Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dresses. Her expenses for the month are 1,000 for rent, 6,000 for wages, 1,500 for fabric and thread, and 500 for electricity. Her total variable costs for the month are:
a. c and e.
b. 4,000.
c. 32 per dress.
d. 7,500.
e. 8,000.
QUESTION 2Which of the following happened during the Great Depression?
a. Unemployment and prices increased while output decreased.
b. Unemployment increased while output and prices decreased.
c. Unemployment and prices decreased while output increased.
d. Unemployment and output decreased while prices increased.
e. Unemployment and output increased while prices decreased.
QUESTION 3Compared to the perfectly competitive outcome, monopolistically competitive markets will result in:
a. a wider variety of products and higher prices.
b. less product variety and higher prices.
c. a wider variety of products and lower prices.
d. less product variety and lower prices.
QUESTION 4If the total variable cost curve for a firm is S-shaped, what is the shape of the total cost curve for that firm?
a. U-shaped
b. Flat.
c. Hill-shaped.
d. S-shaped.
e. There is not enough information.
QUESTION 5The laissez-faire approach popular before the Great Depression influenced the U.S. government to see business downturns as:
a. natural phases in an otherwise healthy system and to therefore take short-term deficit spending measures to help recovery.
b. natural phases in an otherwise healthy system and to therefore wait for recovery to occur naturally.
c. serious maladies in an otherwise healthy system and to therefore work to redesign the system to avoid such failure in the future.
d. failures of the type of system Adam Smith envisaged and to therefore work to move toward an open economy with free trade.
e. failures of the system to achieve the form that Adam Smith envisaged and to therefore work to decrease government interference at the micro level.
QUESTION 6Some economists argue that monopolistically competitive markets are inefficient because:
a. the firms earn economic profits in the long run.
b. the firms' marginal costs and marginal revenues are not always equal.
c. firms do not produce the output rate that would minimize their average total cost.
d. barriers to entry are high.
Quick Reply
