MCQ's of Economics (HELP)

[arvind0708]

8 An economist calculates that a firm has incurred the following costs over the course of a year.
$(000)
wages and salaries 150
opportunity cost of owner's time 40
materials 80
rent 30
marketing fees 20
interest on bank loans 25
interest forgone on finance
provided by owner
15
depreciation 20
What would an accountant calculate to be the total cost incurred by the firm?
A $275 000 B $305 000 C $325 000 D $340 000

how to get the answer.

 

[arvind0708]

MCQ for Economics June 2003 Paper 3 Question 24

24 Assuming a constant income velocity of circulation of money, if real output grows by 3 %, and the
rate of growth of the money supply is 10 %, what will be the approximate change in the price
level?
A – 7 % B + 7 % C + 10 % D + 13 %

what calculation need to be done to get the answer.

 

[arvind0708]

MCQ for Economics Nov 2003 Paper 3 Question 6

6 To increase the labour force from 30 to 31 workers, an entrepreneur is forced to increase the
daily wage rate from $40 to $42.
What is the marginal cost of labour per day?
A $2 B $42 C $62 D $102

how to get the answer.

 

[arvind0708]

MCQ for Economics Nov 2003 Paper 3 Question 9

9 An entrepreneur takes out a $500 000 loan at a rate of interest of 10 %, and invests a further
$500 000 of his own funds to set up a new firm.
In the first year he pays himself a salary of $40 000.
The rate of interest he could have obtained by investing his funds elsewhere is 8%, and the wage
he could have earned in alternative employment is $30 000.
By how much will an economist’s calculation of the firm’s first year costs exceed an accountant's
calculation?
A $20 000 B $30 000 C $40 000 D $50 000

what calculation need to be done to get the answer

 

[arvind0708]

MCQ for Economics Nov 2003 Paper 3 Question 10

10 The schedule shows the short-run marginal cost of producing good X.
units of X 1 2 3 4 5 6
marginal cost ($) 40 30 26 34 50 90
Given that the total fixed cost is $30 what is the level of output that minimises average total cost?
A 2 units B 3 units C 4 units D 5 units

 

[arvind0708]

MCQ for Economics Nov 2003 Paper 3 Question 19

19 Over a given period the nominal value of a country's national income increased by 10% and its
value of output by 12%.
What could explain this?
A The country's money supply fell by 2%.
B There was an increase in the income velocity of circulation.
C There was an increase in the balance of trade deficit.
D The country's general price level fell by 2%.

 

[arvind0708]

MCQ for Economics Nov 2003 Paper 3 Question 210

21 The table shows the level of consumption at various levels of national income for a closed
economy with no government.
national income
($ million)
consumption
($ million)
10 11
12 12
14 13
16 14
18 15
20 16
What happens to the average and marginal propensities to consume as income increases?
average propensity
to consume
marginal propensity
to consume
A constant constant
B falls constant
C falls falls
D rises falls

what calculation need to be done

 

[arvind0708]

MCQ for Economics Nov 2004 Paper 3 Question 21

21 In a closed economy, households pay $0.40 in tax on every $1 increase in their gross income,
and spend 5/6 of every increase in their disposable income.
What is the value of the multiplier?
A 2 B 21/2 C 3 D 6


help

 

[arvind0708]

MCQ for Economics Nov 2004 Paper 3 Question 24

24 Assuming a constant income velocity of circulation of money, if real output grows by 5 %, and the
money supply grows by 2 %, what will be the approximate change in the price level?
A –3 % B +2 % C +3 % D +7 %

help in calculation

 

[arvind0708]

MCQ for Economics June 2005 Paper 3 Question 18

18 In a closed economy with no government, consumption is three-quarters of income at all levels of
income.
The present equilibrium level of income is $220 million.
The full employment level of income is $240 million.
By how much would investment have to increase to reach full employment?
A $5 million B $15 million C $20 million D $30 million

 

