Biology Forums - Study Force

The island nation of Sonorez produces 200 tons of wheat and 500 tons of corn. Munisia, its neighboring country, produces 400 tons of wheat and corn each. Sonorez would like to consume another 80 tons of wheat and is willing to give up a 100 tons of corn for it. Munisia on the other hand would like an extra 50 tons of corn and is willing to give up 100 tons of wheat. Which of the following conclusions can be drawn from this?
 a. The 2 countries will not trade because they will not come to a common bargain.
  b. Sonorez will trade 100 tons of wheat for extra corn.
  c. Munisia will trade 100 tons of corn for extra wheat.
  d. Sonorez will trade 50 - 100 tons of corn with Munisia for 80 - 100 tons of wheat.

QUESTION 2

If long-run costs are plotted on the vertical axis and quantity of output plotted on the horizontal axis, a positively sloped line implies _____.
 a. constant returns to scale
  b. economies of scale
  c. diseconomies of scale
  d. an increase in capital-labor ratio
  e. a decrease in cost-output ratio

QUESTION 3

Farmer Brady sells wheat in a market where sellers are price takers. Which of the following is true in regard to Farmer Brady's production and pricing decisions?
 a. Farmer Brady will be able to increase the total revenue from the sale of his wheat if he increases the price of the wheat.
  b. Since the market dictates the price of his product, Farmer Brady will have no incentive to minimize per-unit production costs.
  c. Since the market dictates the price of his product, Farmer Brady has no production decisions to make.
 d. It would be senseless for Farmer Brady to try to increase sales by lowering the price of his product. His entire output can be sold at the market price.

QUESTION 4

In a market system, incomes are distributed according to the:
 a. principle of equality.
  b. directions of a central authority.
  c. needs of the people.
  d. ownership of resources.
  e. objectives of a planning commission.

QUESTION 5

Laura's team can complete 15 reports and 5 presentations in a day. Albert can motivate his team to complete 12 reports in a day with 10 presentations. Suppose the boss needs 30 reports with 20 presentations completed during a particular day. Assigning the extra presentations to Laura's team would:
 a. lead to an efficient outcome.
  b. push the production level inside the production set.
  c. enhance the production level along the production set.
  d. increase the chances of achieving the target.

QUESTION 6

In the electricity generation industry, the cost per kilowatt hour of electricity declines as the capacity to generate output increases. This situation represents:
 a. a poor opportunity for investors.
  b. constant returns to scale.
  c. diseconomies of scale.
  d. economies of scale.
  e. decreasing returns to scale.

QUESTION 7

A perfectly competitive firm has no influence over price because:
 a. its output is insignificant relative to the market as a whole.
  b. antitrust laws constrain perfectly competitive firms.
 c. consumers establish the prices of products.
 d. it is unaware of the demand curve it faces.

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