Which of the following is TRUE about firms organized along functional lines?
a. In functional organizations workers develop functional expertise
b. Workers find it difficult to share information within their division
c. They inhibit the exploitation of economies of scale
d. All of the above
QUESTION 2A monopolist maximizes revenue at
a. At MR= MC
b. At MR>MC
c. At P=MR
d. At MR=0
QUESTION 3The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
a. Even more intraregional trade of goods across the three countries.
b. Lower transaction costs of trading within North America.
c. A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso.
d. Less migration of workers across the three countries.
e. An elimination of correlated macroeconomic shocks across the countries.
QUESTION 4Which of the following is TRUE about firms organized along functional lines?
a. Workers develop functional expertise
b. Workers can easily share information within their division
c. They foster the exploitation of economies of scale
d. All of the above
QUESTION 5A monopoly has
a. A perfectly elastic demand curve
b. A perfectly elastic supply curve
c. A downward sloping demand curve
d. A upward sloping demand curve
QUESTION 6US and Canada can both grow wheat and can do mining. Use the following table to look for which country has a comparative advantage in mining. (HINT: Find the cost of mining in terms of wheat in each country.) Absolute Cost in US Absolute Cost in Canada Wheat 5 C8 Mining 10 C12
a. Canada has a comparative advantage in mining.
b. The US has a comparative advantage in mining.
c. No comparative advantage in mining exists for either nation.
d. We must first know the exchange rate to be able to answer this question.
e. Both a and b.
QUESTION 7A functionally organized firm is one in which
a. Various divisions perform the same task
b. Various divisions perform separate tasks
c. Various divisions compete with each other
d. Various divisions handle the same production function
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