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Q:
In the above figure, if d1 is the relevant demand curve for this firm, then which level of output will maximize this firmʹs profits or minimize its losses?A) A B) B C) C D) D
Q:
What is the relationship between marginal cost and marginal physical product?
Q:
If in the short run total product is decreasing as more workers are hired, then the marginal physical product isA) increasing. B) zero. C) negative. D) positive.
Q:
An advantage of the proprietorship as a form of business organization is
A) its limited liability.
B) its limited access to capital, thus reducing the possible size of debt.
C) that it is easy to form.
D) that it can sell bonds to the public.
Q:
If the price of a product increases, thenA) the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, decreases.B) the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, increases.C) the budget line shifts outward and the optimal quantity demanded, which corresponds to the higher price, decreases.D) the budget line shifts inward and the optimal quantity demanded, which corresponds to the higher price, increases.
Q:
The price of a hamburger is $1, the price of a movie is $5, and the consumer has $13. A consumer has purchased 3 hamburgers and two movies, receiving 10 units of utility for the last hamburger and 10 units of utility for the last movie. The set of goodsA) is an optimum since the entire income is spent and the marginal utility is the same for the last unit of each good.B) is an optimum because the consumer has maximized her utility given the limited income she had.C) is not an optimum because the marginal utility per dollar spent is greater for the hamburger than for the movie.D) is not an optimum because the marginal utility for the second hamburger was less than the marginal utility for the first hamburger.
Q:
For most goods and services the income elasticity of demand isA) negative. B) positive. C) invisible. D) inverse.
Q:
An inelastic demand indicates thatA) quantity demanded does not vary with changes in the price.B) relatively small changes in price lead to relatively large changes in quantity demanded.C) relatively large changes in price are required to obtain a relatively small change in quantity demanded.D) relatively large changes in quantity demanded lead to relatively large changes in price.
Q:
For voluntary action to correct an externality, A) transaction costs have to be high.B) transaction costs have to be low.C) transaction costs have to be split evenly between all of the parties involved.D) transaction costs are irrelevant.
Q:
Once the national health care program goes into effect and more people will pay fewer of their health care expenses out of their own pockets than they did previously, we can expectA) the quantity of health care services demanded will increase. B) the quantity of health care services demanded will decrease. C) the quantity of health care services supplied will increase.D) the quantity of health care services supplied will decrease.
Q:
Refer to the above figure. Perfect income equality is shown byA) the horizontal axis. B) the vertical axis.C) curve A. D) curve D.
Q:
A plumbersʹ union is an example ofA) an industrial union. B) a craft union.C) skilled workers union. D) auxiliary union.
Q:
In the above figure, if the wage rate fell below W b, in the short run the firm wouldA) hire more workers.B) fire several workers.C) reduce its level of output.D) keep all its input levels the same as they were before.
Q:
The first antitrust law that the U.S. Congress enacted wasA) the Clayton Antitrust Act. B) the Sherman Antitrust Act.C) the Robinson-Patman Act. D) the Federal Trade Commission Act.
Q:
Which of the following federal agencies is engaged in economic regulation?
A) Occupational Safety and Health Administration
B) Federal Motor Carrier Safety Administration
C) Food and Drug Administration
D) Consumer Product Safety Commission
Q:
Between World War II and the 1970s, three firms - General Motors, Chrysler, and Ford - produced and sold nearly all the output of the U.S. auto industry. These three firms hadA) an oligopoly. B) monopolistic competition.C) colluded. D) a pure monopoly.
Q:
Refer to the above figure. Economic profits for this firm areA) negative.B) zero.C) positive.D) undetermined without more information.
Q:
According to the above figure, when the monopolist maximizes profits, its profits are equal to the area given byA) AKMC. B) AKOD. C) BLPE. D) EPRF.
Q:
A firm can be the sole supplier of a good and is still not a monopolist ifA) the firm is not large.B) the good produced is not important to the economy. C) the firm is not making excessive profits.D) there are very close substitutes for the good.
Q:
In the above figure, if d4 is the relevant demand curve for this firm, then which level of output will maximize this firmʹs profits or minimize its losses?A) A B) B C) C D) D
Q:
What is the most important determinant of the firmʹs short -run cost curves?
