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Economics Mcqs 4423 MCQs [All-Courses]

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.

Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ?

A Wages rise, and rental rates fall

B Wages rise, and rental rates rise

C Wages fall, and rental rates rise

D Wages fall, and rental rates fall

Review Detailed Answer

Correct Answer: Wages rise, and rental rates fall

An increase in the price of automobiles shifts the demand for autoworkers to the ?

A left and decreases the wage

B right and decreases the wage

C right and increases the wage

D left and increases the wage

Review Detailed Answer

Correct Answer: right and increases the wage

A competitive profit-maximizing firm should hire workers up to the point where ?

A the wage, the rental price of capital and the rental price of land are all equal

B the marginal product of labor equals zero and the production function is maximized

C the value of the marginal product of labor equals the wage

D the marginal product of labor equals the wage

Review Detailed Answer

Correct Answer: the value of the marginal product of labor equals the wage

An individual firm’s demand for a factor of production ?

A Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal producing the value of the marginal product as more of the factor is use

B Slopes downward due to the factor’s diminishing marginal product

C slopes upward due to the factor’s increasing marginal product

D is perfectly elastic (horizontal) if the factor market is perfectly competitive

Review Detailed Answer

Correct Answer: Slopes downward due to the factor’s diminishing marginal product

A decrease in the supply of farm tractors will cause all but which of the following ?

A an increase in the rental rate for tractor

B a decrease in the rental rate of farmland

C a decrease in the value of the marginal product of tractors

D an increase in the wage of farm workers

Review Detailed Answer

Correct Answer: an increase in the wage of farm workers

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ?

A increase the demand for fishing boats and decrease rental rates on fishing boats

B decreases the demand for fishing boats and increase rental rates on fishing boats.

C decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

D increase the demand for fishing boats and increase rental rates on fishing boats

Review Detailed Answer

Correct Answer: decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ?

A supply curve of capital

B demand curve for capital

C production function

D marginal cost curve

Review Detailed Answer

Correct Answer: demand curve for capital

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

A cause a reduction is output

B have no effect on output

C increase the marginal product of the factor

D generate ever smaller amounts of output

Review Detailed Answer

Correct Answer: generate ever smaller amounts of output

When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ?

A interest

B dividends

C increases in stocks of goods

D retained earnings

Review Detailed Answer

Correct Answer: increases in stocks of goods

Which of the following is not true with regard to workers who have a high value of marginal product? These workers ?

A have skills that are in relatively scarce supply

B produce output for which there is great demand

C usually have little capital with which to work

D are usually highly paid

Review Detailed Answer

Correct Answer: usually have little capital with which to work

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ?

An increase in the price of automobiles shifts the demand for autoworkers to the ?

A competitive profit-maximizing firm should hire workers up to the point where ?

An individual firm’s demand for a factor of production ?

A decrease in the supply of farm tractors will cause all but which of the following ?

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ?

For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ?

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

When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ?

Which of the following is not true with regard to workers who have a high value of marginal product? These workers ?