Advanced Economics MCQ Practice #1

A country has decided that it wants to increase free trade with its trading partners. Which measure would help it achieve this objective?

• an embargo on cars produced in other countries

• a subsidy to domestic car producers

• a higher quota on imported cars

• higher tariffs on imported goods

• A

• B

• C

• D

• Some consumers are willing to pay higher prices.

• Demand for the product will increase.

• Suppliers are facing rising costs.

• No more of the product can be supplied.

• A

• B

• C

• D

Which activity takes place in the tertiary sector?

• making bread

• giving legal advice

• assembling computers

• harvesting grain

What is an expansionary monetary policy?

• a decrease in the interest rate

• a decrease in the rate of value added tax

• an increase in the power of trade unions

• n increase in the standard rate of income tax

Which policy is most likely to increase the level of economic activity?

• increasing the exchange rate

• increasing the rate of interest

• reducing the general tax level

• reducing government spending

A trade union agrees on a ‘closed shop’ policy with employers in an industry.

How does this operate?

• All workers will be members of the trade union.

• Employment will be open only to skilled workers.

• The employers cannot make workers redundant.

• Workers cannot move between employers.

An entrepreneur buys a workshop for $10000 to make picture frames. In the first year he spent $40000 on materials and employed two workers. He paid the workers for each frame produced with a total cost of $30 000. He bought a vehicle to deliver the frames for $10 000.What were his total variable costs?

• $80000

• $40000

• $70000

• $100000

Private multinational clothing companies operate in developing countries to reduce their averagecosts of production.Which feature of developing countries attracts them for this purpose?

• In developing countries, foreign managers are allowed to pay no income tax.

• In developing countries, clothing workers receive low wages.

• In developing countries, there is a large market for fashion clothing.

• In developing countries, multinationals are allowed to take profits out of the country.