Assume a group of firms has formed a cartel and the cartel is in engaged in joint profit maximization. As such, each firm, acting in its own interests, has an incentive to expand production up to the point at which: A) its marginal cost equals the marginal revenue earned by the cartel. B) its marginal […]
Date: September 10th, 2020
To develop a competitive advantage and increase their firm’s profitability, managers need to understand what affects their revenues, costs, and their ability to set prices. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
“Gross Investment spending” refers exclusively to purchases of plant and equipment by businesses and net changes in business inventories. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
To maximize joint profits, a cartel must determine the level of output at which: A) joint marginal revenue equals the marginal cost of the largest member of the cartel. B) marginal revenue equals joint marginal cost. C) the horizontally sum of the members marginal cost curves is at a minimum. D) joint marginal revenue equals […]
Date: September 10th, 2020
When a demand curve is perfectly elastic: A) marginal revenue = average revenue = price. B) marginal revenue > average revenue = price. C) marginal revenue < average revenue = price. D) marginal revenue > average revenue > price. ANSWER A
Date: September 10th, 2020
Which of the following statements is correct for the case of a downward-sloping demand curve (beyond the first unit of output)? A) P = AR = MR B) P = AR > MR C) P > AR > MR D) P = AR < MR ANSWER B
Date: September 10th, 2020
For the U.S. economy, the largest expenditure category is: A) government expenditures. B) net export expenditures. C) personal consumption expenditures. D) investment expenditures. ANSWER C
Date: September 10th, 2020
Measuring expenditures and income with the price level allowed to vary, so that changes in these values represent changes in either the actual amount of goods, services, and income or changes in the price level or a combination of both factors is denoted in ________ terms. A) nominal B) real C) constant dollar D) all […]
Date: September 10th, 2020
If an industry is characterized by substantial diseconomies of scale, as a particular firm in the industry expands its production capacity we will observe: A) a decrease in marginal costs. B) an increase in the marginal product of labor. C) a decrease in the total fixed costs of production. D) an increase in the average […]
Date: September 10th, 2020
According to the circular flow model, an increase in spending by businesses on productive resources would cause the income and spending of consumers to increase. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
