Question # 1

In a market system sellers act in ___ interest, but this leads to behaviors in ___ interest.

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Self : self

Self ; society's

Society's ; society's

society's, self

A recurring theme in economics is.

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People have unlimited wants in the face of limited resources

There are unlimited resources

Our country is rich, we just don't realize it

People have limited wants in the face of limited resource.

An increase in costs will

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Shift aggregate demand

Shift aggregate supply

Reduce the natural rate of unemployment

Increases the productivity of employees

If the price is less than the average cost but higher than the average variable costs.

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The firm is making a loss and will should own in the short term.

The firm is making a profit.

The firm is making a loss but will continue to produce in the short term

The firm is making a loss and is making a negative contribution to fixed costs

To prevent the external value of the currency from failing the government might

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Reduce interest rates

Sell its own currency

Buy its own currency with foreign reserves

Increase its own spending

An increase in aggregate demand is more likely to lead to demand pull inflation if.

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Aggregate supply is perfectly elastic

Aggregate supply is perfectly inelastic

Aggregate supply is unit elastic

Aggregate supply is relatively elastic

Lower interest rates are likely to.

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Decrease consumption

Increase cost of borrowing

Encourage saving

Increase spending

Aggregate demand will increase if

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Consumption falls

Investment falls

Exports fall

imports fall

When internal economics of scale occur

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Total costs fall

Marginal costs increase

Average costs fall

Revenue falls

Which of the following is not an argument for protectionism.

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To protect infant industries

To increase the level of imports

To protect strategic industries

To improve the balance of payments

Which is the most volatile component of aggregate demand.

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Net exports

Consumption

Investment

Government spending

Japan's low interest rates in the mid 80's were due to.

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High rates of domestic savings.

A decrease in Japan's exports

Increases in the U.S. deficit

High rates of domestic spending in Japan

Economics growth can be seen by an outward shift of.

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The production possibility frontier

The gross domestic barrier

The marginal consumption frontier

The Minimum Efficient scale

A profit maximizing firm in perfect competition produces where

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Total revenue is maximized

Marginal revenue equals zero

Marginal revenue equals marginal cost

Marginal revenue equals average cost

In perfect competation.

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The price equals the marginal revenue

The price equals the average variable cost

The fixed cost equals the variable costs

The price equals the total costs

Less demand in the economy may increase unemployment this may lead to less spending which may reduce demand further This is called.

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The upward accelerator

The downward multiplier

The upward PPF

The downward MPC

If the marginal revenue is less than the marginal cost then to profit maximize a firm should.

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Reduce output

Increase output

Leave output where it is.

Increase costs

In land intensive method which mean production is used comparativelymore

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Labour

Land

Capital

Organization

If firm earn normal profits.

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They will aim to leave the industry

Other firms will join the industry

The revenue equals total costs

No profit is made in accounting terms

In monopolistic competition

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Demand is perfectly elastic

Products are homogeneous

Marginal revenue = pirce

The marginal revenue is below the demand curve and diverges

Economic growth can be measured by

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The CPI

The CBI

GDP

MPC

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