21) For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described? A) underproduction compared to the efficient level B) overproduction compared to the efficient level C) Production equals the efficient level. D) Underproduction and overproduction are both possible depending on whether the external benefit is to consumption or production. E) None of […]

  61) If an import quota is imposed on imports of shrimp into the United States, U.S. producer surplus from shrimp will ________ and U.S. total surplus from shrimp will ________. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) increase; not change 62) A quota ________ a deadweight loss and a tariff ________ a deadweight loss. A) creates; creates B) […]

  13.2   Marginal Utility Theory   1) Utility is the A) benefit or satisfaction that a person gets from the consumption of a good or service. B) measure of how useful a resource is in the production process. C) measure of productivity associated with a good or service. D) economic term for consumption possibilities. E) economic term for how changes in price affect a consumer’s […]

  111) Fiscal policy involves the government’s use of ________ to affect economic outcomes. A) exchange rate changes B) interest rate changes C) price level changes D) private investment expenditures E) expenditures and taxation 112) Refer to Figure 22-4. Diagram 1 illustrates an economy that is experiencing a(n) ________ gap. The goal of stabilization policy would be to ________ national income until it is equal […]

  41) Which of the following decreases aggregate demand and shifts the AD curve leftward? A) a tax cut B) an interest rate hike C) an increase in quantity of money D) an increase in government expenditures on goods and services E) a decrease in potential GDP 42) If a country is trying to recover from a recent recession, it is unlikely their government officials […]

  Figure 16-3     Chantal owns a hairdressing salon which caters to two main groups of customers: residents of “The Chateau,” a retirement community, and other residents in the neighborhood. Figure 16-3 shows the demand curves for the residents of the retirement community, labeled Market A, and other residents in the neighborhood, labeled Market B. The demand curves are not identical.   79) Refer […]

    81. Armstrong Products applies fixed overhead at a rate of $3 per direct labor hour. Each unit produced is expected to take 2 direct labor hours. Armstrong expected production in the current year to be 10,000 units but 9,000 units were actually produced. Actual direct labor hours were 19,000 and actual fixed overhead costs were $62,000. Refer to the Armstrong Products information above. Armstrong’s […]

    51. (p. 371) Carolyn is interested in marketing her company’s diet products in Asia. She is studying what acceptable behavior, norms, and values in Asian markets. Carolyn is studying ____.  A. relative advantage B. compatibility C. complexity D. trialability E. observability 52. (p. 371) Ingrid is developing promotional materials and product demonstrations to easily communicate the benefits of her cleaning products. Ingrid is trying to enhance the _____ of her products.  A. relative advantage B. compatibility […]

  191.Aprofit-maximizingmonopolistchargesapriceof$12.Theintersectionofthemarginalrevenueandmarginalcostcurvesoccurswhereoutputis10unitsandmarginalcostis$6.Averagetotalcostfor10unitsofoutputis$5.Whatisthemonopolist’sprofit? a.$60 b.$70 c.$100 d.$120 192.Aprofit-maximizingmonopolistchargesapriceof$14.Theintersectionofthemarginalrevenuecurveandthemarginalcostcurveoccurswhereoutputis15unitsandmarginalcostis$7.Whatisthemonopolist’sprofit? a.$90 b.$105 c.$180 d.Notenoughinformationisgiventodeterminetheanswer. 193.Ifamonopolistsells100unitsat$8perunitandrealizesanaveragetotalcostof$6perunit,whatisthemonopolist’sprofit? a.$200 b.$400 c.$600 d.$800 194.Supposeamonopolistchargesapriceof$27foritsproductandsells10unitsatthatprice.At10 units ofproductionthefirmhasaveragefixedcostequalto$10andaveragevariablecostequalto$12.Howmuchtotalprofitisthefirmearningatthisprice? a.$5 b.$25 c.$50 d.$140 195.Whichofthefollowingformulaswouldcorrectlycalculateamonopolist’sprofit? a.profit=price–marginalcost b.profit=price–averagetotalcost c.profit=(price–marginalcost)×quantity d.profit=(price–averagetotalcost)×quantity 196.Amonopoly’smarginalcostwill a.belessthanitsaveragefixedcost. b.belessthanthepriceperunitofitsproduct. c.exceeditsmarginalrevenue. d.equalitsaveragetotalcost. 197.Ifapharmaceuticalcompanydiscoversanewdrugandsuccessfullypatentsit,patentlawgivesthefirm a.partialownershipoftherighttosellthedrugforalimitednumberofyears. b.partialownershipoftherighttosellthedrugforanunlimitednumberofyears. c.soleownershipoftherighttosellthedrugforalimitednumberofyears. d.soleownershipoftherighttosellthedrugforanunlimitednumberofyears. 198.Duetothenatureofthepatentlawsonpharmaceuticals,themarketforsuchdrugs a.alwaysremainsacompetitivemarket. b.alwaysremainsamonopolisticmarket. c.switchesfromcompetitivetomonopolisticoncethefirm’spatentrunsout. d.switchesfrommonopolistictocompetitiveoncethefirm’spatentrunsout. 199.Whathappenstothepriceandquantitysoldofadrugwhenitspatentrunsout? a.(i)only b.(i)and(ii)only c.(ii)and(iii)only d.(i),(ii),and(iii) 200.Genericdrugsenterthepharmaceuticaldrugmarketonce a.theingredientstothenamebranddrughavebeendiscovered. b.10yearshavepassed. c.theyarepatented. d.thepatentonthenamebranddrugexpires. 201.Namebranddrugsareabletocontinuecapitalizingontheirmarketpowerevenaftergenericdrugsenterthemarketbecause a.(i)and(ii)only b.(ii)and(iii)only c.(i)and(iii)only d.(i),(ii),and(iii) 202.Afterthepatentrunsoutonabrandnamedrug,genericdrugsenterthemarket.Whathappensnextinthe market? a.Priceincreases,andtotalsurplusdecreases. b.Pricedecreases,andtotalsurplusdecreases. c.Pricedecreases,andtotalsurplusincreases. d.Priceincreases,andtotalsurplusincreases. 203.Amonopolist […]

    11) If real GDP per capita in the United States is $8,000, what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%? A) $8,520 B) $9,280 C) $9,365 D) $10,560     12) If real GDP per capita in Ireland is estimated to be $7,400 in 2014, […]