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 […]
Diseconomies of scale are illustrated graphically by an upward shift of the firm’s long-run average cost curve. Indicate whether the statement is true or false ANSWER FALSE
Increase in business taxes will ________ the expenditure curve: A) decrease. B) increase. C) not change. D) none of the above. ANSWER A
As a currency depreciates: A) exports increase and imports decrease. B) exports decrease and imports increase. C) exports increase and imports increase. D) exports decrease and imports decrease. ANSWER A
Price coordination among firms will be more difficult when there are substantial differences among the cost structures of the competing firms and the technologies they employ. Indicate whether the statement is true or false ANSWER TRUE
One of the primary sources of diseconomies of scale is the inefficiencies associated with managing large scale operations. Indicate whether the statement is true or false ANSWER TRUE
A key factor in producing high economic growth is A) eliminating foreign trade. B) well-functioning financial markets. C) high interest rates. D) stock market volatility. ANSWER B
The results of studies of the tobacco industry suggests that college and secondary school students who smoke are much more likely to respond to a change in price than adults who smoke. Indicate whether the statement is true or false ANSWER TRUE
As a currency appreciates: A) exports increase and imports decrease. B) exports decrease and imports increase. C) exports increase and imports increase. D) exports decrease and imports decrease. ANSWER B
Assume there is an improvement in the technology used to produce Blu-ray disc players. What could be expected to happen to the equilibrium price and quantity in the market for Blu-ray disc players? A) Equilibrium price would increase and equilibrium quantity would decrease. B) Equilibrium price and quantity would both decrease. C) Equilibrium price would […]
