162.What is utility, according to economist's use of the term?
163.Define total utility and marginal utility and explain the relationship between them. Give an
164.What is the principle of diminishing marginal utility?
165.What does rational beha
The short-run aggregate supply curve is vertical because firms adjust both prices and quantity
in the short run.
The SAS curve is upward sloping in this case. Any change in aggregate demand is met by a
combination of price and quantity c
33. Refer to the graph above. Monetary policy that shifts the AD curve from AD 0 to AD1 and moves
the economy from A to D:
A. Increases nominal output but not real output
B. Increases both real and nominal output
C. Increases real output but not nominal o
Zach has $100 to spend on meals at restaurants and movie theatre tickets. The price of a
meal is $10 and the price of a movie ticket is $5. At equilibrium, Zach goes to the movies 10
times and eats in the restaurant 5 times a month.
(a) Draw Zach's b
Refer to the graph below.
The section of the long-run average total cost curve marked as "A" represents:
A. economies of scale.
B. diseconomies of scale.
C. diminishing marginal productivity.
D. increasing marginal productivity.
Type: Word problem
Under the cash-flow accounting system used by the U.S. Social Security system:
A. Both current and future pension obligations are accounted for
B. Only current pension obligations are accounted for
C. Only future pension o
Expansionary monetary policy tends to:
A. Reduce inflation and lower the exchange rate of the dollar
B. Increase inflation and lower the exchange rate of the dollar
C. Reduce inflation and raise the exchange rate of the dollar
D. Increase inf
87. Use the following table to answer the question. According to the table, production is characterized
A. Diminishing marginal productivity
B. Decreasing returns to scale
C. Constant returns to scale
D. Increasing returns to scale
88. Suppose the qua
Price elasticity of demand is the:
A. change in the quantity of a good demanded divided by the change in the price of that good.
B. change in the price of a good divided by the change in the quantity of that good demanded.
C. percentage chang
In a monopolistically competitive market:
A. firms produce differentiated products.
B. there are barriers to entry.
C. firms produce homogeneous products.
D. the demand for any firm's product is perfectly elastic.
Firms have limited monopoly
For a monopolistic competitor:
A. P = ATC in long-run equilibrium.
B. P > ATC in long-run equilibrium.
C. P = MR in long-run equilibrium.
D. P = MC in long-run equilibrium.
Due to easy entry, economic profits are pushed to zero in long-run eq
If decreasing returns to scale exist, then an increase in all inputs of 5 percent should:
A. Not affect output
B. Should increase output by less than 5 percent
C. Should increase output by 5 percent
D. Should increase output by more than 5 pe
Refer to the graphs above that show indifference curve analysis with the associated demand
curves. The best explanation for a movement from point D to point E is:
A. an outward rotation of the budget constraint along the X axis, allowing the
Colander - Chapter 06
Refer to the graph above. The approximate elasticity of supply at point A is:
Elasticity is [(3-1)/2]/[(3.5-2.5)/3] = 1/(1/3) = 3. Requires reading "Knowing the Tools:
Calculating Elasticity at
42. The aggregate demand, short-run aggregate supply and long-run aggregate supply curves are
based upon the:
A. Principle of substitution
B. Principle of opportunity cost
C. Relationship between a single good and its price
D. Relationship between the pri
Suppose the Federal funds rate rises by 1 percent. If the Taylor rule is correct, this might be
A. Falls 2 percentage points below potential output
B. Falls 1 percentage point below potential output
C. Rises 1 percentage poin
An isoquant is a curve that represents combinations of:
A. factors of production that produce equal amounts of output.
B. factors of production that cost the same amount.
C. output that can be produced from the same quantity of inputs.
Chapter 9 Key
Accounting profit and economic profit differ because economic profit fails to take into account
Accounting profit fails to take into account opportunity cost.
Colander - Chapt
Under monopolistic competition, a long-run equilibrium exists when price equals:
A. marginal cost.
B. average total cost.
C. minimum average total cost.
D. marginal revenue.
This must be true because otherwise firms would enter or exit and th
Refer to the graph above. If labor costs $10 per unit and machines cost $15 per unit, then the
economically efficient cost of producing 500 units of output is:
D. impossible to determine using the information given
Learning Objective: 31-2
If an economy is operating below potential output:
A. The budget will be in surplus only if there is a passive surplus
B. The budget will be in surplus only if there is a structura
Refer to the graph above. If this monopolistically competitive firm maximizes profit it will:
A. charge $45 per dress.
B. charge $78 per dress.
C. charge $85 per dress.
D. shutdown because it cannot cover its opportunity costs.
At this price,
Refer to the graph above. Assuming each carnival game costs $1 and each Ferris wheel ride
costs $2, a consumer with $16 to spend would optimally choose to consume at point:
First find the budget constraint by determin
Suppose marginal cost is constant and equal to 50 while marginal revenue equals 100 - 10Q.
Then the profit-maximizing monopolist will set quantity equal to:
Equating marginal revenue and marginal costs gives 100-10Q=
31. A U.S. citizen's purchase of stock in Hitachi (a Japanese firm) gives rise to a _
Japanese yen and a capital account _ in the U.S. balance of payments.
A. Demand for; inflow
B. Supply of; outflow
C. Demand for; outflow
D. Supply of; inflow
32. A Japan
Refer to the graph above. The profit-maximizing monopolist produces output:
At this output level, marginal revenue equals marginal cost so profits are maximized.
Colander - C
If marginal cost exceeds average total cost, then:
A. average total cost decreases as output increases.
B. average fixed cost increases as output increases.
C. average variable cost increases as output increases.
D. average variable cost dec
& Sustainability Report
CORPORATE RESPONSIBILITY & SUSTAINABILITY REPORT 2015 2016
In 2015, following a series of stakeholder
roundtables on our Sustainability Plan,