1. Another term for an investment good is
A) interest
B) savings
C) capital
D) rent
E) production
2. The opportunity cost of producing capital is
A) decreased current production of consumption goods
B) increased future production of consumption goods
C) the amount of roundabout production
D) abundant capital accumulation
E) the decreased amount of future capital available
3.
A marginal revenue product curve shows the change in
A) total revenue caused by a one-unit change in output, other things constant
B) total revenue caused by a one-unit change in an input, other things constant
C) total product caused by a one-unit change in output, other things constant
D) total product caused by a one-unit change in an input, other things constant
E) total revenue product caused by a one-unit change in the price of the output, other things constant
4.
Marginal revenue product for a price taker equals
A) MP x P
B) MP/MRC
C) MP x MRC
D) MRC/MP
E) MP/P
5.
Interest provides an incentive for households to defer current consumption
A) True
B) False
6.
An increase in the interest rate tends to increase the demand for loanable funds.
A) True
B) False
7.
Generally, the longer the maturity on a bond, the lower the interest rate.
A) True
B) False
8.
Corporations can obtain investment funds by
A) buying government securities
B) selling stock
C) increasing dividends
D) purchasing more capital
E) buying back stock
9.
Vertical integration has no effect on the internal organization of a firm; it only affects the outside markets.
A) True
B) False
10.
One reason a computer manufacturer may produce its own microchips rather than buy them is that it can maintain control over production quality.
A) True
B) False
11.
When a firm is no longer able to reduce its long-run average cost by expanding, it has achieved its minimum efficient scale of production.
A) True
B) False
12.
If a firm experiences economies of scope, per unit production costs fall as it produces more than one kind of product.
A) True
B) False
13.
Publications such as Consumer Reports magazine
A) increase the optimal amount of information gathered
B) reduce the optimal amount of information gathered
C) reduce the amount of common knowledge
D) raise the marginal benefit of information curve
E) make consumers perfectly informed
14.
The winner's curse is more likely when the value of a good at auction is uncertain.
A) True
B) False
15.
When a seller knows more about the condition of a used car than the buyer does, the information is said to be asymmetric.
A) True
B) False
16.
The three kinds of government regulation designed to alter or control firm behavior are:
A) Antitrust policy, lobbying, and social regulation
B) Economic regulation, antitrust policy, and lobbying
C) Social regulation, lobbying, economic regulation
D) Social regulation, economic regulation, and antitrust policy
E) Social regulation, antitrust policy, fiscal policy
17.
A monopoly is likely to charge a higher price than an otherwise similar competitive industry would be.
A) True
B) False
18.
Public policy can help achieve more efficient use of an economy's resources by eliminating all monopolies.
A) True
B) False
19.
Government attempts to prohibit monopolization of a market are known as
A) antitrust regulation
B) economic regulation
C) social regulation
D) anticompetitive regulation
E) Herfindahl regulation
20.
If the electric company is allowed by regulators to earn only a normal profit, it will produce at the point where
A) MR = MC
B) P = MC
C) MC = quantity demanded
D) P = AC
E) MR = AC
