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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.

The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different ?

A Tastes and preferences

B Expectations of future interest rate levels

C Per-capita income levels

D Labor productivities

Review Detailed Answer

Correct Answer: Per-capita income levels

Boeing aircraft company was able to over its production costs of the first – jumbo jetll in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates ?

A How economies of scale make possible a larger variety of products in international trade

B A transfer of wealth from domestic consumer to domestic producer as the result of trade

C How a natural monopoly is forced to behave more competitively with international trade

D How a natural monopoly is forced to behave less competitively with international trade

Review Detailed Answer

Correct Answer: How economies of scale make possible a larger variety of products in international trade

The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?

A Economies of large-scale production

B Relative abundance of various resources

C Relative costs of labor

D Research and development expenditures

Review Detailed Answer

Correct Answer: Relative abundance of various resources

According to the factor price equalization theorem, the ________ factor should oppose free. trade policies in any given country?

A abundant

B scarce

C neither

D can’t tell without more information

Review Detailed Answer

Correct Answer: scarce

By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect ?

A The prices of trade goods to be lower than when there are no transportation costs

B specialization to stop when the production costs of the trading partners equalize

C The volume of trade to be less than when there are no transportation costs

D The gains from trade to be greater than when there are no transportation costs

Review Detailed Answer

Correct Answer: The volume of trade to be less than when there are no transportation costs

Advocates of industrial policy maintain that government should ?

A pursue free trade as a policy that leads to maximum global efficiency

B grant subsidies to firms offering potential comparative advantage

C provide loans to domestic workers in exporting industries

D increase interest rates on loans made to firms in import-competing industries

Review Detailed Answer

Correct Answer: grant subsidies to firms offering potential comparative advantage

According to the Heckscher-Ohlin model ?

A everyone automatically gains from trade

B The gainers from trade outnumber the losers from trade

C The scarce factor necessarily gains from trade

D None of the above

Review Detailed Answer

Correct Answer: The gainers from trade outnumber the losers from trade

In his empirical test of comparative advantage Wassily Leontief found that ?

A U.S exports are capital intensive relative to U.S imports

B U.S imports are labor intensive relative to U.S exports

C U.S exports are neither labor nor capital intensive

D None of the above

Review Detailed Answer

Correct Answer: None of the above

The Heckshcer-Ohl assumes that are indentical between countries?

A tastes and preferences

B technology levels

C factor indowments

D Both A and B

Review Detailed Answer

Correct Answer: Both A and B

One of the predictions of the Heckscher-Ohlin model is that ?

A countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other

B countries with tend to specialize but not completely in their comparative advantage good

C reciprocal demand leads to an equilibrium terms of trade by inducing change in both demand and supply

D All of the above

Review Detailed Answer

Correct Answer: All of the above

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

The theory of overlapping demand predicts that trade in manufactured goods is unimportant for countries with very different ?

Boeing aircraft company was able to over its production costs of the first – jumbo jetll in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates ?

The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries ?

According to the factor price equalization theorem, the ________ factor should oppose free. trade policies in any given country?

By adjusting the model of comparative advantage to include transportation costs along with production costs we would expect ?

Advocates of industrial policy maintain that government should ?

According to the Heckscher-Ohlin model ?

In his empirical test of comparative advantage Wassily Leontief found that ?

The Heckshcer-Ohl assumes that are indentical between countries?

One of the predictions of the Heckscher-Ohlin model is that ?