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Economics MCQs with Explanations

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2421EconomicsMedium

Which of the following statements regarding taxes is correct?

AA decrease in taxes shifts the aggregate supply curve to the left

BMost economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand

CAn increase in taxes shifts the aggregate demand curve to the right

DA permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

Correct answer

D. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

Explanation

The correct answer is A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes..

2422EconomicsMedium

Specialized socialization occurs most frequently in________?

Athe peer groups

Boccupational groups or organizations

Cchurch

Dthe family

Correct answer

B. occupational groups or organizations

Explanation

The correct answer is occupational groups or organizations.

2423EconomicsMedium

If a factor exhibits diminishing marginal product, hiring additional units of the factor will?

Aincrease the marginal product of the factor

Bgenerate ever smaller amounts of output

Chave no effect on output

Dcause a reduction is output

Correct answer

B. generate ever smaller amounts of output

Explanation

The correct answer is generate ever smaller amounts of output.

2424EconomicsMedium

Which of the following would fit Charles Horton Cooley’s classification of a primary group?

ATourists visiting a resort

BA married couple

CA sales clerk and a customer

DRedheads

Correct answer

D. Redheads

Explanation

The correct answer is Redheads.

2425EconomicsMedium

A merger in which firms at various stages in a production process combine is a?

Ahorizontal merger

Bconglomerate merger.

Cvertical merger

Dproduction merger

Correct answer

C. vertical merger

Explanation

The correct answer is vertical merger.

2426EconomicsMedium

This monopolist should produce?

Correct answer

E. 3

Explanation

The correct answer is 3.

2427EconomicsMedium

Interventionist policies to restore regional imbalance focus on?

Aall of the above

Bimproved infrastructure

Ctax concessions for firms that move.

Dsubsidies to encourage firms that moves

Correct answer

A. all of the above

Explanation

The correct answer is all of the above.

2428EconomicsMedium

Which country is the biggest producer of wool in the world?

APakistan

BUSA

CAustralia

DRussia

Correct answer

C. Australia

Explanation

The correct answer is Australia.

2429EconomicsMedium

Small nations with more than one major trading partner tend to peg the value of their currencies to?

Agold

Ba single currency

Csilver

Da basket of currencies

Correct answer

D. a basket of currencies

Explanation

The correct answer is a basket of currencies.

2430EconomicsMedium

Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored)?

Atradable pollution permits, Pigouvian taxes, command-and-control policies

BPigouvian taxes, command-and-control policies, tradable pollution permits.

CThey would all rank equally high because the same result can be obtained from any one of the policies

Dcommand-and-control policies, tradable pollution permits, Pigovian taxes.

Etradable pollution permits command-and-control policies, Pigovian taxes.

Correct answer

A. tradable pollution permits, Pigouvian taxes, command-and-control policies

Explanation

The correct answer is tradable pollution permits, Pigouvian taxes, command-and-control policies.

Which of the following statements regarding taxes is correct?

AA decrease in taxes shifts the aggregate supply curve to the left

BMost economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand

CAn increase in taxes shifts the aggregate demand curve to the right

DA permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

Correct answer

D. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

Explanation

The correct answer is A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes..

Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored)?

Atradable pollution permits, Pigouvian taxes, command-and-control policies

BPigouvian taxes, command-and-control policies, tradable pollution permits.

CThey would all rank equally high because the same result can be obtained from any one of the policies

Dcommand-and-control policies, tradable pollution permits, Pigovian taxes.

Etradable pollution permits command-and-control policies, Pigovian taxes.

Correct answer

A. tradable pollution permits, Pigouvian taxes, command-and-control policies

Explanation

The correct answer is tradable pollution permits, Pigouvian taxes, command-and-control policies.