Economics Practice MCQ Page 13
Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are useful in the preparation of subject tests for employment or admission.
Question: 1434 Which of the following is primarly determined by the behavior of money prices but not relative prices.
- Resource-allocation decisions.
- Ant-inflation policy.
- Households 'labor-supply decisions.
- Firms'production decisions.
- All of the above are determined primarily by money prices.
Question: 1437 According to the principle of substitution.
- many goods have no effective substitutes .
- households are good substitutes for firms .
- nearly all goods have substitutes.
- the price of substitutes goods must be the same.
- buyers will stop buying a good if its price rises.
Question: 1439 The principle of substitution assures that households will substitute corn for beans if
- the money price of beans rises .
- the money price of corn rises.
- the relative price of corn in terms of beans rises.
- the relative price of corn in terms of beans falls.
- the money price of beans falls.
Question: 1441 The invisible hand refers to
- unseen government control of the economy.
- the power of large corporations.
- a 1950s horror film.
- the unseen coordination of market economies by the price system.
- intangible goods produced in the economy.
Question: 1442 If, at the prevailing price,more of a good is desired than is available for sale ,
- the price is below equilibrium.
- the price is at equilibrium.
- the price must fall.
- the price system cannot allocation the good efficiently.
- we cannot tell anything about the price.
Question: 1444 In a market economy,households are prevented from consuming "too much "of very scare commodities by
- government regulations.
- long line waiting to buy these goods.
- not being able to find them .
- high prices charged for these goods.
- some combination all of the above.
Question: 1445 In a market economy,decisions about what goods to be produced reflect
- the government 's preferences.
- the dollar votes of consumers.
- the dollar votes of producers.
- the preferences of the owners of productive resources.
- the lack of coordination of decisions.
Question: 1447 Which of the following is not omitted from the basic circular flow model?
- Steel industry sales to the automobile industry.
- Intermediate goods.
- Goods and services produced within households that are used by households.
- Households sales of factors of production to businesses.
Question: 1448 Tall, slender athletes play basketball while shorter,huskler ones play football because of
- the law of diminishing returns.
- the law of increasing costs.
- the law of decreasing costs.
- the law of comparative advantage.
- economies of large-scale production.
Question: 1450 Economies of large-scale production
- lead to greater specialization.
- offset the effects of the law of comparative advantage.
- cause firms to use more capital and less labor .
- undermine the efficiency of the price system.
Question: 1452 One recent to the higher airline fares for business travelers was to
- derive rather than fly across the country .
- relocate business operations to major cities.
- increase the use of telefax and teleconferencing.
- have most businesses buy their own planes so employees could fly for free.
Question: 1454 Many is defined as
- currency and coin.
- anything valuable.
- anything that can be exchanged.
- anything widely accepted in exchange for other goods.
- any financial assets issued by the government.
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