Economics Exam, Econ 414 Final Chapter 14, Fin 321 Midterm 2, Macro Final Exam, Econ chapter 14 & 16, ManEcon - Chapter 14 quiz, quiz 4, ECON TEST 3, Managerial Economics Chapter 12 Test Bank

Economics Exam, Econ 414 Final Chapter 14, Fin 321 Midterm 2, Macro Final Exam, Econ chapter 14 & 16, ManEcon - Chapter 14 quiz, quiz 4, ECON TEST 3, Managerial Economics Chapter 12 Test Bank Unlike an accountant, an economist measures costs on a (n) ________ basis. replacement There is no change in total revenue when the demand curve for a good is: Unitary elastic. When the price of a good in a market is above equilibrium: The quantity supplied exceeds the quantity demanded. A surplus is observed. The price will fall in the near future. ALL OF THE ABOVE When a firm raises the price of its product, what happens to total revenue? If demand is elastic, total revenue decreases Which of the following would NOT describe an aspect of long-run adjustment to rising gasoline prices? Consumers make no changes in their current driving habits. Gasoline and sports utility vehicles (SUVs) are complementary goods. One would expect, therefore, that the recent increase in the price of gasoline would cause The demand for SUVs to fall and the equilibrium quantity to fall Which of the following best describes 'Market Value Added'? The difference between the market value of the firm and the amount of contributed capital. If sellers try to charge a price which is above the equilibrium level, then it can be predicted that: Surplus conditions will result and forces will be set in motion to cause prices to fall. Several firms spent millions of dollars advertising their goods and services at the recent Super Bowl. One of the reasons they did so was that they were attempting to: shift the demand for the product to the right. Which of the following statements is true? An increase in demand causes equilibrium price and quantity to rise. A decrease in demand causes equilibrium price and quantity to fall. An increase in supply causes equilibrium price to fall and quantity to rise. A decrease in supply causes equilibrium price to rise and quantity to fall. ALL OF THE ABOVE Which of the following statements highlight the distinction between microeconomics and macroeconomics? microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy. If the cross price elasticity between a Subway Veggie Delite and Jimmy John's Veggie sandwich is 4.0, a 10% increase in the price of Subway sandwich will lead to a: 40% increase in the demand of Jimmy John's sandwiches Assume Coca-Cola and Pepsi-Cola are substitutes. A rise in the price of Coca-Cola will have which of the following effects on the market for Pepsi? A rightward shift in the Pepsi demand curve. Which of the following examples best illustrates the concept of derived demand? The higher the demand for automobiles, the greater the demand for steel. Speed in communications and the growth of internet has caused transaction costs to: decrease significantly Which of the following would represent a microeconomics decision or process? Using forecasted interest rates to determine the appropriate time to finance a new plant. Weather conditions have been exceptionally good for growing strawberries this year and a bumper crop is anticipated. As a result, one would expect The supply to be higher than normal, and the market price to be lower Suppose there is a shortage of food in the market. In the long-run,the guiding (allocation) function of price can be expected to cause an increasing shift in the supply of food. If the coefficient of price elasticity for a given product is -2.5, then it can be said that Demand will increase if price rises A lower price will be accompanied by lower total expenditures on the product A one percent change in the products price will tend to be accompanied by a 2.5 percent change in quantity demanded in the same direction of the price change Demand is inelastic NONE OF THESE Which of the following best describes the difference between a change in quantity demanded and change in demand? A change in quantity demanded occurs when the price of the good has changed; a change in demand occurs when a non-price determinant of demand for the good has changed. A firm earns a normal profit when its total revenues just offset both the ________ cost and ________ cost. accounting; opportunity As you move down along a demand curve, demand becomes less elastic If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using the formula for arc price elasticity what is the price elasticity of demand ? - 1.64 If the demand curve for a good always has unitary price elasticity, what does this imply about consumer behavior? Consumers will spend a constant total amount on the good. A price-ceiling can be defined as: a legal maximum price established by the government for a specific market. Which of the following best describes entrepreneurial ability? The ability to manage scarce resources, find new methods to achieve objectives, and be willing and able to assume the risk associated with achievement. Suppose that the Vice President for Marketing of Aetna Pharmacueticals argues that a 10 percent increase in the price of insulin (used by diabetic patients) will raise total revenues. It can be inferred that the Vice Prseident of Marketing thinks that demand for insulin is: Inelastic. When we are making choices, we do because of: unlimited wants and limited resources. An inferior good has a ________ income elasticity