Consideration of the minimum efficient scale of operation would suggest that, to minimize production costs, the market should be served by a large number of small firms when the LRAC curve slopes downward over the relevant range of output. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assume wages paid by a firm to its workers decrease. What will be the reaction of consumers as the market moves to its new equilibrium? A) Quantity demanded will decrease. B) Quantity demanded will increase. C) The demand curve will shift to the left. D) There will be no reaction by consumers, since input prices […]
Date: September 10th, 2020
Assume an auto firm’s factories are capable of producing both large and small cars and are operating at full capacity. Assume the price of large cars increases due to a shift in consumers’ preferences toward large cars and away from smaller cars. What would reasonably be expected to happen to the equilibrium price and quantity […]
Date: September 10th, 2020
Net exports are: A) negatively related to domestic income, positively related to income in the rest of the world, and positively related to currency appreciation. B) negatively related to domestic income, positively related to income in the rest of the world, and positively related to currency depreciation. C) positively related to domestic income, positively related […]
Date: September 10th, 2020
Increase in the real interest rate will ________ the expenditure curve: A) decrease. B) increase. C) not change. D) none of the above. ANSWER A
Date: September 10th, 2020
The income elasticity of demand for health care is generally less than 1, indicating consumers consider these services to be luxuries. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Failure to account for the increased transportation costs that would result from building fewer and more centrally located production facilities could result in firm managers selecting a scale of operation that is larger than the optimum. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Assume the auto market is initially in equilibrium with imports from Japan taking up a significant share of the market. Now assume a quota on imports of Japanese cars is established. What will occur at the initial equilibrium price to signal market participants regarding the change that has taken place? A) A surplus is created […]
Date: September 10th, 2020
The text’s discussion of the airline industry, the soft drink industry, and the doughnut industry reveals a common theme when it comes to the types of competitive practices firms in each industry engage in. What is it and what advantage does it offer firms? ANSWER Firms in each of the industries listed above tend […]
Date: September 10th, 2020
Studies strongly suggest that advertising strategies are generally much more effective than pricing strategies as a means to increase market share. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
