Economics Mcqs - Page 5 of 269

Suppose that tomatoes from Mexico face a 20 percent tariff in the United States and a 25 percent tariff in Canada. If the United States and Canada maintain free trade between each other, the these two countries belong to a ?

A. free-trade area
B. customs union
C. common market
D. monetary union

The costs that depend on output in the short run are ?

A. total fixed cost only.
B. total variable costs only.
C. both total variable costs and total costs.
D. total costs only

When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?

A. trade creation
B. trade diversion
C. dynamic welfare effects
D. comprehensive welfare effects

Diminishing marginal return implies ?

A. decreasing average fixed costs.
B. decreasing marginal costs.
C. decreasing average variable costs.
D. increasing marginal costs.

Trade creation takes place when ?

A. a country moves from autarky to free trade
B. a movement to a customs union reduces the cost of trade through standardization
C. economic integration results in a movement in product origin to a lower-cost member country
D. economic integration results in a shift in product origin from a lower cost nonmember country to a member country having higher costs

If the total product of two workers is 80 and the total product of 3 workers is 90 then the average product of the third worker is …….. and the marginal product of the third worker is ………?

A. 160; 270
B. 10; 30
C. 10; 3.33
D. 30; 10

Under the EU’s Common Agricultural Policy, a variable import levy equals the ?

A. amount the which the EU’s support price exceeds the world price
B. amount by which the world price exceeds the EU’s support price
C. support price of the EU
D. world price

Suppose Handel’s Ice Cream experiences economies of scale up to a certain point and diseconomies of scale beyond that point. Its long-run average cost curve is most likely to be ?

A. downward sloping to the right
B. U-shaped
C. Horizontal
D. upward sloping to the right

The European Union has achieved all of the following except ?

A. adopted a common fiscal policy for member nations
B. established a common system of agricultural price supports
C. disbanded all tariffs between its member countries
D. levied common tariffs on products imported from nonmembers

A graph showing all the combinations of capital and labor that can used to produce a given amount of output is ?

A. an indifference curves.
B. an isoquant.
C. an isocost line
D. a production functions