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

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

B.   can be set by management to maximize profits.

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

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

A.   realistic extreme.

B.   hypothetical extreme.

C.   hypothetical assumption.

D.   realistic assumption.

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

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

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

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

A.   higher retained earnings from past profits

B.   imposition of hurdle rates of interest

C.   cost of financial capital paid by a firm

D.   tax credits for physical capital investments

A.   market demand.

B.   average demand.

C.   derived demand.

D.   marginal demand.

A.   marginal product is falling.

B.   marginal product is rising.

C.   average product is rising.

D.   average product is falling.

A.   high degree of similarity to competitor's products

B.   they can increase output without affecting quality

C.   price takers find market analysis is too costly

D.   they are very small players in the overall market

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

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

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

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

A.   whether consumers will purchase its product

B.   the competitive actions of other business firms

C.   whether consumers will spend on different products

D.   barriers to entry and competitors’ patent protection

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

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

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

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

A.   Intellectual property

B.   Copyright

C.   Trademark

D.   Patent

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

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

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

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

A.   local fast-food restaurant

B.   local electricity distributor

C.   local television broadcaster

D.   local bathroom fixtures shop

A.   telecommunications sector

B.   postal services sector

C.   banking sector

D.   nuclear power sector

A.   I, II, III, IV, and VI

B.   I, III and IV

C.   I, II, and III

D.   all of the above

A.   abnormally high sustained profits.

B.   elimination of barriers to entry

C.   irregularly high unsustainable profits.

D.   government deregulation.

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

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

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

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

A.   to increase supply to benefit consumers.

B.   to hire more staff to lower unemployment.

C.   to discourage short run competition.

D.   to maximize profits in the long run.

A.   $0.75 or less

B.   $1.75 or less

C.   $2.00 or less

D.   $1.00 or less

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

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

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

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

A.   average cost curve.

B.   total cost curve.

C.   average variable cost curve.

D.   total marginal cost curve

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

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

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

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

A.   zero profits result for all.

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

C.   costs for all are driven up.

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

A.   match price cuts, but not price increases.

B.   stand at opposite ends of the competition spectrum.

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

D.   match price increases, but not price cuts.

A.   be socially responsible.

B.   be perceived more favorably.

C.   differentiate their product.

D.   be environmentally responsible.

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

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

C.   at the very top of the AC curve.

D.   at the very bottom of the AC curve.

A.   profit or loss; exit; economic profits

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

C.   loss; exit; losses on their earnings

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

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 something at a lower opportunity cost than another party.

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

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

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

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

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

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

A.   opportunity cost

B.   comparative cost

C.   absolute cost

D.   relative cost

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

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

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

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

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

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

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

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

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

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

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

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

A.   economies of scale

B.   lower opportunity costs

C.   worker productivity

D.   specialization

A.   60%; 60%

B.   30%; 30%

C.   90%; 90%

D.   10%; 10%

A.   absolute advantage

B.   relative cost

C.   opportunity cost

D.   comparative advantage

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

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

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

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

A.   decrease; decrease

B.   decrease; increase

C.   increase; increase

D.   increase; decrease

A.   50%; 75%

B.   25%; 50%

C.   75%; 90%

D.   10%; 25%

A.   protect foreign producers of goods.

B.   protect domestic consumers of goods.

C.   limit voluntary exchanges.

D.   protect domestic producers of exported goods.

A.   firms will be protected from subsidized foreign competition.

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

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

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

A.   a non-tariff barrier

B.   a quota

C.   an import quota

D.   a government bureaucracy

A.   hazardous goods

B.   imported products

C.   exported products

D.   surplus goods

A.   National Interest Argument

B.   Import Limitation Argument

C.   Anti-Dumping Argument

D.   Buy-American Argument

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

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.   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.

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

A.   $8.25/hour

B.   $6.25/hour

C.   $9.25/hour

D.   $7.25/hour

A.   General Agreement on Tariffs and Trade.

B.   General Accounting for Tariff and Trade.

C.   General Association on Technology and Trade.

D.   General Association for Trade and Tariffs.

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

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

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

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

A.   import quota

B.   export quota

C.   "rules of origin"

D.   dumping

A.   a tax imposed on the value of inheritances

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

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

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

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

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

A.   an increased standard of living; EIC

B.   a tax refund; having earned income

C.   a reduced standard of living; TANF

D.   a tax break; having earned income

A.   illiterate poor

B.   near-poor

C.   working poor

D.   poverty trapped

A.   TNAF

B.   TANF

C.   AFDC

D.   ADFC

A.   inequality and poverty

B.   wealth distribution and poverty

C.   equality and inequality

D.   equality and wealth distribution

A.   An inheritance tax

B.   An estate tax

C.   A redistribution tax

D.   A death tax

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

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

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

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