Graphically, all else constant, a decrease in the price of labor would be illustrated by: A) a parallel shift of the isocost line in toward the origin. B) rotating the isocost line away from the origin along the labor axis. C) a parallel shift of the isocost line away from the origin. D) rotating the […]
Date: September 10th, 2020
Assuming demand is inelastic, if a firm wants to increase its total revenue, it should raise price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The change in import spending due to a change in domestic real income is called: A) marginal propensity to save. B) marginal propensity to consume. C) marginal propensity to import. D) none of the above. ANSWER C
Date: September 10th, 2020
All else constant, an increase in the price of labor would cause the total amount of output that can be produced with a fixed amount of spending to ________. This would result in a movement to a ________ isoquant. A) increase; lower B) increase; higher C) decrease; lower D) decrease; higher ANSWER C
Date: September 10th, 2020
The kinked demand curve model is based on the assumption that firms’ pricing decisions are independent of one another because demand is determined by non-market forces. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assume the demand function for good X can be written as Qd = 80 – 3Px + 2Py + 10I, where Px = the price of X, Py = the price of good Y, and I = Consumer income. According to this equation: A) a rise in the price of Y would cause the demand […]
Date: September 10th, 2020
An increase in the number of buyers in the market for LED TVs would cause the market demand curve for LED TVs to: A) shift right. B) shift left. C) stay the same because market demand doesn’t depend on the number of buyers. D) shift left or right depending on whether the new buyers purchase […]
Date: September 10th, 2020
For the simple case of a production function with two inputs in which the inputs are perfect complements, each isoquant is represented by: A) a vertical line. B) a horizontal line C) a downward sloping straight line. D) a line that forms a right angle. ANSWER D
Date: September 10th, 2020
One could argue that price competition among oligopolistic firms is highly likely to cause the revenues of individual firms to decline, while competition on the basis of product differentiation could cause demand, and total revenues, of individual firms to increase. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Many people consider hot dogs to be an inferior good. For such people, all else held constant, a decrease in income would cause their demand for hot dogs to: A) increase. B) stay the same. C) decrease. D) cannot be determined with the information given. ANSWER A
Date: September 10th, 2020
