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
The list of the major factors that create economies of scale includes all of the following except: A) specialization and division of labor. B) quantity discounts. C) an increase in demand for the firm’s output. D) the use of automation devices. ANSWER C
Date: September 10th, 2020
All else constant, an increase in the amount of government spending on roads and bridges would cause GDP in the domestic economy to increase. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Consumer income can be used for three things: purchases of goods and services, paying taxes and saving. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
A firm could gain from cheating on a cartel agreement by doing all of the following except: A) raising its price above the agreed level. B) lowering its price below the agreed level. C) selling more than its agreed quota. D) increasing production. ANSWER A
Date: September 10th, 2020
Generally speaking, the inclusion of transportation costs in the total costs of production has the effect of causing the LRAC curve to: A) shift down. B) flatten out. C) shift up. D) become steeper over the range on economies of scale. ANSWER C
Date: September 10th, 2020
Which of the following statements regarding cartels is not correct? A) Cartels are sometimes difficult to maintain because a member can cheat by raising its price above the agreed price. B) Cartels restrict industry output in order to raise price. C) Cartels are inherently stable, because oligopolistic firms rarely change price. D) are easier to […]
Date: September 10th, 2020
