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 […]
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
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
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
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
All else constant, a decrease in the level of economic activity in foreign countries could be expected to have an adverse effect on the domestic economy. Indicate whether the statement is true or false ANSWER TRUE
Greater consumer confidence, wealth, available consumer credit, and disposable income ________ personal consumption expenditures. A) increase B) decrease C) have no effect on D) none of the above ANSWER A
