Economics MCQs Quiz Multiple Choice Questions & Answers

1. The fundamental economic problem faced by all societies is:

1. unemployment
2. poverty
3. inequality
4. scarcity

2. Capitalism refers to:

1. the use of markets
2. government ownership of capital goods
3. private ownership of capital goods
4. private ownership of homes & cars

3. There are three fundamental questions every society must answer. Which of the following is one of these questions?

1. What goods and services are to be produced?
2. How are the goods and services to be produced?
3. Who will get the goods and services that are produced?
4. All of the above

4. In the case of agriculture:

1. the demand has shifted to the right more than the supply has shifted to the right
2. the demand has shifted to the right less than the supply has shifted to the right
3. the demand has shifted to the left more than the supply has shifted to the left
4. the demand has shifted to the left less than the supply has shifted to the left

5. The agricultural price support program is an example of

1. a price ceiling
2. a price floor
3. equilibrium pricing

6. If there is a price floor, there will be

1. shortages
2. surpluses
3. equilibrium

7. If there is a price ceiling, there will be

1. shortages
2. surpluses
3. equilibrium

8. If there is a price ceiling, which of the following is NOT likely to occur?

1. rationing by first-come, first-served
2. black markets
3. gray markets
4. sellers providing goods for free that were formerly not free

9. The goal of a pure market economy is to best meet the desires of

1. consumers
2. companies
3. workers
4. the government

10. Which of the following is a characteristic of pure monopoly?

1. one seller of the product
2. low barriers to entry
3. close substitute products
4. perfect information

11. In pure monopoly, what is the relation between the price and the marginal revenue?

1. the price is greater than the marginal revenue
2. the price is less than the marginal revenue
3. there is no relation
4. they are equal

12. In order to maximize profits, a monopoly company will produce that quantity at which the:

1. marginal revenue equals average total cost
2. price equals marginal revenue
3. marginal revenue equals marginal cost
4. total revenue equals total cost

13. Compared to the case of perfect competition, a monopolist is more likely to:

1. charge a higher price
2. produce a lower quantity of the product
3. make a greater amount of economic profit
4. all of the above

14. Which of the following best defines price discrimination?

1. charging different prices on the basis of race
2. charging different prices for goods with different costs of production
3. charging different prices based on cost-of-service differences
4. selling a certain product of given quality and cost per unit at different prices to different buyers

15. In order to practice price discrimination, which of the following is needed?

1. some degree of monopoly power
2. an ability to separate the market
3. an ability to prevent reselling
4. all of the above

16. In price discrimination, which section of the market is charged the higher price?

1. the section with the richest people
2. the section with the oldest people
3. the section with the most inelastic demand
4. the section with the most elastic demand

17. The demand for labor is the same as the

1. marginal revenue product
2. marginal physical product
3. marginal cost
4. wage

18. The demand for labor slopes down and to the right because of

1. the law of demand
2. the iron law of wages
3. the law of diminishing marginal returns
4. economies of scale

19. The demand for labor will be more elastic if:

1. there are few substitutes for labor
2. there is a short time under consideration
3. labor is a large percent of the total cost of production
4. the demand for the product is relatively inelastic

20. Skills that can be transferred to other employers are called:

1. general skills
2. specific skills
3. non-pecuniary skills
4. all of the above

21. Which skills are most likely to be paid for by the employer?

1. General skills
2. Specific skills
3. Educational skills

22. If worker A earns more in wages than worker B, it could be because:

1. The product made by worker A sells for a higher price than that made by worker B
2. Worker A uses more capital per worker than worker B
3. Worker A has more natural ability than worker B
4. All of the above

23. Skills that embodied in a person are called

1. Human capital
2. Embodied skills
3. Physical capital
4. Experience skills

24. Treating an individual as typical of a group is the definition of

1. pure discrimination
2. statistical discrimination
3. human capital
4. specific skills