HAT Subject (Economics) FLP 1 Free Quiz

1. What is utility?

A. Price B. Cost C. Utility D. Value

2. What does the law of diminishing marginal utility state?

A. Decreases B. Increases C. Constant D. Zero

3. What shape are typical indifference curves?

A. Convex B. Concave C. Straight lines D. Vertical

4. When does consumer equilibrium occur?

A. MRS > price ratio B. MRS < price ratio C. Utility is zero D. Budget constraint tangent to indifference curve

5. What is an inferior good?

A. Normal good B. Inferior good C. Luxury good D. Necessity

6. What is a Giffen good?

A. Giffen good B. Veblen good C. Normal good D. Luxury good

7. How is price elasticity of demand calculated?

A. %ΔP/%ΔQ B. %ΔQ/%ΔP C. %ΔQ × %ΔP D. %ΔQ - %ΔP

8. What is consumer surplus?

A. Consumer surplus B. Producer surplus C. Total surplus D. Deadweight loss

9. What theory uses observed choices to infer preferences?

A. Stated preference B. Contingent valuation C. Hedonic pricing D. Revealed preference

10. What does a monotonic utility function mean?

A. More is preferred to less B. Less is preferred C. Neutral D. Satiated

11. What measures the income needed to maintain utility after a price change?

A. Equivalent variation B. Consumer surplus C. Compensating variation D. Deadweight loss

12. What does economic development include?

A. Only income growth B. Only GDP growth C. Improvements in living standards and welfare D. Only industrial growth

13. What is absolute poverty?

A. Absolute poverty B. Relative poverty C. Severe poverty D. Moderate poverty

14. What is a graphical representation of income distribution?

A. Gini coefficient B. Lorenz curve C. Poverty line D. HDI

15. What theory suggests development follows a linear path?

A. Dependency B. Neoclassical C. Modernization D. Institutional

16. What are structural adjustment programs?

A. Subsidies B. Tariffs C. Quotas D. SAPs

17. What provides small loans to low-income individuals?

A. Macrofinance B. Commercial banking C. Microfinance D. Investment banking

18. What consists of economic activities not regulated or taxed?

A. Formal sector B. Public sector C. Private sector D. Informal sector

19. What meets present needs without compromising future generations?

A. Economic growth B. Sustainable development C. Industrialization D. Modernization

20. What curve suggests environmental degradation increases with income until a turning point?

A. Environmental Kuznets Curve B. Laffer curve C. Phillips curve D. Kuznets curve

21. What investment is critical for economic development?

A. Education B. Health C. Agriculture D. Infrastructure

22. What are indicators of economic development?

A. Health improvements B. Income improvements C. Infrastructure improvements D. Industrialization

23. What can provide employment and income in developing countries?

A. Informal sector B. Formal sector C. Public sector D. Private sector

24. What can contribute to economic development by bringing capital and technology?

A. Foreign aid B. Portfolio investment C. FDI D. Foreign trade

25. What is crucial for economic development?

A. Geography B. Culture C. Resources D. Institutions

26. What includes small-scale, unregulated enterprises and self-employment?

A. Formal B. Public C. Informal D. Private

27. What is the independent variable in a regression?

A. Independent B. Dependent C. Response D. Outcome

28. What tests the significance of regression coefficients?

A. R-squared B. P-value C. F-statistic D. Standard error

29. What is used to test individual regression coefficients?

A. F-statistic B. R-squared C. T-statistic D. Standard error

30. What tests the overall significance of a regression model?

A. T-statistic B. R-squared C. P-value D. F-statistic

31. What type of data is collected at a single point in time?

A. Time series B. Panel C. Pooled D. Cross-sectional

32. What method estimates parameters that maximize the likelihood function?

A. MLE B. OLS C. GMM D. IV

33. What is absolute advantage?

A. Comparative B. Competitive C. Strategic D. Absolute

34. What do gains from trade arise from?

A. Losses B. Gains C. Zero D. Negative

35. When does a trade surplus occur?

A. Exports exceed imports B. Imports exceed exports C. Balance D. Zero

36. What is a floating exchange rate?

A. Floating B. Fixed C. Pegged D. Managed

37. What is a fixed exchange rate?

A. Floating B. Flexible C. Fixed D. Free

38. What condition states that currency depreciation improves the trade balance?

A. Sum of elasticities > 1 B. Sum of elasticities = 1 C. Sum of elasticities < 1 D. Sum of elasticities = 0

39. What is foreign direct investment?

A. Portfolio investment B. Foreign aid C. FDI D. Foreign trade

40. What involves purchasing foreign financial assets?

A. FDI B. Foreign aid C. Trade D. Portfolio investment

41. What is a customs union?

A. Free trade area B. Common market C. Economic union D. Customs union

42. What is GNP?

A. GDP B. NNP C. NDP D. GNP

43. What is inflation?

A. Deflation B. Inflation C. Disinflation D. Stagflation

44. What is deflation?

A. Deflation B. Inflation C. Disinflation D. Stagflation

45. What is unemployment?

A. Employment B. Underemployment C. Unemployment D. Labor force participation

46. What is the interest rate?

A. Inflation B. Deflation C. GDP D. Interest rate

47. How many phases are in the business cycle?

A. Two phases B. Four phases C. Three phases D. Five phases

48. What is frictional unemployment?

A. Structural B. Frictional C. Cyclical D. Seasonal

49. What is the natural rate of unemployment?

A. Cyclical B. Seasonal C. Frictional + Structural D. Total unemployment

