Kaplan University MT445 Managerial Economics

QUESTION

1.Where do economic agents such as individuals, firms and
nations, interact with each other?
(Points : 1)

in public locations monitored by
the government.

in any arena that brings together
buyers and sellers.

in any physical location people
where people can physically get together for selling goods, such as shopping
malls.

in any location where transactions
can be monitored by consumer groups and taxed by the government.

Question 2. 2.In the United States and in most European countries,
aging populations and declining birthrates threaten public finances. As the
population ages, there are fewer workers paying taxes relative to the
number of retired people receiving government benefits. Which of the following
government policies would NOThelp reduce the pressure on
public finances? (Points : 1)

offer financial incentives to
increase the birthrate

reduce taxes paid by current
workers so that they an save for their future

reduce retiree benefit payments

raise the retirement age

Question 3. 3.Marginal analysis involves undertaking an activity (Points : 1)

until its marginal costs start
declining.

only when its marginal benefits
are positive.

until its marginal benefits equal
marginal costs.

only if its marginal costs are
greater than its marginal benefits.

Question 4. 4.Which of the following is an example of a “how
much” decision? (Points : 1)

The Pleasantville movie theatre is
open only in the evenings. The theatre’s manager is debating whether to add
daily matinee shows.

The Zhous have demolished their
old home and are debating whether to build a ranch-style house or a Craftsman
home.

You’re planning to hold a
graduation party and must decide between having your party catered or having
a pot-luck.

Chelsea has withdrawn from the
swim team to take up a full-time job.

Question 5. 5.Cassie’s Quilts alters, reconstructs and restores
heirloom quilts. Cassie has just spent $800
purchasing, cleaning and reconstructing an antique quilt which she expects
to sell for $1,500 once she is finished. After having spent $800, Cassie
discovers that she would need some special period fabric that would cost
her $200 in material and time in order to complete the task. Alternatively,
she can sell the quilt “as is” now for $900. What is the marginal
cost of completing the task?
(Points : 1)

$200

$500

$1,000

$1,000 plus the value of her time

Question 6. 6.The production possibilities frontier model shows that (Points : 1)

if consumers decide to buy more of
a product its price will increase.

a market economy is more efficient
in producing goods and services than is a centrally planned economy.

economic growth can only be
achieved by free market economies.

if all resources are fully and
efficiently utilized, more of one good can be produced only by producing less
of another good.

Question 7. 7.
Figure
2-1

Refer to Figure 2-1. Point Cis (Points : 1)

technically efficient.

unattainable with current
resources.

inefficient in that not all
resources are being used.

is the equilibrium output
combination.

Question 8. 8.Specializing in the production of a good or service in
which one has a comparative advantage enables a country to do all of the
following except (Points : 1)

engage in mutually beneficial
trade with other nations.

increase the variety of products
that it can consume with no increase in resources.

consume a combination of goods
that lie outside its own production possibilities frontier.

produce a combination of goods
that lie outside its own production possibilities frontier.

Question 9. 9.
Figure
2-7

Figure 2-7 shows the production
possibilities frontiers for Pakistan and Indonesia. Each country produces
two goods, cotton and cashews.

Refer to Figure 2-7. What is the opportunity cost of
producing 1 pound of cashews in Pakistan? (Points : 1)

5/8 bolts of cotton

3/8 bolts of cotton

1 3/5 bolts of cotton

240 bolts of cotton

Question 10. 10.Individuals who have never been the best at doing
anything (Points : 1)

cannot have a comparative
advantage in producing any product.

can still have a comparative
advantage in producing some product.

perform all tasks at a higher
opportunity cost than others.

must have an absolute advantage in
at least ones task.

ANSWER:

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