Q:
When total product is rising,A) fixed cost must be rising. B) marginal product must be positive. C) variable cost must be declining. D) marginal product must be negative.
Q:
Which of the following is considered an advantage of a sole proprietorship?A) easy to raise large sums of capital B) limited liability for ownerC) profit taxed only once D) permits effective specialization
Q:
If the budget line rotates, then we know thatA) income has changed.B) their has been a change in the consumerʹs tastes. C) the price of one of the goods had changed.D) the consumer was not maximizing their utility.
Q:
A consumer with unlimited income will continue consuming goods untilA) the marginal utility of each is equal to zero.B) the marginal utility of each is negative. C) total utility rises.D) marginal utility equals total utility.
Q:
An inferior good has an income elasticity of demand that isA) positive. B) negative. C) positive but less than 1. D) zero.
Q:
The more sensitive people are to a change in price, theA) greater a change in price must be to induce a certain change in quantity demanded. B) greater is the price elasticity of demand.C) smaller the price elasticity of demand.D) closer the price elasticity of demand is to one.
Q:
Which type of property would be the most likely to experience pollution?A) common property B) private propertyC) property held in partnership D) corporate property
Q:
Which of the following is NOT a subsidy in the new the federal governmentʹs new national health care program?A) Families with incomes up to 133% of the federal poverty level are eligible for federal Medicaid coverage.B) Families with incomes up to 400% of the federal poverty level are eligible for thousands of dollars in tax subsidies per year (amounts vary with family incomes).C) Tax credits are available to businesses providing health insurance to 25 or fewer workers and paying annual salaries averaging no more than $50,000.D) A special subsidy rate of 3.8% is applied to nearly all income earnings above $200,000 for individuals or $250,000 for married couples.
Q:
Refer to the above figure. For which Lorenz curve does the richest 40 percent make 50 percent of the nationʹs money income?A) A B) B C) C D) D
Q:
The Taft-Hartley Act outlawed all of the following practices EXCEPT A) secondary boycotts. B) union shops.C) closed shops. D) sympathy strikes.
Q:
In the above figure, the line labeled ʺMRPLʺ also represents the firmʹsA) supply curve. B) marginal physical product curve. C) total physical product curve. D) demand curve.
Q:
All of the following are exempt from antitrust lawsuits EXCEPTA) labor unions. B) professional baseball. C) public transportation. D) software developers.
Q:
Which of the following federal agencies is engaged in social regulation?A) Equal Employment Opportunity CommissionB) Office of the Comptroller of the Currency C) The Securities and Exchange Commission D) Federal Deposit Insurance Corporation
Q:
Oligopoly is a market situation in whichA) there is no product differentiation. B) there are very few sellers.C) firms seldom react to price changes. D) only homogeneous products are sold.
Q:
Refer to the above figure. Economic profits for this firm areA) negative.B) zero.C) positive.D) undetermined without more information.
Q:
According to the above figure, the profit-maximizing price for the monopolist isA) A. B) B. C) C. D) D.
Q:
A monopolist is defined asA) a firm with annual sales over $10 million.B) a large firm, making substantial profits, that is able to make other firms do what it wants. C) a single supplier of a good or service for which there is no close substitute.D) a producer of a good or service that is expensive to produce, requiring large amounts of capital equipment.
Q:
In the above figure, if d3 is the relevant demand curve for this firm, then which level of output will maximize this firmʹs profits or minimize its losses?A) A B) B C) C D) D
Q:
What is the relationship between the marginal cost curve and marginal product? Explain.
Q:
Marginal physical product of the first worker is 100, 120 for the second, 80 for the third, 30 for the fourth, 5 for the fifth, 3 for the sixth, 2 for the seventh, 1 for the eighth, and 0 for the ninth. What is total product for the fifth worker and the ninth worker respectively?A) 335; 341 B) 335; 0 C) 5; 0 D) 0; 5
Q:
The most common form of business organization in the United States is theA) proprietorship.B) partnership. C) corporation. D) cooperative.
