72.If you are a company that has a very large amount of cash in its treasury and the IRS is concerned that you have been hoarding cash to prevent your shareholders from having to pay dividend taxes, which of the following would be your most likely method of getting cash into your shareholders hands? a.repurchase shares b.pay a cash dividend c.repurchase debt d.none […]

  71.Profit-maximizingfirmsinacompetitivemarketproduceanoutputlevelwhere a.marginalcostequalsmarginalrevenue. b.marginalcostequalsaveragetotalcost. c.marginalrevenueisincreasing. d.priceislessthanmarginalrevenue. 72.Aprofit-maximizingfirminacompetitivemarketwillalwaysmakemarginaladjustmentstoproductionaslongas a.averagerevenueisgreaterthanaveragetotalcost. b.averagerevenueisequaltomarginalcost. c.marginalcostisgreaterthanaveragetotalcost. d.priceisaboveorbelowmarginalcost. 73.Whenpriceisgreaterthanmarginalcostforafirminacompetitivemarket, a.marginalcostmustbefalling. b.thefirmmustbeminimizingitslosses. c.thereareopportunitiestoincreaseprofitbyincreasingproduction. d.thefirmshoulddecreaseoutputtomaximizeprofit. 74.Profit-maximizingfirmsenteracompetitivemarketwhenexistingfirmsinthatmarkethave a.totalrevenuesthatexceedfixedcosts. b.totalrevenuesthatexceedtotalvariablecosts. c.averagetotalcoststhatexceedaveragerevenue. d.averagetotalcostslessthanmarketprice. 75.Ifaprofit-maximizingfirminacompetitivemarketdiscoversthat,atitscurrentlevelofproduction,priceisgreaterthanmarginalcost,itshould a.shutdown. b.reduceitsoutputbutcontinueoperating. c.continuetoproduceatthecurrentlevels. d.increaseitsoutput. 76.Foranygivenprice,afirminacompetitivemarketwillmaximizeprofitbyselectingthelevelofoutputatwhichpriceintersectsthe a.averagetotalcostcurve. b.averagevariablecostcurve. c.marginalcostcurve. d.marginalrevenuecurve. 77.Bycomparingmarginalrevenueandmarginalcost,afirminacompetitivemarketisabletoadjustproductiontothelevelthatachievesitsobjective,whichweassumetobe a.maximizingtotalrevenue. b.maximizingprofit. c.minimizingvariablecost. d.minimizingaveragetotalcost. 78.Aprofit-maximizingfirminacompetitivemarketiscurrentlyproducing200unitsofoutput.Ithasaveragerevenueof$9andaveragetotalcostof$7.Itfollowsthatthefirm’s a.averagetotalcostcurveintersectsthemarginalcostcurveatanoutputleveloflessthan200units. b.averagevariablecostcurveintersectsthemarginalcostcurveatanoutputleveloflessthan200units. c.profitis$400. d.Alloftheabovearecorrect. 79.Ifacompetitivefirmiscurrentlyproducingalevelofoutputatwhichprofitisnotmaximized,thenitmustbetruethat a.marginalrevenueexceedsmarginalcost. b.marginalcostexceedsmarginalrevenue. c.totalcostexceedstotalrevenue. d.Noneoftheaboveiscorrect. 80.Susanquitherjobasateacher,whichpaidher$36,000peryear,inordertostartherowncateringbusiness.Shespent$12,000ofhersavings,whichhadbeenearning10percentinterestperyear,onequipmentforherbusiness.Shealsoborrowed$12,000fromherbankat10percentinterest,whichshealsospentonequipment.Forthepastseveralmonthsshehasspent$1,000permonthoningredientsandothervariablecosts.Alsoforthepastseveralmonthsshehasearned$4,500inmonthlyrevenue.Intheshortrun,Susanshould a.shutdownherbusiness,andinthelongrunsheshouldexittheindustry. b.continuetooperateherbusiness,butinthelongrunsheshouldexittheindustry. c.continuetooperateherbusiness,butinthelongrunshewillprobablyfacecompetitionfromnewlyenteringfirms. d.continuetooperateherbusiness,andsheisalsoinlong-runequilibrium.    

  21) If the federal budget has an actual budget deficit of $100 billion and a cyclically adjusted budget deficit of $75 billion, then the economy A) must be at potential real GDP. B) must be below potential real GDP. C) must be above potential real GDP. D) could be below or above potential real GDP.   22) Suppose that the federal budget is balanced […]

    41.Which of the following statements is true regarding the timing of meals? a.Timing of meals is important because the digestive tract is unable to digest foods at certain times. b.A meal should be consumed immediately before exercise to enhance physical work. c.Eating a meal late at night is desirable because it facilitates sleep. d.Timing of meals is important to feeling well.   42.Digestion […]

  21) Which of the following would create a natural monopoly? A) ownership of all the available units of a necessary input B) an exclusive right granted to supply a good or service C) requirement of a government license before the firm can sell the good or service D) technology enabling a single firm to produce at a lower average total cost than two or […]

  11) The demand curve for pizza is downward sloping and the supply curve is upward sloping. If the government imposes a $2 tax on a pizza, ________ the tax. A) only consumers pay B) only producers pay C) both producers and consumers pay part of D) neither producers nor consumers pay part of E) the government pays   12) Neither the demand nor the […]

  11.4   Chapter Figures     The figure above shows the marginal benefit curve (MB) and marginal cost curve (MC) of surveillance satellites that provide national defense services.   1) In the figure above, the efficient quantity of satellites to produce is A) 200, because this is where marginal benefit equals marginal cost. B) 200, because this is where the market is in equilibrium. C) […]

  Figure 17-3     12) Refer to Figure 17-3.  Which of the panels in the diagram best represents an individual’s labor supply curve? A) Panel A B) Panel B C) Panel C D) Panel D   13) Refer to Figure 17-3.  Which of the following statements is true? A) Panel B correctly describes a situation in which the income effect dominates the substitution effect […]

  31) When a monopolistically competitive firm’s demand curve shifts leftward, what happens to its marginal revenue curve? A) Nothing, the marginal revenue curve is unchanged. B) It disappears. C) It shifts rightward. D) It shifts leftward. E)  None of the above is correct because the effect on the marginal revenue curve depends on whether the demand was initially elastic or inelastic.   32) If […]

  43) Consider the following statements: a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower price than other rival grocery stores in the area. b. Homeowners do not take steps to increase security even though they believe it is more costly to allow burglaries than to install security monitoring equipment. c. Manufacturers produce less of a particular cell […]