A sales tax is divided so that buyers pay the full amount if
A) demand has unitary elasticity.
B) supply has unitary elasticity.
C) demand is perfectly inelastic.
D) supply is perfectly inelastic.
Ques. 2Suppose Clyde always eats ice cream and chocolate syrup together. If the price of syrup increases by 10 percent, and the cross elasticity of demand is -2, the demand for ice cream
A) increases by 5 percent.
B) increases by 20 percent.
C) decreases by 5 percent.
D) decreases by 20 percent.
Ques. 3The value of marginal product (VMP) of an input such as labor is the
A) additional output produced by the last unit of an input.
B) total revenue divided by the units of the input employed.
C) extra revenue gained by selling one more unit of output.
D) extra revenue gained by employing one more unit of the input.
Ques. 4In the short run, a rightward shift of the short-run aggregate supply curve ________ real GDP and ________ the price level.
A) decreases; lowers
B) increases; raises
C) decreases; raises
D) increases; lowers
Ques. 5A monopolist that operates along the elastic range of its demand will find that
A) its total revenue increases when price decreases.
B) its total revenue decreases when price decreases.
C) its marginal revenue is negative.
D) it is more profitable to operate along the inelastic range of the demand curve.
Ques. 6The table above shows some data that describe Tom's T-Shirts' total product when Tom has 1 sewing machine.
An increase in the number of workers from 1 to 2 a day increases average product of labor from ________ T shirts per worker and marginal product of labor is ________ T shirts per worker. A) 10 to 11; 22
B) 10 to 22; 12
C) 10 to 22; 22
D) 10 to 11; 12
Ques. 7In the above table, the government sector balance is a
A) surplus of 200 billion.
B) deficit of 200 billion.
C) surplus of 100 billion.
D) deficit of 100 billion.
Ques. 8A chief purpose of long-term contracts is to improve agents'
A) information.
B) incentives.
C) control over principals.
D) security.
Ques. 9If a perfectly competitive firm decides to shut down in the short run, its loss will equal its
A) minimum average variable cost, AVC.
B) total variable cost, TVC.
C) total fixed cost, TFC.
D) average total cost, ATC.
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