2. Shaju
George
1. The wages of carpenters will tend to rise if
a. The supply of carpenters falls
b. Their productivity rises
c. The price of wooden products falls
d. Demand for plastic products rises
3. Shaju
George
2. The best explanation for
the rise in demand for labour
from Dn to DN1 is:
1. A fall in wages
Wage rate 2. A fall in the price of the
product they produce
3. An increase in unemployment
4. Increasing productivity of
labour
DN1
DN
Quantity of labnour employed
4. Shaju
George
3. Disposbale in come is
a. Gross income before tax
b. Personal income
c. Taxable income
d. Personal income after taxes on
income are deducted.
5. Shaju
George 4. Which of the following is
most likely to lead to a fall in
the savings ratio?
a. An increase in taxes
b. A cut in interest rate
c. A cut in borrowing
d. A fall in people’s propensity to consume
6. 5. The supply curve on the left
Shaju
shows that
George
a. Wages fall as the amount of
Sn labour increases
b. A rise in wages reduces the size
of the working population
c. After a certain level of wages
labour chooses more leisure than
work
d. Supply rises as wages fall
Quantity of labour employed per period
7. Shaju
George
6. The supply of labour to an
occupation will tend to rise
when:
a. Promotion prospects improve
b. There are fewer perks
c. Holiday entitlement is cut
d. Unemployment benefit rises
8. Shaju
George 7. Which one of the following is the least
likely explanation for the observed increase
in consumer spending on leisure goods
and services over time in many countries?
1. Increasing real disposable income
per head.
2. Consumers want healthier lifestyles
3. Increasing levels of personal debt
4. Increased Wealth
9. Shaju
George 8. Which one of the following types of
household is most likely to spend the highest
proportion of its disposable income?
a. High income, middle aged with no
children
b. Low income, young single parent
with young children.
c. Middle income, young children
person, no children.
d. High income, middle-aged couple
with two grown-up children.
10. Shaju
George 9. Which of the following is a non-economic
reason why women may earn less than male
employees?
A. They may be discriminated against.
B. They undertake more part-time work
C. Married women may be less mobile
than men
D. They take more career breaks to
raise children
11. Shaju
George
10. What has happened in the diagram to
the equilibrium wage and employment?
Wage Rate
a. Wages and employment have
Sn1
Dn risen
Sn
b. Wages and employment have
fallen
c. Wages have risen;
employment has fallen
d. Wages have fallen;
employment has risen.
Quantity of labour per period
12. Shaju 11. Personal borrowing has increased in many
George countries. Which on of the following factors is
the most likely explanation?
A. Higher real interest rates.
B. Reduced personal wealth.
C. Increased availability of credit
D. Increased public sector borrowing
13. Shaju
George 12. The savings ratio in an
economy measures;
A. Deposits in banks as proportion of total
savings.
B. Total savings as proportion of gross
household income
C. Long-term savings relative to total
savings.
D. Total savings as proportion of total
disposable income
14. Shaju
George
13. Disposable income will tend to rise if:
a. Indirect taxes are reduced
b. Interest rates are cut
c. Price inflation falls
d. Direct taxes are reduced
15. Shaju 14. Which of the following changes is
George
most likely to attract an increase in the
supply of labour to engineering
professions?
a. An increase in training requirements
b. An increase in holiday entitlements
c. An increase in contracted hours of
work
d. A cut in income taxes
16. Shaju
George
15. Which one of the following can be
defined as a secondary industry?
A. Insurance services
B. Coal mining
C. Paper making
D. Banking
17. Shaju
George
16. Which one fo the following reasons will not
help explain why small firms exist and survive?
a. Lack of finance
b. Consumers lime personalized
service
c. Government financial help
d. Low start-up costs
18. Shaju
George
17. Which of the following is unlikely to
raise productivity in a firm?
a. Training workers in new skills
b. Performance related pay
c. Investing in new equipment
d. Reducing overtime working
19. Shaju
George 18. A firm employs 25 full-time employees. They
produce 500 tee-shirts each week. What is their
average labour productivity?
a. 25
b. 500
c. 20
d. 12500
20. Shaju
George 19. Which of the following reasons can explain
why a firm may substitute capital for labour in
production?
a. Wage fall
b. The cost of borrowing rises
c. Consumer demand rises
d. The productivity of labour falls
21. Shaju
George
20. Which of the following mergers between two
firms is an example of vertical integration?
a. A bank and an insurance company
b. A car rental firm and a car maker
c. A tin mine and a coal mine
d. A restaurant and a hot food take-
away
22. Shaju
George
Output per Total cost Total
week ($) Revenue ($)
A 1000 10000 13000
B 2000 16000 30000
C 3000 18000 42000
D 4000 28000 56000
21.At what level of output is average cost at a minimum?
22.At what level of output is average at a maximum?
23. At what level of output is profit maximized
23. Shaju
George
24. Which of the following is a variable cost of
production?
A. Purchase of component parts.
B. Insurance premiums
C. Loan repayments
D. Computer repair costs
24. Shaju
George 25. A firm A firm expands its scale of
production by investing in additional
factory space and machinery. What is the
most likely impact of this decision on
costs?
A. Variable costs will fall
Fixed costs will rise
Total costs will be unchanged
Average costs will rise.
25. Shaju
George 26. On the graph, what level of output
represents the beak-even point of
production? Total
Revenue
Total
Costs ($)
Revenue
Variable Cost
Fixed Cost
A B C D Output Per Period
26. Shaju 27. Average cost of producing 200
George compact discs is:
Total output of Total Costs
compact discs
0 $ 100
100 $ 800
200 $ 1500
300 $ 2200
400 $ 2900
500 $ 3600
600 $ 4300
A. $7
B. $70
C. $7.5
D. $1500
27. Shaju
George 28. The fixed cost of
productin are
Total output of Total Costs
compact discs
0 $ 100
100 $ 800
200 $ 1500
300 $ 2200
400 $ 2900
500 $ 3600
600 $ 4300
A. $1 B. $10 C. $100 D. $800
28. Shaju
George 29. The variable cost of
producing a compact disc is;
Total output of Total Costs
compact discs
0 $ 100
100 $ 800
200 $ 1500
300 $ 2200
400 $ 2900
500 $ 3600
600 $ 4300
A. $ 7 B. $8 C. $ 7.5 D. $ 7.20
29. Shaju
George 30. If the company produces 500 compact discs and
wanted to make a $ 1400 profit from their sale, the
price of each disc must be;
Total output of Total Costs
compact discs
0 $ 100
100 $ 800
200 $ 1500
300 $ 2200
400 $ 2900
500 $ 3600
600 $ 4300
A. $5 B. $10 C. $2.8 D. $7.20
30. Shaju 31. If a firm doubles all its factor inputs of
George
land, labour and capital, and output more
than doubles, we can say the firm has
experienced.
A. Constant returns to scale
B. Diminishing returns to scale
C. Decreasing Returns to scale
D. Increasing Returns to scale
