Project #44163 - Economics Multiple Choice

 

   1.       Which of the following statements is true with respect to the production possibilities model?

a.    a point inside the production possibilities curve is a combination of capital and consumer products below the potential output level for the economy

b.    a point on the curve indicates that full employment is being experienced within the economy

c.    in order for the economy to experience the greatest rate of economic growth it must produce a relatively larger amount of capital products and a relatively smaller amount of consumer products

d.    all of the above statements are true

 

   2.       The law of supply states

a.    price and supply are inversely related

b.    price and supply are directly (positively) related

c.    price and quantity supplied are inversely related

d.    price and quantity supplied are directly related

e.    as the price increases, supply increases

 

    3.     If demand decreases for a product, this will cause

a.    the price of the product to rise

b.    the amount bought and sold to fall

c.    a temporary shortage of the product which will be eliminated over time as buyers competitively bid up the price

d.    all of the above

 

   4.       Which of the following will cause an increase in the demand for a product?

a.    a decrease in the price of the product

b.    an increase in the price of a complementary product

c.    people expect the price to fall in the near future

d.    a decrease in the number of producers

e.    none of the above

 

   5.       If at some price, quantity demanded exceeds quantity supplied

a.    a shortage exists and the price will decrease in the near future because buyers will

                   competitively bid down the price

b.    a shortage exists and the price will increase in the near future because buyers will competitively bid up the price

c.    a surplus exists and the price will decrease in the near future because sellers will competitively bid down the price

d.    a surplus exists and the price will increase in the near future because buyers will competitively bid up the price

   6.       Consider the market for some piece or type of clothing. If this type of clothing suddenly goes out of style, what will happen in the market?

a.    demand will fall

b.    a temporary surplus of the product will be observed

c.    price will decrease

d.    the equilibrium quantity will fall

e.    all of the above

 

   7.       Suppose the supply of a product rises. What effect will this have on this market?

a.    it will cause the equilibrium price of the product to fall

b.    it will cause the prices paid resources to rise

c.    it will cause employment opportunities in this market to rise

d.    the equilibrium quantity of the product will rise

e.    all of the above

 

   8.       Surpluses tend to drive competitive prices downward toward equilibrium while shortages tend to drive competitive prices upward toward equilibrium.

a.    true

b.    false

 

   9.       From an economic perspective, the level of pollution control provided by government, as well as any other government involvement in the economy, should be increased for as long as marginal benefits exceed marginal costs of the government involvement.

a.    true

b.    false

 

10.       Which of the following characterizes monopolistic competition?

a.    firms are price-takers

b.    there are relatively strong barriers to entry

c.    firms sell a differentiated product

d.    there are only a few dominant firms in the market

 

11.       If a perfectly competitive industry has some firms earning very large economic profits, over the long run (over time) we can expect

a.    new firms to enter the industry

b.    the market supply curve to shift to the right

c.    the market price to fall

d.    profits earned by firms in the industry to fall

e.    all of the above

 

12.       A monopsony will hire __________ workers at a __________ wage than an employer in a competitive labor market.

             a.    more, lower                                                        c.   fewer, higher

             b.    more, higher                                                       d.   fewer, lower

 

 

 

 

13.       If we observe higher prices for gasoline and a greater quantity of gasoline purchased this is most likely because of

             a.    a decrease in the demand for gas

             b.    an increase in the demand for gas

             c.    a decrease in the supply of gas

             d.   an increase in the supply for gas

 

14.       Which of the following is likely to have the most monopoly power?

             a.    Ford Motor Corporation                                    c.   Mobil Oil Corporation

             b.    your local water company                                  d.   Avon Products (cosmetics)

 

  15.     If everyone expects the price of gasoline to rise in the near future, what will happen in the market for gas?

a.   people will buy more now, causing an increase in demand

b.   people will buy the same amount now

c.   the supply of gasoline will decrease

d.   the amount bought and sold will remain the same

e.   the amount bought and sold will decrease

 

  16.     Suppose the demand for an industry’s product falls (e.g., American-made cars). What effect will this have on this market or industry?

a.   it will cause the equilibrium price of the product to rise

b.   it will cause the prices paid resources used in the production of the product to fall

c.   it will cause employment opportunities in this industry to rise

d.   the industry’s production (output) level will rise

 

  17.     Assume that lettuce and salad dressing are complements. An increase in the price of lettuce could be expected to

a.   lead to a fall in the demand for salad dressing

b.   lead to an increase in the price of salad dressing

c.   have no impact on the demand for salad dressing

d.   lead to an increase in the supply of salad dressing

 

