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ETS MFT Business Exam Version 1 Newest 2025
Complete All Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+||Brand New
Version!!
Sue and Neal are twins. Sue invests $5,000 at 7 percent when
she is 25 years old. Neal invests $5,000 at 7 percent when he is
30 years old. Both investments compound interest annually.
Both Sue and Neal retire at age 60. Which one of the following
statements is correct assuming that neither Sue nor Neal has
withdrawn any money from their accounts?
a) Sue will have less money when she retires than Neal.
b) Neal will earn more interest on interest than Sue.
c) Neal will earn more compound interest than Sue.
d) If both Sue and Neal wait to age 70 to retire, then they will
have equal amounts of savings.
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e) Sue will have more money than Neal as long as they retire at
the same time - ANSWER-E
In general, the __________ difficult it is for an organization to
enter an industry as a new competitor, the __________ are the
barriers to entry to this industry
a) Less; lower
b) More; lower
c) More; higher
d) Less; higher - ANSWER-C
An open access good (or common property good), such as a
fishery:
a) Is rival but not excludable
b) Is both rival and excludable
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c) Is neither rival nor excludable
d) Is not rival but is excludable - ANSWER-A
A differentiation strategy enables a business to address the five
competitive forces by
a) lessening competitive rivalry by distinguishing itself
b) having brand-loyal customers become more sensitive to
prices
c) increasing economies of scale
d) serving a broader market segment - ANSWER-A
Only one of the following statements is false at the long-run
equilibrium for a firm in a monopolistically competitive
industry. Which one is false?
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a) Price equals Average Total Cost, like a competitive firm
b) Price exceeds marginal cost, like a monopolist
c) Firms make zero economic profit, like a competitive firm
d) Firms produce at the bottom of the ATC curve, like a
competitive firm - ANSWER-D
Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one
hour of direct labor to manufacture. Raw material costs $3 per
pound and direct production labor is paid $4 per hour. Fixed
supervisory costs are $2,000 per month and Dreamland rents its
factory on a five-year lease for $4,000 per month. All costs are
considered costs of production.
Another firm has offered to produce "Old Softy" and sell them
to Dreamland for $12 each. Dreamland cannot avoid the factory
lease payments, but can avoid all labor costs if it does not
produce these pillows. Under these conditions, how many "Old
Softy" pillows must Dreamland sell to earn monthly gross
profits of $1,000?
ETS MFT Business Exam Version 1 Newest 2025
Complete All Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+||Brand New
Version!!
Sue and Neal are twins. Sue invests $5,000 at 7 percent when
she is 25 years old. Neal invests $5,000 at 7 percent when he is
30 years old. Both investments compound interest annually.
Both Sue and Neal retire at age 60. Which one of the following
statements is correct assuming that neither Sue nor Neal has
withdrawn any money from their accounts?
a) Sue will have less money when she retires than Neal.
b) Neal will earn more interest on interest than Sue.
c) Neal will earn more compound interest than Sue.
d) If both Sue and Neal wait to age 70 to retire, then they will
have equal amounts of savings.
,2|Page
e) Sue will have more money than Neal as long as they retire at
the same time - ANSWER-E
In general, the __________ difficult it is for an organization to
enter an industry as a new competitor, the __________ are the
barriers to entry to this industry
a) Less; lower
b) More; lower
c) More; higher
d) Less; higher - ANSWER-C
An open access good (or common property good), such as a
fishery:
a) Is rival but not excludable
b) Is both rival and excludable
,3|Page
c) Is neither rival nor excludable
d) Is not rival but is excludable - ANSWER-A
A differentiation strategy enables a business to address the five
competitive forces by
a) lessening competitive rivalry by distinguishing itself
b) having brand-loyal customers become more sensitive to
prices
c) increasing economies of scale
d) serving a broader market segment - ANSWER-A
Only one of the following statements is false at the long-run
equilibrium for a firm in a monopolistically competitive
industry. Which one is false?
, 4|Page
a) Price equals Average Total Cost, like a competitive firm
b) Price exceeds marginal cost, like a monopolist
c) Firms make zero economic profit, like a competitive firm
d) Firms produce at the bottom of the ATC curve, like a
competitive firm - ANSWER-D
Dreamland Pillow Company sells the "Old Softy" model for $20
each. One pillow requires two pounds of raw material and one
hour of direct labor to manufacture. Raw material costs $3 per
pound and direct production labor is paid $4 per hour. Fixed
supervisory costs are $2,000 per month and Dreamland rents its
factory on a five-year lease for $4,000 per month. All costs are
considered costs of production.
Another firm has offered to produce "Old Softy" and sell them
to Dreamland for $12 each. Dreamland cannot avoid the factory
lease payments, but can avoid all labor costs if it does not
produce these pillows. Under these conditions, how many "Old
Softy" pillows must Dreamland sell to earn monthly gross
profits of $1,000?
