21) With perfect price discrimination, a monopoly can extract the ________ price each customer is willing to pay and thereby obtain the entire ________ surplus. A) maximum; consumer B) minimum; producer C) maximum; producer D) minimum; consumer E) None of the above answers are correct. 22) When a firm is able to engage in perfect price discrimination, its marginal revenue curve A) lies below […]

  20.2   How Economic Inequality Arises   1) Workers who have invested in education and training A) are more likely to find jobs that are not rewarding. B) have a higher value of marginal product. C) have a more difficult time finding a job because their wage rate is higher. D) have identical supply curves to otherwise similar workers who have not invested in education […]

    31) Japan has developed a comparative advantage in designing and producing automobiles. The source of its comparative advantage in these products is A) abundant supplies of natural resources. B) a favorable climate. C) a strong central government. D) technology.   32) China has developed a comparative advantage in the production of clothing. The source of this comparative advantage is A) a large supply […]

  81.Asthepriceelasticityofsupplyapproachesinfinity,verysmallchangesinpriceleadto a.verylargechangesinquantitysupplied. b.verysmallchangesinquantitysupplied. c.nochangeinquantitysupplied. d.Noneoftheaboveiscorrect. 82.Ifthepriceelasticityofsupplyforagoodisequaltoinfinity,thenthe a.supplycurveisvertical. b.supplycurveishorizontal. c.supplycurvealsohasaslopeequaltoinfinity. d.quantitysuppliedisconstantregardlessoftheprice. 83.Amanufacturerproduces1,000units,regardlessofthemarketprice.Forthisfirm,thepriceelasticityofsupplyis a.infinity. b.zero. c.one. d.negativeone. 84.Ifsellersdonotadjusttheirquantitysuppliedatallinresponsetoachangeinprice,thepriceelasticityofsupplyis a.zero,andthesupplycurveishorizontal. b.zero,andthesupplycurveisvertical. c.infinity,andthesupplycurveishorizontal. d.infinity,andthesupplycurveisvertical. 85.Whichofthefollowingstatementsisvalidwhenthemarketsupplycurveisvertical? a.Marketquantitysupplieddoesnotchangewhenthepricechanges. b.Supplyisperfectlyelastic. c.Anincreaseinmarketdemandwillincreasetheequilibriumquantity. d.Anincreaseinmarketdemandwillnotincreasetheequilibriumprice. 86.Whichofthefollowingstatementsisnotvalidwhenthemarketsupplycurveisvertical? a.Marketquantitysupplieddoesnotchangewhenthepricechanges. b.Supplyisperfectlyinelastic. c.Anincreaseinmarketdemandwillincreasetheequilibriumquantity. d.Anincreaseinmarketdemandwillincreasetheequilibriumprice. 87.Ifthequantitysuppliedisthesameregardlessofprice,thensupplyis a.elastic. b.perfectlyelastic. c.perfectlyinelastic. d.inelastic. 88.Ifsellersdonotadjusttheirquantitiessuppliedatallinresponsetoachangeinprice, a.advancesintechnologymustbeprevalent. b.thetimeperiodunderconsiderationmustbeverylong. c.supplyisperfectlyelastic. d.supplyisperfectlyinelastic. 89.Ifthepriceelasticityofsupplyiszero,then a.supplyismoreelasticthanitisinanyothercase. b.thesupplycurveishorizontal. c.thequantitysuppliedisthesame,regardlessofprice. d.achangeindemandwillcausearelativelysmallchangeintheequilibriumprice. 90.WhichofthefollowingisanillustrationofthemarketfororiginalpaintingsbydeceasedartistVincentVanGogh? a. b. c. d. a.A b.B c.C d.D Figure5-19   91.RefertoFigure5-19.Whichofthefollowingstatementsisnotcorrect? a.SupplycurveAisperfectlyinelastic. b.SupplycurveBisperfectlyelastic. c.SupplycurveCisunitelastic. d.SupplycurveDismoreelasticthansupplycurveC. 92.RefertoFigure5-19.Whichofthefollowingstatementsiscorrect? a.SupplycurveAisperfectlyelastic. b.SupplycurveBisperfectlyinelastic. […]

  15.2   Output, Price, and Profit in the Short Run   1) The market supply in the short run for the perfectly competitive industry is A) the same as each producer’s supply. B) the sum of the supply schedules of all firms. C) divided up according to each firm’s selling price. D) set at the maximum price a buyer will pay for one unit. E) […]

    31) Dixon Enterprises needs to reduce its long-term workforce. The firm wants to reduce the scale and scope of its business to improve financial performance. The company is most likely: A) conducting a layoff. B) downsizing. C) buying out the workforce. D) rightsizing. 32) If a business is downsizing, it is most likely: A) offering training and development opprotunities to new hires. B) […]