  18.     Which of the following government actions would be appropriate for the presence of an external (spillover) benefit good or service?

            a.   ban the good or service                                         c.   regulate the good or service

            b.   tax the good or service                                          d.   subsidize the good or service

 

  19.     Government failure can stem from

            a.   corruption                                                              c.   special-interest group political pressure

            b.   ignorance                                                               d.   all of the above

 

  20.     A price floor (support)

            a.   is a legal price set by the government that is below the equilibrium level

            b.   causes a shortage

            c.   causes the quantity demanded to exceed the quantity supplied

            d.   attempts to create a more desired redistribution of income

            e.   occurs when the market is in equilibrium

 

21.       The “gain” to a nation from international trade is

             a.    decreased employment in the domestic export sector

             b.    more goods to consume than would be attainable through domestic production alone

             c.    reduced tariff revenue

             d.   increased employment in the domestic import sector

 

22.       Which of the following statements best illustrates the relationship between the market for products and the market for resources (inputs)?

             a.    an increase in the price of cameras will decrease the demand for film

             b.    as income rises, people demand relatively smaller amounts of food

             c.    an increase in demand for automobiles will increase the demand for auto workers

             d.   an increase in the price of butter will cause people to buy margarine

             e.    none of the above

 

23.       A profit-maximizing firm will employ workers up to the point where the value of the

             marginal product of the last worker employed

             a.    is equal to the wage rate

             b.    is greater than the wage rate

             c.    is less than the marginal cost of employing that last worker

             d.   is equal to the marginal cost of employing that last worker

 

24.       If people desire the nonmonetary benefits of a given job more than before, then the

             a.    demand for labor curve will shift to the right

             b.    demand for labor curve will shift to the left

             c.    supply of labor curve will shift to the right

             d.   supply of labor curve will shift to the left

 

25.       Depreciation of the dollar will tend to

             a.    decrease the prices of both American imports and exports

             b.    increase the prices of both American imports and exports

             c.    decrease the prices of goods Americans import, but increase the prices to foreigners of the goods Americans export

             d.   increase the prices of goods Americans import, but decrease the prices to foreigners of the goods Americans export

 

26.       Empirical evidence suggests that for a nation the

             a.    costs of trade barriers cannot be estimated with reasonable accuracy

             b.    costs and benefits of trade barriers are about equal

             c.    benefits of trade barriers exceed their costs

             d.   costs of trade barriers exceed their benefits

 

27.       If a nation has a comparative advantage in the production of X, this means that the nation

             a.    cannot benefit by producing and trading this product

             b.    must give up less of other goods than other nations in producing a

                   unit of X

             c.    has a production possibilities curve identical to those of other nations

             d.   is not subject to increasing opportunity costs

 

  28.     The purpose of advertising and other forms of nonprice competition by a firm is to shift its demand curve to the

            a.   right and make it steeper (more inelastic)

            b.   right and make it flatter (more elastic)

            c.   left and make it steeper (more inelastic)

            d.   left and make it flatter (more elastic)

 

  29.     If a firm is losing money in the short run

a.   it should shut down

b.   it should shut down if its losses are greater than its total fixed cost

c.   it should shut down if total revenue is equal to or greater than total variable cost

d.   it should never shut down in the short run

e.   then it is because price is equal to average total cost

 

  30.     The enforcement of anti-trust laws is an attempt by government to correct for which of the following market failures?

            a.   the demise of competition (growth of monopoly power)

            b.   presence of externalities (spillovers)

            c.   inequitable distribution of income

            d.   macroeconomic instability (the presence of the business cycle)

            e.   lack of public goods and services

 

31.       If a firm enlarges its plant and equipment (operates with a larger scale of operation) and realizes lower average total costs of production, we can conclude

             a.    that production was unprofitable before this expansion occurred

             b.    that diminishing returns have been encountered

             c.    that variable costs are relatively greater than fixed costs

             d.   the firm is realizing some economies of scale

 

32.       A fixed cost

a.    increases with increases in the output level

b.    decreases with increases in the output level

c.    decreases at first then increases after diminishing returns set in

d.    increases at first then decreases after diminishing returns set in

e.    is any cost that does not vary with the output level

 

33.       Graphically, average fixed cost is represented by

a.    an upward-sloping line

b.    the vertical distance between the average variable cost curve and the average total cost curve at any output level

c.    a horizontal line

d.    the vertical distance between the total variable cost curve and the marginal cost curve at any output level

e.    a vertical line

 

