A.   short run; the quantity of output where profits are highest

B.   short run; profits by ignoring the concept of total cost analysis

C.   long run; methods to reduce production and shut down

D.   long run; the quantity of output where profits are highest

A.   is dictated by the forces of demand and supply.

B.   can be tailored to exceed the price of its inputs.

C.   can be set by management to maximize profits.

D.   can be tailored to meet the price of its inputs.

A.   hypothetical extreme.

B.   realistic assumption.

C.   realistic extreme.

D.   hypothetical assumption.

A.   pressure from competing firms will force acceptance of the prevailing market price.

B.   it must be a relatively small player compared to its competitors in the overall market.

C.   quality differences will be very perceptible and will play a major role in purchasers' decisions.

D.   it can increase or decrease its output without affecting overall quantity supplied in the market.

A.   imposition of hurdle rates of interest

B.   tax credits for physical capital investments

C.   cost of financial capital paid by a firm

D.   higher retained earnings from past profits

A.   market demand.

B.   average demand.

C.   derived demand.

D.   marginal demand.

A.   marginal product is rising.

B.   average product is rising.

C.   marginal product is falling.

D.   average product is falling.

A.   price takers find market analysis is too costly

B.   high degree of similarity to competitor's products

C.   they are very small players in the overall market

D.   they can increase output without affecting quality

A.   minimized at the output that maximizes the industry's profitability.

B.   lowest when there are a large number of producers in the industry.

C.   lowest when a single firm generates the entire output of the industry.

D.   lower for the smaller firms than for larger firms.

A.   barriers to entry and competitors’ patent protection

B.   the competitive actions of other business firms

C.   whether consumers will purchase its product

D.   whether consumers will spend on different products

A.   have legal protection to prevent copying its methods of production for commercial use.

B.   acquire rights for its investors to produce and sell their product.

C.   raise prices, cut production, and realize positive economic profits.

D.   have a patent giving it exclusive legal rights to make, use, and sell for a limited time.

A.   Copyright

B.   Trademark

C.   Intellectual property

D.   Patent

A.   producing maximum output where price is equal to its marginal cost.

B.   setting output at MR = MC and setting price at the demand curve's highest point.

C.   producing output where MR = MC and charging a price along the demand curve.

D.   setting the price at the level that will maximize its per-unit profit.

A.   local television broadcaster

B.   local fast-food restaurant

C.   local electricity distributor

D.   local bathroom fixtures shop

A.   banking sector

B.   telecommunications sector

C.   postal services sector

D.   nuclear power sector

A.   I, III and IV

B.   I, II, and III

C.   I, II, III, IV, and VI

D.   all of the above

A.   elimination of barriers to entry

B.   abnormally high sustained profits.

C.   government deregulation.

D.   irregularly high unsustainable profits.

A.   the entry of new firms will eventually cause price to decline.

B.   entry will be blocked even if firms are earning high profits.

C.   abnormally high profits will attract the entry of new firms.

D.   surviving firms earn only a normal level of profit in the long run.

A.   to hire more staff to lower unemployment.

B.   to maximize profits in the long run.

C.   to increase supply to benefit consumers.

D.   to discourage short run competition.

A.   $0.75 or less

B.   $1.00 or less

C.   $2.00 or less

D.   $1.75 or less

A.   they will be unable to earn higher-than-normal profits in the long run.

B.   they will be unable to earn higher-than-normal profits in the short run.

C.   they will wish to cooperate to make decisions about what quantity to produce.

D.   they will wish to cooperate to make decisions about what price to charge.

A.   total marginal cost curve

B.   total cost curve.

C.   average cost curve.

D.   average variable cost curve.

A.   the price that people are willing to pay is lower

B.   a higher quantity of a good and charge a lower price

C.   a lower quantity of a good and charge a higher price

D.   the price people are willing to pay is not more

A.   costs for all are driven up.

B.   they end up acting very much like imperfect competitors.

C.   zero profits result for all.

D.   they end up acting very much like monopolistic competitors.

A.   match price increases, but not price cuts.

B.   stand at opposite ends of the competition spectrum.

C.   match price cuts, but not price increases.

D.   stand at the high point of the competition spectrum.

A.   be environmentally responsible.

B.   be perceived more favorably.

C.   differentiate their product.

D.   be socially responsible.

A.   at the very bottom of the AC curve.

B.   at the very top of the AC curve.

C.   on the downward-sloping portion of the average cost curve.

D.   on the upward-sloping portion of the average cost curve.

A.   loss; exit; losses on their earnings

B.   profit or loss; entry and exit; a zero-profit outcome

C.   profit or loss; exit; economic profits

D.   profit; entry; a price that lies at the very bottom of the AC curve

A.   with an absolute advantage in producing two different may export goods both of those goods to the other party.

B.   may be able to produce everything relatively more efficiently than another party.

