4.1   Consumer Surplus and Producer Surplus   1) The difference between the ________ for a good and the ________ is called consumer surplus. A) highest price a consumer is willing to pay; lowest price a consumer is willing to pay B) lowest price a consumer is willing to pay; price the consumer actually pays C) highest price a consumer is willing to pay; price […]

  Article Summary Roberto Azevedo, director-general of the World Trade Organization (WTO), reported that global trade growth estimates will be lowered for 2013 and 2014 because of increasing global protectionism. The current protectionism is based primarily in regulations rather than the more common tariffs and subsidies. Since 2008, almost 700 new trade restrictions have materialized – over 150 of those in 2012 alone – with […]

  31.Roger Ramon is a militant member of a faculty union at a medium-sized college. When the union’s negotiating committee is reporting to a meeting of the faculty, he always finds fault with the work of that committee and strongly advocates striking. When a member of the negotiating committee resigns because of illness, the union’s executive committee appoints Roger to take his place. This is […]

    51.You decide to drive your car on a long road trip of 1,500 miles. The opportunity cost of driving your car: A. is the amount of money spent on gas. B. is zero because the car is paid for. C. includes lost wages that you could have earned instead of driving. D. None of these. 52.If Johnny weren’t in economics class this morning, he’d be sleeping. The […]

  *111.Merlin Component’sHillside Division is currently operating at 100 percent capacity (capacity is 100,000 units). The normal selling price for its wrap film is $12 per case. At current operating levels, fixed costs are $3 per case and variable costs are $7 per case. Another division of Merlin Components would like to buy from the Hillside Division. If this sale is made, $1.20 per case […]

21) Which of the following statements is true? A) Production and sales will fluctuate by the same amount and in the same direction over time. B) Production will not fluctuate over time, but a firm’s sales will fluctuate over time. C) Production will fluctuate somewhat over time, but not as much as sales fluctuates over time. D) Production and sales will both fluctuate by the […]

    45.              Moe, Larry and Curly are partners in the 3S Company. Their profit and loss sharing relationship is 6:4:2. Larry’s share of $48,000 in partnership income would be: A)$16,000 B)$19,200 C)$24,000 D)$32,600   46.              John, Doe and Smitty are partners in the NoName Company. Their profit and loss sharing relationship is 7:5:3. Doe’s share of a $75,000 partnership loss would be: A)$(37,500) B)$(25,000) […]

  16.On December 31, 2015, Carlson Incorporated had total liabilities of $60,000 and total shareholders’ equity of $100,000, resulting in a debt/equity ratio of 0.60 before warranty expense is recognized. On December 31, 2015, Carlson estimated warranty expense to be 5% of sales of $100,000. What is Carlson’s debt/equity ratio after the warranty expense and related liability is recognized?     17.On March 2, 2015, […]

  11) Which of the following describes the infant industry argument for protectionism? A) An industry must be protected in its early stages of development so that firms can compete with government-subsidized foreign competition. B) Some strategic industries must be protected to ensure adequate supplies of resources needed for national defense in emergencies. C) Domestic producers in high-wage countries must be protected from foreign producers […]

    61) Refer to Table 19-12. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how many swords will Morocco gain compared to the “without trade”numbers? A) 5 B) 45 C) 105 D) 150   62) Examples of comparative advantage show how trade between two countries can make each better off. Compared to their pre-trade positions, […]