The total amount of spending on nonresidential structures, equipment, software, residential structures, and business inventories in a given period of time is called: A) net exports. B) government consumption and investment. C) gross private domestic investment. D) personal consumption. ANSWER C
Date: September 10th, 2020
Assume firm X is one of the three largest firms in an oligopolistic industry. Firm X is currently considering a vertical merger with another firm that is the sole supplier of an input used by all of the firms that compete with firm X. If the merger goes through, firm X would be able to […]
Date: September 10th, 2020
Which of the following statements about the beer industry is correct? A) Over the last 30 years, technological change has resulted in substantial diseconomies of scale in the industry. B) In 2000, the minimum efficient scale in the industry was approximately 18 million barrels per year. C) As a result of an increase in the […]
Date: September 10th, 2020
The opportunity costs of the firm using its own funds are measured by the: A) market interest rate. B) inflation rate. C) price level. D) menu costs. ANSWER A
Date: September 10th, 2020
Taxes levied on a firm’s earnings ________ the effective cost of funds. A) lower B) raise C) have no effect D) none of the above ANSWER B
Date: September 10th, 2020
Which of the following is not cited as one of the factors that accounts for the large-scale production that exists in many sectors of the economy? A) Economies of scale. B) Advertising and image differentiation. C) The minimum efficient scale of operation in many industries is quite high relative to market demand. D) Risk spreading. […]
Date: September 10th, 2020
List and describe the sources of spending in the economy by focusing on the four major sectors of the economy. What will be an ideal response? ANSWER The four major sources of spending in the economy include consumption spending, which is spending by households on durable and non-durable goods and services; gross private domestic […]
Date: September 10th, 2020
Assume a consumer is currently purchasing a combination of goods, X and Y, that maximizes her utility given her budget constraint, i.e., MRSX,Y = PX/PY. Now assume that there is a decrease in the price of Y. In this case, to once again maximize her utility, the consumer will want to adjust her purchases of […]
Date: September 10th, 2020
The capacity utilization rate is the ratio of ________ to ________. A) production; capacity B) capacity; production C) capacity; potential GDP D) none of the above ANSWER A
Date: September 10th, 2020
Many analysts have argued that the federal government should stop spending money on programs such as agricultural price supports and should redirect that spending to such things as improvements in the nation’s roads and bridges. Construct an economic argument that supports this proposed change in policy. ANSWER Government spending on agricultural price supports amounts […]
Date: September 10th, 2020
