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1. Migration of educated individuals from developing- to developed countries is referred to as the
a. survival of the fittest
b. demographic transition
c. disguised unemployment
d. brain drain
e. none of the above
2. The (age) dependency ratio is the
a. ratio of children to the total population
b. ratio of people not of working age to the total population
c. ratio of infants to the total population
d. ratio of the elderly to the total population
e. none of the above
3. During the demographic transition the population growth rate
a. slows down
b. rises
c. rises and then slows down
d. increases in spurts followed by long periods of stagnancy
e. none of the above
4. Investment in health and education
a. slows growth because it takes resources from growth-creating sectors
b. is harmful because it encourages families to have children
c. is beneficial because in improves the capabilities of the population
d. is beneficial because it provides jobs for doctors and teachers
e. none of the above
5. An AIDS epidemic hurts an economy by
a. requiring additional expenditures on health care
b. reducing the working-age population
c. increasing the child mortality rate
d. reducing the growth of output
e. all of the above
6. The informal sector is characterized by
a. firms that don’t pay their taxes
b. firms from other countries that are not subject to local laws
c. firms producing illegal goods
d. firms that are small and often able to avoid many government regulations
e. all of the above
7. Which of the following is not a “pull” factor in urban migration?
a. higher urban incomes
b. better urban job opportunities
c. more modern way of life
d. rural land consolidation
e. all are pull factors
f. none is a pull factor
8. Migration from poor to rich countries hurts poor countries through
a. loss of educated individuals
b. residents sending money abroad to migrants
c. tightening job markets at home
d. opening executive jobs to workers from developed countries
e. all of the above
9. A minimum wage in the formal sector will likely
a. reduces the number of formal-sector workers
b. increase labor supply and lower wages in the informal sector
c. encourages rural-urban migration
d. lead to increased mechanization in the formal sector
e. all of the above
10. Disguised unemployment refers to workers whose
a. marginal product exceeds the wage
b. marginal product exceeds the average product
c. marginal product is less than the wage
d. marginal product is less than that of co-workers
e. none of the above
11. A positive aspect of migration out of developing countries is
a. reduced population growth
b. remittances to developing countries
c. increased agricultural productivity
d. increased foreign aid
e. all of the above
12. The Todaro model suggests that rural urban migration depends on
a. the gap between rural and urban wages
b. the gap between rural and urban wages modified by the likelihood of obtaining a job
in the city
c. the gap between rural and urban wages modified by the likelihood of having a family
member already in the city
d. the gap between rural and urban wages modified by government-provided employment
possibilities in the city
e. none of the above
13. Educating girls and women should reduce population growth because better-educated girls
and women
a. will take better care of their children
b. is more likely to practice contraception
c. is more likely to want income from working rather than having additional children
d. tends to want to spend more on fewer children rather than less on a greater number of
e. all of the above
14. Over the last several decades, per capita world food production has
a. risen rapidly
b. been stable
c. risen at first, but then fallen
d. risen slowly
e. fallen continuously
15. Crops that are grown primarily to sell, rather than to consume, are referred to as
a. staples
b. subsistence crops
c. cash crops
d. market crops
e. none of the above
16. As incomes rise, the income elasticity of demand for food
a. falls below one
b. becomes equal to one
c. rises above one
d. remains stable
e. cannot be calculated
17. Agricultural extension refers to
a. increasing the amount of land on which crops are grown
b. helping farmers understand and use new techniques
c. increasing the number of workers on the land
d. increasing the range of inputs used by farmers
e. none of the above
18. Economists suggest that food supply can best be assured by a policy of
a. self sufficiency
b. encouraging imports
c. focusing on export crops
d. food security
e. all of the above
19. The Green Revolution has not resulted in
a. reduced food prices
b. increased yields
c. more irrigation
d. more agricultural research
e. The Green Revolution has resulted in all of the above.