[arvind0708]

MCQ for Economics Nov 2005 Paper 3 Question 2

2 The table shows the total utility that an individual derives from consuming different quantities of a
good.
quantity of good
(units)
total utility
(units)
1 20
2 36
3 50
4 62
5 72
6 80
The individual's marginal utility of money is $1 = 2 units of utility.
What is the maximum quantity of the good that the individual will buy when its price is $6?
A 2 units B 3 units C 4 units D 5 units

 

[arvind0708]

MCQ for Economics June 2006 Paper 3 Question 9

9 A firm in perfect competition currently sells 100 units at $5 each.
What will be the revenue obtained by the firm if it increases its price to $6?
A zero B $100 C $500 D $600

 

[arvind0708]

MCQ for Economics June 2006 Paper 3 Question 20

20 A closed economy with no government has an equilibrium level of national income of
$10 000 million. Consumption expenditure is $8000 million.
Assuming that the MPC = APC what will be the change in national income following an increase
in investment of $100 million?
A $100 m B $120 m C $400 m D $500 m

help in calculating it

 

[arvind0708]

MCQ for Economics Nov 2006 Paper 3 Question 2

2 The diagram shows the marginal utility that an individual derives from a good at different levels of
consumption.
1 2 3 4 5 6 7 8
80
70
60
50
40
30
20
10
0
quantity (units)
utility
(units)
MU
The utility he derives from the last $ he spends on every good is 2 units.
Assuming the marginal utility of money is constant, which quantity will he purchase if the price of
the good is $20?
A 4 units B 5 units C 6 units D 7 units

 

[arvind0708]

MCQ for Economics Nov 2006 Paper 3 Question 21

21 In a closed economy with no government C = 30 + 0.8 Y and I = 50, where C is consumption, Y is
income and I is investment.
What is the equilibrium level of income?
A 64 B 80 C 250 D 400

how to calculate it.

 

[arvind0708]

MCQ for Economics June 2007 Paper 3 Question 6

6 The diagram shows an individual’s supply of labour curve.
40
number of hours
S
hourly wage ($)
w x
y
z
80
60
40
20
0
He is offered a job which would require him to work a standard 40-hour week.
Which area measures the lowest amount he would have to be paid per week to get him to accept
this job offer?
A w + z B x + y C x + y - z D w + x + z + y

 

[arvind0708]

MCQ for Economics June 2007 Paper 3 Question 9

9 The short-run total costs of a firm are given by the formula
SRTC = $(10 000 + 5X2)
where X is the level of output.
What are the firm’s average fixed costs?
A $10 000
B
X
$(10 000 5X ) 2
+
C
X
$10 000
D
X
$(5X 10 000) 2
−
help in calculating it

 

[arvind0708]

MCQ for Economics Nov 2007 Paper 3 Question 7

7 The table shows a firm’s total and marginal costs.
output total cost ($) marginal cost ($)
1 200 20
2 215 15
3 225 10
4 240 15
5 260 20
What is the average fixed cost of producing 6 units?
A $20 B $30 C $180 D $200

how to get the answer

 

[arvind0708]

MCQ for Economics Nov 2007 Paper 3 Question 15

15 In the diagram, D is a country’s demand curve for an imported good which cannot be produced
domestically.
The world market price is OPw.
D
O
price
x
y
Pw
Pc
quantity
Which area measures the deadweight loss to the country of imposing an import tariff equal to
PwPc on the good?
A x + y B x C y D x – y

 

[arvind0708]

MCQ for Economics June 2008 Paper 3 Question 2

2 The table shows the total utility that an individual derives from consuming different quantities of a
good.
quantity of good
(units)
total utility
(units)
1 24
2 45
3 63
4 78
5 90
6 99
The individual’s marginal utility of money is $1 = 2 units of utility.
What is the maximum quantity of the good that the individual will buy when its price is $6?
A 2 units B 3 units C 4 units D 5 units
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