Economics MCQs


Quiz # 1, MCQs

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  1. 1)

    Which of the following is NOT a factor of production?

    • A) Labour.
    • B) Land.
    • C) Capital.
    • D) Investment.

  2. 2)

    Land is best described as:

    • A) Produced factors of production.
    • B) "Organizational" resources.
    • C) Physical and mental abilities of people.
    • D) "Naturally" occurring resources.

  3. 3)

    Fixed costs are fixed with respect to changes in:

    • A) Output.
    • B) Capital expenditures.
    • C) Wages.
    • D) Time.

  4. 4)

    When a firm charges each customer the maximum price that the customer is willing to pay, the firm:

    • A) Engages in a discrete pricing strategy.
    • B) Charges the average reservation price.
    • C) Engages in second-degree price discrimination.
    • D) Engages in first-degree price discrimination.

  5. 5)

    Say's Law is a proposition underlying classical economics stating that:

    • A) Supply creates its own demand.
    • B) Leakages are greater than injections.
    • C) Unemployment is a common condition.
    • D) Consumption expenditures are a function of disposable income.

  6. 6)

    An assumption of classical economics is:

    • A) Prices and wages are inflexible.
    • B) Self-correction takes a long time.
    • C) Supply creates its own demand.
    • D) Investment and saving are seldom equal.

  7. 7)

    Refer to the blow figure, the marginal propensity to consume is:

    • A) 0.25
    • B) 0.50
    • C) 0.60
    • D) 0.67

  8. 8)

    Real Gross Domestic Product (GDP) equals:

    • A) Nominal GDP minus net exports.
    • B) Nominal GDP divided by the GDP deflator.
    • C) Nominal GDP multiplied by the GDP deflator.
    • D) GDP minus depreciation.

  9. 9)

    Which of the following statements is TRUE?

    • A) Net National Product = Gross National Product – Depreciation.
    • B) Net National Product = National Income.
    • C) Net National Product = Disposable Personal Income.
    • D) Net National Product = Personal Income.

  10. 10)

    An individual whose attitude towards risk is known as:

    • A) Risk averse.
    • B) Risk loving.
    • C) Risk neutral.
    • D) None of the given options.