31. Benjamin Products uses job order costing and assigns overhead to specific jobs using direct labor hours. During the month of June, a total of 1,800 direct labor hours at a cost of $16 per hour were incurred for all jobs. Actual overhead costs for the month totaled $9,000. If a specific job required 36 direct labor hours of work, how much overhead should be […]
5) The figure above shows the market demand curve and the ATC curve for a firm. If all firms in the market have the same ATC curve, then ________ limit the market to 3 firms. A) economies of scale B) a “tit for tat” strategy C) collusion D) a Nash equilibrium E) legal requirements 6) The figure above shows the market demand […]
1.CongressmanSmithcitesthe“jobsargument”whenhearguesinfavorofrestrictionsontrade?hearguesthateverythingcanbeproducedatlowercostinothercountries.ThelikelyflawinCongressmanSmith’sreasoningisthatheignoresthefactthat a.thereisnoevidencethatanyworkereverlosthisorherjobbecauseoffreetrade. b.unemploymentoflaborisnotaseriousproblemrelativetoothereconomicproblems. c.thegainsfromtradearebasedoncomparativeadvantage. d.thegainsfromtradearebasedonabsoluteadvantage. 2.“Ownersoffirmsinyoungindustriesshouldbewillingtoincurtemporarylossesiftheybelievethatthosefirmswillbeprofitableinthelongrun.”Thisobservationhelpstoexplainwhymanyeconomistsareskepticalaboutthe a.national-securityargument. b.infant-industryargument. c.unfair-competitionargument. d.jobsargument. 3.Oneshouldbeespeciallywaryofthenational-securityargumentforrestrictingtradewhenthatargumentismadeby a.representativesofindustry. b.representativesofthedefenseestablishment. c.membersofhouseholds. d.foreigngovernmentofficials. 4.The“unfaircompetition”argumentmightbecitedbyanAmericanwhobelievesthat a.almosteverycountryhasacomparativeadvantage,relativetotheUnitedStates,inproducingalmostallgoods. b.youngindustriesshouldbeprotectedagainstforeigncompetitionuntiltheybecomeprofitable. c.theAmericanautomobileindustryshouldbeprotectedagainstJapanesefirmsthatareabletoproduceautomobilesatrelativelylowcost. d.theFrenchgovernment’ssubsidiestoFrenchfarmersjustifyrestrictionsonAmericanimportsofFrench 5.IftheUnitedStatesthreatenstoimposeatariffonHonduranblueberriesifHondurasdoesnotremoveagriculturalsubsidies,theUnitedStateswillbe a.betteroffnomatterhowHondurasresponds. b.betteroffifHondurasgivesin,andwillbenoworseoffifitdoesn’t. c.worseoffifHondurasdoesn’tgiveintothethreat. d.worseoffnomatterhowHondurasresponds. 6.Whichofthefollowingargumentsfortraderestrictionsisoftenadvanced? a.TraderestrictionsmakeallAmericansbetteroff. b.Traderestrictionsincreaseeconomicefficiency. c.Traderestrictionsarenecessaryforeconomicgrowth. d.Traderestrictionsaresometimesnecessaryfornationalsecurity. 7.AboutwhatpercentoftotalworldtradeisaccountedforbycountriesthatbelongtotheWorldTradeOrganization? a.54percent b.72percent c.89percent d.97percent 8.Atpresent,theUnitedStatesusesasystemofquotastolimittheamountofsugarimportedintothecountry.Whichofthefollowingstatementsismostlikelytrue? a.ThequotasareprobablytheresultoflobbyingfromU.S.consumersofsugar.ThequotasincreaseconsumersurplusfortheUnitedStates,reduceproducersurplusfortheUnitedStates,andharmforeignsugarproducers. b.ThequotasareprobablytheresultoflobbyingfromU.S.producersofsugar.ThequotasincreaseproducersurplusfortheUnitedStates,reduceconsumersurplusfortheUnitedStates,andharmforeignsugarproducers. c.Thequotasareprobablytheresultoflobbyingfromforeignproducersofsugar.ThequotasreduceproducersurplusfortheUnitedStates,increaseconsumersurplusfortheUnitedStates,andbenefitforeignsugarproducers. d.U.S.lawmakersdidnotneedtobelobbiedtoimposethequotasbecausetotalsurplusfortheUnitedStatesishigherwiththequotasthanwithoutthem. 9.SupposeFrancesubsidizesFrenchwheatfarmers,whileGermanyoffersnosubsidytoGermanwheatfarmers.AsaresultoftheFrenchsubsidy,salesofFrenchwheattoGermany a.maypromptGermanfarmerstoinvoketheunfair-competitionargument. b.increasetheconsumersurplusofGermanbuyersofwheat. c.increasethetotalsurplusoftheGermanpeople. d.Alloftheabovearecorrect. 10.CongresswomanGagarepresentsastateinwhichseveralfirmsmanufacturefurniture.Shewantstoimposetariffsonallimportedfurniture.Whichofthefollowingistheleastlikelyconsequenceofsuchtariffs? a.Domesticfurniturebuyerswillloseconsumersurplus,havelessvariety,andwillpayhigherprices. b.Domesticfurnitureproducerswillgainproducersurplus. c.Domesticfurnitureproducerswillhaveahigherrateoftechnologicaladvance. d.Domesticfurnitureproducerswillhavemoremarketpower.