  81) Tacit collusion in an oligopolistic industry A) occurs when firms make an explicit agreement to cooperate. B) results in a non-cooperative equilibrium. C) occurs when firms achieve the cooperative outcome without an explicit agreement. D) results in competitive behaviour. E) is a form of predatory pricing. 82) Explicit collusion in an oligopolistic industry A) occurs when firms make an explicit agreement to cooperate. […]

  21. Under a defined contribution plan, the contribution made on behalf of the employee is determined using a formula dependent on the employee’s current compensation. a. True b. False 22. If a Section 401(k) plan allows an employee to choose between a direct payment of compensation in cash or a contribution to the retirement plan, the plan is not a “qualified” plan. a. True b. False 23. In order for a […]

  191.InresponsetothesharpdeclineinstockpricesinOctober1987,theFederalReserve a.increasedthemoneysupplyandincreasedinterestrates. b.increasedthemoneysupplyanddecreasedinterestrates. c.decreasedthemoneysupplyandincreasedinterestrates. d.decreasedthemoneysupplyanddecreasedinterestrates. 192.InresponsetothesharpdeclineinstockpricesinOctober1987,theFederalReserve a.increasedinterestrates,andtheeconomyavoidedarecession. b.increasedinterestrates,buttheeconomywasunabletoavoidarecession. c.decreasedinterestrates,andtheeconomyavoidedarecession. d.decreasedinterestrates,buttheeconomywasunabletoavoidarecession. 193.TheinterestratethattheFederalReservepaysbanksonthereservestheyholdiscalledthe a.open-marketrate. b.discountrate. c.preferencerate. d.Noneoftheabovearecorrect. 194.TheFedcaninfluencethemoneysupplyby a.changinghowmuchitlendstobanks. b.changingtheinterestrateitpaysbanksonthereservestheyareholding. c.usingopen-marketoperations. d.Alloftheabovearecorrect. 195.Whichofthefollowingsequencesbestexplainsthenegativeslopeoftheaggregate-demandcurve? a.pricelevel↑⇒demandformoney↑⇒equilibrium interest rate↑⇒quantityofgoodsandservicesdemanded↓ b.pricelevel↑⇒demandformoney↓⇒equilibrium interest rate↑⇒quantityofgoodsandservicesdemanded↓ c.pricelevel↓⇒demandformoney↓⇒equilibrium interest rate↑⇒quantityofgoodsandservicesdemanded↓ d.pricelevel↑⇒equilibrium interest rate↑⇒demandformoney↑⇒quantityofgoodsandservicesdemanded↓ 196.Whichofthefollowingsequencesbestexplainsthenegativeslopeoftheaggregate-demandcurve? a.pricelevel↑⇒demandformoney↓⇒equilibrium interest rate↑⇒quantityofgoodsandservicesdemanded↓ b.pricelevel↑⇒demandformoney↑⇒equilibrium interest rate↓⇒quantityofgoodsandservicesdemanded↓ c.pricelevel↓⇒demandformoney↓⇒equilibrium interest rate↓⇒quantityofgoodsandservicesdemanded↑ d.pricelevel↓⇒equilibrium interest rate↓⇒demandformoney↑⇒quantityofgoodsandservicesdemanded↑ 197.Considerthefollowingsequenceofevents: a.money-supplycurveisvertical. b.aggregate-demandcurveshiftsleftwardinresponsetoamonetaryinjection. c.aggregate-demandcurveshiftsrightwardinresponsetoamonetaryinjection. d.aggregate-demandcurveslopesdownward. 198.AsituationinwhichtheFed’stargetinterestratehasfallenasfarasitcanfallissometimesdescribedasa a.liquiditypreference. b.liquiditytrap. c.open-markettrap. d.interest-ratecontraction. 199.Economistswhoareskepticalabouttherelevanceof“liquiditytraps”arguethat a.acentralbankcontinuestohavetoolstostimulatetheeconomy,evenafteritsinterestratetargethitsitslowerboundofzero. b.acentralbankcontinuestohavetheoptionofcommittingitselftofuturemonetarycontraction,evenafteritsinterestratetargethitsitslowerboundofzero. c.acentralbankcangreatlyreducethelikelihoodofaliquiditytrapbysettingthetargetrateofinflationatzero. d.whiletheconceptofaliquiditytrapistheoreticallypossible,nothingresemblingaliquiditytrapeverhasbeenobservedintherealworld. 200.Iftheinflationrateiszero,then a.boththenominalinterestrateandtherealinterestratecanfallbelowzero. b.thenominalinterestratecanfallbelowzero,buttherealinterestratecannotfallbelowzero. […]

    59) Collusion occurs when A) a firm chooses a level of output to maximize its own profit. B) two firms’ price and output decisions come into conflict. C) there is an agreement among firms to charge the same price or otherwise not to compete. D) firms refuse to follow their price leaders.   60) An agreement among firms to charge the same price […]