For a natural monopoly, long-run average costs
A) fall as output increases.
B) rise as output increases.
C) fall as output falls.
D) rise as output falls.
Ques. 2Which of the following could best be categorized as a public good?
A) an apartment in a public housing project
B) a pumpkin pie
C) public fireworks
D) a race track
Ques. 3Refer to the above figure. If the government imposes a price floor of 60
A) the quantity of goods that will be traded is 100.
B) the quantity of goods that will be traded is 200.
C) the quantity of goods that will be traded is 150.
D) the quantity of goods that will be traded is 0.
Ques. 4Which of the following is a TRUE statement about the relationship between the price of bonds and the interest rate?
A) The prices of bonds are directly related to the interest rate.
B) The prices of bonds increase when the interest rates rise.
C) The prices of bonds are unrelated to the interest rate.
D) The prices of bonds are inversely related to the interest rate.
Ques. 5Portfolio investment means buying
A) less than 10 percent of stock shares of of a foreign company.
B) more than 50 percent of stock shares of a foreign company.
C) a combination of different companies' stock shares.
D) bonds through a financial company.
Ques. 6Normative economic statements
A) are statements of what ought to be.
B) are statements of what is.
C) are statements that may be tested by referring to facts and data.
D) do not involve value judgments.
Ques. 7The market supply curve can be derived by
A) vertically adding the individual supplies at each quantity level.
B) multiplying the price and quantity supplied at each price level.
C) horizontally adding the individual supplies at each price level.
D) looking at the capacity utilization in the largest firms in the industry.
Ques. 8The production possibilities curve (PPC) illustrates economic growth by a(n)
A) bowed-out shape of the PPC.
B) outward shift of the PPC.
C) inward shift of the PPC.
D) movement along the PPC.
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