Yield management is the practice of
A) determining production functions to minimize production costs.
B) forecasting competitors’ responses to price changes.
C) using buyer data to rapidly adjust prices.
D) using information technology to find the best interest rate.
Linesha, a college student working part-time, receives a wage increase. An avid movie
buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs.
Based on this information,
A) DVDs and Blu-ray discs are substitutes.
B) Blu-ray discs are normal goods and DVDs are inferior goods.
C) DVDs and Blu-ray discs are normal goods.
D) the cross-price elasticity between DVDs and Blu-ray discs is negative.
The marginal utility per dollar that Harold Stratton receives from oranges is greater than
the marginal utility per dollar Harold receives from pears. To maximize his utility, what
should Harold do?
A) He should acquire more income so that he can afford to buy more oranges and pears.
B) He should reduce his consumption of both oranges and pears so that he can buy a
greater variety of goods.
C) He should buy fewer pears and more oranges.
D) He should buy fewer oranges and more pears.
You have just opened a new Italian restaurant in your hometown where there are three
other Italian restaurants. Your restaurant is doing a brisk business and you attribute your
success to your distinctive northern Italian cuisine using locally grown organic produce.
What is likely to happen to your business in the long run?
A) Your competitors are likely to change their menus to make their products more
similar to yours.
B) Your success will invite others to open competing restaurants and ultimately your
profits will be driven to zero.
C) If your success continues, you will be likely to establish a franchise and expand your
market size.
D) If you continue to maintain consistent quality, you will be able to earn profits
indefinitely.
Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6
per unit. This month, the company supplied the same quantity of binders at $4 per unit.
Based on this evidence, Tecumseh has experienced
A) a decrease in supply.
B) an increase in supply.
C) an increase in the quantity supplied.
D) a decrease in the quantity supplied.
Table 2-2 Production choices for Billie’s Bedroom Shop
Assume Billie’s Bedroom Shop only produces pillows and blankets. A combination of 9
pillows and 14 blankets would appear
A) along Billie’s production possibilities frontier.
B) inside Billie’s production possibilities frontier.
C) outside Billie’s production possibilities frontier.
D) at the vertical intercept of Billie’s production possibilities frontier.
A decrease in the price of GPS systems will result in
A) a smaller quantity of GPS systems supplied.
B) a larger quantity of GPS systems supplied.
C) a decrease in the demand for GPS systems.
D) an increase in the supply of GPS systems.
Figure 17-2
Suppose the economy is at point A. The Fed uses expansionary monetary policy to
lower the unemployment rate permanently below the level associated with A. Which of
the following will occur?
A) Inflation will accelerate in the long run.
B) Inflationary expectations will decline.
C) Unemployment will rise above the natural rate.
D) Unemployment will accelerate in the long run.
Many people leave their servers tips in restaurants, even when they are not likely to
visit the restaurant again. This is evidence that
A) people would rather pay for good service at an inexpensive restaurant than pay
higher prices and receive poor service at an expensive restaurant.
B) people enjoy eating at restaurants more than eating at home.
C) people treat others fairly even if doing so makes them worse off financially.
D) there has been an improvement in the service people receive in restaurants over
time, partly because the restaurant industry has become more competitive.
If the price of music downloads was to decrease, then
A) the demand for MP3 players would decrease.
B) the demand for MP3 players would increase.
C) the supply of MP3 players would increase.
D) the quantity demanded of MP3 players would decrease.
If the current account is in deficit and the capital account is zero, then
A) the financial account must be in surplus.
B) the balance of trade must be in surplus.
C) the balance of payments must be in surplus.
D) there is a capital outflow.
E) the balance of services must be in surplus.
Figure 2-1
Point A is
A) technically efficient.
B) unattainable with current resources.
C) inefficient in that not all resources are being used.
D) the equilibrium output combination.
Figure 4-3
Figure 4-3 shows the market for tiger shrimp. The
market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose
producers decide to cut output to 40in order to raise the price to $18.
What is the value of the deadweight loss at a price of $18?
A) $100
B) $180
C) $660
D) $1,040
Given the equations for C, I, G, and NX below, what is the marginal propensity to save?
C = 1,000 + 0.8Y
I = 1,500
G=1,250
NX = 100 A) 0.2
B) 0.8
C) 1.8
D) 10
Which of the following is a part of the “employer mandate” provision of the Patient
Protection and Affordable Care Act (ACA)?
A) Every firm with more than 3 full-time employees must offer health insurance to its
employees and must automatically enroll them in the plan.
B) small businesses with fewer than 50 employees will be exempt from being required
to participate in the program.
C) Firms with more than 50 full-time employees must offer health insurance or pay a
$3,000 fine to the federal government for every employee who receives a tax credit
from the federal government for obtaining health insurance through a health exchange.
D) Every resident of the United States must have health insurance that meets certain
basic requirements.