What balance of payment account records foreign investment between countries?
What will be an ideal response?
Ques. 2In the above figure, suppose the government subsidizes the production of milk so that milk production increases to 8 million gallons per day.
What is the size of the deadweight loss? (Hint: It is equal to the triangular area of negative consumer and producer surplus that results when output exceeds the efficient level.) A) 12.5 million
B) 6.25 million
C) 4.50 million
D) 2.25 million
Ques. 3Which of the following is an example of money functioning as a medium of exchange?
A) Walmart accepting your 20 when you buy a Blu-ray.
B) Apple pricing an iPhone at 299.
C) Bank of America paying you 3 percent on your saving account.
D) You saving your spare change in a jar before depositing them in your savings account.
Ques. 4Average variable cost is equal to
A) average total cost minus average fixed cost.
B) average total cost multiplied by output.
C) total cost divided by output.
D) the change in total cost divided by the change in output.
Ques. 5The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is maximized when it produces
A) 0 units of output.
B) 5 units of output.
C) 15 units of output.
D) 20 units of output.
Ques. 6The above payoff matrix shows the economic profits (in millions of dollars) of two firms in a duopoly that have agreed to a cartel agreement to restrict their output and set their prices equal to the monopoly price.
Assuming the game is played once, the equilibrium outcome is where A) both choose the monopoly price.
B) both choose the competitive price.
C) firm A chooses the monopoly price and firm B chooses the competitive price.
D) firm B chooses the monopoly price and firm A chooses the competitive price.
Ques. 7As output increases, AVC approaches ATC because of
A) diseconomies of scale.
B) diminishing marginal returns.
C) decreasing average fixed cost.
D) increasing marginal cost.
Ques. 8The figure above shows Sam's budget line. Which of the following equals the vertical intercept of Sam's budget line?
A) Y/Pc
B) Y/Pg
C) -(Pc/Pg)
D) -(Pg/Pc)
Ques. 9The figure shows the relationship between Moira's income and the quantity of macaroni that she demands. When income is less than 350 per month, macaroni ________.
A) is an inferior good
B) is a normal good
C) has many substitutes
D) has negative income elasticity
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