | Total product is increasing with increases in input |
| D. | Marginal product is greater than average product |
| Answer» B. Total product is declining with increases in input | |
| 341. |
The total product curve may initially show output increasing at an increasing rate as more labour is hired because of the: |
| A. | Declining quality of the labor force. |
| B. | Principle of comparative advantage. |
| C. | Law of diminishing marginal returns. |
| D. | Increase in marginal physical product. |
| Answer» D. Increase in marginal physical product. | |
| 342. |
If labour is the only variable resource and its marginal physical product falls as more workers are hired: |
| A. | The law of diminishing marginal returns is at work. |
| B. | Marginal cost is rising. |
| C. | Average cost may still be declining. |
| D. | Average physical product may still be rising. |
| Answer» A. The law of diminishing marginal returns is at work. | |
| 343. |
When both average and total product are greater than zero, and marginal product equals average product, then total product: |
| A. | Is at a maximum. |
| B. | Is positive and rising. |
| C. | Is falling. |
| D. | Is negative but rising. |
| Answer» B. Is positive and rising. | |
| 344. |
Costs incurred only when production occurs are known as: |
| A. | Explicit costs. |
| B. | Fixed costs. |
| C. | Variable costs. |
| D. | Technological expenses. |
| Answer» C. Variable costs. | |
| 345. |
Which of the following is irrelevant for rational decision making? |
| A. | Total variable cost (TVC) |
| B. | Explicit cost. |
| C. | Average fixed cost (AFC). |
| D. | Marginal cost (MC). |
| Answer» A. Total variable cost (TVC) | |
| 346. |
A curve that can never be “U” shaped is the: |
| A. | Average variable cost curve. |
| B. | Marginal cost curve. |
| C. | Average fixed cost curve. |
| D. | Average total cost curve. |
| Answer» C. Average fixed cost curve. | |
| 347. |
Diminishing marginal returns are most compatible with: |
| A. | Economies of scale. |
| B. | Advantages from specialization. |
| C. | Positively-sloped marginal cost curves |
| D. | Depreciation of the capital stock. |
| Answer» B. Advantages from specialization. | |
| 348. |
If average variable costs fall as output grows: |
| A. | Marginal costs must also be declining. |
| B. | Fixed cost must also be declining. |
| C. | Total cost must also be declining. |
| D. | Average cost must be below average variable cost. |
| Answer» C. Total cost must also be declining. | |
| 349. |
In economic theory the costs of a firm |
| A. | Tend to be less than the everyday use of the term costs would suggest |
| B. | Includes implicit as well as explicit outlays |
| C. | Always decline as more output is produced |
| D. | Are usually defined in such a way that profits will be larger than the |
| Answer» B. Includes implicit as well as explicit outlays | |
| 350. |
The short run as the term is used in connection with the theory of the firm is a period of time: |
| A. | Too short for the firm to vary all its inputs |
| B. | No more than a week |
| C. | Long enough for the firm to vary the quantity of all its inputs |
| D. | In which the fixed costs are zero |
| Answer» A. Too short for the firm to vary all its inputs | |
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