Thomas Edison constructed the first building that was used solely to make
a. movies.
b. airplanes.
c. telephones.
d. cameras.
Under an acreage allotment program,
a. the government sets a limit on the quantity of a product that a farmer is allowed to
bring to market, which is intended to cause farmers to cut back on the number of acres
they cultivate.
b. farmers are paid to take part of their land out of cultivation.
c. farmers are given limits as to the number of acres that can be farmed.
d. farmers are paid the difference between the market price of their product and a
governmentally determined price that would maintain an established price parity.
e. the government establishes a minimum price that farmers will be paid for their
product, which causes the farmers to cut back on the number of acres planted.
For a given firm, marginal factor cost is the same dollar amount no matter what quantity
of a factor it purchases. For this firm,
a. VMP = MRP.
b. VMP > MRP.
c. MRP > VMP.
d. MPP necessarily declines beginning with the first factor unit.
e. none of the above
Refer to Exhibit 39-4. At a target price of $4 per bushel, how many bushels of wheat are
produced?
Exhibit 39-4
a. 900
b. 800
c. 700
d. 600
If the LRATC curve is falling, then
a. the law of diminishing marginal returns is operating.
b. economies of scale are present.
c. constant returns to scale are present.
d. diseconomies of scale are present.
Refer to Exhibit 38-1. The coupon rate for bond B is
a. 0.09 percent.
b. 16.7 percent.
c. 9.5 percent.
d. 11 percent.
Refer to Exhibit 34-8. Assume that the current price of sugar in the United States is
$300 per ton (which includes a $100 per ton tariff on sugar imports). Americans
purchase __________ million tons of sugar from U.S. producers and import
__________ million tons of sugar from abroad.
Exhibit 34-8
a. 15; 10
b. 15; 20
c. 10; 5
d. 10; 15
e. 10; 20
Refer to Exhibit 23-7. At the profit-maximizing output level, average total cost is
Exhibit 23-7
a. $2.00.
b. $4.50.
c. $5.00.
d. $6.00.
e. This cannot be determined based on the information provided.
Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium the total surplus
will equal
Exhibit 4-8
a. area 1 + 2 + 3 + 4 + 5
b. area 1 + 2 + 3
c. area 2 + 3 + 4 + 5
d. area 4 + 5
Refer to Exhibit 27-5. The marginal revenue product of the second unit of labor is
a. $80.
b. $180.
c. $70.
d. $480.
Refer to Exhibit 22-3. What level of output exhibits the lowest average total cost?
Exhibit 22-3
a. 10 units
b. 25 units
c. 45 units
d. 60 units
e. 70 units
The sale of goods abroad at a price below their cost and below the price charged in the
domestic market is called
a. priming.
b. coping.
c. invading.
d. dumping.
A perfectly competitive market is initially in long-run competitive equilibrium. Then,
market demand increases. This causes existing firms in the market to __________ and
__________. As a result of the latter, the market supply curve shifts __________.
a. produce more output; some existing firms to exit the market; leftward
b. produce less output; new firms to enter the market; rightward
c. produce more output; new firms to enter the market; rightward
d. expand their plant size; some existing firms to exit the market; leftward
e. none of the above
If total revenue falls as a result of a decrease in the price of a given good, it follows that
demand is
a. perfectly elastic.
b. inelastic.
c. unit elastic.
d. perfectly inelastic.
e. b or d
A low price-earnings ratio usually indicates that people believe that this corporation
will have lower than average growth in earnings.
a. True
b. False
In the U.S., studies have shown that as real incomes have risen, per capita demand for
food has been increasing by a much lower percentage.
a. True
b. False
Price elasticity of demand is the ratio of the percentage change in price of one good to
the percentage change in quantity demanded of another good.
a. True
b. False
The branch of economics that studies the decisions made by individuals and firms is
called macroeconomics.
a. True
b. False
If supply is inelastic, it follows that
a. a rise in price will not change quantity supplied.
b. a fall in price will not change quantity supplied.
c. consumers will pay 100 percent of any tax placed on sellers.
d. quantity supplied always changes more than price changes.
e. none of the above
The objective of speculators is to buy at one price and sell at a lower price.
a. True
b. False