Suppose that M = 300, P = 150, and Y = 6. Then the velocity of circulation equals
A) 0.02.
B) 0.50.
C) 2.00.
D) 3.00.
Ques. 2In monopolistically competitive industries
A) non-price competition through product differentiation is actively pursued by firms.
B) product variety is the same as in perfectly competitive industries.
C) firms do not respond to changes in consumer demand.
D) firms' economic profits are protected by barriers to entry.
Ques. 3Lisa is spending all of her income on compact discs and downloadable games for her smart phone. She finds that the marginal utility from the last compact disc she buys is 30 and the marginal utility from the last downloadable game is 10.
The price of a compact disc is 15 and the price of a downloadable game is 5. Lisa should A) increase her consumption of compact discs.
B) increase her consumption of downloadable games.
C) not change her consumption of downloadable games and compact discs.
D) decrease the price of downloadable games.
Ques. 4In the figure above, a decrease in the price of a bag of potato chips would result in the budget line
A) making a parallel shift toward point a.
B) making a parallel shift toward point c.
C) becoming flatter.
D) becoming steeper.
Ques. 5A public good is ________ and ________.
A) rival; excludable
B) nonrival; excludable
C) rival; nonexcludable
D) nonrival; nonexcludable
Ques. 6Sun'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 marginal product from hiring the fourth worker?
A) 70 gallons of gasoline
B) 280 gallons of gasoline
C) 40 gallons of gasoline
D) 80 gallons of gasoline
Ques. 7The mode household income is
A) the income that separates households into two equal groups.
B) the most common level of household income.
C) the mean household income.
D) the average household income.
Ques. 8Total product divided by the total quantity of labor employed equals the
A) average product of labor.
B) marginal product of labor.
C) average total cost.
D) average variable cost.
Ques. 9Which of the following types of business organization have limited liability? I. proprietorship II. partnership III. corporation
A) I, II only
B) II, III only
C) III only
D) I, II, III
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