Question:

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.

Question:

Which one of the following is roughly equal to national income?

A.

GDP

B.

NNP

C.

GNP

D.

SDP

Answer» b. NNP

Question:

When individuals income falls (everything remain the same) his demand foran inferior good

A.

rises

B.

falls

C.

remains the same

D.

we cannot say without additional information

Answer» a. rises

Question:

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.

Question:

Which aspect of taxation involves normative economics?

A.

The incidence of the tax

B.

The fairness of the tax

C.

The effect of the tax on incentives to work

D.

All of the above

Answer» b. The fairness of the tax

Question:

The substitution effect for a commodity is

A.

is always positive

B.

depends upon the nature of the commodity

C.

depends upon price effect

D.

sometimes negative and sometimes positive

Answer» a. is always positive

Question:

Keynesian economics is also known as:

A.

Supply side economics

B.

Monetary economics

C.

Rational expectations

D.

Depression economics

Answer» d. Depression economics

Question:

The ________ method consists in deriving conclusions from general truths, takes few general principles and applies them draw conclusions.

A.

Inductive

B.

Deductive

C.

Empirical

D.

Scientific

Answer» b. Deductive

Question:

Excess demand for money, according to Say’s law in the Economy:

A.

Is greater

B.

Is very less

C.

Is equal to zero

D.

There is no relationship between excess demand for money and Say’s Law

Answer» d. There is no relationship between excess demand for money and Say’s Law

Question:

The perfectly elastic segment of the LM curve is:

A.

Keynesian range

B.

Classical range

C.

Intermediate range

D.

None of these

Answer» a. Keynesian range