If the area between the line of equality and the Lorenz curve is 1,250, and the entire area beneath the line of equality is 5,000, the Gini ratio is
A) 0.25.
B) 4.00.
C) 0.33.
D) 0.80.
Ques. 2Dell uses outsourcing, that is, Dell buys the components of the computers it produces from other firms. This is an example of
A) firm coordination.
B) a partnership.
C) a command system.
D) market coordination.
Ques. 3What is the money multiplier and what affects its size?
What will be an ideal response?
Ques. 4In the long run, firms in monopolistic competition produce at a level that is ________ the efficient scale of output.
A) less than
B) equal to
C) more than
D) All of the above are possible depending on market conditions.
Ques. 5The concept of diminishing marginal rate of substitution indicates that
A) as the consumption of good X increases, individuals are willing to give up an increasing amount of good Y in order to obtain one more unit of good X.
B) as the consumption of good X increases, individuals are willing to give up a decreasing amount of good Y in order to obtain one more unit of good X.
C) along an indifference curve, a consumer prefers the consumption combinations moving to the northwest along the curve.
D) None of the above answers is correct.
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