Which are considered the most important factors of production?
Correct answer B. Labour, land and capital
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Economics MCQs
Page 6 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 6 of 131
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
How is the value of the marginal product of labour defined?
Correct answer B. The price of the output times the marginal product of labour
What effect does a fall in demand for fish have?
Correct answer B. It decreases the value of the marginal product of fishermen, reduces their wage and reduces employment in the fishing industry
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An increase in the demand for apples will cause all of the following EXCEPT which one?
Correct answer D. A decrease in the number of apple pickers employed
If input and output markets are competitive and firms maximise profit, what does each factor of production earn in equilibrium?
Correct answer A. The value of its marginal product
What does an increase in demand for a firm’s output do?
Correct answer A. It increases the prosperity of both the firm and the factors hired by the firm
Which statement is NOT true of workers with a high value of marginal product?
Correct answer C. Usually have little capital with which to work
When capital is owned by firms rather than directly by households, capital income can take any of these forms EXCEPT which one?
Correct answer D. Increases in stocks of goods
If a factor shows diminishing marginal product, what will hiring extra units of it do?
Correct answer A. Generate ever smaller amounts of additional output
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For a competitive, profit-maximising firm, what does the value-of-the-marginal-product curve for capital represent?
Correct answer B. Demand curve for capital
Why does an individual firm’s demand curve for a factor of production behave as it does?
Correct answer D. It slopes downward due to the factor's diminishing marginal product
Up to what point should a competitive, profit-maximising firm hire workers?
Correct answer A. Where the value of the marginal product of labour equals the wage
How does a rise in the price of cars affect the demand for car workers?
Correct answer D. It shifts right and increases the wage
Suppose a war is fought with biological weapons that kill people but leave capital intact. Compared with before the war, what is likely to happen to equilibrium wages and rental rates?
Correct answer B. Wages rise and rental rates fall
Where must the government set a price ceiling for it to be a binding constraint on the market?
Correct answer C. Below the equilibrium price
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The equilibrium rent for apartments is Rs500 a month, but the government imposes a rent control of Rs250. Which result is unlikely?
Correct answer C. The quality of apartments will improve
Which statement about a binding price ceiling is true?
Correct answer B. The shortage created by the price ceiling is greater in the long run than in the short run
When will the surplus caused by a binding price floor be largest?
Correct answer A. When both supply and demand are elastic
The government sets a price ceiling on petrol of Rs150 per litre while the equilibrium price is Rs100 per litre. Which statement is true?
Correct answer A. A significant increase in the demand for petrol could cause the price ceiling to become a binding constraint
In the supply and demand model, how does a tax collected from buyers shift the curves?
Correct answer D. The demand curve shifts downward by the size of the tax per unit