20. Engel’s law suggests that as income rises, the demand for food
a. rises less than proportionately
b. rises more than proportionately
c. rises proportionately
d. falls
e. none of the above
21. Marketing boards were intended to
a. buy crops from farmers
b. import crops from other countries
c. subsidize agriculture by incurring losses
d. ensure that all food stayed in the country
e. all of the above
22. When a farmer uses someone else’s land in exchange for a percentage of the crop, this is called
a. rental contract
b. labor contract
c. sharecropping
d. tenancy
e. none of the above
23. A price ceiling on maize will likely
a. increase the amount of maize demanded
b. reduce the amount of wheat supplied
c. cause maize to be smuggled outside the country
d. reduces the income of maize farmers
e. all of the above
24. Improving agriculture’s terms of trade involves
a. increasing the amount of goods available to farmers
b. increasing the number of markets in which farmers can sell
c. increasing the amount of credit available to farmers
d. increasing the relative price of agricultural goods compared to manufactured goods
e. none of the above
25. A good way to reduce unemployment in rural areas is to
a. encourages migration of surplus labor to the cities
b. encourages manufacturing and service activities in the rural areas
c. increases the labor intensity of agricultural production
d. improves the technological sophistication of agricultural production
e. none of the above
26. A good way to encourage agricultural production is to
a. encourages farmers to work harder
b. subsidizes input prices for farmers
c. permit farm prices to rise with increasing demand
d. creates a monopoly firm to buy all farm output
e. all of the above
27. Farm productivity can always be improved by
a. transforming small plots into larger ones
b. encouraging the use of modern equipment
c. making sure that each farmer has land in each ecological zone
d. encouraging mono-cropping
e. none of the above
28. Incentive goods are
a. manufactured goods for consumption by farmers
b. manufactured inputs for farm production
c. agricultural goods that can be sold in the cities
d. agricultural goods that are left for consumption in the rural areas
e. none of the above
29. Which of the following is not an important contribution of the agricultural sector to overall
a. increasing national food supplies
b. permitting foreign exchange earnings through imports
c. allowing excess labor to flow to urban areas
d. providing savings for industrial investment
e. increasing the demand for manufactured goods
f. All of the above are important contributions.
30. Economists tend to believe the most efficient way to induce environmental protection is
a. standards that control economic activities
b. government provision of environmentally sensitive goods and services
c. market-based incentives such as taxes and subsidies
d. economic planning
e. none of the above
31. Reduction in the quality of agricultural land through overuse is called
a. degradation
b. deforestation
c. desertification
d. defenestration.
e. none of the above
32. Adjustments to GDP to account for environmental impacts is
a. Eco development
b. sustainable growth
c. externalities
d. environmental accounting
e. none of the above
33. Public goods are not normally characterized by the following:
a. externalities
b. market provision
c. the free rider problem
d. non-exclusion
e. all the above characterize public goods
34. Where pollution is prevalent, we might expect that
a. externalities are being effectively internalized
b. marginal social costs are greater than marginal private costs
c. marginal costs are greater than marginal benefits
d. marginal private costs are greater than marginal social costs
e. externalities are not important
35. Sustainable development implies that succeeding generations preserve the value of
a. natural capital
b. physical investment
c. all natural resources
d. human capital
e. none of the above
36. The most significant international undertaking to prevent worsening of global warming is
a. Montreal Protocol
b. Rio Declaration
c. Agenda 21
d. Kyoto Protocol
e. None of the above
37. Common ownership of resources such as land can be efficient as long as
a. people are honest
b. government regulates resource use
c. rules for resource use are clear in assigning rights and responsibilities
d. penalties for misuse are severe
e. all the above are required
38. Natural resources should be left in the ground
a. if their discounted future value exceeds their current value
b. so future generations will be able to use them
c. until companies agree to restore land after mining
d. because we may run out
e. economists have no good way to analyze this question
39. Using a discount rate above the market interest rate to evaluate projects will
a. bias a decision toward going ahead with the project
b. correct for distortions in capital markets
c. has no impact on project evaluation
d. bias a decision toward rejecting a project
e. none of the above
40. Market failure means that
a. markets are inefficient resource allocators
b. a market may be distorted in such a way as to ignore some social costs and benefits
c. a market has collapsed due to overuse
d. a market has been so regulated by government that it no longer functions properly
e. all of the above
41. With respect to CO2 emissions, low-income countries
a. does not contribute to the problem
b. can expect to have “dirtier” industries as they develop
c. contributes more per dollar of output than high-income countries
d. will have to sacrifice output in order to reduce emissions
e. none of the above
42. Which of the following environmental issues overflow national boundaries and so might be
addressed multilaterally?
a. dams
b. the ozone layer
c. global warming
d. biodiversity loss
e. all of the above
43. Which of the following countries has a two-party system?
a) Brazil.
b) Finland.
c) Switzerland.
d) United States.
44. Liberal political ideology is associated with
a. charity donations.
b. coalition politics.
c. media campaigning.
d. moral freedom.
e. all of the above
45. Which of the following is not a democratic country?
a. North Korea
b. USA
c. Nepal
d. Sri Lanka
46. Which of the following countries follows theocratic totalitarianism?
a. Zimbabwe
b. Iran
c. Uganda
d. Taiwan
47. Which of the following countries does follow common law?
a. Brazil
b. Mexico
c. India
d. Italy
48. Which of the following comes into the picture in case of international trade legal disputes?
a. IMF
b. International Centre for Settlement of Investment Disputes
c. World Bank
d. WTO
49. Political institutions/ideologies are important for economic development (i.e., autocracies versus democracies).
a. True
b. False
50. Political institutions/ideologies determine
a. the allocation of political power among groups of citizens.
b. influence how efficiently wealth is created and how it’s distributed.
c. both (a) and (b) are correct
d. none of the above is correct


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