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
The marginal propensity to consume is defined as: A) ΔC/ΔYd. B) ΔS/ΔYd. C) ΔYd/ΔC. D) ΔYd/ΔS. ANSWER A
Date: September 10th, 2020
All else constant, an improvement in technology at each scale of operation would cause: A) a movement up an industry’s LRAC curve. B) a movement down an industry’s LRAC curve. C) an upward shift of an industry’s LRAC curve. D) a downward shift of an industry’s LRAC curve. ANSWER D
Date: September 10th, 2020
All else constant, an increase in the amount of borrowing by the federal government would reduce the amount of money available for businesses to borrow to finance investment spending. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Which of following is not a condition that must be met for a cartel to maximize its joint profits? A) Total output by the cartel must be allocated among the member firms such that the individual firm’s marginal costs are equal. B) The cartel must produce the level of output at which its marginal revenues […]
Date: September 10th, 2020
For a normal good, the income elasticity of demand is: A) positive or negative depending on the share of income accounted for by the good. B) always equal to 1. C) positive if income increases and negative when income declines. D) always positive. ANSWER D
Date: September 10th, 2020
Suppose a consumer’s income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer’s income elasticity of demand for CDs? A) 0.5 B) 1.0 C) 1.5 D) 2.0 ANSWER B
Date: September 10th, 2020
