FREE MTTC Economics Questions and Answers

Question 1

Which of the following provides the most effective illustration of marginal analysis?

Accepted Answer

comparing the costs and benefits of a proposed investment

Answer

estimating potential sales for a new product

Answer

forecasting likely changes in major economic trends

Answer

determining the fixed costs for a new production facility

Question 2

Two pharma firms that are each separately owned come to an agreement to combine their operations. However, in order to make sure that the merger does not break antitrust rules, the merger must first have government approval.

This scenario most likely took place in which of the following types of economic systems?

Accepted Answer

mixed-market economic system

Answer

command economic system

Answer

pure market economic system

Answer

traditional economic system

Question 3

Which of the following theories best explains how the fundamental economic tenet that free trade generates prosperity works?

Accepted Answer

specialization

Answer

economies of scale

Answer

capital mobility

Answer

marginal efficiency of capital

Question 4

Which of the following would be initially affected by government aircraft purchases?

Accepted Answer

Payment for Goods and Services

Answer

Goods and Services

Answer

Land, Labor, Capital

Answer

Rent, Wages, Interest

Question 5

As a gauge of a country's economic success, the gross domestic product (GDP) has the following significant limitations:

Accepted Answer

nonmarket activities.

Answer

overseas transactions.

Answer

inventory investment.

Answer

government purchases.

Question 6

Which of the following better denotes the start of a business cycle's contraction phase for the economy?

Accepted Answer

Answer

an increase in the time required to make deliveries

Answer

a decline in business inventories

Answer

a reduction in the length of the average workweek

Answer

a rise in commodity prices

Question 7

Which of the following is the best sign that a business cycle's recession phase has begun for the economy?

Accepted Answer

a reduction in the length of the average workweek

Answer

an increase in the time required to make deliveries

Answer

a decline in business inventories

Answer

a rise in commodity prices