Assume the price of product A increases from $1 to $1.50, while the price of competing product B increases from $1.50 to $2.00. Based on the information, what we can say about the absolute and relative price differences between the two products and the relative attractiveness of the two products to consumers. ANSWER Clearly, […]
Referring to the previous question, as a result of the consumer’s adjustment to the change in the price of Y, assuming Y is a normal good and X and Y are complements, it is reasonable to expect that the amount of Y consumed will ________, and the amount of X consumed will ________: A) increase; […]
A lower real interest rate, amount of consumer debt, and personal taxes ________ personal consumption expenditures. A) increase B) decrease C) have no effect on D) none of the above ANSWER A
Regarding the production of health care, more recent studies suggest that: A) economies of scale exist up to a hospital size of approximately 500 beds. B) hospitals of many different sizes can compete effectively with each other on the basis of cost. C) the LRAC curve exhibits significant diseconomies of scale beginning with a hospital […]
Price leadership: A) has rarely occurred in U.S. history. B) is always illegal in the United States. C) is usually the result of a dominant firm in the industry. D) usually results in the smaller firms in the industry incurring economic losses. ANSWER C
Consider an indifference curve drawn for movies and pizzas. Which of the following statements about this indifference curve is false? A) As an individual consumes more pizzas, the amount of movies the consumer is willing to give up for an additional pizza increases. B) If the individual consumes more pizzas, the amount of movies consumed […]
An index, based on a telephone survey of 500 households conducted by the University of Michigan, that measures households’ attitudes regarding expected business conditions, personal financial conditions, an consumer confidence about purchasing furniture and major household appliances is called the: A) Consumer Sentiment Index. B) Consumer Confidence Index. C) Consumer Satisfaction Index. D) Consumer Consumption […]
The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the: A) engineering estimation technique. B) statistical cost estimation technique. C) survivor approach. D) back-of-the-envelope approach. ANSWER C
One way for the federal government to increase the amount of spending in the domestic economy would be to decrease personal and business taxes. Indicate whether the statement is true or false ANSWER TRUE
Which of the following is the best example of tacit collusion? A) The formation of a cartel. B) Price leadership. C) Predatory pricing. D) Noncooperative pricing behavior. ANSWER B
