In order to ensure consistency across goods and services, elasticities should always be calculated based on absolute changes in quantity demanded. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
“Demand” is best defined as the relationship between: A) the price of a good and the quantity consumers are willing and able to buy at each price level. B) the current price of a good and the quantity demanded at that price. C) the quantity supplied and the price people are willing to pay for […]
Date: September 10th, 2020
The extent to which investment spending changes with changes to income is called the: A) marginal propensity to consume. B) marginal propensity to save. C) marginal propensity to import. D) marginal propensity to invest. ANSWER D
Date: September 10th, 2020
Isoquants are convex to the origin due to: A) the law of diminishing marginal utility. B) the assumption of the diminishing marginal productivity of each input. C) the fact that as less capital is used, its marginal productivity falls. D) the fact that as more labor is used, its marginal productivity rises. ANSWER B
Date: September 10th, 2020
The marginal rate of technical substitution (MRTS) along an isoquant: A) is equal to the price ratio at all points along an isoquant. B) is equal to the ratio of the marginal utilities of the two goods. C) is equal to the ratio of the marginal products of the two inputs. D) remains constant as […]
Date: September 10th, 2020
Much of the research on the minimum efficient scale suggests that for many firms the LRAC curve is: A) downward sloping over the relevant range of output. B) upward sloping over the relevant range of output. C) U-shaped. D) flat over a relatively large range of output levels. ANSWER D
Date: September 10th, 2020
Because each firm has a relatively large share of the market, the actions of one firm do not have much effect on the decision making of other firms in an oligopolistic market. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Firms in an oligopoly market will have a more difficult time maintaining price coordination when: A) demand for the firms’ products remains stable. B) the firms’ cost structures are similar. C) the firms’ products are highly differentiated. D) each firm controls the same share of the market. ANSWER C
Date: September 10th, 2020
Which of the following statements is true when the consumer is in utility-maximizing equilibrium? A) The number of units of each good purchased is equal. B) The prices of the goods in question must be equal. C) The total benefits the consumer receives from every good consumed must be the same for all goods. D) […]
Date: September 10th, 2020
Assume an individual is considering opening a new car dealership in a medium-sized metropolitan area (population = 200,000 ). Provide a list of economic variables you would recommend that the person consider in making his decision whether to open the business, and explain your rationale for including each variable. ANSWER At a minimum, it […]
Date: September 10th, 2020
