A firm with two or more owners who have unlimited liability is known as
A) a partnership.
B) a proprietorship.
C) a corporation.
D) an establishment.
Ques. 2The value of marginal product of labor is the ________ when one additional unit of a labor is employed, all other things remaining the same.
A) change in marginal revenue
B) change in marginal product
C) change in total revenue
D) total revenue
Ques. 3The figure above shows the market for coffee. The ________ price that producers must be offered to get them to produce 30 million pounds of coffee per month is ________.
A) maximum; 2.50
B) minimum; 2.50
C) maximum; 4.00
D) minimum; 4.00
Ques. 4The government of Healthyland imposes a tax on sellers of salt. The tax is 0.10 per pound. With no tax, the price of salt is 0.40 per pound. The demand for salt is perfectly inelastic and the elasticity of supply is 1.5.
With the tax, the price of salt paid by buyers in Healthyland is A) 0.40 per pound.
B) 0.45 per pound.
C) 0.35 per pound.
D) 0.50 per pound.
Ques. 5Consider the prisoner's dilemma model where two criminals have two options (confess or deny), and each criminal must make their decision without speaking to the other criminal first.
If they both confess they each get 3 years, if only one confesses then he gets 1 and his partner gets 10, and if neither confesses then they each get 0. They are in fact both guilty. In this game, the Nash equilibrium is where A) both confess.
B) neither one confesses.
C) only one will confess.
D) It is impossible to say.
Ques. 6If a rise in the price of good B increases the quantity demanded of good A
A) A and B are substitutes.
B) A and B are complements.
C) A is a substitute for B, but B is a complement to A.
D) B is a substitute for A, but A is a complement to B.
Ques. 7A graph measures y on the vertical axis and x on the horizontal. The curve on the graph is a vertical line. From this fact we know that
A) the value of x does not change when the value of y changes.
B) the value of y is constant.
C) the ratio of x to y is constant.
D) the ratio of y to x is constant.
Ques. 8Using the data in the above table, in the short-run macroeconomic equilibrium, there is
A) an inflationary gap of 1 trillion.
B) an inflationary gap of 2 trillion.
C) a recessionary gap of 1 trillion.
D) a recessionary gap of 2 trillion.
Ques. 9Using the data in the above table, if saving equals 650 billion and exports are greater than imports,
A) the government sector must run a deficit.
B) net taxes will be greater than 1300 billion.
C) net taxes will be less than 650 billion.
D) government expenditures must increase.
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