Managerial Economics Assignment Academic Essay

Managerial Economics Assignment

1. What are the fiscal policy tools used to shift aggregate demand?
a. Government spending and interest rates
b. Taxes and interest rates
c. Government spending and taxes
d. Taxes and employment rates
2. Which of the following could cause a recession?
a. A decline in aggregate demand
b. A decline in unemployment
c. An increase in aggregate supply
d. An increase in government spending
3. Inflation begins when:
a. Aggregate demand increases faster than unemployment
b. Unemployment increases faster than the labor force
c. Aggregate demand increases faster than output
d. Output increases faster than unemployment
4. Household Consumption…
a. Is typically the largest component of aggregate demand
b. Represents household expenditures on goods and services
c. Accounts for about 2/3 of total spending in the U.S.
d. All of the above
5. Which of the following is not an example of “investment spending”?
a. Construction of a new factory
b. The government buying goods or services
c. Purchasing items for inventory
d. New production equipment
6. All of the following represent government spending as part of consumer demand except for…
a. Federal government spending on roads
b. State and local spending on schools
c. Social Security checks or other income transfers
d. National defense
7. Ceteris paribus, an increase in ___________ will cause an increase in ___________.
a. Disposable income; government spending
b. Consumer confidence; consumer demand
c. Taxes; consumption
d. Imports; disposable income
8. Net exports for the U.S. GDP are…
a. Always positive
b. Always a greater percentage of GDP than government spending
c. Negative if Americans export less goods than they import
d. Zero if Americans export more goods than they import
9. Fiscal stimulus includes…
a. Government spending for highways
b. Government purchase of military goods
c. A tax cut
d. All of the above
10. When the government injects spending into our economy, the spending triggers a “multiplier effect”. Which of the following explains why the multiplier effect exists?
a. The circular nature of the economy
b. The fact that money is spent and re-spent multiple times
c. The idea that one person’s spending becomes another person’s income
d. All of the above
11. Alternating periods of growth and contraction in real GDP are defined as:
a. The business cycle
b. Government intervention
c. Capitalism
d. Macro equilibrium
12. Which of the following is a basic measure of macroeconomic performance?
a. Output growth
b. Unemployment
c. Inflation
d. All of the above
13. Which of the following is characteristic of a downturn in the business cycle?
a. Less unemployment
b. An increase in population
c. A decrease in real output
d. Lower prices
14. Which of the following is true during the peak phase of a business cycle?
a. The unemployment rate is too high
b. The inflation rate has rapid changes
c. Real GDP is increasing
d. None of the above
15. The long-term average growth rate for real GDP in the U.S. on average has been approximately…
a. 1% per year
b. 3% per year
c. 4% per year
d. 6% per year
16. Which of the following individuals is still part of the labor force?
a. The CEO of Bank of America
b. A retired school teacher
c. A man who stays home, does housework and take care of his children
d. A woman serving seven years in prison for selling drugs
17. Which of the following types of unemployment would best characterize a tax preparer’s unemployment after tax returns are due?
a. Seasonal unemployment
b. Frictional unemployment
c. Underemployment
d. Cyclical unemployment
18. When the unemployment rate reaches the full-employment level…
a. There is increased concern about inflation
b. There are fewer idle human resources available
c. The economy is producing at maximum on the production possibilities curve
d. All of the above
19. Our full employment goal is not zero percent because…
a. Frictional unemployment will always exist
b. Unacceptably high rates of inflation would probably result
c. There will always be changes in the economy that cause structural unemployment
d. All of the above
20. The labor force is smaller than the total population because the labor force does not include:
a. People who have jobs
b. Very young and elderly citizens
c. People looking for a job
d. Those who are structurally unemployed
21. Which of the following is an example of perfect competition?
a. One large firm supplies all of the product to the market
b. Two firms supply the entire market and compete with each other for customers
c. Many small firms produce the same good
d. Many firms essentially supply the same good, but each has significant brand loyalty
22. Which of the following is true concerning a monopoly…
a. A single firm sells all the market output
b. The firm is a price setter rather than a price taker
c. There is significant market power
d. All of the above
23. In which of the following competitive markets would a single company have the least market power?
a. Perfect competition
b. Monopolistic competition
c. Oligopoly
d. Monopoly
24. Which of the following is an example of monopolistic competition?
a. One large firm supplies all of the product to the market
b. One firm supplies supplies 60% of the product to the market, and there are 3 other rival firms
c. Many firms essentially supply the same good, but each has significant brand loyalty
d. Two firms supply the entire market
25. The equilibrium price for a perfectly competitive firm occurs:
a. Where price equals minimum average total cost
b. At the intersection of market supply and market demand
c. Where a firm’s marginal cost equals total revenue
