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A year ago
A Lorenz curve measures
  A) the benefits received through welfare programs.
  B) the actual income distribution and compares it to an equal income distribution.
  C) the degree to which income taxes are regressive.
  D) the effect of flat taxes on income distribution.

Ques. 2

The vast majority of all business sales are accounted for by
  A) partnerships.
  B) proprietorships.
  C) corporations.
  D) nonprofit organizations.

Ques. 3

The figure above shows the market for milk. If the population increases, then the efficient quantity of milk ________ and the producer surplus ________.
  A) increases; increases
  B) increases; decreases
  C) decreases; increases
  D) decreases; decreases

Ques. 4

A firm's total variable cost (TVC) is defined as a cost that
  A) does not change (is not variable) as the firm changes its output.
  B) changes as the firm changes its output.
  C) falls as the firm increases its output.
  D) varies only when the firm reaches the long run.

Ques. 5

The table below shows data for India's economy. Real GDP is measured in millions of rupees.
  Price level Real GDP
  supplied in the short run Real GDP demanded
  a 114 23,501 35,898
  b 120 25,355 32,341
  c 125 27,670 27,670
  d 131 30,366 18,569
  e 138 33,164 15,898
  If potential GDP in India is ________ million rupees, India is experiencing ________.
  A) 26,500; an inflationary gap
  B) 28,500; an above-full-employment gap
  C) 26,500; a recessionary gap
  D) 30,000; a potential GDP gap

Ques. 6

The quantity theory of money predicts how changes in
  A) the price level affect nominal GDP.
  B) the price level affect real GDP.
  C) the quantity of money affect the price level.
  D) real GDP affect the nominal GDP.

Ques. 7

An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will
  A) raise its price and decrease its output.
  B) lower its price and increase its output.
  C) raise its price and increase its output.
  D) continue to produce this level of output because any change will lower its profit.

Ques. 8

If the value of marginal product of the last worker hired is 24 and the wage rate is 25, then
  A) more workers should be hired.
  B) the worker should be fired.
  C) the firm has hired the profit maximizing number of workers.
  D) the firm is earning 1 of profit from this worker.

Ques. 9

The figure above shows a perfectly competitive firm. The firm will shut down in the short run if total fixed costs
  A) are between 201 and 400.
  B) exceed 401.
  C) are less than 200.
  D) exceed total costs.

Ques. 10

Marginal social cost is equal to ________.
  A) marginal private cost plus the marginal external cost
  B) the marginal external cost
  C) the value of the tax that will make the market efficient
  D) the marginal cost imposed on people other than the producer of the good
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A year ago
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(Answer to Q. 1)  B

(Answer to Q. 2)  C

(Answer to Q. 3)  A

(Answer to Q. 4)  B

(Answer to Q. 5)  A

(Answer to Q. 6)  C

(Answer to Q. 7)  A

(Answer to Q. 8)  B

(Answer to Q. 9)  C

(Answer to Q. 10)  A

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