Consider two goods, X and Y, where X is measured on the horizontal axis and Y is measured on the vertical axis. All else constant, a decrease in the price of X will cause the consumer’s budget constraint to: A) rotate in along the X axis B) rotate out along the X axis. C) shift […]
Date: September 10th, 2020
Firms have tried a number of different strategies to reduce the negative effects of competition on their ability to earn economic profits. Which of the following strategies is most desirable from the viewpoint of economic efficiency and consumer well being? A) Collusion. B) Price leadership. C) Formation of cartels. D) Investment in research and development. […]
Date: September 10th, 2020
The U.S. Treasury is responsible for controlling the money supply and interest rates in the economy. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
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
Date: September 10th, 2020
You are given the following consumption function C = 50 + .80YD. What is the amount of autonomous consumption expenditures? A) 75 B) 100 C) 5 D) 50 ANSWER D
Date: September 10th, 2020
Which of the following statements regarding OPEC is false? A) Because it sells a homogeneous product, since its formation in 1960 OPEC has been the clear leader when it comes to determining the price of crude oil. B) OPEC’s membership includes countries from the Middle East, Africa, and South America. C) Over time, OPEC’s ability […]
Date: September 10th, 2020
In which of the following situations would consideration of the minimum efficient scale of operation suggest that the market should be served by a single firm to minimize production costs? A) When the LRAC curve slopes downward over the relevant range of output. B) When the LRAC curve hits its minimum point at a relatively […]
Date: September 10th, 2020
Which of the following is not a basic assumption underlying the theory of consumer behavior? A) Consumers prefer more to less. B) Consumer preferences depend on the amounts of goods they consume as well as the amounts being consumed by other consumers. C) Goods are continuously divisible, that is, consumers can always purchase one more […]
Date: September 10th, 2020
Monetary policy consists of changes in taxes, which in turn affects the amount of money households can spend on consumption. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Assuming that C = $6,200, I = $1,300, G = $1,100, Exports = $630, Imports = $750, and Depreciation = $600 (all in billions of dollars), GDP equals $7,880. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
