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
Date: September 10th, 2020
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
Date: September 10th, 2020
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
Date: September 10th, 2020
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
Date: September 10th, 2020
“Learning by doing” has the effect of causing: A) a movement down the LRAC curve. B) a movement up the LRAC curve. C) the LRAC curve to shift up. D) the LRAC curve to shift down. ANSWER D
Date: September 10th, 2020
Hot dogs and hot dog buns would be expected to have: A) positive income elasticities of demand with respect to each other. B) negative income elasticities of demand with respect to each other. C) a positive cross-price elasticity of demand. D) a negative cross-price elasticity of demand. ANSWER D
Date: September 10th, 2020
Assume the firms in an oligopoly produce a differentiated product and are initially colluding. If each firm begins to cheat (to increase sales) by underpricing the other firms, as the amount of cheating increases, the resulting industry price and output will approach the outcome for: A) perfect competition. B) monopolistic competition. C) noncooperative monopoly. D) […]
Date: September 10th, 2020
Which of the following would cause a firm’s LRAC curve to shift up? A) An increase in the amount of “learning by doing.” B) An increase in the price of labor, all else constant. C) An increase in the amount of output produced by the firm. D) A decrease in the amount of capital employed […]
Date: September 10th, 2020
The nominal interest rate is 7 percent and the expected inflation rate is 4 percent. The real interest rate is: A) 10 percent. B) -2 percent. C) 3 percent. D) 4 percent. ANSWER C
Date: September 10th, 2020
Because it has a direct effect on the hiring decisions of firms, a change in business confidence has a much larger impact on the level of economic activity than does a change in consumer confidence. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
