Assume that a health spa can earn an additional 35,000 of revenue each year from advertising every day in a local newspaper. What must the additional cost of this daily advertising be to make this advertising economically rational?
What will be an ideal response?
Ques. 2What is the key assumption about marginal utility?
What will be an ideal response?
Ques. 3Most doctors and hospitals operate as private businesses in all of the following countries except
A) the United Kingdom. B) the United States.
C) Japan. D) Canada.
Ques. 4Which of the following products comes closest to having a perfectly inelastic demand?
A) bus rides B) cholesterol medication in general
C) gasoline D) iPhones
Ques. 5How does the increasing use of digital cameras affect the market for traditional camera film?
A) The quantity of traditional camera film demanded decreases.
B) The demand curve for traditional camera film shifts to the left.
C) The quantity of traditional camera film demanded increases.
D) The demand curve for traditional camera film shifts to the right.
Ques. 6Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above.
As a result of an increase in the government budget deficit, the ________ for loanable funds will ________, thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds.
A) supply; rise; decreasing; increasing B) demand; fall; decreasing; decreasing
C) demand; rise; increasing; decreasing D) supply; fall; increasing; decreasing
Ques. 7What is a zero-sum game? Can you think of any zero-sum games in real life?
What will be an ideal response?
Ques. 8The table below shows how the total utility that Alan derives from watching basketball games changes as he watches more and more games each week:
Basketball Games Total Utility Marginal Utility
1 55
2 85
3 110
4 130
5 145
6 155
Fill in the table above. Do the numbers in the table support the law of diminishing marginal utility? Explain.
Ques. 9Which of the following is an advantage of starting a new business as a corporation?
A) ease in setting up B) low expenses of legally organizing
C) double taxation D) greater ability to raise funds
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