Multiple Choice Questions  48.Effective communication occurs when:  A.information is sent through informal rather than formal channels. B.information is collected from various sources but sent to a limited audience. C.the sender convinces the receiver to accept the information sent. D.information is transmitted and understood between two or more people. E.the sender transmits information that is received by someone other than the intended receiver. 49._____ refers […]

    51.In August of this year, Jack can best estimate the current year’s GDP by: A. adjusting the first two quarterly estimates of GDP for seasonal variation. B. taking an average of the last four quarterly estimates of GDP available. C. multiplying the most recent quarter’s GDP estimate by four. D. All of these methods would give Jack the same answer. 52.The market value of a good or […]

    41) Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit. This month, the company supplied the same quantity of binders at $4 per unit. Based on this evidence, Tecumseh has experienced A) a decrease in supply. B) an increase in supply. C) an increase in the quantity supplied. D) a decrease in the quantity supplied.   42) […]

  Use the breakfast cereal label below (shown on the following page) to answer questions 81-85.     81.This cereal product has a claim on the package front that it provides 100% of nine vitamins. What would be a result of eating this cereal every morning? a.This would guarantee that you would not have any deficiencies of those vitamins. b.The cereal would be a good […]

  61) Assume that a small country produces only green peppers and red peppers. Last year, it produced 100 green peppers and 50 red peppers and sold them at prices of $2 per green pepper and $3 per red pepper. This year, it produced 150 green peppers and 60 red peppers and sold them at prices of $2 per green pepper and $4 per red […]

  18.4   Antitrust Law   1) The focus of antitrust legislation is to A) encourage cartels to form because they are easier to regulate. B) maintain competition. C) force society to act in the best interest of producers. D) limit the power of regulatory bodies. E) ensure that producers earn enough profit to stay in business so that consumers are not harmed by too many […]

  41. Amended individual returns are filed on: a.Form 1040X b.Form 1120S c.Form 1041 d.Form 1040Amend 42. Depending on the amounts of income and other tax information, some individuals may report their income on: a.Form 1040A b.Form 1065 c.Form 1120 d.Form 1041 43. If an individual wishes to amend his individual tax return, he will make the amendment using what form? a.Form 1040A b.Form 1040X c.Form 1120 d.Schedule […]

  51) A statement that argues that “if taxes on gasoline increase, gasoline consumption will decrease” is an example of what kind of statement? A) a marginal statement B) a macroeconomic statement C) a normative statement D) a positive statement E) a statement that violates rational choice 52) Which of the following statements is a positive statement? A) Our country must increase military spending. B) […]

  11.RefertoFigure27-1.Whichdistancealongtheverticalaxisrepresentsthemarginalutilityofanincreaseinwealthfrom$600to$800? a.thedistancebetweentheoriginandpointB b.thedistancebetweentheoriginandpointC c.thedistancebetweenpointAandpointC d.thedistancebetweenpointBandpointC 12.RefertoFigure27-1.Let0ArepresentthedistancebetweentheoriginandpointA;letABrepresentthedistancebetweenpointAandpointB;etc.Whichofthefollowingratiosbestrepresentsthemarginalutilityperdollarwhenwealthincreasesfrom$400to$600? a. b. c. d. 13.RefertoFigure27-1.Forthepersontowhomthisutilityfunctionapplies, a.themorewealthshehas,thelessutilityshegetsfromanadditionaldollarofwealth. b.themorewealthshehas,themoreutilityshegetsfromanadditionaldollarofwealth. c.herlevelofsatisfactionwillbeenhancedmorebyanincreaseinwealthfrom$600to$800thanitwouldbebyanincreaseinwealthfrom$400to$600. d.herlevelofsatisfactionwillbeenhancedequallybyanincreaseinwealthfrom$600to$800orbyanincreaseinwealthfrom$400to$600. 14.RefertoFigure27-1.Supposethepersontowhomthisutilityfunctionappliesbeginswith$600inwealth.Startingfromthere, a.shewouldbewillingtoacceptacoin­flipbetthatwouldresultinherwinning$200iftheresultwas“heads”orlosing$200iftheresultwas“tails.” b.thepainoflosing$200ofherwealthwouldequalthepleasureofadding$200toherwealth. c.thepainoflosing$200ofherwealthwouldexceedthepleasureofadding$200toherwealth. d.thepleasureofadding$200toherwealthwouldexceedthepainoflosing$200ofherwealth. 15.RefertoFigure27-1.Thepropertiesexhibitedbythisutilityfunctionhelptoexplainvariousthingsweobserveintheeconomy,including a.therisk-returntradeoff. b.insurance. c.diversification. d.Alloftheabovearecorrect. Figure27-2.ThefigureshowsautilityfunctionforBritney.   16.RefertoFigure27-2.Fromtheappearanceoftheutilityfunction,weknowthat a.Britneyisriskaverse. b.BritneygainslesssatisfactionwhenherwealthincreasesbyXdollarsthanshelosesinsatisfactionwhenherwealthdecreasesbyXdollars. c.thepropertyofdiminishingmarginalutilityappliestoBritney. d.Alloftheabovearecorrect. 17.RefertoFigure27-2.Fromtheappearanceoftheutilityfunction,weknowthat a.Britneyisriskaverse. b.BritneygainsmoresatisfactionwhenherwealthincreasesbyXdollarsthanshelosesinsatisfactionwhenherwealthdecreasesbyXdollars. c.thepropertyofincreasingmarginalutilityappliestoBritney. d.Alloftheabovearecorrect. 18.RefertoFigure27-2.Supposetheverticaldistancebetweenthepoints(0,A)and(0,B)is5.Ifherwealthincreasedfrom$1,050to$1,350,then a.Britney’ssubjectivemeasureofherwell­beingwouldincreasebylessthan5units. b.Britney’ssubjectivemeasureofherwell­beingwouldincreasebymorethan5units. c.Britneywouldchangefrombeingarisk-aversepersonintoapersonwhoisnotriskaverse. d.Britneywouldchangefrombeingapersonwhoisnotriskaverseintoarisk-averseperson. a.ifBritneyownsahouse,shewouldnotconsiderbuyingfireinsurance. b.Britneywouldprefertoholdaportfolioofstockswithanaveragereturnof8percentandastandarddeviationof2percenttoaportfolioofstockswithanaveragereturnof8percentandastandarddeviationof5percent. c.Britneywouldprefertoholdaportfolioofstockswithanaveragereturnof8percentandastandarddeviationof5percenttoaportfolioofstockswithanaveragereturnof6percentandastandarddeviationof3percent. d.Alloftheabovearecorrect. 20.RefertoFigure27-2.SupposeBritneybeginswith$1,050inwealth.Startingfromthere, a.shewouldbewillingtoacceptacoin­flipbetthatwouldresultinherwinning$300iftheresultwas“heads”orlosing$300iftheresultwas“tails.” b.thepainoflosing$300ofherwealthwouldequalthepleasureofadding$300toherwealth. c.thepainoflosing$300ofherwealthwouldexceedthepleasureofadding$300toherwealth. d.thepleasureofadding$300toherwealthwouldexceedthepainoflosing$300ofherwealth.    

    21) Refer to Figure 7-6. At the midpoint of the demand curve, in absolute value A) the price elasticity coefficient is at a maximum. B) the price elasticity coefficient is at a minimum. C) the price elasticity coefficient is zero. D) the price elasticity coefficient is one.   22) Which of the following statements is true about the price elasticity of demand along […]