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Economic
Q:
A perfectly elastic long-run supply curve indicates
A) a decreasing-cost industry.
B) a constant-cost industry.
C) an increasing-cost industry.
D) that some input prices change as firms enter and exit the industry.
Q:
In a perfectly competitive market, the average revenue curve of a firm isA) the same as its total revenue curve. B) the same as its demand curve.C) the same its economic profits.D) the difference between its total revenue curve and its marginal revenue curve.
Q:
Notice the costs as given in the table below. What is the total fixed cost in the table below ?Total OutputTotal Costs0$101$152$183$204$215$23A) $5 B) $0 C) $10 D) $9
Q:
Which of the following statements about ʺinside informationʺ is FALSE?A) It is information that is not available to the general public.B) It is illegal to knowingly use inside information when trading stocks. C) Profits can be made using inside information.D) The government never imposes fines or other penalties for abuse of inside information.
Q:
In a firm, an entrepreneur is one whoA) decides to hire or fire.B) works for the owner by running the firm.C) takes the risks associated with a business firm. D) represents the firm in legal proceedings.
Q:
What are the key properties of indifference curves?
Q:
Using the above table, what is the marginal utility of the 4th soda?A) 23.2 B) 5 C) 10 D) 15
Q:
Why is elasticity of demand greater for goods that are a large share of a consumerʹs budget?
Q:
If price decreases by 10 percent and quantity demanded increases by 30 percent, the price elasticity of demand will beA) 0.333. B) 3. C) 30. D) 300.
Q:
The costs of pollution abatementA) increase at an increasing rate with the increase in pollution abatement.B) increase at a decreasing rate with the increase in pollution abatement. C) decrease at an increasing rate with the increase in pollution abatement. D) decrease at a decreasing rate with the increase in pollution abatement.
Q:
Current income maintenance programs
A) often provide benefits to people who are working and earning substantially more than the poverty level.
B) reduce the incentive of recipients to work.
C) have safeguards to ensure that recipients work whenever physically able.
D) fail to make the income distribution more equal.
Q:
A company town in the lumber or mining industry is an example of aA) monopoly. B) bilateral monopoly.C) buyerʹs monopoly. D) monopsony.
Q:
A legal arrangement whereby a firm can hire only union labor is calledA) a union shop. B) a closed shop. C) a sweat shop. D) an open shop.
Q:
Quantity of WorkersTotal ProductMarginal Marginal Physical Product Revenue Product00- -17 218 330 440 548 In the above table, what is the marginal physical product of worker 2?A) 10 B) 40 C) 11 D) 12
Q:
The total costs of federal regulation
A) encompasses only explicit costs of satisfying regulatory demands.
B) also includes the explicit costs associated with regulations issued by 50 different state governments.
C) encompasses only opportunity costs of satisfying regulatory demands.
D) encompasses both explicit and opportunity costs of satisfying regulatory demands..
Q:
A Tweedle Dee-Tweedle Dum outcome occurs when
A) firms earn highest profits by adopting different product formats.
B) firms earn highest profits by adopting the same product format.
C) firms cheat after forming a cartel.
D) firms earn highest profits by cooperation.
Q:
Explain how information products are ʺspecial.ʺ
Q:
In a monopolistically competitive market, entry into the industry
A) is relatively easy.
B) is blocked.
C) is difficult due to extensive government regulation.
D) is as difficult as entry into a monopoly.
Q:
In the above figure, the monopolistʹs profit-maximizing output level isA) A. B) B. C) C. D) D.
Q:
Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a higher long-run price, we know thatA) this is a decreasing-cost industry. B) this is an increasing-cost industry.C) some firms will be losing money in the long run.D) after further adjustments, price will fall to its original level.
Q:
For a perfect competitor, price equalsA) marginal revenue only.B) average revenue only.C) both average revenue and marginal revenue.D) neither marginal revenue nor average revenue.
Q:
Notice the costs as given in the table below. What is the marginal cost when total cost is $23?Total OutputTotal Costs0$101$152$183$204$215$23A) $5 B) $3 C) $2 D) $1
Q:
The random walk theory says that
A) stock prices follow a trend for varying periods of time.
B) successive stock prices increase more than they decrease.
