Figure 4-5
Figure 4-5 shows the market for apartments in
Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000
per month for apartments. What is the value of producer surplus after the imposition of
the price floor?
A) $40,000
B) $240,000
C) $270,000
D) $290,000
Figure 15-12 Figure 15-12 shows
the cost and demand curves for a monopolist.
If the firm maximizes its profits, the deadweight loss to society due to this monopoly is
equal to the area
A) ABF.
B) ABEG.
C) ACE.
D) EFG.
Figure 2-19
Which two arrows in the diagram depict the following transaction: Carter earns a $400
commission for selling men’s designer shoes at Brooks Brothers.
A) J and M
B) K and G
C) K and M
D) J and G
At a recent company meeting, Ravi Batra, sales manager of Life’s a Beach, a surfboard
producer, announced, “We have increased our sales by 13 percent in just 9 months.”
Suppose 9 months ago, its sales amounted to $245,000. What is the value of its sales
today?
A) $31,850
B) $207,638
C) $276,850
D) $359,905
A normal rate of return refers to the ________ that investors must earn on the funds
they invest in a firm, expressed as a percentage of the amount invested.
A) minimum amount
B) maximum amount
C) total amount
D) profit
Table 11-1
Based on the table above, which country has a higher standard of living and why?
A) Sweden has a higher standard of living because their GDP is higher.
B) Ireland has a higher standard of living because their GDP per capita is higher.
C) Sweden has a higher standard of living because their GDP per capita is higher.
D) Ireland has a higher standard of living because growth in GDP is greater in Ireland
than in Sweden.
Consider a downward-sloping demand curve. When the price of a normal good
increases, the income and substitution effects
A) work in the same direction to increase quantity demanded.
B) work in the same direction to decrease quantity demanded.
C) work in opposite directions, and quantity demanded increases.
D) work in opposite directions, and quantity demanded decreases.
Which of the following is a true statement about real and nominal GDP?
A) If nominal GDP increases from one year to the next, we know that production of
goods and services has risen.
B) Nominal GDP is a better measure than real GDP in comparing changes in the
production of goods and service year after year.
C) Increases in average prices do not affect the calculation of nominal GDP.
D) If real GDP increases from one year to the next, we know that production of goods
and services has risen.
A set of actions that a firm takes to achieve a goal, such as maximizing profits, is called
A) a business strategy.
B) a payoff matrix.
C) the Porter’s Competitive Forces plan.
D) game theory.
Figure 4-3 Figure 4-3 shows the market for
granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now
suppose producers decide to cut output to Q2 in order to raise the price to P2. What area
represents consumer surplus at the equilibrium price of P1?
A) A
B) A + B + C
C) D + E
D) A + B + C + D + E
To affect the market outcome, a price ceiling
A) must be set below the black market price.
B) must be set below the legal price.
C) must be set below the price floor.
D) must be set below the equilibrium price.
The minimum point on the average variable cost curve is called
A) the shutdown point.
B) the break-even point.
C) the loss minimizing point.
D) the point of diminishing returns.