Suppose an oligopolistic firm raises the price of its output. Demand for the firm’s output will be relatively price ________ if the other dominant firms in the market ________. A) elastic; do not raise price B) unit elastic; do not raise price C) inelastic; also raise price D) cannot be determined ANSWER A
Date: September 10th, 2020
Gross Domestic Product (GDP) is defined as the market value of: A) all goods and services sold during the year by domestic and foreign producers. B) all final consumer goods produced during the year by domestic and foreign suppliers. C) all intermediate goods produced during the year by domestic and foreign suppliers. D) all final […]
Date: September 10th, 2020
If a country’s central bank wants to stimulate spending in the economy, it should: A) increase the amount of assets banks should keep on reserve at all times. B) decrease taxes. C) lower interest rates. D) increase government spending. ANSWER C
Date: September 10th, 2020
Assume the production of a particular good is characterized by significant economies of scale. In addition, three different versions of the good can be produced, and large segments of the population prefer different versions of the good. In this case, the preferred market structure for this good would be: A) perfect competition. B) monopoly. C) […]
Date: September 10th, 2020
In which of the following cases would the price elasticity of demand be expected to increase? A) The number of close substitutes for the good increases. B) The time period under consideration decreases. C) The cost of the good relative to total income decreases. D) The supply of the good increases. ANSWER A
Date: September 10th, 2020
Assume the four-firm concentration ratio in industry X is 75 percent and that the firms in the industry produce a differentiated product. Industry X most likely would be characterized as: A) perfectly competitive. B) a monopoly. C) monopolistically competitive. D) an oligopoly. ANSWER D
Date: September 10th, 2020
In the equation GDP = C + I + G + F, in which F equals net export spending (i.e., total spending on exports minus total spending on imports), imports are subtracted from the other types of expenditures because: A) imports reduce national welfare. B) other countries do not import goods from the U.S. C) […]
Date: September 10th, 2020
When demand is inelastic and price decreases: A) the effect of the decrease in price on total revenue dominates the effect of the increase in quantity demanded on total revenue; overall total revenue declines. B) the effect of the increase in quantity demanded on total revenue dominates the effect of the decrease in price on […]
Date: September 10th, 2020
Which of the following best illustrates the mutual interdependence among firms in the airline industry? A) The considerable efforts made by the various competitors to coordinate fare increases. B) The unwillingness of individual firms to match increased amenities offered by other firms. C) The substantial profits airlines have earned over the past several years. D) […]
Date: September 10th, 2020
Assuming that C = $4,500, I = $1,000, G = $1,200, Exports = $450, Imports = $550, Depreciation = $600, and Indirect Business Taxes = $500 (all in billions of dollars), GDP equals: A) $5,500 billion. B) $6,000 billion. C) $6,400 billion. D) $6,600 billion. ANSWER D
Date: September 10th, 2020
