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Grand Canyon COURSE FIN & ACC 450, Winter 2014

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Question;1. A point on a nation's;production-possibilities curve represents;A) Combinations of production that are;unattainable, given current technology and resources;B) The full employment of resources to;achieve a particular combination of goods and services;C) Levels of production that will cause;both unemployment and inflation;D) An undesirable combination of goods and;services;2.;Opportunity cost may be defined as the;A) Dollar cost of producing a particular;product;B) Dollar prices paid for final goods and;services;C) Difference between wholesale and retail;prices;D) Goods or services that are forgone in;order to obtain something else;3.;Factors of production are;A) Unlimited in quantity;B) Scarce only in United States;C) Scarce only in the poorest countries of;the world;D) Scarce in every society;4.;Given that resources are scarce;A) Poor countries must make choices but;rich countries with abundant resources do not have to make choices.;B) Opportunity costs are experienced;whenever choices are made.;C) Some choices involve opportunity costs;while other choices do not.;D) A "free lunch" is possible;but only for a limited number of people.;5. A;consequence of the economic problem of scarcity is that;A) There is never too much of any good or;service produced.;B) The production-possibilities curve is;bowed outward.;C) The production of goods and services;must be controlled by the government.;D) Choices have to be made about how;resources are used.;6.;If an economy experiences increasing opportunity costs with respect to two;goods, then the production-possibilities curve between the two goods will be;A) A straight, downward-sloping line;B) Bowed inward;C) Bowed outward until the two goods are;equal, and then bowed inward;D) Bowed outward;7.;An increase in the capacity to produce can be represented by a movement from;point;A) A to point C;B) A to point B;C) D to point E;D) C to point E;8. Which of the following is true about the;combination of plasma televisions and MP3 players represented by point F?;A) This economy will never be able to reach;point F.C) Point F is attainable if this economy reduces its unemployment rate.;D) Point F will be more easily attainable;if the government takes control of all privately-run factories.;9. A;movement from point C to point A results in;A) More efficient production;B) A reallocation of resources from MP3;player production to plasma television production;C) A reallocation of resources from plasma;television production to MP3 player production;D) Permanent unemployment of workers;producing plasma televisions;10.;A shift of the production-possibilities curve from PP1 to PP2 could be caused;by;A) An increase in the unemployment rate;C) Tougher pollution controls for the;producers of plasma televisions and MP3 players;D) Better use of existing technology;11.;A market is said to be in equilibrium when;A) The buying intentions of all consumers;are realized.;B) The supply intentions of all sellers are;realized.;C) The quantity demanded equals the quantity;supplied.;D) Demand is fully satisfied at all;alternative prices.;12. the most desirable rate of output for a;firm is the output that;A) Minimizes marginal costs.;B) Maximizes total profit;C) Maximizes total revenue.;D) Minimizes total costs;13.;Accounting costs and economic costs differ because;A) Economic costs include implicit costs;and accounting costs do not.;B) Economic costs include explicit costs;and accounting costs do not.;C) Accounting costs include implicit costs;and economic costs do not.;D) Accounting costs include explicit costs;and economic costs do not.;14. Which of the following determinants of demand is most directly an;indication of a consumer's utility for a good?;A) Income;B) Expectations of future prices;C) Tastes;D) Other goods (availability and prices);15.;A U-shaped average total cost curve implies;A) A linear total cost curve;B) First, diminishing returns, and then;increasing returns;C) That total costs are at a minimum at the;minimum of the average cost curve;D) First, marginal cost below average total;cost, and then marginal cost above average total cost;16.;In the short run, when a firm produces zero output, variable cost equals;A) Total cost;B) Fixed cost;C) Zero;D) Marginal cost;17. If there is a surplus at a given price;then;A) The price is zero.;B) That price is lower than the equilibrium;price.;C) That price is greater than the;equilibrium price.;D) The market is in equilibrium at that;price.;18.;Economies of scale;A) Exist in both the short run and the long;run;B) Explain why average total costs decline;as output increases in the long run;C) Explain why average variable and average;total costs decline in the short run;D) Explain why average total costs increase;as output increases in the long run;19.;If Carmen's Coffee Company wants to increase total revenue and the price;elasticity of demand is 0.43, the company should;A) Keep the price constant since a price;increase or decrease will cause total revenue to fall.;B) Decrease the price of coffee.;C) Advertise since this is only option that;will increase total revenue.;D) Increase the price of coffee.;20.;When Claudia goes to the gas station she buys 10 gallons of gas no matter what;the price per gallon. What does this imply about her price elasticity of demand;for gasoline?;A) It is unitary.;B) It is perfectly elastic.;C) It is perfectly inelastic.;D) It is relatively elastic.;21.;Total utility is maximized when;A) Marginal utility is zero.;B) Price is less than marginal utility.;C) Price is equal to marginal utility.;D) Marginal utility is maximized.;22.;When the size of a factory (and all its associated inputs) doubles and, as a;result, output more than doubles;A) The law of diminishing returns must not;apply in the smaller factory.;B) The short-run ATC curve must be;declining.;C) Economies of scale must exist.;D) Marginal costs must be declining.;23.;The additional pleasure or satisfaction from a good declines as more of it is;consumed in a given period. This is the definition of