Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will A) make entry of other firms more likely. B) make entry of other firms less likely. C) serve as higher barrier to entry. D) induce the incumbent firm to exit the industry. ANSWER A
Date: September 9th, 2020
Which of the following is NOT an output of the production function? A) a haircut B) a share of Acme Corporation stock C) a case of soda pop D) an extra-large pepperoni pizza ANSWER B
Date: September 9th, 2020
A fifty cent tax imposed on a pack of cigarettes is _____. a. a unit tax b. an ad valorem tax c. a retail sales tax d. relatively cheap ANSWER a
Date: September 9th, 2020
Which of the following is an input to the production process? A) a janitor’s time B) a cement mixer C) Both A and B D) None of the above. ANSWER C
Date: September 9th, 2020
One of the primary reasons tax withholding was instituted was _____. a. help speed up payments to the government b. decrease the government’s record-keeping burden c. to improve the ability to audit individuals d. so that top marginal tax rates could be tripled ANSWER a
Date: September 9th, 2020
A person is betting a coin will come up heads or tails. The coin always lands on one of these two outcomes. This person can bet to A) eliminate only the systematic risk. B) eliminate only the random risk. C) eliminate all risk. D) All of the above. ANSWER C
Date: September 9th, 2020
The short run is A) usually 3 – 6 months. B) dependent on the characteristics of the industry. C) when a firm has to decide whether or not to exit. D) identical to the long run for most firms. ANSWER B
Date: September 9th, 2020
Which of the following is an output of production? A) a haircut B) a U.S. savings bond C) a share of Acme Corporation stock D) None of the above. ANSWER A
Date: September 9th, 2020
If two events are perfectly positively correlated, then A) diversification is not necessary since there is no risk. B) diversification eliminates all risk. C) diversification does not reduce risk at all. D) diversification only cuts the risk in half. ANSWER C
Date: September 9th, 2020
If there are negative externalities that spill across governmental borders, this provides a justification for _____. a. private action b. larger governments c. smaller governments d. intergovernmental competition ANSWER b
Date: September 9th, 2020
