The elasticity of supply equals ________ if the supply curve is horizontal.
A) 0
B) 1
C) infinity
D) -1
Ques. 2In the above figure, the slope across the arc between points a and b equals
A) 5.
B) 4.
C) 2.
D) 1.
Ques. 3The above table shows Sue's total utility from golf and tennis. If the price of each hour of golf is twice the price of each hour of tennis, and Sue plays four hours of tennis, then Sue plays
A) one hour of golf.
B) two hours of golf.
C) three hours of golf.
D) four hours of golf.
Ques. 4Based on the table and information in the previous question, which of the following is TRUE?
A) George prefers to make 15,000 with certainty than make the investment.
B) George prefers making the investment than to make 15,000 with certainty.
C) George is indifferent between making 15,000 with certainty and making the investment.
D) As the investment has risk George should not make it under any circumstances.
Ques. 5List the Fed's main policy tools and briefly explain each one.
What will be an ideal response?
Ques. 6All points above a given indifference curve are
A) inferior to any point on the indifference curve.
B) preferred to any point on the indifference curve.
C) definitely not affordable.
D) Both answers Band C are correct.
Ques. 7The table above lists the market shares of the twenty makers of personal computers. The four-firm concentration equals
A) 5 percent.
B) 20 percent.
C) 25 percent.
D) 100 percent.
Ques. 8A single-price monopoly causes a deadweight loss because it ________.
A) restricts its output so it is less than the efficient quantity
B) increases the amount produced beyond the efficient quantity
C) maximizes marginal revenue rather than minimizes marginal cost
D) increases marginal cost
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