21) Holding everything else constant, the demand for a good tends to be more elastic A) the more substitutes there are for the good. B) the shorter the time period involved. C) the more consumers perceive the good to be a necessity. D) the less important the product is in consumers’ budgets. 22) Holding everything else constant, the absolute value of the price […]
Competitive Mesh Shirts Competitive Mesh Shirts is considering a plan to ease its credit terms in order to generate greater revenues. Last year, Competitive had sales of 1,000,000 units at a price and variable cost of $20 and $15, respectively. Its current average collection period is 20 days and its percentage of bad debt expense is 2% while it required return on investment […]
31) Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to A) a decrease in the supply of electric cars so that the supply curve shifts leftward. B) a decrease in the supply of electric cars so that the supply curve shifts rightward. C) an increase in the supply of electric cars so […]
61) A huge 50 percent off sale on golf clubs is advertised for next week. What happens this week in the market for golf clubs? A) The supply of golf clubs increases. B) The supply of golf clubs decreases. C) The demand for golf clubs increases. D) The demand for golf clubs decreases. E) The demand for and the supply of golf clubs decreases. […]
51. Teresa Summerlin manufactures hand-crafted pottery. Overhead is applied to products based on direct labor hours. At the beginning of the current year, Teresa estimated total overhead costs would be $30,000 and estimated direct labor hours would be 20,000. Actual overhead costs for the year totaled $36,000 for 18,000 actual direct labor hours. Refer to the Teresa Summerlin information above. How much overhead was […]
61) The Maastricht Treaty called for: A) the creation of an Asia Free Trade Area (AFTA). B) the creation of an economic and monetary union in Europe. C) Chile’s acceptance into Mercosur. D) the purchase of CDs and tapes from distributors in Europe. E) the creation of the seven-nation European Free Trade Association (EFTA). 62) The introduction of the euro by EU resulted in […]
61) The figure above shows the market for education, a good possessing an external benefit. In order to attain the efficient number of students, a government subsidy must equal ________ per student. A) $2,000 B) $8,000 C) $6,000 D) $10,000 E) $16,000 62) A voucher is A) the production of a good by some public institution. B) a payment that government makes […]
1) Which of the following statements provides the best definition of economics? A) The study of the most equitable distribution of scarce resources. B) The study of the use of scarce resources to satisfy unlimited human wants. C) The study of the production of goods and services. D) The study of the productive capacity of a nation’s factors of production. E) The study of […]
31.Whateconomicargumentsuggeststhatiftransactionscostsaresufficientlylow,theequilibriumiseconomicallyefficientregardlessofhowpropertyrightsaredistributed? a.theCoasetheorem b.thelawsofsupplyanddemand c.thelawofcomparativeadvantage d.thelawofexternalities 32.TheCoasetheoremstatesthat a.taxesareanefficientwayforgovernmentstoremedynegativeexternalities. b.subsidiesareanefficientwayforgovernmentstoremedypositiveexternalities. c.industrialpoliciesencouragetechnologyspillovers. d.intheabsenceoftransactioncosts,privatepartiescansolvetheproblemofexternalitiesontheirown. 33.MaryandCathyareroommates.Maryassignsa$30valuetosmokingcigarettes.Cathyvaluessmoke-freeairat a.CathyoffersMary$20nottosmoke.Maryacceptsanddoesnotsmoke. b.MarypaysCathy$16sothatMarycansmoke. c.MarypaysCathy$14sothatMarycansmoke. d.CathyoffersMary$15nottosmoke.Maryacceptsanddoesnotsmoke. 34.Adentistsharesanofficebuildingwitharadiostation.Theelectricalcurrentfromthedentist’sdrillcausesstaticintheradiobroadcast,causingtheradiostationtolose$10,000inprofits.Theradiostationcouldputupashieldatacostof$30,000;thedentistcouldbuyanewdrillthatcauseslessinterferencefor$6,000.Eitherwouldrestoretheradiostation’slostprofits.Whatistheeconomicallyefficientoutcome? a.Theradiostationputsupashield,whichitpaysfor. b.Theradiostationputsupashield,whichthedentistpaysfor. c.Neithertheradiostationnorthedentistpurchaseadditionalequipment. d.Thedentistgetsanewdrill;itdoesnotmatterwhopaysforit. 35.Abeownsadog?thedog’sbarkingannoysAbe’sneighbor,Jenny.Supposethatthebenefitofowningthedogisworth$200toAbeandthatJennybearsacostof$400fromthebarking.AssumingAbehasthelegalrighttokeepthedog,apossibleprivatesolutiontothisproblemisthat a.JennypaysAbe$150togivethedogtohisparentswholiveonanisolatedfarm. b.AbepaysJenny$350forherinconvenience. c.JennypaysAbe$300togivethedogtohisparentswholiveonanisolatedfarm. d.Thereisnoprivatetransactionthatwouldimprovethissituation. 36.WallyownsadogwhosebarkingannoysWally’sneighbor,Corrine.Supposethatthebenefitofowningthedogisworth$700toWallyandthatCorrinebearsacostof$500fromthebarking.AssumingWallyhasthelegalrighttokeepthedog,apossibleprivatesolutiontothisproblemisthat a.WallypaysCorrine$600forherinconvenience. b.CorrinepaysWally$400togivethedogtohisparentswholiveonanisolatedfarm. c.CorrinepaysWally$550togivethedogtohisparentswholiveonanisolatedfarm. d.Thecurrentsituationisefficient. 37.DickownsadogwhosebarkingannoysDick’sneighborJane.Dickreceivespersonalbenefitfromowningthedog,andJanebearsacostofDick’sownershipofthedog.AssumingJanehasthelegalrighttopeaceandquiet,whichofthefollowingstatementsiscorrect? a.IfDick’sbenefitexceedsJane’scost,governmentinterventionisnecessary. b.DickwillpaytokeephisdogifhisbenefitexceedsJane’scost. c.IfJane’scostexceedsDick’sbenefit,DickwillpayJanetokeephisdog. d.IfJanehasthelegalrighttopeaceandquiet,nofurthertransactionswillbemutuallybeneficial. 38.Karen’scatcausesDannytosneeze.Karenvalueshercat’scompanionshipat$300peryear.ThecosttoDannyoftissuesandherallergymedicationis$350peryear.BasedontheCoasetheorem, a.KarenshouldpayDanny$400sothatshemaykeephercat. b.KarenshouldpayDanny$350fortissuesandallergymedication. c.DannyshouldpayKaren$325togiveawayhercat. d.Dannyshouldmove. 39.AccordingtotheCoasetheorem,inthepresenceofexternalities a.privatepartiescanbargaintoreachanefficientoutcome. b.governmentassistanceisnecessarytoreachanefficientoutcome. c.theassignmentoflegalrightscanpreventexternalities. d.theinitialdistributionofpropertyrightswilldeterminetheefficientoutcome. 40.Assumethatyourroommateisverymessy.Supposeshegetsa$25benefitfrombeingmessybutimposesa$50costonyou.TheCoasetheoremwouldsuggestthatanefficientsolutionwouldbeforyouto a.payyourroommateatleast$25butnomorethan$50tocleanupafterherself. b.payyourroommateatleast$51tocleanupafterherself. c.chargeyourroommateatleast$25tohaveyoucleanupafterher. d.chargeyourroommateatleast$50butnomorethan$100tokeepyoufromcomplainingaboutthemess.
92) Under which of the following conditions will a profit-maximizing perfectly competitive firm shut down in the short run? A) when it is making a normal profit B) whenever its marginal cost is less than its marginal revenue C) when the price is less than its minimum average variable cost D) whenever its total cost is greater than its total revenue E) when the […]
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Henry HillsI NEED
4 years ago
08.12.2020
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