C) successive stock prices are dependent on the weighted average of the previous weekʹs prices.
D) successive stock prices are independent of each other.
Q:
By definition, a firm isA) a business organization that makes profits.B) a business organization that utilizes resources to produce goods or services with the goal of making a profit.C) a business organization that consists of more than one person.D) an organization, whether private or public, that may or may not make a profit.
Q:
One characteristic of indifference curves is thatA) they must intersect at the origin. B) they cannot intersect. C) they have a positive slope. D) they are straight lines.
Q:
Using the above table, what is the total utility of consuming 3 bottles of soda?A) 115 B) 120 C) 240 D) 135
Q:
A product that has an elastic demand curve has all of the following characteristics EXCEPT A) it has many substitutes.B) a consumer can wait to buy the product. C) it has few or no substitutes.D) it is a large part of a consumerʹs income.
Q:
The formal definition of price elasticity of demand is
A) change in quantity demanded divided by change in price.
B) quantity demanded divided by price.
C) percentage change in quantity demanded divided by percentage change in price.
D) quantity demanded multiplied by price and divided by 100.
Q:
The marginal benefit of pollution abatement
A) increases at an increasing rate as abatement increases.
B) decreases as pollution abatement increases because of the law of diminishing marginal utility.
C) increases as pollution abatement increases because of the law of increasing marginal returns.
D) is constant as pollution abatement increases.
Q:
The purpose of the Temporary Assistance to Needy Families program isA) to provide rebates of Social Security taxes to low -income workers.B) to provide cash assistance and supportive services to assist the family, helping them achieve economic self-sufficiency.C) to provide a minimum income for the aged, blind, and the disabled.D) to supplement Social Security for the elderly with medical problems.
Q:
When there is only one buyer of labor in a community, we talk of aA) monopoly. B) monopsony.C) monopolistic market. D) labor cooperative.
Q:
Laws that make it illegal to require union membership as a condition of continuing employment in a firm areA) union shop laws. B) right-to-work laws. C) closed-shop laws. D) jurisdictional laws.
Q:
Quantity of WorkersTotal ProductMarginal Marginal Physical Product Revenue Product00- -17 218 330 440 548 In the above table, what is the marginal physical product of worker 4?A) 10 B) 40 C) 11 D) 12
Q:
The total costs of regulationA) include increased taxes and increased prices of the products being regulated. B) are paid entirely by the regulated industries.C) much higher than just the explicit government outlays to fund the administration of various regulations.D) are paid entirely by the consumers of regulated industries.
Q:
The situation in which firms choose incompatible product formats is calledA) the prisonersʹ dilemma. B) a Tweedle Dee-Tweedle Dum game. C) Battle of the Sexes. D) a cartel.
Q:
Marginal cost pricing for an information productA) would cause the firm to experience economic losses. B) would allow the firm to break even.C) would cause the firm to earn economic profits.D) would cause the firm to expand output to increase economic profits.
Q:
Monopolistic competition meansA) monopolies from several countries compete in the global market. B) a large number of firms producing homogeneous products.C) a large number of firms producing differentiated products. D) few firms producing differentiated products.
Q:
As a price searcher, a monopoly firm
A) must only determine the price it charges.
B) must determine its optimal price-output combination.
C) must determine its output level and then accept the market price for its product.
D) must determine the prices it pays for its inputs and accept the market price for its output.
Q:
Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a lower long-run price, we know thatA) this is a decreasing-cost industry. B) this is an increasing-cost industry.C) some firms will be losing money in the long run.D) after further adjustments, price will rise to its original level.
Q:
The equation TR/Q is used to computeA) total cost. B) average revenue.C) demand. D) marginal revenue.
Q:
Notice the costs of production for a firm in the table below. What are the total costs for outputs of 7 units and 8 units respectively?Total Output (Q/day)Total Fixed Costs (TFC)Total Variable Costs (TVC)0$10$01$10$3.502$10$4.753$10$5.804$10$6.405$10$7.256$10$8.327$10$9.338$10$10.12A) $20.12; $19.33 B) $17.25; $18.32 C) $19.33; $20.12 D) $9.33; $10.12
Q:
According to the random walk theory,
A) todayʹs stock price will be related to yesterdayʹs stock price.
