Which of the following is true of economic fluctuations?
a. They can be experienced by the world economy as well as by a single nation.
b. They tend to be equal in length and intensity.
c. They reflect an economy's socio-political condition.
d. They tend to become more severe when the government attempts to stabilize an economy.
e. They have been completely offset by appropriate government policies during the last 40 years.
QUESTION 2Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a 2,000 rebate on new truck sales, what can Ford expect to see?
a. an unprecedented increase in truck sales
b. an immediate response by GM and Dodge
c. a visit from the antitrust authorities of the government
d. a revolution from Ford stockholders
e. announcements by GM and Dodge that plans are underway to produce a much cheaper pick-up truck in six years
QUESTION 3In the long run, total fixed cost:
a. falls.
b. rises.
c. is constant.
d. does not exist.
QUESTION 4Which of the following is true of a recession?
a. It is typically accompanied by inflation and investment growth.
b. It lasts for more than two years on an average.
c. It is typically longer than periods of expansion.
d. It begins after an expansion has peaked.
e. It continues as long as actual output exceeds the potential output.
QUESTION 5Pricing and output determination under an oligopoly is more complicated than pricing and output determinations in other industries. The primary reason for the complication is the:
a. fewness of firms.
b. brand loyalty of consumers.
c. powerful effect of advertising.
d. variability of concentration ratios.
e. mutual interdependence of firms.
QUESTION 6The long run is a planning period:
a. during which the firm can vary all inputs including its plant size.
b. less than six months.
c. less than one year.
d. less than five years.
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