51) Competition in the political marketplace can result in the efficient provision of a public good if A) there is only one political party. B) voters’ preferences are unknown. C) benefits are small. D) voters are well informed and evaluate the alternatives. E) politicians need to be elected by majority votes.   52) Which of the following can bring about an efficient level of […]

    41) Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling wine in Vinyardia? A) Consumer surplus will increase. B) Producer surplus will increase. C) Deadweight loss will increase. D) Market efficiency will increase. 42) Which of the following is not a result of […]

  15.4   Chapter Figures   The figure above shows a firm’s total revenue and total cost curves.   1) When the firm maximizes its profit, it produces ________ cans per day. A) 0 B) more than 0 and less than 5 C) 5 or more but less than 10 D) 10 E) more than 10 2) To maximize its profit, the firm in the figure […]

  61) When managers at Matsushita realized that cost advantages in TV production were often fleeting, they added quality and reliability advantages, thus establishing: A) loose bricks. B) a “double diamond.” C) attribute diversity. D) layers of advantage. E) buyer power. 62) An approach to competitive advantage that exploits weaknesses in competitors’ narrow-focus strategies is called a ________ strategy. A) loose bricks B) collaboration C) […]

  Multiple Choice – Section 05:  IsGDPaGoodMeasureofEconomicWell-Being? 1.GDPperpersontellsustheincomeandexpenditureofthe a.richestpersonintheeconomy. b.poorestpersonintheeconomy. c.averagepersonintheeconomy. d.entireeconomy. 2.GDPisusedasthebasicmeasureofasociety’seconomicwell-being.Abettermeasureoftheeconomicwell-beingofindividuals insociety is a.savingperperson. b.GDPperperson. c.governmentexpendituresperperson. d.investmentperbusinessfirm. 3.Whichofthefollowingisatruestatement? a.Internationaldataleavefewdoubtsthatanation’sGDPperpersonisassociatedwithitscitizens’standardofliving. b.Richandpoorcountriesoftenhavevastlydifferentstandardsofliving,butsimilarlevelsofrealGDPperperson. c.ThevalueofleisuretimeisincludedinthecalculationofGDPperperson. d.InternationaldataindicatethatmeasuresonthedistributionofincomearecloselyassociatedwithGDPperperson. 4.Manythingsthatsocietyvalues,suchasgoodhealth,high-qualityeducation,enjoyablerecreationopportunities,anddesirablemoralattributesofthepopulation,arenotmeasuredaspartofGDP.Itfollowsthat a.GDPisnotausefulmeasureofsociety’swelfare. b.GDPisstillausefulmeasureofsociety’swelfarebecauseprovidingtheseotherattributesistheresponsibilityofgovernment. c.GDPisstillausefulmeasureofsociety’swelfarebecauseitmeasuresanation’sabilitytopurchasetheinputsthatcanbeusedtohelpproducethethingsthatcontributetowelfare. d.GDPisstillthebestmeasureofsociety’swelfarebecausetheseothervaluescannotactuallybemeasured. 5.GDPdoesnotreflect a.thevalueofleisure. b.thevalueofgoodsandservicesproducedathome. c.thequalityoftheenvironment. d.Alloftheabovearecorrect. 6.WhichofthefollowingstatementsregardingGDPiscorrect? a.GDPincludesfactoryproduction,butnotanyharmthatmaybeinflictedontheenvironment. b.GDPaccountsforallactivitiestakingplaceoutsidemarkets. c.GDPprovidesdetailedinformationaboutthedistributionofincome. d.GDPisagoodmeasureofeconomicwell-beingforallpurposes. 7.GDPisnotaperfectmeasureofwell-being;forexample, a.GDPincorporatesalargenumberofnon-marketgoodsandservicesthatareoflittlevaluetosociety. b.GDPplacestoomuchemphasisonthevalueofleisure. c.GDPfailstoaccountforthequalityoftheenvironment. d.Alloftheabovearecorrect. 8.GDPisnotaperfectmeasureofwell-being;forexample, a.GDPexcludesthevalueofvolunteerwork. b.GDPdoesnotaddressthedistributionofincome. c.GDPdoesnotaddressenvironmentalquality. d.Alloftheabovearecorrect. 9.Supposethegovernmentpassesalaweliminatingholidaysand,asaresult,theproductionofgoodsandservicesincreasesbecausepeopleworkmoredaysperyear(andthusenjoylessleisureperyear).Basedonthisscenario,whichofthefollowingstatementsiscorrect? a.GDPwoulddefinitelyincrease,despitethefactthatGDPincludesleisure. b.GDPwoulddefinitelyincreasebecauseGDPexcludesleisure. c.GDPcouldeitherincreaseordecreasebecauseGDPincludesleisure. d.GDPcouldeitherincreaseordecreasebecauseGDPexcludesleisure. 10.Supposethegovernmenteliminatesallenvironmentalregulationsand,asaresult,theproductionofgoodsandservicesincreases,butthereisconsiderablymorepollution.Basedonthisscenario,whichofthefollowingstatementsiscorrect? a.GDPwoulddefinitelyincrease,despitethefactthatGDPincludesenvironmentalquality. b.GDPwoulddefinitelydecreasebecauseGDPincludesenvironmentalquality. c.GDPwoulddefinitelyincreasebecauseGDPexcludesenvironmentalquality. d.GDPcouldeitherincreaseordecreasebecauseGDPexcludesenvironmentalquality.    

  7.5   The Price Elasticity of Demand and Its Measurement   1) Price elasticity of demand measures A) how responsive suppliers are to price changes. B) how responsive sales are to changes in the price of a related good. C) how responsive quantity demanded is to a change in price. D) how responsive sales are to a change in buyers’ incomes.   2) Suppose the […]

    Table 4-11   Demand Supply P = 80 – QD P = 50 + 1/2 QS QD = 80 – P QS = 2P – 100   9) Refer to Table 4-11.  The equations above describe the demand and supply for Chef Ernie’s Sushi-on-a-Stick. What are the equilibrium price and quantity (in thousands) for Chef Ernie’s sushi? A) $80 and 80 thousand B) […]

    33.              Bonita Industries purchased $5,000 of merchandise on account for resale purposes. Bonita plans to sell the merchandise for $7,500. If Bonita returned $1,000 of merchandise for credit, the journal entry to record the return would include a: A)debit to Accounts Payable for $1,000 B)credit to Inventory for $1,500 C)debit to Sales for $1,500 D)credit to Cash for $1,000   34.              In a […]

  22) An illegal market in which the price exceeds a legally imposed price ceiling is called a A) shortage market. B) surplus market. C) black market. D) fair market. E) subsidized market.   23) A black market A) is legal only when it is associated with government price ceilings. B) is defined as the deadweight loss associated with taxes. C) benefits no one. D) […]

  Use the following case study to answer questions 40-43. Mrs. Brown is 55 years old and 5 ft. 3 in. tall, with a medium frame. She reports having lost 20 pounds in the last 6 months and now weighs 130 pounds. She eats 2 meals a day and is complaining that food has lost its taste, and when she eats, she feels something sticking […]