41) In the above figure, Jill’s opportunity cost of producing 1 gallon of soda is ________ of bottled water. A) 2 gallons B) 1/2 of a gallon C) 4 gallons D) 1 gallon E) 1/4 of a gallon 42) In the above figure, Jill’s opportunity cost of producing 1 gallon of bottled water is ________ of soda. A) 2 gallons B) 1/2 of a […]

    11) If the real interest rate rises, A) the quantity of loanable funds demanded increases. B) the quantity of loanable funds demanded decreases. C) there is is movement down along the demand for loanable funds curve. D) the demand for loanable funds curve shifts leftward. E) the demand for loanable funds curve shifts rightward. 12) An increase in the quantity of loanable funds […]

    108.Splurge Electronics sells homework machines for $80 each. Variable costs per unit are $45 and total fixed costs are $43,750. Splurge is considering the purchase of new equipment that would increase fixed costs to $48,700, but decrease the variable costs per unit by $5. At that level, Splurge Electronics expects it can sell 1,500 units next year. What is the company’s break-even point […]

    51) Which of the following are typically financed in a “stock market”? i)shares sold by a firm to finance its international growth plans ii)new mortgages for home buyers iii)credit card balances A) i only B) i, ii and iii C) ii and iii D) ii only E) i and iii   52) Which of the following represents ownership of a firm? A) stocks […]

    41) If the Fed is concerned about a possible recession, it ________ the federal funds rate, which ________ the quantity of reserves and ________ the amount of bank loans. A) raises; decreases; decreases B) lowers; decreases; decreases C) lowers; increases; decreases D) raises; increases; increases E) lowers; increases; increases   42) The Fed is concerned about inflation. Its policy will ________ U.S. short-term […]

  71) Positioning refers to the act of: A) determining on what points on the globe to target. B) ensuring a choice retail shelf location. C) differentiating a brand in customer’s mind. D) formulating a private label strategy. E) formulating a companion product. 72) For years, ads for Volvo automobiles stressed safety features and protection in the event of a crash. Thus, Volvo automobiles developed […]

    51) In the short run, a decrease in aggregate demand will lead to A) a decrease in the price level and an increase in real GDP. B) an increase in the price level and a decrease in real GDP. C) a decrease in the price level and an increase in the unemployment rate. D) an increase in the price level and an increase […]

  5.5   Integrative Questions   1) Suppose an increase in supply lowers the price from $10 to $8 and increases the quantity demanded from 100 units to 130 units. Using the midpoint method, the elasticity of demand equals A) 1.17. B) 0.85. C) 0.26. D) 1.56. E) None of the above answers is correct.   2) Suppose a decrease in supply raises the price from […]

    41) If the selling price of a firm’s product is $500 and the estimated average cost of producing this product is $400, what is the firm’s markup? A) 15 percent B) 20 percent C) 25 percent D) 40 percent     42) Which of the following is not an advantage of cost-plus pricing? A) It is easy to calculate. B) It requires little […]

  31) Suppose you are shown two intersecting demand curves that are drawn on the same scale. At the point of intersection, one of the demand curves is steeper than the other. Which of the following could explain the difference in slopes? A) The steeper one has a higher income elasticity of demand. B) The steeper one is probably the demand curve for a luxury […]