Paul's Plumbing is a small business that employs 12 people. Which of the following is most likely to be a fixed cost for Paul's Plumbing?
a. The tax and insurance payments on the property owned by the firm.
b. The wages paid to the 12 employees.
c. The payroll taxes on the wages of the 12 employees.
d. The salary paid to Paul, who is the manager of the firm.
QUESTION 2The aggregate supply curve of an economy:
a. is a downward-sloping straight line.
b. is an upward-sloping curve.
c. is a vertical line parallel to the price axis.
d. is a horizontal line parallel to the output axis.
e. is a ray from the origin.
QUESTION 3In order to make oil profits as large as possible, OPEC meets to set oil production quotas for its members. OPEC is best classified as a:
a. monopoly.
b. cartel.
c. kinked demand industry.
d. price-leadership industry.
QUESTION 4Which of the following best describes total fixed cost?
a. The change in total cost when one additional unit of output is produced.
b. Total cost divided by the quantity of output produced.
c. Total variable cost divided by the quantity of output produced.
d. Total fixed cost divided by the quantity of output produced.
e. Costs that do not vary as output varies.
QUESTION 5Which of these is a likely impact of a decrease in the price level in an economy on the aggregate supply in the economy?
a. An increase in the quantity of real GDP supplied
b. A decrease in the quantity of real GDP supplied
c. A leftward shift of the aggregate supply curve
d. A rightward shift of the aggregate supply curve
e. An increase in the slope of the aggregate supply curve
QUESTION 6If OPEC is an effective cartel,
a. price changes are dictated by changes in demand.
b. output changes are dictated by changes in demand.
c. members agree on output quotas.
d. all of these.
QUESTION 7The ____ is the situation in which the marginal product of labor is greater than zero and declining as more labor is hired.
a. law of demand
b. law of diminishing supply
c. law of diminishing returns
d. law of returns to scale
QUESTION 8Which of these is a likely impact of an increase in the price level in an economy on the aggregate supply in the economy?
a. An increase in the quantity of real GDP supplied
b. A decrease in the quantity of real GDP supplied
c. A leftward shift of the aggregate supply curve
d. A rightward shift of the aggregate supply curve
e. An increase in the slope of the aggregate supply curve
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