1. Which of the following is the best definition of a market?
a) A shopping center
b) An arrangement of buyers and sellers
c) An industry with many competitors
d) An industry that is not a monopoly
e) None of above
2. What two factors determine prices in a market?
a) Demand and supply
b) Inflation and unemployment
c) Number of buyers and sellers
d) Interest rates and exchange rates
e) None of these
3. Which of the following is not an example of legal trading activity?
a) Cartels
b) Price fixing
c) Market sharing
d) Discounting the price of new products
e) None of these
4. Giffen goods are the goods for which demand decrease when their prices:
a) Increase
b) Decrease
c) Remains constant
d) Reduce to a certain level
e) None of these
5. A market where there are many sellers offering an identical product and where there is free entry to the market is known as –
a) Monopoly
b) Oligopoly
c) Perfect competition
d) Monopolistic competition
e) None of above
6. What tends to happen in the short term when there is excess demand in a market?
a) Prices rises in the market
b) Prices fall in the market
c) Governments intervene by raising taxes
d) Businesses makes lower profits
e) None of the above
7. Market Expansion means-
a) hiring more staff
b) firing more staff
c) buying more products
d) buying more companies
e) None of above
8. When price of good is held above equilibrium price, normal result will be
a) Excess demand
b) Increase in supply
c) Increase in demand
d) Surplus of product
e) None of these
9. In short run to stay in business, firm must cover?
a) Total costs
b) Fixed costs
c) Variable costs
d) Normal profit
e) None of these
10. Which of the following sector of economy produces unrefined raw materials?
a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Public sector
e) None of these
11. Profit is defined as:
a) Value added less fixed assets
b) Total revenues less direct costs
c) Total revenues less total costs
d) Cash receipt less cash payments
e) None of above
12. Which of the following is an example of an indirect tax?
a) Income tax
b) Wealth tax
c) Inheritance tax
d) Corporation tax
e) Value added tax
13. The market value of all final goods and services produced and/made with the geographical boundaries of a country in a year is known as
a) Gross Fiscal Deficit
b) Gross National Saving
c) Gross Domestic Product
d) Gross Domestic Capital Formation
e) None of the above
14. Micro economics is concerned with
A) Optimal production decisions
B) Optimal resource allocation
C) Pricing policy
a) Only (A)
b) Only (B)
c) Only (C)
d) Both (A) & (B)
e) All (A), (B) & (C)
15. Government economic policy based on taxation and public expenditure is known as :
a) Monetary policy
b) Fiscal policy
c) Economic policy
d) Spending policy
e) None of these
ANSWERS:
1.b
2.a
3.d
4.b
5.c
6.a
7.e
8.d
9.c
10.a
11.c
12.e
13.c
14.e
15.b
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