If a firm expects that the price of its product will be higher in the future than it is today
A) the firm will go out of business.
B) the firm has an incentive to increase supply now and decrease supply in the future.
C) the firm has an incentive to decrease quantity supplied now and increase quantity
supplied in the future.
D) the firm has an incentive to decrease supply now and increase supply in the future.
The business cycle ________ on FedEx since the company’s inception over 40 years
ago.
A) has had virtually no effect
B) has always had a negative effect
C) has had a large effect
D) has always had a positive effect
If a straight line passes through the point x = 24 and y = 8 and also through the point x =
8 and y = 16, the slope of this line is
A) negative 8 divided by 4.
B) seven tenths.
C) negative one half.
D) one and one half.
All but one of the following statements is used to justify protectionism. Which
statement is not used to justify protectionism?
A) Free trade leads to higher prices for imported goods.
B) Free trade reduces employment by driving domestic firms out of business.
C) A country should not rely on other countries for goods that are critical to its national
defense.
D) Trade restrictions are necessary to protect new firms until they can gain experience
and become more productive.
If an increase in investment spending of $50 million results in a $400 million increase
in equilibrium real GDP, then
A) the multiplier is 0.125.
B) the multiplier is 3.5.
C) the multiplier is 8.
D) the multiplier is 50.
Table 9-3
Bryce and Tina are artisans who produce homemade candles and soap. Table 9-3 lists
the number of candles and bars of soap Bryce and Tina can each produce in one month.
Select the statement that accurately interprets the data in the table.
A) Tina has a comparative advantage in making candles.
B) Bryce has an absolute advantage in making soap.
C) Bryce has a comparative advantage in making candles.
D) Bryce has a comparative advantage in making candles and making soap.
Table 17-1
Suppose the output price is $3. If the firm represented in the table is maximizing its
profit by hiring six workers, what is the wage rate?
A) $120
B) $65
C) $40
D) There is insufficient information to answer the question.
One reason why, in the short run, the marginal product of labor might increase initially
as more workers are hired is that
A) the first workers hired get to use the best equipment.
B) specialization allows a worker to focus on one task, thereby increasing her
proficiency at that task.
C) the best workers are hired first and later hires are not as skillful.
D) beyond some point, a firm has hired too many workers.
Table 9-5
Madison and Austin own Cafe Ole’. Table 9-5 lists the number of empanadas and tacos
Madison and Austin can each make in one hour. Select the statement that accurately
interprets the data in the table.
A) Madison has a greater opportunity cost than Austin for making tacos.
B) Madison’s opportunity cost for making tacos is less than Austin’s.
C) Austin has a greater opportunity cost than Madison for making empanadas.
D) Austin’s opportunity cost for making tacos and making empanadas are both greater
than Madison’s.
A constant-cost industry is an industry in which
A) average costs fall as the industry expands output.
B) average costs rise as the industry expands output.
C) average costs remain constant as the industry expands output.
D) input prices rise at a constant rate as firms in the industry use more inputs.