Question # 1

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

Resources in an economy

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Are always fixed

Can never decrease

Always increase over time

Are limited at any moment in time

Effective branding will tend to make

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Demand mover price inelastic

Supply more price inelastic

Demand more income elastic

Supply more income elastic

If demand is price inelastic.

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An increase in price must raise profits

An increase in price decreases revenue

An increase in price increase revenue

A decrease in price reduces sales.

To be productively efficient a firm must produce where

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Marginal costs are maximized

Marginal costs are minimized

Average costs are minimized

Average revenue is maximized

The Philips curve shows the relationship between inflation and what?

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The balance of trade

The rate of growth in an economy

The rate of price increases

Un employment

Which of the following rights be a scarce good.

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Love

faith

Self control

All of above

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are.

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Market prices

Sticky prices

Fixed prices

Regulatory prices

Profit is measured by

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Revenue - Fixed costs

Fixed cost + revenue

Revenue - sales

Revenues - total costs

Investment depend mainly on.

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Past levels of income

Future expected profits

Present national income levels

Historic data

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

Why does it make sense in assume that people are rational, if you want to predict their behavior.

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People are not guided by emotions when making decisions

People wheo act in the way that best gets them what they want will tend to repeat that behavior, and will tend to learn from mistakes that they do make

People never make mistakes, and tend to make the correct choices all of the time

People always logically figure out what to do.

If the price elasticity of demand for a product in market A is -0.2 and in market B is -3 a price discriminator will charge.

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The higher price in market A

The higher price in market B

The same price in both markets

There are many sellers

Which is the most volatile component of aggregate demand.

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Net exports

Consumption

Investment

Government spending

According to the law of diminishing utility.

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Utility is at a maximum with the first unit

Increasing units of consumption increase the marginal utility

Marginal product will fall as more units are consumed

Total utility will rise at a falling rate as more units are consumed

A higher GDP per capita may not mean that the quality of life has really improved because.

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It measures wealth not income

It measures Gross Domestic product

It does not measure the quality of the items produced

it is only measured every five years

Friend man's theory of consumption focuses on

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Past income

Current income

Disposable income

Permanent income

Price equal to.

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Total revenue -quantity

Total revenue/quantity sold

total quantity sold * quantity sold

Total revenue/total cost

Economists use the term utility to mean

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The value of a product before it has been advertised

The satisfaction a consumer obtains from a good or service

any characteristic of a good or service which cannot be measured

The contribution a good or service makes to social welfare

Revealed preference theory was presented by.

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Samuelson

Hicks

Marshall

rICARDO

Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale.

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Purchasing

Technical

Financial

Safety

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