of demand and demand for the good ________ as income rises. negative; decreases Typically, we can expect that the: Elasticities for individual brands are likely to be higher than for the entire product category. Which of the following best describes the conditions necessary for a market to attain equilibrium? All of the above accurately describe the conditions necessary for a market to attain equilibrium. Suppose President Trump threatens that all imports of Mexican built cars will be subjected to a border tax (tariff) in the future. As a result of this announcement, we can expect that the current demand for these cars to: increase, which is a shift to the right of the demand curve. If a product has several possible substitutes, we would expect the demand curve to be Relatively elastic Yesterday Seller A supplied 400 units of a good X at $10 per unit. Today Seller A supplied the same quantity of units at $5 per unit. Based on this evidence, Seller A has experienced a (an): Increase in supply. In order to confirm that Apple and Samsung are indeed competitors, the Federal Trade Commission should test the ____ and should get a ____. cross-price elasticity; positive number Management can be best described as: How firms organize and allocate a firms resources to achieve the firm's objectives Which of the following best describes modern corporations in the U.S.? Large publicly held firms in which the management of the firm is typically the dominate proportion of its owners. Managerial economics can best be described as: How firm managers use economic analysis to make business decisions and solve problems to best use the firms resources. When there are variation in a firm's returns over the business cycle, the firm is facing _______ risk. Business Which of the following best describes the opportunity cost of a year of college? The dollar value of tuition, books, all associated explicit expenses, the interest that may have been earned on that sum, and any foregone income from not working over that period If when the price of good A rises by 5 percent the quantity demanded of good B rises by 10 percent, it can be said that A and B are substitute goods Which of the following best describes the process of answering the basic economic question in the United States? A mixed economy where most goods and services produced are the result of market forces and government regulation. Transactions costs of a good or service, being higher than internal provision: Result in the firm providing the good or service for itself. Which of the following describes how the allocating function of price determines long-run equilibrium quantity? The change in market price provides an incentive for consumers to change their quantity of consumption and for producers to redistribute their resources. Producers respond to an increase in demand by allocating a greater amount of resources to production due to the increased profitability of the product. Consumers respond to an increase in supply by substituting away from other goods due to the relative price decrease. ALL OF THE ABOVE ACCURATELY DESCRIBE THE LONG-RUN PROCESS Which of the following best describes the "guiding function" of price? The guiding function of price is the movement of resources into or out of markets in response to a change in the equilibrium price of a good or service. An optimal decision in managerial economies in reached when: MR = MC Consumers will tend to increase their expenditures on a product When price increases and demand is price inelastic Which of the following describes marginal revenue? The addition to total revenue associated with a one-unit rise in quantity. When transaction cost are high, a company may decide to: May choose to provide the service/product itself The three main economic questions can be categorized as: What to produce, how to produce, for whom to produce Number of Workers Units of Output 0 0 1 40 2 90 3 126 4 150 The Marginal Product of the fourth worker is: 24 units of output. Which of the following costs is likely to be irrelevant to a short-run business decision? historical cost The learning curve indicates that repetition of various production tasks cause unit costs to decrease. When the more recent observations are more relevant to the estimate of the next period than previous observations, the naïve forecasting method to employ is exponential smoothing. Ultimately, the firm's production level depends on: How much consumers want to buy. Which of the following is the best example of economies of scope? A decides to rent out its Web site to independent e-commerce companies. Which of the following situation where using a moving average forecast may be the most appropriate? There is no pronounced trend. When we observe the relationship between productivity and costs, we can conclude that there is: an inverse relationship between productivity and costs Which of the following best describes a production function? The relationship between the maximum amounts of output a firm can produce and various quantities of inputs. In the short run, a perfectly competitive firm Might make an economic profit, an economic loss, or a normal profit. Which of the following statements is true? When marginal productivity of a variable input is falling then marginal costs of production must be rising. When we collect the uninsurance rates across all the counties of the state of Texas in March of 2018, it represents an example of using cross-sectional data.