When a firm faces a downward-sloping demand curve, marginal revenue
A) must exceed price because the price effect outweighs the output effect.
B) is less than price because a firm must lower its price to sell more.
C) equals price because the firm sells a standardized product.
D) must exceed price because the output effect outweighs the price effect.
Figure 16-4
In the graph above, suppose the economy is initially at point A. The movement of the
economy to point B as shown in the graph illustrates the effect of which of the
following policy actions by the Congress and the president?
A) an increase in transfer payments
B) an increase in interest rates
C) an increase in the marginal income tax rate
D) an open market purchase of Treasury bills
Table 15-4
Shakti Inc. has been granted a patent for its Arnica toothache balm. Table 15-4 shows
the demand and the total cost schedule for the firm. What is the amount of the
deadweight loss generated by Shakti when it produces the monopoly output?
A) $124
B) $42
C) $36
D) $12
Table 29-2
Given the following exchange rates in the above table, what are the exchange rates
stated as U.S. dollars per Mexican peso and U.S. dollars per British pound respectively?
A) 0.10 dollars per peso and 2.00 dollars per pound
B) 1.00 dollars per peso and 20.00 dollars per pound
C) 0.01 dollars per peso and 0.20 dollars per pound
D) 0.10 dollars per peso and 5.00 dollars per pound
E) 0.01 dollars per peso and 0.50 dollars per pound
A sharp increase in the divorce rate increases the number of lawyers hired to determine
divorce settlements. This will
A) increase GDP and increase well being in the economy.
B) increase GDP and decrease well being in the economy.
C) decrease GDP and increase well being in the economy.
D) decrease GDP and decrease well being in the economy.
If expected inflation rises, the long-run Phillips curve will
A) shift to the right.
B) not be affected.
C) shift to the left.
D) become negatively sloped.
Which of the following statements is true?
A) All individuals in both countries are made better off as a result of international trade.
B) Within each country, some individuals are made better off as a result of international
trade, but one of the countries will be worse off overall.
C) Although some individuals are made better off as a result of international trade, both
countries may be made worse off overall.
D) Each country as a whole is made better off as a result of international trade, but
individuals within each country may be made worse off.
If the Fed buys Treasury bills, this will shift the
A) money supply curve to the right.
B) money supply curve to the left.
C) money demand curve to the right.
D) money demand curve to the left.
If a monopolistically competitive firm has excess capacity,
A) it has exhausted all economies of scale.
B) it is producing beyond the minimum efficient scale.
C) it is experiences diseconomies of scale.
D) it produces an output rate that places it on the negatively sloped portion of its
average total cost curve.
Figure 4-8 Figure 4-8 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 quantity of apartments demanded at the
new price?
A) 0
B) 200
C) 300
D) 500
The extra cost associated with undertaking an activity is called
A) net loss.
B) marginal cost.
C) opportunity cost.
D) foregone cost.
If 11 workers can produce 53 units of output while 12 workers can produce 56 units of
output, what is the marginal product of the 12th worker?
A) 0.16
B) 3
C) 4.67
D) 36
If a corporation earns a profit, how do owners of the firm share in the profit?
A) through coupon payments on that firm’s bonds
B) through dividend payments on shares of that firm’s stock
C) by selling any bonds or stocks owned and realizing a capital gain
D) by raising the interest rate on bonds