By and large, the price of each item on a restaurant menu is: A) an accurate reflection of the item’s marginal cost. B) based strictly on consumer demand. C) a function of cost and the price elasticity of demand for the item. D) a fixed multiple of the item’s total cost. ANSWER C
Date: September 10th, 2020
Assume there is a simultaneous increase in home foreclosures and a decrease in consumer incomes. Based on this information we can conclude, with certainty, that in the market for used single-family homes equilibrium: A) price will increase. B) price will decrease. C) quantity will increase. D) quantity will decrease. ANSWER B
Date: September 10th, 2020
If the inputs to a production process are perfect substitutes and the marginal rate of technical substitution is equal to the ratio of the prices of the two inputs, the firm can choose from a virtually infinite array of combinations of the two inputs to minimize the costs of producing a given level of output. […]
Date: September 10th, 2020
Low stock market prices might ________ consumers willingness to spend and might ________ businesses willingness to undertake investment projects. A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase ANSWER C
Date: September 10th, 2020
Illustrate graphically the effect the credit market crisis in the United States in 2008 had in the market for existing single-family homes. Assuming the demand for existing single-family homes is relatively inelastic, what is likely to happen to the total revenues of home sellers as a result of the credit market crisis? ANSWER The […]
Date: September 10th, 2020
Assume that, over time, engineers develop new residential furnaces that can run on different types of fuels, e.g., natural gas, electricity, propane, and fuel oil, simply by flipping a switch on the furnace. How would this technological change affect the price elasticity of demand for natural gas? Why? ANSWER The price elasticity of demand […]
Date: September 10th, 2020
As the price of labor increases relative to the price of capital, the firm will move to a more labor-intensive production method to minimize costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
A record of all transactions between residents of the reporting country and residents of the rest of the world over a period of time is called the: A) national income product accounts. B) balance of payments accounting system. C) accrual accounting system. D) none of the above. ANSWER B
Date: September 10th, 2020
Assume that, for a particular demand curve, when price rises from $50 to $60, total revenue falls from $8,750 to $7800. a. Based on this information, what is the quantity demanded at each price. b. Without calculating the coefficient of elasticity, is demand over this range elastic or inelastic? How do you know? ANSWER […]
Date: September 10th, 2020
Consumer confidence is measured by two indices: the Consumer Sentiment Index and the Consumer Confidence Index. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
