Refer to the above figure. Which one of the following statements is TRUE with regard to the economy depicted in the graph?
A) Point C cannot be produced.
B) The best production point is 500 loaves of bread and 50 bales of wool.
C) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is more than the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.
D) The total amount of resources it takes to produce 20 bales of wool and 500 loaves of bread is the same as the amount of resources needed to produce 50 bales of wool and 250 loaves of bread.
Ques. 2Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?
A) A
B) B
C) neither graph
D) both graphs
Ques. 3Labor productivity is commonly measured as
A) the number of workers divided by real GDP.
B) the change in real GDP divided by change in number of workers.
C) nominal GDP divided by number of workers.
D) real GDP divided by number of workers.
Ques. 4Which of the following goods is NOT subject to the free-rider problem?
A) national defense
B) the local police force
C) public fireworks
D) a public transit system
Ques. 5There are 30 firms in an industry. What happens to that industry's four-firm concentration when the third- and fourth-largest firms merge?
A) Nothing, because their shares are already included in the concentration calculation.
B) The industry's concentration ratio will fall.
C) The industry's concentration ratio will increase.
D) It is impossible to know without more information.
Ques. 6Commonwealth Edison is the only provider of electricity to many households in the Chicago area. Commonwealth Edison is regulated by the government. This type of regulation is known as
A) the Federal Register.
B) social regulation.
C) the market share test.
D) economic regulation.
Ques. 7Which of the following are substitute goods?
A) margarine and butter
B) peanut butter and jelly
C) pizza and beer
D) sports utility vehicles and gasoline
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