B) successive prices of a stock are independent of each other.
C) stock prices can easily be predicted for as much as 52 weeks into the future.
D) stock prices rise and fall in predictable cycles that correspond with the overall business cycle.
Q:
A proprietorship is a businessA) with annual sales below $100,000.B) in which the stock of the company is closely held by members of one family. C) which produces a service rather than goods.D) owned by one individual who is responsible legally for the debts of the firm.
Q:
An indifference curveA) must be convex to the origin. B) must be concave to the origin.C) may be convex or concave to the origin.D) depends on the prices of the products and the consumerʹs income.
Q:
Using the above table, what is the total utility of consuming 2 bottles of soda?A) 115 B) 120 C) 140 D) 240
Q:
Generally, expenses on a sport utility vehicle are a large part of a consumerʹs budget, so the demand for sport utility vehicles is more likely to beA) elastic. B) inelastic.C) unit elastic. D) perfectly elastic.
Q:
If the price elasticity of demand for good A is -1, then a 1% increase inA) consumer income will result in a 1% decrease in the demand for good A.B) consumer income will result in a 1% increase in the demand for good A.C) the market price of good A will result in a 1% increase in the quantity demanded of good A .D) the market price of good A will result in a 1% decrease in the quantity demanded of good A .
Q:
The optimal amount of pollution is not zero becauseA) it has been found that pollution in moderate amounts actually has positive benefits.B) there are no benefits to anyone from having zero pollution. C) zero pollution would be too costly.D) we donʹt have the political structure that could accomplish the goal.
Q:
The purpose of the Supplemental Security Income program is
A) to provide a minimum income for all households with children.
B) to provide a guaranteed minimum income for all Americans.
C) to provide a minimum income for the aged, blind, and the disabled.
D) to supplement Social Security for the elderly with medical problems.
Q:
When there is only one buyer in a market, there is aA) buyerʹs monopoly. B) monopoly.C) monopsony. D) buyerʹs cooperative.
Q:
A closed shop is a business enterprise in whichA) employees cannot belong to a union when they are employed, and cannot join a union and keep working there.B) employees must join the union to maintain employment.C) employees must belong to the union before they can be employed.D) employees cannot belong to the union when they are hired, but may join the union laterand keep their jobs.
Q:
The demands for labor and other input factors are calledA) derived demands, because the demand for these inputs depends on the demand for goods and services they are employed to produce.B) developed demands, because the demand for these inputs is developed from an analysis of the costs of advertising products.C) indirect demands, because the demand for these inputs is indirectly related to the costs of advertising products.D) reverse demands, because the demand for these inputs varies inversely with the demand for goods and services they are employed to produce.
Q:
The costs of regulationA) include increased taxes and increased prices of the products being regulated. B) are paid entirely by the regulated industries.C) are more than covered by the benefits gained from the regulation. D) are relatively small.
Q:
Beta videocassettes had the highest degree of product compatibility with A) VHS videocassettes. B) audiocassettes. C) videocassette players. D) CD players.
Q:
An information product typically hasA) high total fixed costs and high marginal costs. B) low total fixed costs and low marginal costs. C) low total fixed costs and high marginal costs. D) high total fixed costs and low marginal costs.
Q:
Which of the following is most likely to be a monopolistically competitive firm?A) Smart phone producer B) Cell phone service providerC) College textbook publisher D) Computer software maker
Q:
Which of the following statements concerning a monopolist is FALSE?A) A monopolist will produce at which MR = MC.B) For a monopolist, marginal revenue is less than price.C) A monopolist will charge the highest price at which any individual will purchase the product.D) A monopolist will shut down if price is less than average variable cost.
Q:
An industry in which an increase in output leads to a reduction in long -run per-unit costs is a(n)A) increasing-cost industry. B) constant-cost industry.C) break-even cost industry.D) decreasing-cost industry.
Q:
We assume that firms, when they are deciding the best rate of output at which to produce, A) try to get the highest price possible. B) want to maximize sales.C) want to minimize costs. D) want to maximize profits.
Q:
Use the above figure. The AVC at output 5 isA) $35.00. B) $2.00. C) $3.00. D) $5.00.