Q:
Holding all other prices and money income constant, if the price of food rises, then the consumer will adjust her expenditures andA) reach an optimum on a higher indifference curve. B) reach an optimum on a lower indifference curve. C) reach an optimum on the same indifference curve. D) her level of satisfaction may go up or down.
Q:
The consumer optimum is the set of goods and services, subject to the limited income of the consumer, thatA) the consumer can afford to buy.B) is characterized by zero marginal utility on each good and service.C) maximizes the level of satisfaction for each consumer. D) is characterized by increasing marginal utility.
Q:
Use the above figure. Which graph depicts a normal good?A) A B) B C) C D) D
Q:
Price elasticities are calculated for four goods, and the values are: 4.1; 3.7; 1.0; 0.002. Which price elasticity is most elastic?A) 4.1 B) 3.7 C) 1.0 D) 0.002
Q:
Which of the following is NOT an example of common property?A) a trampoline B) air C) gravity D) sunshine
Q:
Government agencies to which the national health care program assigns the task of assisting individuals, families, and small businesses in identifying health insurance policies to purchase are known asA) health care exchanges. B) markets for health care.C) health insurance regulations. D) health insurance mandates.
Q:
Refer to the above figure. For which Lorenz curve does the richest 25 percent make 50 percent of the nationʹs money income?A) A B) B C) C D) D
Q:
A labor union composed of workers in the same industry is calledA) a craft union. B) an industrial union.C) a company shop. D) a guild.
Q:
In the above figure, the competitive firm will employ the quantity of laborA) equal to Lc. B) equal to Lb.C) less than Lb. D) greater than Lc
Q:
All of the following are exempted from antitrust laws EXCEPTA) labor unions. B) Microsoft Windows. C) professional baseball. D) hospitals.
Q:
One key purpose of economic regulation is
A) to force a firm to produce at the point at which marginal cost equals marginal revenue.
B) to control the quality of service provided by a monopolist.
C) to control the price that regulated enterprises are allowed to charge.
D) to focus on the impact of production on the environment and society, the working conditions under which goods and services are produced, and sometimes the physical attributes of goods.
Q:
There are fewer than half as many publishers of college textbooks in the United States now as a generation ago. Three companies alone account for almost two -thirds of the sale of new textbooks. This market situation characterized by very few sellers is known asA) an oligopoly. B) perfect competition.C) pure monopoly. D) monopolistic competition.
Q:
Refer to the above figure. This firm is operating in theA) long run since economic profits are greater than zero.B) long run since economic profits are less than zero.C) short run since economic profits are greater than zero.D) short run since economic profits are less than zero.
Q:
According to the above figure, the profit-maximizing output for this monopolist is found directly below the letterA) K. B) M. C) P. D) N.
Q:
Which of the following statements is FALSE?A) An unregulated, profit-maximizing monopolist will not operate in the inelastic portion of the demand curve.B) The marginal revenue earned by a monopolist will always be less than the productʹs price. C) Typically there are numerous very close substitutes for the product of a monopolist.D) For a profit-maximizing monopolist, marginal revenue equals marginal cost.
Q:
In the above figure, if the firm is facing demand curve d 2, then to maximize profits it will produce at output levelA) A. B) B.C) C. D) D.
Q:
If the price of labor is constant and a firm experiences diminishing marginal product, then itsA) marginal costs decrease. B) fixed costs increase.C) average variable cost increases. D) total costs decrease.
Q:
If marginal product is negative, thenA) total product is rising. B) total product is falling.C) marginal cost is falling. D) average profit is rising.
Q:
Which of the following is the most common form of a business organization?A) corporation B) partnershipC) sole proprietorship D) subchapter S corporation
Q:
The slope of the budget line will changeA) when the consumerʹs income increases. B) when the consumerʹs taste changes.C) when the total satisfaction changes.D) when the price of one of the products changes.
Q:
Consumers do not buy as many units of each good as they want becauseA) of the law of diminishing marginal utility.B) they have limited incomes.C) they do not know what they want in all situations.D) eventually marginal utility equals zero.
