8.6   Costs in the Long Run 1) Long-run cost curves are U-shaped because A) of the law of demand. B) of the law of diminishing returns. C) of economies and diseconomies of scale. D) of the law of supply. 2) If, when a firm doubles all its inputs, its average cost of production decreases, then production displays A) diminishing returns. B) economies of scale. […]

  51) Real GDP is $13 trillion and aggregate planned expenditure is $14 trillion. As a result, unplanned inventory change is ________ and real GDP ________. A) positive; decreases B) positive; increases C) negative; increases D) negative; decreases E) negative; does not change 52) When aggregate planned expenditure exceeds real GDP, A) firms increase production and real GDP increases. B) firms decrease production and real […]

  7.2   Comparative Advantage in International Trade   1) ________ is the ability to produce more of a good or service than competitors when using the same amount of resources. A) Absolute advantage B) Comparative advantage C) Trade superiority D) Trade autarky     2) Trade that is within a country or between countries is based on the principle of A) absolute advantage. B) scarcity. […]

    21.  According to the table shown, what can be said about the cost of living in 2010? A. The typical consumer must spend 5 percent more in 2010 than they did in 2009 for the same goods. B. Every consumer will experience a 5 percent increase in their cost of living from 2009. C. Whatever consumers bought in 2010 cost 5 percent more than what they […]

  71. (p. 479) ‘Asahi’ is the largest newspaper of ____.  A. Germany B. Spain C. Japan D. Mexico E. China 72. (p. 481) The president of the Mexican National Advertisers Association charged that newspaper circulation figures are grossly exaggerated. He suggested that as a rule, agencies should:  A. divide the circulation data in two and take the result with a grain of salt. B. avoid using newspaper as a medium of advertisement in Mexico. C. use newspaper circulation […]

    81.Wangley Company has an inventory turnover of 8. Which statement is true? A.Wangley has about 2 months of sales in its inventory. B.Wangley takes about 46 days from the time an item is sold until Wangley collects the cash. C.Wangley takes about one month from the time an item is purchased until the cash is collected from the sale of the inventory. D.Wangley […]

    51) The sum of the balances of the three accounts of the balance of payments (the current account, the capital and financial account, and the official settlements account) is A) negative if there is a balance of trade deficit. B) equal to zero. C) positive if there is a balance of trade surplus. D) negative if there is a balance of trade surplus […]

82               Assets and liabilities appear on which statement? A)Schedule of cost of goods sold B)Statement of cash flows C)Income statement D)Balance Sheet   83.              On September 1, 2010, Olpe Corporation paid $2,400 for a 1-year insurance policy.  What amount of expense should Olpe report for the year ended December 31, 2010? A)$800 B)$1,200 C)$2,400 D)$0   84.  On November 1, 2010 Clyde Corp paid […]

  11) You have observed that the forecasts of an investment advisor consistently outperform the other reported forecasts.  The efficient markets hypothesis says that future forecasts by this advisor A) may or may not be better than the other forecasts.  Past performance is no guarantee of the future. B) will always be the best of the group. C) will definitely be worse in the future.  […]

    41) Although some economists believe network externalities are important barriers to entry, other economists disagree because A) they believe that the dominant positions of firms that are supposedly due to network externalities are to a greater extent the result of the efficiency of firms in offering products that satisfy consumer preferences. B) they believe that most examples of network externalities are really barriers […]