C.   may be able to produce something at a lower dollar cost than another party.

D.   may be able to produce something at a lower opportunity cost than another party.

A.   Canada has an absolute advantage in the production of maple syrup.

B.   Germany has an absolute advantage in the production of maple syrup.

C.   Canada has a comparative advantage in the production of hockey sticks.

D.   Germany has a comparative advantage in the production of hockey sticks.

A.   comparative cost

B.   absolute cost

C.   relative cost

D.   opportunity cost

A.   China has both an absolute and comparative advantage in the production of rice.

B.   India has an absolute advantage in the production of rice.

C.   India has a comparative advantage in the production of rice.

D.   China has a comparative advantage in the production of rice.

A.   it can gain from international trade in that commodity only if it has an absolute advantage in that commodity.

B.   it cannot gain from international trade unless it has an absolute advantage in every other commodity.

C.   it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.

D.   it cannot gain from international trade in the commodity.

A.   it is in the interest of both countries to specialize and trade with one another.

B.   it is in the interest of Beta to grow oranges and trade for apples.

C.   there are no incentives for Alpha to specialize and trade with Beta.

D.   there are no incentives for Beta to engage in international specialization and trade of apples and oranges.

A.   worker productivity

B.   specialization

C.   lower opportunity costs

D.   economies of scale

A.   30%; 30%

B.   10%; 10%

C.   90%; 90%

D.   60%; 60%

A.   absolute advantage

B.   relative cost

C.   opportunity cost

D.   comparative advantage

A.   Alland has a comparative advantage, but not an absolute advantage, in producing food.

B.   Georgeland has a comparative advantage, but not an absolute advantage, in producing clothing.

C.   Alland has an absolute advantage in producing food but will not trade with Georgeland.

D.   Georgeland has both a comparative and absolute advantage in producing clothing.

A.   decrease; decrease

B.   increase; decrease

C.   decrease; increase

D.   increase; increase

A.   75%; 90%

B.   50%; 75%

C.   10%; 25%

D.   25%; 50%

A.   protect domestic producers of exported goods.

B.   protect foreign producers of goods.

C.   limit voluntary exchanges.

D.   protect domestic consumers of goods.

A.   there will be adequate supplies of crucial resources in case they are needed for national defence.

B.   it will not be subjected to a takeover from a foreign competitor.

C.   domestic producers can attain the economies of scale to allow them to compete in world markets.

D.   firms will be protected from subsidized foreign competition.

A.   a government bureaucracy

B.   a quota

C.   an import quota

D.   a non-tariff barrier

A.   hazardous goods

B.   imported products

C.   surplus goods

D.   exported products

A.   Anti-Dumping Argument

B.   National Interest Argument

C.   Buy-American Argument

D.   Import Limitation Argument

A.   Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits.

B.   Companies seek the lowest market prices on products in order to gain market share, resulting in inferior goods and increased waste and pollution.

C.   Companies seek to influence environmental legislation standards are set to the lowest possible standards in the USA in order to maximize profits.

D.   Companies seek to reduce their costs of operations on plant and equipment design and this results in higher levels of pollution.

A.   $6.25/hour

B.   $9.25/hour

C.   $7.25/hour

D.   $8.25/hour

A.   General Agreement on Tariffs and Trade.

B.   General Accounting for Tariff and Trade.

C.   General Association for Trade and Tariffs.

D.   General Association on Technology and Trade.

A.   protectionism will prevent them from applying for those jobs in other industries.

B.   protectionism provides a barrier to entry to the job markets that the low-wage earners want entry to.

C.   protectionism will encourage foreign workers to apply for American jobs.

D.   protectionism forces them to pay higher prices for basic necessities like clothing and food.

A.   dumping

B.   "rules of origin"

C.   export quota

D.   import quota

A.   redistribution from those with high incomes to those with low incomes

B.   a tax imposed on the value of inheritances

C.   trying to assure that a ladder of opportunity is widely available

D.   the three mains sets of tools it can use include all of the above

A.   married women with families who were below the poverty line.

B.   married men with families who were below the poverty line.

C.   only those orphans who were living below the poverty line.

D.   all mothers with children who were below the poverty line.

A.   an increased standard of living; EIC

B.   a tax break; having earned income

C.   a tax refund; having earned income

D.   a reduced standard of living; TANF

A.   working poor

B.   poverty trapped

C.   near-poor

D.   illiterate poor

A.   ADFC

B.   TNAF

C.   TANF

D.   AFDC

A.   equality and wealth distribution

B.   wealth distribution and poverty

C.   equality and inequality

D.   inequality and poverty

A.   A death tax

B.   An estate tax

C.   An inheritance tax

D.   A redistribution tax

A.   then a substantial share of the U.S. population will subsist in dire poverty.

B.   it will be useful to have a poverty line whose basic definition changes a lot.

C.   then it will set two poverty lines that it applies to welfare and the near-poor.

D.   then it would be difficult to compare poverty rates over time.