20 Jul EXPORTING COUNTRIES
) An economist who is studying the relationship betweenthe money supply, interest rates, and the rate of inflation isengaged in
A. microeconomic research
B. macroeconomic research
C. theoretical research, because there is no data on thesevariables
D. empirical research, because there is no economic theory relatedto these variables
2) A basic difference between microeconomics and macroeconomics isthat microeconomics
A. focuses on the choices of individual consumers, whilemacroeconomics considers the behavior of large businesses
B. focuses on financial reporting by individuals, whilemacroeconomics focuses on financial reporting by large firms
C. examines the choices made by individual participants in aneconomy, while macroeconomics considers the economy’s overallperformance
D. focuses on national markets, while macroeconomics concentrateson international markets
3) The distinction between supply and the quantity supplied is bestmade by saying that
A. the quantity supplied is represented graphically by a curve andsupply as a point on that curve associated with a particularprice
B. supply is represented graphically by a curve and the quantitysupplied as a point on that curve associated with a particularprice
C. the quantity supplied is in direct relation with prices, whereassupply is in inverse relation
D. the quantity supplied is in inverse relation with prices,whereas supply is in direct relation
4) After several years of slow economic growth, world demand forpetroleum began to rise rapidly in the 1990s. Much of the increasein demand was met by additional supplies from sources outside theOrganization of Petroleum Exporting Countries (OPEC). OPEC, duringthis time, was unable to restrain output among members in itseffort to lift oil prices. What best describes these events?
A. The rise in demand shifted the demand for oil to the right. OPECactions shifted the demand for oil back to the left.
B. The rise in demand shifted the demand for oil to the right. Asprice rose, the supply of oil also rose.
C. The rise in demand shifted the demand for oil to the right. Asprice rose, the quantity of oil supplied rose.
D. The rise in demand reflects a movement down along the demandcurve as supply shifted to the right when suppliers produced moreoil.
5) Price elasticity of demand is the:
A. change in the quantity of a good demanded divided by the changein the price of that good
B. change in the price of a good divided by the change in thequantity of that good demanded
C. percentage change in price of that good divided by thepercentage change in the quantity of that good demanded
D. percentage change in quantity demanded of a good divided by thepercentage change in the price of that good
6) If average movie ticket prices rise by about 5 percent andattendance falls by about 2 percent, other things being equal, theelasticity of demand for movie tickets is about:
A. 0.0
B. 0.4
C. 0.6
D. 2.5
7) When labor is the variable input, the average product equalsthe
A. marginal product divided by the number of workers
B. marginal product multiplied by the number of workers
C. number of workers divided by the quantity of output
D. quantity of output divided by the number of workers
8) The increase in output obtained by hiring an additional workeris known as
A. the average product
B. the marginal product
C. the total product
D. value added
9) Which of the following is the best example of a long-rundecision?
A. An automobile manufacturing company is considering whether ornot to invest in robotic equipment to develop a more cost-effectiveproduction technique.
B. An automobile manufacturing company is considering whether ornot to expand its existing workforce, while keeping the samefactory and equipment.
C. A business consulting firm is considering whether or not to hireinterns to assist with research and data processing.
D. A business consulting firm is considering whether or not to addnew computers while maintaining the same number of employees.
10) Other things being equal, when average productivity falls,
A. average fixed cost must rise
B. marginal cost must rise
C. average total cost must rise
D. average variable cost must rise
According to economist Colin Camerer of the California Institute ofTechnology, many New York taxi drivers decide when to finish workby setting an income goal for themselves. If this is true, then onbusy days when the effective hourly wage is higher, taxi driverswill
A. work the same number of hours as they will on slower days
B. work fewer hours than they will on slower days
C. work more hours than they will on slower days
D. not work any hours
12) A firm’s demand for labor is derived from the
A. opportunity costs associated with labor and leisure
B. desires and needs of the entrepreneur
C. cost of labor inputs
D. demand for its output
13) Owen runs a delivery business and currently employs threedrivers. He owns three vans that employees use to make deliveries,but he is considering hiring a fourth driver. If he hires a fourthdriver, he can schedule breaks and lunch hours so all three vansare in constant use, allowing him to increase deliveries per dayfrom 60 to 75. This will cost an additional $75 per day to hire thefourth driver. The marginal cost per delivery of increasing outputbeyond 60 deliveries per day
A. is $0 because Owen does not have to purchase another van
B. is $5
C. is $75
D. cannot be calculated without knowing Owen’s total fixedcosts
14) Expected economic profit per unit is equal to
A. expected price
B. expected average total cost
C. the difference between expected average price and expectedaverage total cost
D. the difference between expected total revenue and expected totalcost
15) If a firm in a perfectly competitive market experiences atechnological breakthrough,
A. other firms would find out about it eventually
B. other firms would find out about it immediately
C. other firms would not find out about it
D. some firms would find out about it, but others would not
16) A significant difference between monopoly and perfectcompetition is that
A. free entry and exit is possible in a monopolized industry, butimpossible in a competitive industry
B. competitive firms control market supply, but monopolies donot
C. the monopolist’s demand curve is the industry demand curve,while the competitive firm’s demand curve is perfectly elastic
D. profits are driven to zero in a monopolized industry, but may bepositive in a competitive industry.
17) A monopoly firm is different from a c
ompetitive firm in that
A. there are many substitutes for a monopolist’s product whilethere are no substitutes for a competitive firm’s product
B. a monopolist’s demand curve is perfectly inelastic while acompetitive firm’s demand curve is perfectly elastic
C. a monopolist can influence market price while a competitive firmcannot
D. a competitive firm has a U-shaped average cost curve while amonopolist does not
18) The difference between a perfectly competitive firm and amonopolistically competitive firm is that a monopolisticallycompetitive firm faces a
A. horizontal demand curve and price equals marginal cost inequilibrium
B. horizontal demand curve and price exceeds marginal cost inequilibrium
C. downward-sloping demand curve and price equals marginal cost inequilibrium
D. downward-sloping demand curve and price exceeds marginal cost inequilibrium
19) As long as marginal cost is below marginal revenue, a perfectlycompetitive firm should
A. increase production
B. hold production constant
C. decrease production
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