11) One reason patent protection is vitally important to pharmaceutical firms is A) successful new drugs are not profitable. If firms are not granted patents many would go out of business and health care would be severely diminished. B) the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms […]
21) The United Auto Workers bargained for higher wages and more benefits for autoworkers. As a result of the higher wages and increased benefits, i.the quantity of new automobiles supplied decreases. ii.the supply of new automobiles decreases. iii.the supply of new automobiles increases. A) only i B) only ii C) only iii D) both i and ii E) Neither i, ii, nor iii is […]
12.2 Information Problems in Insurance Markets 1) The idea of an insurance company “pooling” the risk means that A) the risk is completely eliminated from society. B) the insurance company requires buyers to pay a large deductible. C) the risk is spread over a large population. D) the insurance company insists on a pooling equilibrium. E) moral hazard and adverse selection are eliminated. […]
24) The federal corporate income tax is A) regressive. B) proportional. C) progressive. D) unfair. 25) All of the following occur whenever a government taxes a product except A) the quantity consumed of that product falls. B) the price of that product rises. C) the marginal benefit of the last unit sold exceeds the marginal cost of producing it. D) there […]
126.Barnes Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period: Estimated annual overhead cost$3,000,000 Actual annual overhead cost$2,940,000 Estimated machine hours300,000 Actual machine hours290,000 a.$2,900,000 applied and $40,000 overapplied b.$3,000,000 applied and $40,000 overapplied c.$2,900,000 applied and $40,000 underapplied d.$2,940,000 applied and neither under- nor overapplied […]
148.The following information is available for Halle Department Stores: Average operating assets$600,000 Controllable margin60,000 Contribution margin150,000 Minimum rate of return8% How much is Halle’s residual income? a.$102,000 b.$540,000 c.$12,000 d.$48,000 a149.What is the goal of residual income? a.To maximize the amount of costs which are controllable b.To maximize profits c.To maximize the total amount of residual income d.To maximize controllable margin […]
2.2 Comparative Advantage and Trade 1) You have an absolute advantage whenever you A) are better educated than someone else. B) can produce more of something than others with the same resources. C) prefer to do one particular activity. D) can produce something at a lower opportunity cost than others. Table 2-9 Serena Haley Bracelets 8 9 Necklaces 16 […]
121.In the context of the 1997 Asian crisis, how did the International Monetary Fund's “one-size-fits-all” approach to macroeconomic policy affect South Korea?
A. It led to a decrease in the interest rates of short-term loans.
B. It made it difficult for companies to service their excessive short-term debt obligations.
C. It decreased the probability of widespread corporate defaults.
D. South Korea failed to recover from its financial crises.
E. South Korea was forced to increase restrictions on foreign direct investment.
122._____ arises when people behave recklessly because they know they will be saved if things go wrong.
A. Systemic risk
B. Moral hazard
C. Ethical dilemma
D. Tragedy of the commons
E. Risk compensation
123.Jade, a working professional, began driving rashly ever since she got her car insured against damage. She believed that the insurance claim would cover her in case of any accidents. Jade’s behavior is due to a situation known as _____.
A. cognitive dissonance
B. conflict of interest
C. systemic risk
D. moral hazard
E. tragedy of the commons
124.The International Monetary Fund been criticized for:
A. its lack of “one-size-fits-all” approach to macroeconomic policy.
B. encouraging moral hazard among banks.
C. its lack of power and authority.
D. using external experts to gain knowledge about a country.
E. keeping its operations open to outside scrutiny.
125.According to the critics of the International Monetary Fund (IMF), how should the problem of moral hazard exhibited by banks be resolved?
A. The IMF should use a “one-size-fits-all” approach to macroeconomic policy.
B. The IMF should establish a mechanism for accountability.
C. The IMF should free all banks from the obligation of financial reporting.
D. The banks should be forced to pay the price for their rash lending policies.
E. The IMF should bail out the banks whose loans gave rise to financial crises.
126.According to the noted economist Jeffrey Sachs, the International Monetary Fund should:
A. not be accountable to anyone as it is a powerful institution.
B. bail out the banks that have rash lending policies.
C. have a “one-size-fits-all” approach to macroeconomic policy.
D. keep its operations open to greater outside scrutiny.
E. lend only to countries with safe credit ratings.
127.The International Monetary Fund programs have been counterproductive, or only had limited success in _____.
A. Turkey
B. Iceland
C. Greece
D. Ireland
E. Latvia
128.In response to the global financial crisis of 2008–2009, the International Monetary Fund began to:
A. exercise tight controls on fiscal policy of the borrowing countries.
B. encourage activities that resulted in high inflation rates.
C. display inflexibility in policy responses.
D. urge countries to adopt policies that included fiscal stimulus and monetary easing.
E. adopt a “one-size-fits-all” approach to macroeconomic policy.
129.Which of the following observations about the International Monetary Fund (IMF) is true?
A. The IMF can force countries to adopt the policies required to correct economic mismanagement.
B. Internal political problems can affect a government's commitment to taking corrective action in return for an IMF loan.
C. In recent years, the IMF has begun to make its policies more tight and inflexible.
D. In response to the global financial crisis of 2008–2009, the IMF began to adopt a “one-size-fits-all” approach to macroeconomic policy.
E. In recent years, the IMF has begun to urge countries to oppose fiscal stimulus and monetary easing.
130.Which of the following poses a problem for international businesses in the long run?
A. Using exchange rate instruments like the forward market and swaps
B. Volatility of global exchange rate regime
C. Anti-inflationary monetary policies
D. Maintaining strategic flexibility by dispersing production to different locations
E. A policy of reduction in government spending
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