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1) If the price-elasticity coefficient for a good is .75, the demand for that good is
described as:
A.Normal
B.Elastic
C.Inferior
D.Inelastic
2)
Refer to the diagram, which relates to Firm A. Which of the following would shift A's
average total cost curve from ATC1 to ATC2?
A.Replacement of old equipment with new, more productive equipment embodying
technological advance.
B.A decrease in the incomes of A's customers.
C.A move along A's total product curve (not shown).
D.The increase in the price of one of the major inputs used to produce A's product.
3) If price and total revenue vary in opposite directions, demand is:
A.perfectly inelastic.
B.perfectly elastic.
C.relatively inelastic.
D.relatively elastic.
4) Answer the question on the basis of the following information:
Refer to the information. Average total cost is:
A.
B.
C.
D.
5)
Refer to the graph above, showing the long-run supply and demand curves in a purely
competitive market. We know that when this market reaches equilibrium, the marginal:
A.Cost equals marginal benefit
B.Benefit exceeds marginal cost
C.Cost exceeds marginal benefit
D.Cost equals zero
6) How will the marginal and average cost curves of the typical pure competitor shift or
change as a result of the following events: (a) an increase in wages of all labor; (b) an
increase in the rental payments on office machinery; (c) a technological advance; (d) an
increase in sales taxes; (e) an increase in property taxes; and (f) a decline in the price of
a basic raw material?
7) In 2010, the wealthiest 1 percent of U.S. households held about ____ percent of U.S.
household wealth.
A.35
B.77
C.23
D.32
8) A decrease in interest rates:
A.Raises the present value of a future amount
B.Lowers the present value of a future amount
C.Raises the future value of a present amount
D.Has no effect on present or future amount
9) There will be pressure on the interest rate for loanable funds to increase when:
A.Supply increases
B.Demand decreases
C.Quantity supplied exceeds quantity demanded
D.Quantity demanded exceeds the quantity supplied
10) Use the graph to answer these questions: (a) What is the profit-maximizing level of
output? (b) What is the economic profit? (c) What is the per-unit amount of profit at the
profit-maximizing level of output? (d) At what price would the firm decide to shut
down?
11) Which of the following is correct?
A.The excess capacity problem diminishes as the monopolistically competitive firm's
demand curve becomes less elastic.
B.The excess capacity problem means that monopolistically competitive firms typically
produce at some point on the rising segment of their average total cost curve.
C.The greater the degree of product variation, the lesser is the excess capacity problem.
D.The greater the degree of product variation, the greater is the excess capacity
problem.
