Pre-Test Chapter 1 McConnell 19
1. When economists say that people act rationally in their self interest, they mean that individuals:
A. look for and pursue opportunities to increase their utility.
B. generally disregard the interests o
Pre-Test Chapter 11w
1. Fiber-optic telephone lines are rapidly replacing copper telephone cable. This is an example of:
A. capital-labor substitutability.
B. economies of scale.
market (or monopoly) power.
Pre-Test Chapter 6
1. Which of the following statements is most accurate about advanced economies?
A. Economies experience a positive growth trend over the short run, but experience significant
variability in the long run.
B. Economies experien
Pre-Test Chapter 8
The following is cost information for the Creamy Crisp Donut Company:
Entrepreneur's potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers
Pre-Test Chapter 14
1. The incentive function of prices:
A. indicates that price increases bring forth more of a resource.
B. is the idea that competitive markets will always clear.
applies to all resources.
only applies to l
Pre-Test Chapter 12
1. Resource pricing is important because:
A. resource prices are a major determinant of money incomes.
B. resource prices allocate scarce resources among alternative uses.
resource prices, along with resource prod
Pre-Test Chapter 4 McConnell 19
1. The basic formula for the price elasticity of demand coefficient is:
A. absolute decline in quantity demanded/absolute increase in price.
B. percentage change in quantity demanded/percentage change in price
ANALYZING AND RECORDING TRANSACTIONS The Accounting process identifies business transactions and events, analyzes and records their effects, and summarizes and presents information in reports and financial statements. These reports and statement
Pre-Test Chapter 13
1. Over the long run, real earnings per worker can increase only at about the same rate as the
economy's rate of growth of:
A. total output.
B. stock of capital.
output per worker.
Pre-Test Chapter 11
1. Monopolistic competition is characterized by a:
A. few dominant firms and low entry barriers.
B. large number of firms and substantial entry barriers.
large number of firms and low entry barriers.
Pre-Test Chapter 10
1. A nondiscriminating pure monopolist's demand curve:
A. is perfectly inelastic.
B. coincides with its marginal revenue curve.
lies above its marginal revenue curve.
lies below its marginal revenue curve.
Pre-Test Chapter 9
1. An industry comprised of a small number of firms, each of which considers the potential reactions
of its rivals in making price-output decisions is called:
A. monopolistic competition.
Pre-Test Chapter 3 McConnell 19
1. The relationship between quantity supplied and price is _ and the relationship between
quantity demanded and price is _.
A. direct, inverse
B. inverse, direct
Pre-Test Chapter 2 McConnell 19
1. Of the following countries, which one best exhibits the characteristics of a market economy?
2. Broadly defined, competition involves: