98.Winton Corporation currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are given below:   Materials$0.24 per roll Labor$0.40 per roll Variable overhead$0.16 per roll Fixed overhead$0.20 per roll   A potential supplier has offered to sell Winton the rolls for $0.90 each. If the rolls are […]

  101) Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will A) decrease. B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. C) stay the same. D) increase. E) definitely either stay the same […]

    51) The balanced budget multiplier is based on the point that the ________ multiplier is larger than the ________ multiplier so that an equal increase in government expenditure and taxes ________ aggregate demand.  A) tax; expenditure; does not change B) expenditure; tax; does not change C) expenditure; tax; decreases D) expenditure; tax; increases E) tax; expenditure; decreases   52) The balanced budget multiplier […]

  19.3   Capital and Natural Resource Markets   1) Other things remaining the same, the A) higher the rental rate of capital, the greater the quantity of capital demanded. B) lower the rental rate of capital, the smaller the quantity of capital demanded. C) higher the rental rate of capital, the smaller the quantity of capital demanded. D) rental rate of capital and the quantity […]

    11.Available-for-sale securities: a.are reported on the balance sheet at original cost. b.may have unrealized price increases or decreases, which increase or decrease shareholders’ equity. c.are reported in the shareholders’ equity section of the balance sheet at fair value. d.may have unrealized gains or losses on the income statement associated with price increases or decreases.       12.When a company recognizes unrealized losses […]

  169.Billy Bob Tacos pays for 40% of its inventory purchases in the month of the purchase and the remainder in the following month. The company’s inventory purchases totaled $850,000 in October, $980,000 in November, and $720,000 in December. The company also paid for new equipment with a total cost of $520,000 in November and made an income tax payment of $130,000 in December. Salaries […]

  111.The new trade theory is at variance with the _____ theory, which suggests that a country will predominate in the export of a product when it is particularly well endowed with those factors used intensively in its manufacture.  A. Heckscher-Ohlin B. product life-cycle C. comparative advantage D. absolute advantage E. national competitive advantage 112.Which of the following is an empirically supported prediction of the new trade theory?  A. Trade increases […]

  21) If the automobile workers’ union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles? A) The supply increases. B) The supply decreases. C) The quantity supplied increases. D) The quantity supplied decreases. E) Both answers B and D are correct.   22) Plywood is used in the construction of houses. If the price of […]

    21. Sellars Ltd. has the following information available for 2007 and 2008:          2007        2008    Current assets $   600,000 $   800,000 Long-term assets   300,000   200,000 Total assets $   900,000 $1,000,000           Converting the 2008 column into a common-size statement would show current assets as being: A. 33.33 percent higher than 2007 current assets.B. 80 percent of 2008 total assets.C. 88.9 […]

  41.Supposethatcandyproducerscreateapositiveexternalityequalto$1perpoundofcandy.Furthersupposethatthegovernmentoffersa$1-per-poundsubsidytotheproducers.Whatistherelationshipbetweentheequilibriumquantityandthesociallyoptimalquantityofcandy? a.Theequilibriumquantityisgreaterthanthesociallyoptimalquantity. b.Theequilibriumquantityislessthanthesociallyoptimalquantity. c.Theyareequal. d.Thereisnotenoughinformationtoanswerthequestion. 42.Supposethatflushotscreateapositiveexternalityequalto$9pershot.Furthersupposethatthegovernmentoffersa$9-per-shotsubsidytoproducers.Whatistherelationshipbetweentheequilibriumquantityandthesociallyoptimalquantityofflushotsproduced? a.Theyareequal. b.Theequilibriumquantityisgreaterthanthesociallyoptimalquantity. c.Theequilibriumquantityislessthanthesociallyoptimalquantity. d.Thereisnotenoughinformationtoanswerthequestion. 43.Supposethatflushotscreateapositiveexternalityequalto$8pershot.Furthersupposethatthegovernmentoffersa$6-per-shotsubsidytoproducers.Whatistherelationshipbetweentheequilibriumquantityandthesociallyoptimalquantityofflushotsproduced? a.Theyareequal. b.Theequilibriumquantityisgreaterthanthesociallyoptimalquantity. c.Theequilibriumquantityislessthanthesociallyoptimalquantity. d.Thereisnotenoughinformationtoanswerthequestion. 44.Supposethatflushotscreateapositiveexternalityequalto$8pershot.Furthersupposethatthegovernmentoffersa$11-per-shotsubsidytoproducers.Whatistherelationshipbetweentheequilibriumquantityandthesociallyoptimalquantityofflushotsproduced? a.Theyareequal. b.Theequilibriumquantityisgreaterthanthesociallyoptimalquantity. c.Theequilibriumquantityislessthanthesociallyoptimalquantity. d.Thereisnotenoughinformationtoanswerthequestion. 45.Whichofthefollowingstatementsisnotcorrect? a.Tradablepollutionpermitshaveanadvantageovercorrectivetaxesifthegovernmentisuncertainastotheoptimalsizeofthetaxnecessarytoreducepollutiontoaspecificlevel. b.Bothcorrectivetaxesandtradablepollutionpermitsprovidemarket-basedincentivesforfirmstoreducepollution. c.Correctivetaxessetthemaximumquantityofpollution,whereastradablepollutionpermitsfixthepriceofpollution. d.Bothcorrectivetaxesandtradablepollutionpermitsreducethecostofenvironmentalprotectionandthusshouldincreasethepublic’sdemandforacleanenvironment. Figure10-15   46.RefertoFigure10-15.Whichgraphillustratesapollutionpermitprogram? a.theleftgraph b.therightgraph c.bothgraphs d.neithergraph 47.RefertoFigure10-15.Whichgraphillustratesacorrectivetax? a.theleftgraph b.therightgraph c.bothgraphs d.neithergraph 48.RefertoFigure10-15.Which of the following isnotnecessaryinorderforthecorrectivetaxandpollutionpermittohaveequivalenteffects? a.PBmustbeequivalenttothecorrectivetax. b.QAmustbeequivalenttotheamountofpollutionallowedtothepollutionpermitholders. c.Theequilibriumpriceandquantityofpollutionmustbethesameinbothgraphs. d.Theamountofpollutionemittedbyeachfirmmustbethesame. 49.RefertoFigure10-15.The supply of pollutionpermits is a.elasticandrepresentedbylineA. b.inelasticandrepresentedbylineA. c.elasticandrepresentedbylineF d.inelasticandrepresentedbylineF. 50.Whichofthefollowingstatementsiscorrect? a.Correctivetaxesareoftenpreferredoverdirectregulationbecausetheytypicallyreduceexternalitiesatalowercost. b.Correctivetaxesdistorteconomicincentives. c.Correctivetaxesareoftenpreferredoverdirectregulationbecausetheytypicallyreduceexternalitiesatafasterrate. d.Bothaandbarecorrect.