Q:
Use the above figure. Which graph depicts an inferior good?A) A B) B C) C D) D
Q:
When the absolute percentage change in quantity demanded is just equal to the percentage change in price, demand isA) elastic. B) perfectly inelastic. C) unit-elastic. D) relatively inelastic.
Q:
Property owned by everyone (and thus no one in particular) is generally referred to asA) social property. B) private property.C) common property. D) natural property.
Q:
The new federal governmentʹs national health care program imposes the following regulations on health care insurers EXCEPTA) health insurers must cover all who apply, including people who already have health problems.B) all new plans must cover certain preventive services such as mammograms and colonoscopies but must be paid 100% by patients.C) a ceiling is imposed on the rate of increase in health insurance prices charged to elderly people.D) insurance companies will be prohibited from imposing lifetime dollar limits on essential benefits, like hospital stays.
Q:
Refer to the above figure. Which curve shows the second most unequal distribution of income?A) A B) B C) C D) D
Q:
Craft unions exert market control byA) limiting the demand for labor. B) limiting the supply of labor. C) setting minimum wages. D) setting maximum wages.
Q:
The individual firm operating in a perfectly competitive labor marketA) can hire more labor only by offering a higher wage.B) faces an inelastic demand for labor.C) will pay less to the additional labor employed.D) can buy all the labor it wants at the going market wage rate.
Q:
Which of the following acts outlawed selling products at ʺunreasonably low pricesʺ with the intent of reducing competition?A) Sherman Act B) FTC ActC) Robinson-Patman Act D) Wheeler-Lea Act
Q:
One of the basic differences between social and economic regulations is thatA) economic regulations only apply to financial institutions while social regulations apply to a greater variety of institutions.B) social regulations only apply to non -profit organizations while economic regulations apply only to for-profit organizations.C) economic regulations cover only particular industries while social regulations apply to all firms in the economy.D) economic regulations focus on the banking industry while social regulations focus on monopolies.
Q:
An oligopolistic industry is characterized byA) a small number of firms. B) a large number of firms. C) no interdependence. D) no barriers to entry.
Q:
Refer to the above figure. As more and more firms are able to and actually do enter the industry, the demand curve of each firm and its marginal revenue curveA) will shift inward until the demand curve is tangent to the average total cost curve. B) will become vertical.C) will become upward sloping.D) None of the above will occur.
Q:
A monopolist will not be able to receive a positive economic profit at any price -output combination at whichA) marginal cost is less than average total cost when the monopolist has equated marginal revenue and marginal cost.B) the average total cost curve is everywhere above the demand curve.C) marginal cost is less than average variable cost when the monopolist has equated marginal revenue and marginal cost.D) marginal revenue falls at a faster rate than marginal cost increases.
Q:
Which of the following is a characteristic of a monopoly market?A) many firms B) one firmC) easy entry D) firm is a price taker
Q:
OutputTotal Costs100$400101402102405103409104414105420106427107435A firm in a perfectly competitive industry faces the following cost and revenue conditions: ATC = $6; AVC = $3; MR = MC = $5. The firm isA) earning economic profits.B) experiencing economic losses.C) experiencing zero profits.D) in a position in which it should shut down.
Q:
If the price of labor is constant and a firm experiences diminishing marginal product, then itsA) marginal costs increase. B) marginal costs decrease.C) fixed costs increase. D) total costs decrease.
Q:
If the marginal product curve is increasing from workers 1 -89 and then decreases steadily, crossing the horizontal axis at 190 workers, we know thatA) the total output curve increases from workers 1 -89, decreases from workers 90-189, and becomes 0 at the 190th worker.B) the total output curve is increasing at an increasing rate from workers 1 -89, then increases at a decreasing rate until the 190th worker, after which it decreases.C) the total output curve is increasing throughout, although at an increasing rate for the first 190 workers and at a decreasing rate after the 190th worker. D) diminishing marginal product sets in with the 190th worker.
Q:
The three basic legal forms of business enterprise in the United States areA) monopolies, enterprises, and competitors.B) vertical, horizontal, and conglomerate corporations. C) national, global, and multinational corporations.D) proprietorships, partnerships, and corporations.