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Economics Mcqs 4423 MCQs [All-Courses]

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Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

All Topics  4423

Which of the following must be true about a signal that is used to reveal private information in order for the signal to be effective ?
A It must be “as seen on TV”
B It must be free to the signaling party
C It must be costly to the signaling party but less costly to the party with higher-quality product
D It must be applied to an inexpensive product
Correct Answer: It must be costly to the signaling party but less costly to the party with higher-quality product
Nicole wants to avoid buying a car that is a lemon. She takes a car she would like to buy to her mechanic before she purchases it. This is known as ?
A screening
B signaling
C moral hazard
D adverse selection
Correct Answer: screening
Which of the following is a response to People’s inconsistent behavior over time ?
A all of these answers
B forced contributions to a retirement plan
C year-end bonuses
D efficiency wages
Correct Answer: forced contributions to a retirement plan
Jamil’s friend dies of a sudden heart attack. Jamil rushes to his doctor for an expensive physical examination. This response demonstrates that ?
A People give too much weight to a small number of vivid observations
B People easily change their minds when confronted with new information
C People enjoy going to the doctor
D People tend to plan ahead and follow through on their plans
Correct Answer: People give too much weight to a small number of vivid observations
In the ultimatum game, what split would be rational for both the person proposing the split and the person who must accept or reject the split ?
A There is no rational solution
B 75/25
C 99/1
D 1/99
Correct Answer: 99/1
Which of the following is true under pairwise majority rule if people vote for the outcome closest to their most preferred outcome ?
A The average preferred outcome wins
B There is no clear winner due to Arrow’s Impossibility Theorem.
C The outcome preferred by the median voter wins
D The outcome preferred by the greatest number of voters wins.
Correct Answer: The outcome preferred by the median voter wins
hich of the following is not a property required of a perfect voting system ?
A The median voter always wins
B no dictators
C independence of irrelevant
D transitivity
Correct Answer: The median voter always wins
Refer to Figure 1 What percent of the population vote for A when the choice is between A and B ?
A 75 percent
B 35 percent
C 60 percent
D 40 percent
Correct Answer: 60 percent
A life insurance company forces Enzo to have a medical examination prior to selling him insurance ?
A transitivity
B impossibility
C independence
D unanimity
Correct Answer: transitivity
Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?
A They pay employees with delayed compensation such as a year-end bonus
B They buy life insurance on their workers
C They pay above equilibrium wages
D They put hidden video cameras in the workplace
Correct Answer: They buy life insurance on their workers
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