Deck 1: Economic Theories and Concepts

Question 1

Which of the following is NOT an economic theory of Ricardo's discussed in this article?

A)Economic Rent
B)Comparative Advantage
C)Division of Labor
D)All of the concepts listed can be contributed

Answer 1

Division of Labor

Question 2

The concept Industrial Reserve Army is introduced by

A)Turgot
B)Karl Marx
C)Joan Robinson
D)J.S. Mill

Answer 2

Karl Marx

Question 3

Who gives a welfare definition of economics?

A)Adam Smith
B)Alfred Marshall
C)Lionel Robbins
D)Paul Samuelson

Answer 3

Alfred Marshall

Question 4

According to Ricardo, as an economy grows, the-------------------are the only group that would benefit.

A)Workers
B)Land-owners
C)Businessmen
D)None of the above

Question 5

The type of equilibirium that deals with the determination of price and quantity of only one

A)General equilibrium
B)Partial equilibrium
C)Zero Equilibrium
D)Pareto efficiency

Question 6

Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to

A)the accumulation of capital
B)the division of labor
C)the perils of government
D)All of the above

Question 7

The Classical theory did not provide any coherent theory of ------

A)Income distribution
B)Rent Thoery
C)Labor value theory
D)Profit

Question 8

In Case the supply of a factor of production is fixed , its entire income will be -----

A)Economic Rent
B)Marginal rent
C)Rent
D)Profit

Question 9

According to Adam Smith , employers earned profits due to ----------used by them

A)Land
B)Labor
C)Capital
D)Enterpreuer

Question 10

According the law of diminishing returns:

A)The marginal product of a variable factor
B)Marginal utility falls as more units of a product are consumed
C)The total product falls as more units of a variable factor
D)The marginal product eventually increases as more

Question 11

Communist Manifesto was authored by:

A)Stalin
B)Karl Marx
C)Laski
D)George Bernard Shah

Question 12

The book Principles of Economics was published in the year

A)1776
B)1932
C)1890
D)1936

Question 13

The main focus of Karl Marx's work was on which of the following social elements?

A)The plight of the working class
B)Economics of the upper class
C)Worker\s conditions in factories
D)Gender equality

Question 14

Which two philosophers developed the principal concept of Marxism?

A)Marx and Engels
B)Marx and Aristotle
C)Marx and Adam
D)Plato and Aristotle

Question 15

Walras' law implies that if there are N markets, we only need to find equilibrium prices in

A)N-1 markets.
B)N-2 markets.
C)all markets
D)N-3 markets

Question 16

The Fisher effect .

A)States that nominal interest rates are equal to the real interest rates plus the expected inflation rate
B)States that nominal interest rates are equal to real interest rates minus the expected inflation rate
C)Predicts that as the expected inflation rate rises, so do nominal interest rates
D)Predicts that as the expected inflation rate rises, real interest rates fall

Question 17

If you want a 4% real interest rate and the expected inflation rate is 3%, you should set the

A)1%
B)4%
C)7%
D)20%

Question 18

The average number of times that a dollar is spent in buying the total amount of final goods and

A)gross national product
B)the spending multiplier
C)the money multiplier.
D)Velocity

Question 19

Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to

A)the accumulation of capital
B)the division of labor
C)the perils of government regulation
D)All of the above

Question 20

Ricardo Theory Of Rent is based on ------ reasoning

A)Deductive
B)Empirical
C)illogical
D)Inductive

Question 21

According to Ricardo, as an economy grows, the ----------------are the only group that would benefit.

A)Workers
B)Land-owners
C)Bussiness Man
D)None of the above

Question 22

According the law of diminishing returns:

A)The marginal product of a variable factor eventually falls as more units of it are added to a fixed factor
B)Marginal utility falls as more units of a product are consumed
C)The total product falls as more units of a variable factor are added to a fixed factor
D)The marginal product eventually increases as more units of a variable factor are added to a fixed factor

Question 23

The quantity theory of money is expressed by the identity equation

A)MV/PY
B)MV=Y
C)M= PYV
D)MV=PY

Question 24

Both sides of the quantity theory of money identity represent . *

A)Real GDP
B)Inflation.
C)Nominal GDP.
D)The Money Supply.

Question 25

In the quantity theory of money, P and Y represent the price and quantity of:

A)all raw materials and natural resources sold in an economy
B)all financial services sold in an economy.
C)all durable capital (tractors, manufacturing equipment) purchased in the economy
D)all finished goods and services sold in an economy

Question 26

Nominal GDP in terms of is represented by how much money there is and how many times it is spent, while Nominal GDP in terms of------------- is represented by all goods and services and their prices.

A)buyers & sellers
B)domestic production & international production
C)profit & loss
D)imports & exports

Question 27

Adam Smith in his book, The Wealth of Nations, developed a theory about:

A)communism
B)capitalism
C)regulating foreign investment
D)ensuring internal order