BA Principles Of Economics

Topics: Economics, Supply and demand, Consumer theory Pages: 27 (9814 words) Published: February 18, 2015
Principles of Economics
(Common for Private Registration to BA History, Political Science, Sociology, & Islamic History Programmes)
1.
a)
b)
c)
d)
e)

In Economics the central problem is:
money
production
consumption
allocation
scarcity

2.
a)
b)
c)
d)

Macroeconomics deals with:
the behaviour of firms.
the activities of individual units.
economic aggregates.
the behaviour of the electronics industry

3.
a)
b)
c)
d)

Microeconomics is not concerned with the behaviour of:
firms.
aggregate demand.
consumers.
Industries

4.
a)
b)
c)
d)

The study of inflation is part of:
macroeconomics.
normative economics.
microeconomics.
descriptive economics

5.
a)
b)
c)
d)

Aggregate supply is the total amount:
of goods and services produced in an economy.
produced by the government.
of products produced by a given industry.
of labour supplied by all households

6.
a)
b)
c)
d)

The total demand for goods and services in an economy is known as: aggregate demand.
national demand.
economy-wide demand.
gross national product

7.
a)
b)
c)
d)

Inflation is:
a decrease in the overall level of economic activity.
a decrease in the overall price level.
an increase in the overall price level.
an increase in the overall level of economic activity

8. A recession is:
a) a period of very rapidly declining prices.
b) a period of declining prices.
1

c) a period during which aggregate output declines.
d) a period of declining unemployment
9.
a)
b)
c)
d)

Indicate below what is NOT a factor of production.
Labour
Land
Capital
A bank loan

10.
a)
b)
c)
d)

Unemployment means that:
there are some people who will not work at the going wage rate. there is excess demand in the labour market.
people are not willing to work at the going wage rate.
at the going wage rate, there are people who want to work but cannot find work

11.
a)
b)
c)
d)

If marginal benefit is greater than marginal cost, a rational choice involves: no more of the activity.
more or less, depending on the benefits of other activities. less of the activity.
more of the activity

12.
a)
b)
c)
d)

A student chooses to study because the marginal benefit is greater than the ________ cost. total
expected
average
marginal

13. The concept of opportunity cost:
a) would be irrelevant if we eliminated poverty.
b) suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.
c) is relevant only for a capitalist economy like the United States. d) suggests all our wants can be achieved.
14.
a)
b)
c)
d)

Opportunity cost is
the additional benefit of buying an additional unit of a product. that which we forgo, or give up, when we make a choice or a decision. the cost incurred in the past before we make a decision about what to do in the future. a cost that cannot be avoided, regardless of what is done in the future

15. A graph showing all the combinations of goods and services that can be produced if all of society's resources are used efficiently is a:
a) circular-flow diagram.
b) capital consumption frontier.
c) production possibility curve.
d) Lorenz curve
16.
a)
b)
c)
d)

Periods of less than full employment correspond to:
points on the production possibility curve.
points outside the production possibility curve.
either points inside or outside the production possibility curve. points inside the production possibility curve
2

17.
a)
b)
c)
d)

The circular flow of goods and incomes shows the relationship between: wages and salaries.
income and money.
goods and services.
firms and households

18. In a free market system, the amount of goods and services that any one household gets depends upon its:
a) income.
b) wage and interest income.
c) income and wealth.
d) wealth.
19.
a)
b)
c)
d)

In a planned or command economy, all the economic decisions are taken by...
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