Question: In the short run, the law of diminishing returns…
Answer Options: A. can be overcome by more variable inputs B. occurs for only a few economies C. can be observed in every production process D. does not occur in command economies
Answer: C (can be observed in every production process)
Question: In the long run, which is likely a variable cost?
Answer Options: A. wages but not equipment B. interest but not utilities C. factory rental but not wages D. rent, wages, and all other costs
Answer: D (rent, wages, and all other costs)
Question: Who participates in markets?
Answer Options: A. business firms B. consumers and government agencies C. business firms, consumers, and government agencies D. business firms and consumers
Answer: C (business firms, consumers, and government agencies)
Question: (Table 22.1) Accounting profit if entrepreneur could earn $1,000 elsewhere No multiple-choice given.
Answer: $925.
Question: Higher prices will increase total revenue if demand is…
Answer Options: A. inelastic B. elastic C. unitary elastic D. zero elasticity
Answer: A (inelastic)
Question: Each producer in monopolistic competition has…
Answer Options: A. substantial market power B. some market power C. no market power D. complete market power
Answer: B (some market power)
Question: Marginal cost pricing means…
Answer Options: A. produce where MC = MR B. goods offered at price = MC C. goods offered at price = ATC D. produce where MC=0
Answer: B (goods are offered at prices equal to marginal cost)
Question: Investment decisions are based on price relative to…
Answer Options: A. long-run fixed cost B. short-run marginal cost C. long-run average total cost D. short-run average total cost
Answer: C (long-run average total cost)
Question: When tariffs are imposed, losers include…
Answer Options: A. domestic consumers and domestic producers B. domestic consumers and domestic government C. domestic consumers and foreign producers D. foreign consumers and domestic producers
Answer: C (domestic consumers and foreign producers)
Question: Monopolistic competition like soft drinks likely to…
Answer Options: A. advertise for brand loyalty B. behave like a monopoly C. meet to set prices D. reduce market power
Answer: A (advertise to create brand loyalty)
Question: As interest rate rises, which does not occur?
Answer Options: A. cost of borrowing rises B. Q supplied of loanable funds up C. Q demanded of loanable funds down D. supply shifts right
Answer: D (supply curve does not shift right)
Question: [Question text not visible in source]
Answer: The answer for this is #1 to #3 (No multiple-choice given, no change. This was from the user’s text and did not require an answer option selection.)
Question: The kinked demand curve explains…
Answer Options: A. Why oligopolists are more sensitive to cost changes B. price-fixing elastic part and predatory pricing inelastic part C. how oligopoly achieves monopoly profits D. interdependent behavior of oligopolists
Answer: D (the consequences of the interdependent behavior of oligopolists)
Question: A monopoly can have market power because of all but…
Answer Options: A. gov’t bestowed franchise B. downward-sloping demand C. many close substitutes D. control over key inputs
Answer: C (the presence of many close substitutes)
Question: If U.S. quotas on sugar eliminated:
Answer Options: A. world price rises B. supply shifts left, price rises C. supply shifts right, price falls D. demand shifts left, price falls
Answer: C (the supply of sugar in U.S. would shift right and price falls