As output increases
A) average variable cost becomes smaller and smaller.
B) the difference between average total cost and average variable cost decreases.
C) marginal cost increases continuously.
D) the difference between average total cost and average variable cost becomes greater
and greater.
________ is defined as the value of a household’s assets minus the value of its
liabilities.
A) Household income
B) Household wealth
C) Personal household consumption
D) Planned household investment
Figure 11-18
Starting from point d a movement along isoquant1 to point f
A) increases the total cost of production with no change in output.
B) increases output but not the total cost of production.
C) increases the total cost of production and decreases output.
D) increases both the total cost of production and output.
Figure 2-8 Figure 2-8 above shows the production
possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids.
If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to
maximize production?
A) 30 dozen roses
B) 50 dozen roses
C) 100 dozen roses
D) 150 dozen roses
From 1950 to 2013 the number of people who lived on farms fell from 23 million to
fewer than 3 million? Which of the following factors have contributed to this trend?
A) increases in the cost of farming and a desire for young adults to move to urban areas
B) rapid growth in farm production and low income and price elasticities for food
products
C) slow growth in agricultural productivity and low income elasticities for food
products
D) government policies that have increased the cost of living and working on farms
Figure 11-1
Diminishing marginal productivity sets in after
A) the 2nd worker is hired.
B) the 3rd worker is hired.
C) the 4th worker is hired.
D) the 5th worker is hired.
Figure 6-5
The section of the demand curve labeled “A” represents
A) the inelastic section of the demand curve.
B) the unit-elastic section of the demand curve.
C) the elastic section of the demand curve.
D) the perfectly elastic section of the demand curve.
Table 11-7
Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
What is the average total cost of production when the firm produces 120 lanterns?
A) $1,680
B) $72
C) $14
D) $12.3
A perfectly elastic demand curve is
A) vertical.
B) horizontal.
C) curvilinear.
D) upward sloping.
An implicit cost is
A) a nonmonetary opportunity cost.
B) a cost unique to sole proprietorships.
C) a cost that involves spending money.
D) a cost unique to corporations.
Full-employment GDP is also known as
A) realized GDP.
B) potential GDP.
C) politico-economic GDP.
D) balanced-budget GDP.
If an increase in autonomous consumption spending of $25 million results in a $100
million increase in equilibrium real GDP, then
A) the MPC is 0.25.
B) the MPC is 0.75.
C) the MPC is 0.8.
D) the MPC is 2.5.
The average period of unemployment was ________ following the 2007-2009 recession
as following any other recession since the end of World War II.
A) three times as low
B) approximately the same
C) twice as high
D) eight times as high
How were countries whose industries competed with Chinese industry affected by a
yuan that was pegged to the dollar?
A) Because the yuan was undervalued at the pegged exchange rate, the level of Chinese
exports remained higher than they would have been if the exchange rate was allowed to
float freely.
B) Because the yuan was overvalued at the pegged exchange rate, competing firms
from other countries feared that abandoning the peg would lead to an increase in
Chinese exports.
C) Competitors feared that the declining value of the dollar would continue to make
Chinese goods more expensive.
D) Because China’s population is so large relative to other countries, the pegged
exchange rate made the goods of foreign competing firms much less expensive than
domestic Chinese goods.
Which of the following is an advantage of starting a new business as a corporation?
A) double taxation
B) ease in setting up
C) low expenses of legally organizing
D) greater ability to raise funds
The balance of payments includes which three accounts?
A) the current account, the financial account, and the capital account
B) the capital flows account, the financial account, and the trade account
C) the net investment account, the net exports account, and the net transfers account
D) the balance of trade account, the net foreign investment account, and statistical
discrepancy
In a small economy in 2013, aggregate expenditure was $850 million while GDP that
year was $800 million. Which of the following can explain the difference between
aggregate expenditure and GDP that year?
A) Aggregate expenditure is always less than GDP in developed countries.
B) Firm investment in inventories was less than anticipated in 2013.
C) Firm investment in inventories was greater than anticipated in 2013.
D) Aggregate expenditure is always less than GDP in developing countries.