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
Assume the LRAC curve for a particular industry hits its minimum point at a relatively low level of output and then increases, and the demand for industry output is quite large. In this case, consideration of the minimum efficient scale of operation suggest that the market should be served by: A) a large number of […]
Date: September 10th, 2020
Which of the following pairs of goods would be expected to have a positive cross-price elasticity of demand? A) coffee and tea. B) gasoline and large SUVs. C) tennis racquets and tennis balls. D) hot dogs and hot dog buns. ANSWER A
Date: September 10th, 2020
Comparing the situation of a nominal interest rate of 10 percent and an inflation rate of 9 percent with a nominal interest rate of 6 percent and inflation rate of 2 percent, consumers would borrow more in which situation? A) Nominal interest rate of 10 percent since real interest rate is 1 percent. B) Nominal […]
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
Gross Domestic Product (GDP) is defined as the market value of all goods and services purchased in the economy during a particular year. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Household consumption primarily depends on: A) disposable income. B) the interest rate. C) marginal propensity to import. D) credit card debt. ANSWER A
Date: September 10th, 2020
Which of the following is most likely to create diseconomies of scale? A) concentration of production in a small number of very large plants. B) the use of automation devices. C) technological advance. D) division of labor. ANSWER A
Date: September 10th, 2020
Assume the income elasticity of a good has been calculated to be +0.83. Based on this information, we can infer that the good is: A) a normal good and a luxury. B) an inferior good and a necessity. C) a normal good and a necessity. D) an inferior good and a luxury. ANSWER C
Date: September 10th, 2020
