FUTA Economics 2013/2014 Past Questions

Practice each question, then open it to see the full details.

The shape of a production probability frontier is determined by the

A.returns to scale
B.increasing relative cost
C.increasing returns to a variable factor
D.diminishing return to a fixed factor

Normative economics deals with

A.Facts and not figures
B.what is and not what shall should be
C.value judgment
D.facts and figures

In a free market economy, the price system allocates resources

A.Under government's directives
B.to their best alternative uses
C.to ensure general welfare
D.to reduce poverty

In a centrally planned economy, the economic problem of deciding what to produce is dependent on

A.Average cost
B.state command
C.average profit
D.relative prices

A demand which is positively related to price is true of

A.capital goods
B.normal goods
C.given goods
D.ostentatious goods

Use the table below to answer

Price in #	Quantity supplied	Quantity demanded
10	50	450
20	150	350
30	250	250
40	350	150
50	450	50

What is the equilibrium quantity?

A.0
B.250
C.350
D.450

Use the table below to answer

Price in #	Quantity supplied	Quantity demanded
10	50	450
20	150	350
30	250	250
40	350	150
50	450	50

Above the equilibrium point, a further rise in price tends to

A.Increase demand and restrict supply
B.Restrict demand and restrict supply
C.Increase demand and decrease supply
D.Decrease demand and increase supply

A firm faces diminishing returns if its

A.Total output diminishes
B.Average output diminishes
C.Marginal output diminishes
D.Marginal revenue diminishes

Cross elasticity of demand can be Mathematically expressed as the

A.percentage change in quantity of Commodity X over percentage change in quantity of commodity Y
B.percentage change in quantity demanded over percentage change in price
C.percentage change in quantity demanded of commodity X over percentage change in price commodity Y
D.percentage change in demanded over Percentage change in income

Situation in which all inputs are doubled and output also doubles is known as

A.Constant proportion
B.Constant returns
C.increasing returns to scale
D.Constant returns to scale

At any given level of output, the total cost of a firm equals the

A.Marginal cost plus the average cost
B.Fixed costs plus its variable cost
C.Average cost multiplied by its output
D.Economic costs multiplied variable costs.

At any given level of output, a firm's variable cost equals

A.Total cost less marginal cost
B.Total cost less average cost
C.Total cost less fixed cost
D.Average and marginal variable cost.

The main reason for charging interest is to

A.Reward entrepreneurial effort
B.Redistributes profits
C.Reward investors for capital
D.Mobilize more funds for development

In the Keynesian model,

A.the demand for money related to the rate of interest
B.Investment is directly related to the rate of interest
C.investment is not related to the rate of interest
D.the demand for money is directly related to the rate of interest

If inflation is anticipated to continue,

A.People will lose confidence in goods
B.lenders will demand higher interest rates
C.the growth of full-employment output will be accelerated
D.people will want to hold more money