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Economics Mcqs 4423 MCQs [All-Courses]

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Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

All Topics  4423

In autarky the relative price of wine, in terms of beer, in Country B is ?
A 1W = 3B
B 1W = 4 1/2B
C 1W = 5B
D 1W = 6B
Correct Answer: 1W = 4 1/2B
Country A has an absolute advantage in ?
A Beer
B Wine
C Both products
D neither products
Correct Answer: neither products
If countries were to trade along the lines of comparative advantage ?
A A would export X to B
B A would export Y to B
C Neither country would want to trade
D None of the above
Correct Answer: A would export Y to B
Country B has an absolute advantage in ?
A Product X
B Product Y
C Neither X nor Y
D Both X and Y
Correct Answer: Product X
Comparative advantage is determined by ?
A actual differences in labor productivity between countries
B relative differences in labor productivity between countries
C Both (a) and (b)
D Neither (a) nor (b)
Correct Answer: relative differences in labor productivity between countries
In the classical model of Ricardo, the direction of trade is determined by ?
A Absolute advantage
B Comparative advantage
C Physical advantage
D Which way the wind blows
Correct Answer: Comparative advantage
The gains from international trade are closely related to ?
A The labor theory of value
B How much the autarky price differs from international terms of trade change
C The fact that a country must lose from trade
D All of the above
Correct Answer: How much the autarky price differs from international terms of trade change
Mercantilism ?
A Is the philosophy of free international trade?
B Was a system of export promotion and barriers to imports practiced by governments?
C Was praised by Adam Smith in the Wealth of Nations
D Both (a) and (c)
Correct Answer: Was a system of export promotion and barriers to imports practiced by governments?
If the international terms of trade settle at a level that is between each country’s opportunity cost ?
A There is no basis for gainful trade for either country
B Both countries gain from trade
C Only one country gains from trade
D One country gain and the other country loses from trade
Correct Answer: Both countries gain from trade
The earliest statement of the principle of comparative advantage is associated with ?
A Adam Smith
B David Ricardo
C Eli Heckscher
D Berti IOhlin
Correct Answer: David Ricardo
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