answers_en - ANSWERS TO TEST BANK QUESTIONS ANSWERS 57 58...

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ANSWERS TO TEST BANK QUESTIONS ANSWERS 57
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Chapter 1: MANAGERS, PROFITS, AND MARKETS 1-1 a 1-11 d 1-21 e I-31 c 1-2 c 1-12 d 1-22 e I-32 a 1-3 a 1-13 e 1-23 a I-33 d 1-4 d 1-14 d 1-24 d I-34 e 1-5 c 1-15 d 1-25 d I-35 e 1-6 d 1-16 e 1-26 e 1-7 a 1-17 d 1-27 d 1-8 e 1-18 c 1-28 d 1-9 a 1-19 a 1-29 e 1-10 d 1-20 c 1-30 b 1-1F a. $100,000; $75,000; $175,000 b. $275,000 c. $350,000 d. $237,500 1-2F a. 1 2 3 4 23,000,000 23,000,000 23,000,000 23,000,000 (1.12) (1.12) (1.12) (1.12) 20,535,714 18,335,459 16,370,946 14,616,916 $69,859,035 Value = + + + = + + + = b. higher; decrease 1-3F a . $629,036; $629,036 b. $575,022; $575,022 1-4F a. total revenue; accounting profit b. economic c. smaller d. differentiated e. larger f. owner-supplied g. shareholders; managers h. hazard i. control j. outsiders; value (or price) ANSWERS 59
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60
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Chapter 2: DEMAND, SUPPLY, AND MARKET EQUILIBRIUM c 2-16 d 2-31 a 2-46 a a 2-17 b 2-32 b 2-47 a d 2-18 a 2-33 b 2-48 d c 2-19 b 2-34 c 2-49 b e 2-20 c 2-35 d 2-50 a c 2-21 b 2-36 e 2-51 b d 2-22 a 2-37 d 2-52 e c 2-23 a 2-38 b 2-53 d e 2-24 c 2-39 d 2-54 d b 2-25 a 2-40 b 2-55 d a 2-26 d 2-41 a 2-56 b c 2-27 c 2-42 e 2-57 d b 2-28 d 2-43 b 2-58 e e 2-29 e 2-44 d a 2-30 b 2-45 c 2-1F income; positive 2-2F related; positive 2-3F downward; demand; inversely 2-4F inferior 2-5F negative; increase; rightward; increase 2-6F positive; decrease; leftward; decrease 2-7F increase 2-8F greater; supply 2-9F less; demand 2-10F rises (or increases); rises (or increases) 2-11F rises (or increases); falls (or decreases) 2-12F rises; may either rise or fall (indeterminate) ANSWERS 61
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2-13F may either rise or fall (indeterminate); falls 2-14F shortage, surplus 2-15F a. normal; M ; positive b. complements; P B ; negative c. 51,000 2-16F a. Q s = - 560 + 4 P ; $140 b. 640; 1,040 c. P = 140 + 0.25 Q s ; $327.50 2-17F a. $10; 45 b. shortage; 19; surplus; 19 c. $8; 32 d. $7.67; 52 2-18F a. 450 0.5 d P Q = - b. $200 c. $125 d. surplus; 100 e. $140 2-19F a. demand; increase; increase; increase b. supply; increase; decrease; increase c. may rise, fall, or stay the same (i.e., indeterminate); is going to increase d. If price controls deep gasoline prices below the market clearing price. 2-20F Event (i) is an increase in the price of a complement in production, so the supply of leather increases (shifts rightward). Event (ii) is an increase in the price of a substitute, so the demand for leather increases (shifts rightward). The two events cause an increase in the equilibrium quantity of leather but the effect on the price of leather is indeterminate. 2-21F Event (i) is an increase in the number of firms or productive capacity of the movie theater industry, so the supply of movie tickets increases (shifts rightward). Event (ii) is a decrease in the price of a complement, so the demand for movie tickets increases (shifts rightward). The two events cause an increase in the equilibrium quantity of movie tickets but the effect on ticket prices is indeterminate. 2-22F A decrease in the supply of RAM chips will not cause a shortage in RAM chips as long as prices of RAM chips are allowed to rise when supply decreases. The market for RAM chips will clear at a higher price when supply decreases.
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