Mode income is
A) the most common income.
B) the average income.
C) the middle income level.
D) the same as money income.
Ques. 2To say that turnips are inferior goods means that the income elasticity
A) is definitely greater than 1.
B) is definitely between 0 and 1.
C) is positive but could be greater than or less than (or equal to) 1.
D) is negative.
Ques. 3Sun's Gas Station is a firm operating in a perfectly competitive industry. Sun's Gas Station sells each gallon of gas for 3. What is the value of marginal product from hiring the fourth worker?
A) 2,400
B) 840
C) 120
D) 60
Ques. 4Archibald's Tattoos is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price of a tattoo is 12.50 and if Archibald's does not shut down, what is the firm's profit-maximizing output?
A) 2 tattoos per hour
B) 3 tattoos per hour
C) 4 tattoos per hour
D) 5 tattoos per hour
Ques. 5The term direct relationship means the same as
A) correlation.
B) trend.
C) positive relationship.
D) negative relationship.
Ques. 6Suppose a firm produces pollution when it generates electricity. The cost of the pollution is called the
A) marginal cost.
B) marginal private cost.
C) marginal external cost.
D) marginal social cost.
Ques. 7Which school of thought believes that recessions are the result of inappropriate monetary policy?
A) only classical
B) only Keynesian
C) Monetarist
D) both Keynesian and classical
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