1) Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information you can conclude that
A. the supply of clothing has grown faster than the demand for clothing
B. demand for clothing has grown faster than the supply of clothing
C. the supply of and demand for clothing have grown by the same proportion
D. there is no way to determine what has happened to supply and demand with this information
2) Camille’s Creations and Julia’s Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can’t keep up with the quantity demanded at that price), then we would expect both Camille’s and Julia’s to:
A. raise their price and reduce their quantity supplied
B. raise their price and increase their quantity supplied
C. lower their price and reduce their quantity supplied
D. lower their price and increase their quantity supplied
3) In which of the following industries are economies of scale exhausted at relatively low levels of output?
A. Aircraft production
B. Automobile manufacturing
C. Concrete mixing
D. Newspaper printing
4) The average cost curves (AVC and ATC) should be minimized
A. where MC = ATC and MC = AVC
B. where FC = ATC and FC = AVC
C. where TC starts to increase at a faster rate
D. where ATC = AVC
5) If the wage rate increases,
A. a purely competitive producer will hire less labor, but an imperfectly competitive producer will not
B. an imperfectly competitive producer will hire less labor, but a purely competitive producer will not
C. a purely competitive and an imperfectly competitive producer will both hire less labor
D. an imperfectly competitive producer may find it profitable to hire either more or less labor
6) The real wage will rise if the nominal wage
A. falls more rapidly than the general price level
B. increases at the same rate as labor productivity
C. increases more rapidly than the general price level
D. falls at the same rate as the general price level
7) Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to
A. restrict the supply of construction workers
B. increase the elasticity of demand for construction workers
C. increase the demand for construction workers
D. increase the price of substitute inputs
8) Paying an above-equilibrium wage rate might reduce unit labor costs by
A. permitting the firm to attract lower-quality labor
B. increasing the cost to workers of being fired for shirking
C. increasing voluntary worker turnover
D. increasing the supply of labor
9) A good real-world example of monopolistic competition is
B. gas stations
C. Time Warner Cable
D. groceries stores
10) An industry comprising a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions, is called
A. monopolistic competition
C. pure monopoly
D. pure competition
11) Price is constant or given to the individual firm selling in a purely competitive market because
A. the firm’s demand curve is downward sloping
B. of product differentiation reinforced by extensive advertising
C. each seller supplies a negligible fraction of total supply
D. there are no good substitutes for its product
12) The most important pricing strategy for a perfectly competitive firm is
A. minimizing cost
B. maximizing sales
C. product differentiation
13) Which of the following is a non price barrier of entry?
A. Huge sunk cost
C. Product differentiation
14) A third-degree price discrimination can be applied to which of the following market structures?
A. A monopoly
B. An oligopoly
C. A monopolistic competition
D. A perfect competition
15) Investing in R&D is more likely to occur in markets where
A. firms have monopoly power protected by regulatory barriers
B. markets are closely competitive markets with close to zero economic profits
C. markets are oligopoly markets with strong collusion agreements
D. markets are monopolistic competitive markets
16) All economies of scale are achieved at the minimum of
A. average total cost
B. total cost
C. average variable cost
D. average fixed cost
17) Inflation is undesirable because it
A. arbitrarily redistributes real income and wealth
B. invariably leads to hyperinflation
C. usually is accompanied by declining real GDP
D. reduces everyone’s standard of living in the same proportion
18) An economy’s aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the
A. net export effect
B. wealth effect
C. real-balances effect
D. multiplier effect
19) Suppose productivity rises in a particular economy, but wages stay the same. Other things equal,
A. the demand curve will shift leftward
B. the supply curve will shift rightward
C. the supply curve will shift leftward
D. expenditures curve will shift rightward
20) If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium
A. output would rise
B. output would fall
C. price level would necessarily fall
D. price level would necessarily rise
21) Expansionary fiscal policy is so named because it
. involves an expansion of the nation’s money supply
B. can only be attained by expanding government consumption
C. is aimed at achieving greater price stability
D. can motivate an expansion of real GDP
22) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative$100 billion. To achieve full-employment output (exactly), government should
A. increase government expenditures by $100 billion
B. increase government expenditures by $50 billion
C. reduce taxes by $50 billion
D. reduce taxes by $200 billion
23) GDP understates the value of output produced by an economy because it
A. includes transactions that do not take place in organized markets, such as home cooked meals
B. includes environmental degradation caused by increased output production
C. excludes value added from the underground economy, such as tips taken under the table
D. excludes the value of the wages and benefits of government employee
24) Other things equal, a decrease in the real interest rate will
A. shift the investment demand curve to the right
B. shift the investment demand curve to the left
C. move the economy upward along its existing investment demand curve
D. move the economy downward along its existing investment demand curve
25) Other things equal, a decrease in corporate income taxes will
A. decrease the market price of real capital goods
B. have no effect on the location of the investment demand curve
C. shift the investment demand curve to the right
D. shift the investment demand curve to the left
26) Inflation in U.S. prices will cause
A. an increase in the demand for U.S. dollars and an appreciation in the exchange rate
B. an increase in the supply of U.S. dollars and a depreciation in the exchange rate
C. a decrease in the demand for U.S. dollars and a depreciation in the exchange rate
D. a decrease in the supply of U.S. dollars and an appreciation in the exchange rate
27) The quantity theory of money states that
A. the money supply divided by the velocity of money equals the price level divided by real output
B. the money supply times the velocity of money equals the price level times real output
C. the money supply times the price level equals real output divided by the velocity of money
D. the money supply times the price level equals real output times the velocity of money
28) Suppose that U.S. prices rise 4% over the next year while prices in Mexico rise 6%. According to the purchasing power parity theory of exchange rates, what should happen to the exchange rate between the dollar and the peso?
A. The dollar should depreciate.
B. The peso should appreciate.
C. The peso should depreciate.
D. The dollar will be revalued.
29) A rise in the domestic interest rate leads to capital
A. outflows and exchange rate appreciation
B. outflows and exchange rate depreciation
C. inflows and exchange rate depreciation
D. inflows and exchange rate appreciation
30) A firm under monopolistic competition will earn
A. a positive economic profit as it has some monopoly power
B. zero economic profit as it sets P = MC
C. Zero economic profit as its P = ATC
D. a positive economic profit as it sets MC = MR
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.