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1.During the 1980s, economists noticed that investments in information and communications technology (ICT) did not correspond with increased productivity. What is this phenomenon called?

2.What term describes market prices that have been modified to reflect the gap between social and private cost-benefit analyses?

price anomaliesbuyer advantageshadow pricescurrency conversion rates

3.Which of the following is an example of external diseconomies?

Financial aid for technical studiesResearch and development in robotic technologyDevelopment of a medication to treat AIDSPollution caused to the environment

4.Immunizing individuals against diseases such as measles, rubella, polio, and cholera to significantly enhance overall social welfare by boosting population health and productivity is an example of what?

5.Which statement accurately describes labor conditions in Less Developed Countries (LDCs)?

Labor is frequently underutilized and has a low opportunity cost.Hiring labor in LDCs is less expensive because workers are more productive than those in Developed Countries.Modifying Western technologies to suit LDC environments demands minimal innovation.Labor is typically regarded as the limited resource in LDCs.

6.Which statement below is incorrect?

In 1990, there were 98 landline phones and 2 mobile phones per 1,000 individuals worldwide; by 2001, these numbers rose to 169 landlines and 153 mobiles per 1,000 people.Mobile phones require significantly less infrastructure investment compared to traditional landline telephones.Global spending on information technology in 2001 accounted for roughly 0.05% of the total world gross investment.In 2001, the number of internet users per 1,000 inhabitants in middle-income countries exceeded that in high-income countries.

7.What causes the deficiency of absorptive capacity in developing nations?

Insufficient government administrative systemsLimited infrastructure scaleA shortage of innovative business leadersInappropriate technological solutionsAll of the above factors contribute

8.Which economist is credited with attributing productivity growth to advancements in computer technology?

Dale JorgensonJoseph StiglitzRobert SolowTheodore W. Schultz

9.Over time, enhancing education and training systems, along with transportation, communication, and other infrastructure in Less Developed Countries (LDCs), is expected to improve which of the following?

10.Which scenario best describes a situation where internal economies of scale cause the average cost curve to continuously decline, making it inefficient for more than one firm to operate in the market?

A natural monopolyA restriction limiting an LDC to a single firm in the industryA single firm encountering a perfectly elastic (horizontal) demand curve in LDCsThe presence of an oligopolistic market structure

11.Which of the following does not represent a natural public monopoly?

Cellular phone servicesPower generation and distributionProvision of water servicesMail and parcel delivery

12.A project generates a net cash flow of $200 annually for 4 years, with no income afterward. If the discount rate is 5%, what is the present value of this income stream over the 4-year period?

13.What does the efficiency wage represent?

The labor cost incurred for each unit producedThe typical salary level found in less developed countriesThe wage rate divided by the labor productivityThe ratio of the marginal product of labor to the wage

14.Based on their field studies in Africa, James Pickett, D. J. C. Forsyth, and N. S. McBain observed that businesspeople often prefer the most advanced designs without realizing these may not yield the highest profits. What do they attribute this behavior to?

excessive capital investmentdistorted factor costsan engineering mindsetuse of intermediate technology

15.Which group includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States?

The G-7 nationsCountries with the fastest productivity growth globally since 1960Nations experiencing a decline in TFP growth since the 1990sCountries with the cheapest prices for information technology equipment and software

Capital Formation, Investment Choice, Information Technology, And Technical Progress – MCQs