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
As we move down a particular indifference curve, if the “marginal rate of substitution” between the two goods does not change we can conclude that the two goods are: A) perfect substitutes. B) perfect complements. C) totally unrelated. D) both inferior goods. ANSWER A
The use of surveys of experts to estimate long-run production costs may be undermined by the fact that: A) it is a time-consuming process. B) it is dependent on the judgments of individuals closely connected with the industry. C) reporting biases can occur. D) all of the above. ANSWER D
All else constant, if the central bank wants to slow the pace at which the economy is expanding, it should increase interest rates. Indicate whether the statement is true or false ANSWER TRUE
It has been observed that whenever one imported beer distributor raises its price, other imported beer distributors quickly raise their price as well. Such behavior is characteristic of: A) the barometric-firm model of price leadership. B) explicit collusion. C) price leadership. D) the kinked-demand curve model of oligopoly. ANSWER C