50. What is economic growth?

A. Inflation B. Unemployment C. Economic growth D. Recession

51. What is the GDP deflator?

A. CPI B. GDP deflator C. PPI D. WPI

52. What is nominal GDP?

A. Nominal GDP B. Real GDP C. GDP deflator D. Potential GDP

53. What does market structure refer to?

A. Characteristics influencing behavior B. Consumer behavior C. Producer behavior D. Government regulation

54. What market structure has many buyers and sellers, identical products, and free entry?

A. Monopoly B. Oligopoly C. Perfect competition D. Monopolistic competition

55. What does a monopoly have?

A. Barriers to entry B. Low barriers C. No barriers D. Free entry

56. What market structure has a few large sellers?

A. Perfect competition B. Monopoly C. Oligopoly D. Monopolistic competition

57. What characteristic do firms in oligopoly have?

A. Independent B. Price takers C. Monopolists D. Interdependent

58. What market structure has many sellers with differentiated products?

A. Perfect competition B. Monopolistic competition C. Monopoly D. Oligopoly

59. What type of price discrimination charges different prices to different groups?

A. Third-degree B. First-degree C. Second-degree D. Uniform

60. What is the prisoner's dilemma?

A. Perfect competition B. Prisoner's dilemma C. Monopoly D. Price discrimination

61. What is a Nash equilibrium?

A. Nash equilibrium B. Dominated equilibrium C. Cooperative equilibrium D. Competitive equilibrium

62. What does a high HHI indicate?

A. Competitive B. Low concentration C. Perfect competition D. Highly concentrated

63. What market has low barriers to entry?

A. Monopoly B. Oligopoly C. Perfect competition D. Contestable market

64. What are sunk costs?

A. Fixed costs B. Sunk costs C. Variable costs D. Marginal costs

65. What occurs when resources are allocated to their highest valued use?

A. Efficiency B. Inefficiency C. Deadweight loss D. Market failure

66. What is the basic economic problem?

A. Inflation B. Unemployment C. Scarcity D. Inequality

67. What is opportunity cost?

A. Monetary cost B. Sunk cost C. Total cost D. Value of the next best alternative

68. What does the law of supply state about quantity supplied as price increases?

A. Increases B. Decreases C. Unchanged D. Unpredictable

69. What does price elasticity of demand measure?

A. Income elasticity B. Cross-price elasticity C. Supply elasticity D. Price elasticity

70. What does inelastic demand mean?

A. More B. Less C. Equal D. Zero

71. What is utility?

A. Price B. Cost C. Utility D. Value

72. What are fixed costs?

A. Variable costs B. Total costs C. Fixed costs D. Marginal costs

73. What market has many buyers and sellers, identical products, and free entry?

A. Monopoly B. Oligopoly C. Perfect competition D. Monopolistic competition

74. What market has a single seller?

A. Perfect competition B. Oligopoly C. Monopolistic competition D. Monopoly

75. What is the money supply?

A. Fiscal B. Debt C. Deficit D. Money supply

76. What are open market operations?

A. Open market operations B. Discount rate C. Reserve requirement D. Interest rate

77. What is the discount rate?

A. Federal funds rate B. Prime rate C. Discount rate D. Deposit rate

78. What is the quantity theory of money?

A. MV = PY B. MV = PY C. MV = PY D. MV = PY

79. What guideline sets interest rates based on inflation and output gaps?

A. Friedman rule B. McCallum rule C. Bernanke rule D. Taylor rule

80. What theory suggests governments can create money to finance spending?

A. Classical B. Keynesian C. Monetarist D. MMT

81. What does a steep yield curve indicate?

A. Steep B. Flat C. Inverted D. Humped

82. What is the short run in production?

A. Long run B. Short run C. Very long run D. Market period

83. What do isoquant curves show?

A. Budget lines B. Isoquants C. Indifference curves D. Demand curves

84. What is the marginal rate of technical substitution (MRTS)?

A. MRTS B. MRS C. MR D. MC

85. When does producer equilibrium occur?

A. MRTS > input price ratio B. MRTS < input price ratio C. Output is zero D. Isoquant tangent to isocost

86. What is total cost?

A. Fixed cost B. Total cost C. Variable cost D. Marginal cost

87. What is marginal cost?

A. Average cost B. Total cost C. Marginal cost D. Fixed cost

88. What does increasing returns to scale mean?

A. Less B. More C. Equal D. Zero

89. What does constant returns to scale mean?

A. Less B. More C. Equal D. Zero

90. What is total revenue?

A. Total revenue B. Profit C. Cost D. Marginal revenue

91. What is marginal revenue?

A. Total revenue B. Average revenue C. Marginal revenue D. Profit

92. What is the supply curve of a perfectly competitive firm?

A. ATC B. AVC C. MC above AVC D. AFC

93. What are public goods?

A. Private goods B. Club goods C. Public goods D. Common goods

94. What is an indirect tax?

A. Indirect B. Direct C. Progressive D. Regressive

95. What does government expenditure include?

A. Revenue B. Debt C. Expenditure D. Tax

96. What is fiscal policy?

A. Monetary policy B. Trade policy C. Industrial policy D. Fiscal policy

97. What does the Laffer curve say about very high tax rates?

A. Increases B. Constant C. Reduces D. Zero

98. What is a sin tax?

A. Income tax B. Property tax C. Sin tax D. Sales tax

99. What is Pareto efficiency?

A. Optimal B. Pareto efficiency C. Equitable D. Efficient

100. What occurs when the market does not allocate resources efficiently?

A. Market failure B. Market equilibrium C. Market efficiency D. Market success

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