 

 

 

 

34.       In the short-run

a.    average variable costs always increase as output is expanded

b.    average fixed costs first fall and then rise

c.    average total costs fall and then begin to rise as output is expanded

       d.  the firm does not have sufficient time to change the amount of any of the resources it employs

 

35.  To say there is an inelastic demand for some product means that

a.    consumers are very responsive to a change in the price of the product

b.    consumers are not very responsive to a change in the price of the product

c.    if the price rises by some percentage, then the quantity demanded will fall by a larger percentage

d.    there is an inverse relationship between price and total revenue

e.    there are many substitutes and a long time period under consideration

 

36.       Which of the following is a characteristic of an elastic product?

a.    the cost of the product is a relatively large percentage of one’s income

b.    there are very few substitutes for the product

c.    there is a short time period under consideration

d.    the product is considered a necessity

e.    there is a small number of competitors from which to purchase the product

 

37.       Total cost equals

a.    total fixed cost when output is zero

b.    total variable cost minus total fixed cost

c.    total variable cost divided by total fixed cost

d.    total variable cost when output is zero

e.    marginal cost of the last unit produced plus total fixed cost

 

38.       If a firm is losing money in the short run

a.    it should shut down

b.    it should shut down if its losses are greater than its total fixed cost

c.    it should shut down if total revenue is equal to or greater than total variable cost

d.    it should never shut down in the short run

e.    then it is because price is equal to average total cost

 

39.  When a firm shuts down in the short run its losses will equal

a.    zero

b.    its marginal cost

c.    its total fixed cost

d.    its total variable cost

 

40.       If the absolute value of the elasticity of demand equals 1.50 and price increases by 10 percent, then

a.    quantity demanded will increase by 15 percent

b.    total revenue will increase

c.    quantity demanded will decrease by 15 percent

d.    quantity demanded will increase by 1.5 percent

e.    total revenue will remain unchanged

41.       Assume a firm wishes to maximize its profits or minimize its losses.  If the firm is producing an output level in which

a.    marginal revenue exceeds marginal cost then it should reduce its output level to increase profits (or decrease losses)

b.    marginal revenue is less than marginal cost then it should expand its output level to increase profits (or decrease losses)

c.    marginal cost is at a minimum then it is producing the profit-maximizing (or loss-minimizing) output level

d.    all of the above

       e.   none of the above

 

  42.     Charging different admission prices to different age groups to see the same movie at the same theater is an example of

            a.   nonmarket discrimination                                c.   price discrimination

            b.   monopoly power                                                   d.   market imperfection

 

43.       Which of the following is a characteristic of monopolistically competitive firms?

            a.   they do not advertise

            b.   they are price-takers

            c.   there are very strong barriers to entry

            d.   success of firms rests on their ability to differentiate their products from their competitors’

            e.   there are only a few dominant sellers

 

  44.     Barriers to entry into a market might include

            a.   the sole ownership of a strategic resource

            b.   product differentiation

            c.   a lack of technological expertise

            d.   huge financial capital (money) required to get the business started

            e.   all of the above

 

  45.     Which of the following is an example of oliopolistic industries?

            a.   the appliance industry                                           d.   the soft drink industry

            b.   the oil industry                                                      e.   all of the above

            c.   the tire industry

 

  46.     Which of the following is likely to have the most monopoly power?

            a.   Ford Motor Corporation                                       c.   Mobil Oil Corporation

            b.   your local water company                                     d.   Avon Products (cosmetics)

 

  47.     Firms which coordinate their actions to maximize joint profits are said to have formed a(n)

            a.   monopsony                                                            d.   oligopoly

            b.   cartel                                                                     e.   economic treaty

            c.   product market

 

 

 

 

 

 

  48.     Which of the following is true of more free international trade?

            a.   reduced competition resulting in generally higher prices for consumers

            b.   a greater quantity of products to consume

            c.   a lower variety of poorer quality products to consume

            d.   all of the above

 

  49.     Which of the following characterizes pure competition?

            a.   firms are price-takers

            b.   there are relatively strong barriers to entry

            c.   firms sell a differentiated product

            d.   there are only a few dominant firms in the market

 

  50.     A firm will maximize profits by producing

            a.   an output in which total revenue is maximized

            b.   an output in which marginal revenue exceeds marginal cost

            c.   the output in which total cost is minimized

            d.   the maximum amount possible

 

            e.   an output in which marginal revenue equals marginal cost

Subject Business
Due By (Pacific Time) 10/19/2014 10:00 pm
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy