Economics Mcqs
Supply of land in a given use ?

A. Will be perfectly inelastic in the long run. but upward sloping in the short run
B. Is perfectly inelastic since there is a fixed amount of land
C. Is perfectly elastic since there is fixed amount of land
D. Will be upward sloping because as land becomes more valuable in once use, the amount of land made available for that use will increase

A Gini coefficient of zero means that the ?

A. The income is split equally between the top 20% and the rest of the distribution
B. One person has all the income and every one else has nothing
C. All the income is received by the top 20% of the income distribution
D. Income is equally distributed

Vertical equity holds that ?

A. Those will equal ability to pay should bear equal tax burdens.
B. Those who benefit the most from government service should bear the higher tax burden
C. Those with equal ability to pay should bear unequal burdens
D. Those with greater ability to pay should pay more

Rawls’s suggestion that policy should be directed at maximizing the welfare of the least well off person in society is derived from ?

A. The idea that people should consider policy as if behind a veil of ignorance as to what their circumstances might be in society, and the idea that as long as there is no theft then there is no need for governments to intervene and redistribute income.
B. The idea that people should consider policy as if behind a veil of ignorance as to what their circumstances might be in society, and the idea that people will then be particularly concerned about the possibility that they might find themselves at the b
C. The idea that people a veil of ignorance as policy as if behind a veil of ignorance as to what their circumstances might be in society, and the ignorant people should be looked after
D. The idea that everyone in society should have an equal income

An increase in the minimum wage will cause a relatively large increase in unemployment among ?

A. Unskilled workers if the demand for labour is relatively inelastic
B. Unskilled workers if the demand for labour is relatively elastic
C. Skilled workers if the demand for labour is relatively elastic
D. Skilled workers if the demand for labour is relatively inelastic

The greatest advantage of a negative income tax is that it ?

A. Generates a smaller disincentive to work than most alternative anti-poverty policies.
B. Reduces the cost to the government of fighting poverty
C. Would not provide benefits to lazy people
D. Ensures that the poor actually receive what the government thinks they need does all these answers.

Constrained choice is relevant for households ?

A. Making spending decision but not labour-supply decision.
B. Making both spending and labour-supply decisions
C. Considered to be ‘poor’ but not for those who are considered to be ‘rich’
D. Making labour-supply decisions but not spending decisions.

Assuming leisure is a normal good, if the income effect is greater than the substitution effect a wage increase ?

A. Will have no effect on labour supply
B. Will decreases labour supply
C. Could cause either an increases or a decrease in labour supply
D. Will increase labour supply.

Assuming that leisure is a normal good. if an individual’s labour supply curve is backward bending then the ?

A. Income effect is zero
B. Substitution effect outweighs the income effect
C. Income effect outweighs the substitution effect
D. Income effect and the substitution effects are equal

As the wage rate per hour increases, the opportunity cost of leisure ?

A. Remains constant
B. Increases since the cost of forgoing one hour of work increases
C. Decreases since the customer now has more income to spend
D. May increase of decrease depending on the individual’s preferences.