the;A) Total revenue rule;B) Law of diminishing total utility;C) Law of diminishing marginal utility;D) Law of demand;24.;In the short run, when a firm produces zero output, total cost equals;A) Zero;B) Variable costs;C) Fixed costs;D) Marginal costs;25.;Assume a series of forest fires reduces the supply of lumber, which is an input;in the production of wooden bats. Baseballs and wooden bats are complements. If;the price of wooden bats increases, we can expect the;A) Supply of baseballs to increase;B) Supply of baseballs to decrease;C) Demand for baseballs to decrease;D) Demand for baseballs to increase;26. Suppose a university raises its tuition;by 6% and as a result the enrollment of students decreases by 3%. The absolute;value of the price elasticity of demand is;A) 6.0;B) 0.5;C) 2.0;D) 8.0;27. Maximum total revenue occurs when;A) Price multiplied by quantity is 1.0.;B) The absolute value of the price;elasticity of demand is 1.0.;C) Total revenue is -1.0.;D) The absolute value of the price;elasticity of demand is 100.;28.;Marginal physical product is the;A) Change in total input required to;produce one additional unit of output;B) Change in total output associated with;one additional unit of the variable input;C) Number of units of output obtained from;all units of input employed;D) Additional cost of an additional unit of;output;29. The equilibrium price in a market is;found where;A) The market supply curve intersects the;y-axis.;B) The market supply curve intersects the;market demand curve.;C) The market demand curve intersects the;y-axis.;D) The market supply curve intersects the;x-axis.;30. When the percentage change in quantity demanded is less than the;percentage change in price, ceteris paribus;A) Elasticity is impossible to calculate.;B) Demand is elastic.;C) Demand is inelastic.;D) Demand is unitary elastic.;31. Economies of scale are reductions in average;A) Total cost that result from using;operations of larger size;B) Fixed cost that result from reducing the;firm's scale of operations;C) Total cost that result from declining;average fixed costs;D) Fixed cost resulting from improved;technology and production efficiency;32. Which of the following is the best explanation of why the law of;diminishing returns does not apply in the long run?;A) In the long run, firms have enough time;to find the most qualified workers.;B) In the long run, firms can increase the;availability of space and equipment to keep up with the increase in variable;inputs.;C) All factors of production are fixed, in;the long run.;D) The MPP does not change, in the long;run.;33.;The term market mechanism refers to;A) The use of market prices and sales to;determine resource allocation;B) The establishment of a ceiling price in;a market;C) Government laws and regulations;concerning how the market should operate;D) Supply and demand curves;34.;Assume that pencils and pens are substitutes. If the price of pencils rises;then we will see;A) An increase in the supply of pens;B) A decrease in the demand for pens;C) A decrease in the supply of pens;D) An increase in the demand for pens;35. Which of the following is a determinant of supply?;A) Available technology;B) Consumers' income;C) Suppliers' tastes for the good they;produced;D) Consumers' desire for the good;36.;A lower quantity demanded of a good reflects, ceteris paribus;A) A higher price of the good;B) Fewer units actually purchased;C) A downward shift of the supply curve;D) Lower income;37. A shift in supply is defined as a;change in;A) Equilibrium quantity;B) Quantity supplied because of a change in;price;C) Price;D) Supply because of a change in a nonprice;determinant;38.;If there is a shortage at a given price, then;A) That price is greater than the;equilibrium price.;B) That price is less than the equilibrium;price.;C) There is no equilibrium price in the;market.;D) That price is the equilibrium price.;39.;A production function shows the;A) Minimum amount of output that can be;obtained from alternative combinations of inputs;B) Maximum quantity of inputs required to;produce a given quantity of output;C) Maximum output that can be produced with;varying combinations of factor inputs;D) Output capacity of the entire economy;40.;If the marginal cost curve is rising, then which of the following must be true?;A) The average total cost curve must be;above the marginal cost curve.;B) Total costs must be rising.;C) The average total cost curve must be;below the marginal cost curve.;D) The average total cost curve must be;rising.;41.;Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes;three plates of food. He does not go back for a fourth plate of food because;A) His total utility would increase with;the fourth plate of food.;B) He has reached the point of increasing;marginal utility.;C) The price of the fourth plate is too;high.;D) The marginal utility of the fourth plate;would be zero or even negative.;42.;Marginal cost;A) Falls whenever marginal physical product;decreases;B) Rises whenever marginal revenue product;rises;C) Falls in the short run because some;resources are fixed;D) Rises as a direct result of diminishing;returns;43. Which determinant of demand changes in the personal computer market;as more individuals become interested in "surfing the Internet"?;A) Income;B) Expectations;C) Cost of factors of production;D) Number of buyers;44. What is the marginal cost of the 120th unit of output?;A) $1.20;B) $288.00;C) $208.00;D) $200.00;45.;At what output level does diminishing marginal return begin?;A) 120 units;B) 100 units;C) Only the production function will indicate;when diminishing marginal returns begins.;D) 40 units;46.;What is the total cost of 120 units?;A) $34,560;B) $24,960;C) $9,600;D) $10,560;47. At what output does this firm maximize;technical efficiency?;A) 40 units;B) 0 units;C) 120 units;D) 100 units;48. What is the total variable cost when;output is 100 units?;A) $200;B) $20,000;C) $296;D) $9,600;49.;What is the average fixed cost when output is 120 units?;A) $208.00;B) $96.00;C) $80.00;D) $0.67;50. What is the total fixed cost?;A) $10,000;B) $9,600;C) $80;D) $29,600

 

Paper#48204 | Written in 18-Jul-2015

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