Q:
Suppose that you decide to purchase either stocks or bonds of a particular corporation and you also prefer to receive some returns from the securities every year. Which should you buy - stocks or bonds? Why?
Q:
The most numerous or plentiful firms in the United States are found in this form of businessA) partnership. B) proprietorship. C) monopoly. D) corporation.
Q:
An indifference curveA) must slope downward towards the right.B) is positively sloped.C) is upsloping and is concave to the origin.D) may be upsloping or downsloping, depending on whether the two products are complements or substitutes.
Q:
Slices of PizzaTotal UtilityMarginal Utility150 290 3120 4130 5137 6120 In the above table, what is the marginal utility of the sixth slice of pizza consumed?A) 7 B) 137 C) 120 D) -17
Q:
After full adjustment to a price change has occurred, the absolute price elasticity of demand for an item is equal to 1. In the short run, the absolute price elasticity of demand for the item was probablyA) less than 0. B) greater than 0. C) less than 1. D) greater than 1.
Q:
When economists want to obtain a measure of the responsiveness of quantity demanded to changes in price, they useA) the slope of the demand curve. B) the price elasticity of demand.C) only the percentage change in quantity demanded.D) the cross-price elasticity of demand.
Q:
From an economic standpoint, the amount of pollution should be
A) zero.
B) the amount that allows firms to maximize profits.
C) the amount where firms are earning a normal rate of return on investment.
D) at the point at which the marginal benefit from further reduction equals the marginal cost of further reduction.
Q:
The funds paid to the government today for Social Security taxes are
A) invested to provide for the future benefits of the taxpayers.
B) saved to ensure sufficient resources in the future to pay the benefits of workers today when they reach retirement age.
C) used by the government to purchase goods and services that will enhance the future productivity of business in the country.
D) used to pay the benefits of those who are currently retired.
Q:
Since the National Basketball Association is the only significant employer of professional basketball players, it might be referred to as a(n)A) oligopsony. B) monopoly. C) monopsony.D) oligopolist.
Q:
A right-to-work law makes it illegal forA) employers to refuse to hire union workers.B) union membership to be a requirement for continued employment in any establishment.C) union membership to be denied on the basis of race, gender, or national origin. D) a union to exist in a state.
Q:
Since the demand for labor depends upon the demand for the final product, we say that labor isA) a derived demand. B) an ʺinverseʺ demand.C) a positive demand. D) a reverse demand.
Q:
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. Which of the following statements is true?A) Under both the capture theory and the share -the-gains, share-the-pain theory profits will decrease.B) An increase in price will occur quicker in the share -the gains, share-the-pain theory than the capture theory.C) An increase in price will occur quicker in the capture theory than the share -the-gains, share-the-pain theory.D) In the capture theory there will be an increase in price but not in the share -the-gains, share-the-pain theory.
Q:
Product compatibility applies to products of different firms thatA) are complementary. B) are substitutable.C) have no network effects. D) none of the above
Q:
Firms that sell information products experience relatively high fixed costs but, once they have produced the first unit, canA) sell additional units at a loss, or above cost.B) provide expensive information products to consumers.C) sell additional units at a relatively low cost per unit.D) experience short-run diseconomies of scale.
Q:
Which of the following products is most likely to be sold in a monopolistically competitive market?A) fast food B) coal C) wheat D) electricity
Q:
In the above figure, if the firm is producing Q 2 units at a price P2, it shouldA) increase output and decrease price. B) decrease output and increase price.C) not change output or price. D) shut down.
Q:
An industry in which an increase in industry output is accompanied by an increase in long -run per-unit costs is a(n)A) increasing-cost industry. B) constant-cost industry.C) break-even cost industry. D) decreasing-cost industry.
Q:
Refer to the above table. The table represents information on the costs for Ajax Corporation.Ajax operates in a perfectly competitive market and the price of the product is $7. What does profit equal when quantity equals 2?A) $14 B) -$2 C) $16 D) $2
Q:
Use the above figure. The ATC at output 5 isA) $25.00. B) $2.00. C) $3.00. D) $5.00.
Q:
Which method of corporate finance is used the most? Why?