d. None of the above
26. In making a production decision, a business owner:
a. Decides whether to enter or exit the market
b. Makes a long-run decision about output and revenues
c. Decides whether to buy or lease new plant and equipment
d. Decides the short-run rate of output
27. Suppose a perfectly competitive firm increases its output. In order to sell this additional output the firm:
a. Should price it at market price first
b. Should raise its price to sell the additional output
c. Will not be able to sell the additional output at any price because of the many competitors
d. Is forced to lower price to sell the additional output
28. Marginal costs:
a. Are the additional costs incurred in producing one more unit of output
b. Increase as the rate of output increases
c. Are used to make the production decision
d. All of the above
29. If marginal cost equals price, then __________ is at a maximum.
a. Total cost
b. Profit
c. Total revenue
d. Marginal cost
30. Which of the following firms is likely to have the greatest market power?
a. A farmer who can sell as much lettuce as he can grow
b. A single soft drink company serving a campus with no barriers to entry
c. The only producer of the latest computer microchip technology
d. A regulated natural monopoly selling natural gas service
31. In order to demand a product, in economic terms, a consumer must…
a. Just be willing to purchase the product
b. Only be able to purchase the product
c. Be both willing and able to purchase the product
d. Find the product somewhere
32. If quantity demanded rises significantly following a price cut, then demand is…
a. Elastic
b. Inelastic
c. Unitary elastic
d. Unusual
33. Match the following types of demand to their respective price & revenue outcomes:
__ Elastic demand (E > 1) a. Price increases, Total revenue decreases
__ Inelastic demand (E<1) b. Price increases, Total revenue increases
__ Unitary elastic (E=1) c. Price increases, Total revenue does not change
34. Which of the following is an elastic product with respect to demand?
a. A luxury good
b. A good with many substitutes
c. A good that is very expensive
d. All of the above
35. Ceteris Paribus, a price decrease will cause total revenue to decrease for a company, only if the demand for its product is…
a. Unitary
b. Inelastic
c. Elastic
d. Non-existant
36. Total revenue…
a. Is the income a company receives from the sales of goods
b. Is equal to the price times quantity of goods sold
c. Goes up with a price decrease…if demand is elastic
d. All of the above
37. Market participants in the U.S. economy include…
a. Businesses
b. Government
c. Foreigners
d. All of the above
38. Which of the following is a determinant of demand?
a. Income
b. Expectations of income
c. Price of other goods
d. All of the above
39. Match the following types of demand to their respective price & revenue outcomes:
__ Elastic demand (E > 1) a. Price decreases, Total revenue does not change
__ Inelastic demand (E<1) b. Price decreases, Total revenue decreases
__ Unitary elastic (E=1) c. Price decreases, Total revenue increases
40. Adam Smith’s concept of the “invisible hand” refers to…
a. The market mechanism
b. Central planning
c. Oppression of workers by the wealthy business owners
d. Government regulations
41. The study of economics focuses on…
a. Only successful businesses
b. Value of the dollar
c. How best to allocate scarce resources
d. Elimination of opportunity costs
42. Limited resources, or “factors of production”…
a. Act as a constraint on what can be produced
b. Require economic choices to be made
c. May cause tradeoffs when the mix of output changes
d. All of the above
43. Which of the following is the best example of the “WHAT” economic question?
a. Should we substitute labor with more capital in the production process?
b. Who gets the goods we are producing?
c. Is there a more efficient way to produce goods?
d. What is the optimal or best mix of output?
44. The economy of the United States is important because it…
a. Produces exactly the same output as China, Japan, and Western Europe combined
b. Produces over 20% of the total world output
c. Exceeds the combined production of all other countries in the world together
d. Contains over 30% of the world population

45. Which of the following are available in limited quantity and contributes to the problem of scarcity?
a. Production, pricing, and purchasing
b. Land, labor, capital, and entrepreneurship
c. Net exports
d. Full employment, price stability, and growth in output
46. Which of the following is a reason why government intervenes in the economy?
a. To ensure safe products
b. To reduce pollution
c. To improve the mix of output
d. All of the above
47. The opportunity cost of going to a concert is…
a. Zero, because concerts rock!
b. Negative, since other activities cost more time and money
c. All the other activities that you gave up to go
d. The price of your concert ticket
48. GDP is…
a. A measure of the per capita income of the economy
b. The sum of physical inventories of goods and services in the economy
c. A physical measure of the capital purchases in an economy
d. A measure of the output produced within a nation’s borders during a given time period
49. When economists talk about a tradeoff between “guns and iPhones,” they mean…
a. Society is able to produce more military goods without giving up any consumer goods
b. Military goods are not the best use of resources
c. Producing more military goods may mean fewer consumer goods
d. Consumer goods are more costly than military goods
50. Total output (GDP) includes which consumers?
a. Household consumption
b. Business investment
c. Government purchases
d. All of the above