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Monetary Policy and International Trade 20 ... - Student Of Fortune

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					1. Economists (Points: 1)

    believe that tastes are the major influence on consumers' income expectations

    have observed that tastes vary with changes in the number of consumers

    recognize that tastes have an important impact on demand

    can say a great deal about the origin of tastes




2. If a price reduction leads to larger total revenue, demand is (Points: 1)

    perfectly inelastic

    inelastic

    unit elastic

    elastic




3. The total revenue from selling trucks is equal to (Points: 1)

    the price of a truck times the quantity sold

    the change in quantity sold divided by the change in price

    average cost times quantity produced

    the price of a truck times the quantity produced




4. Which of the following will cause demand to be relatively elastic? (Points: 1)

    There are few substitutes

    The time interval is relatively long

    The good is considered a necessity
    The good involves a relatively small portion of the consumers' budget




5. The more broadly a good is defined, (Points: 1)

    the more substitutes it has so the more elastic is its demand

    the fewer substitutes it has so the more elastic is its demand

    the more substitutes it has so the less elastic is its demand

    the fewer substitutes it has so the less elastic is its demand




6. For which of the following goods is the value of income elasticity most likely to be negative? (Points:
1)

    macaroni and cheese

    champagne

    airline tickets

    clothes




7. Substitutes are pairs of products with (Points: 1)

    positive cross-price elasticity of demand

    negative cross-price elasticity of demand

    positive income elasticity of demand

    negative income elasticity of demand




8. If marginal cost exceeds average variable cost, (Points: 1)
    average variable cost is negative

    average variable cost is increasing

    marginal cost is greater than average total cost

    average variable cost is decreasing




9. A firm's long-run average cost curve is also called its (Points: 1)

    profit curve

    planning curve

    production curve

    explicit cost curve




10. Economies of scale occur where (Points: 1)

    long-run average cost falls as new firms enter the industry

    short-run average cost falls as new firms enter the industry

    long-run average cost falls as one firm expands plant size

    short-run average cost falls as one firm expands plant size




11. Economies of scale can be caused by (Points: 1)

    all of the following

    short-run increases in marginal productivity

    the use of larger, more specialized machines

    higher information costs as a firm expands
12. As output increases, diseconomies of scale (Points: 1)

    lead to rising long-run average costs

    lead to declining long-run average costs

    lead to rising short-run average total costs

    lead to declining short-run total cost




13. Perfectly competitive firms are price takers because (Points: 1)

    all small firms must take the price set by the largest firm in the market

    firms take the price that government determines is a "fair" price

    each firm is small and goods are perfect substitutes for one another

    free entry and exit in the short run creates a constant market price in the long run




14. Average revenue is (Points: 1)

    total revenue minus total cost

    total revenue divided by quantity of output

    total revenue divided by quantity of input

    the change in total revenue divided by the change in output




15. A perfectly competitive firm's profit per unit of output equals (Points: 1)

    price times quantity
    total revenue minus total cost

    price minus average variable cost

    price minus average total cost




16. If price is less than its minimum average variable cost, a perfectly competitive firm that continues to
produce in the short run (Points: 1)

    cannot cover any of its variable cost

    incurs a loss greater than its fixed cost

    can cover all of its fixed cost and some of its variable cost

    can cover all of its variable cost and some of its fixed cost




17. The entry of new firms into a competitive industry in the long run has the effect of (Points: 1)

    driving up long-run equilibrium price

    eliminating economic profits

    reducing equilibrium quantity

    making the demand curve facing each firm more inelastic




18. Long-run equilibrium for a perfectly competitive firm occurs when (Points: 1)

    P = MC = MR = ATC

    MC = MR = AFC = ATC

    MC = MR = P > ATC

    P > MC > MR > ATC
19. Which of the following describes the market structure of monopoly? (Points: 1)

    many firms with some control over price, and considerable product differentiation

    a single firm producing all of the output for the industry

    many firms with no control over price, producing identical products with no differentiation

    a few firms with no control over price, producing highly differentiated products




20. Which of the following is true at the profit-maximizing quantity for both a perfectly competitive firm
and a monopoly? (Points: 1)

    Price equals marginal cost.

    Price is greater than marginal cost.

    Marginal revenue equals marginal cost.

    Marginal revenue is less than marginal cost.

				
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