ECON 6115- Test Bank with 105 A+ PASS!!!

ECON 6115- Test Bank with 105 A+
PASS!!!
ECON 6115- Test Bank with 105 A+
PASS!!!
This textbook is about microeconomics because it deals mainly with the behavior of
variables such as:
A. economic sectors, the business cycle and monetary and fiscal policies.
B. national output, interest rates, unemployment and inflation.
C.individual economic units, such as consumers, firms, workers and investors
D.national and international markets, exchange rates and economic treaties. -
ANSWER-C

Which of the following statements is false? An economic analysis of carbon taxes can:
A. predict the effect on unemployment in West Virginia coal mining communities.
B. conclude that such taxes should be imposed to benefit future generations.
C. present a trade-off of the costs and benefits of different levels of carbon taxes.
D. calculate the increase in costs faced by coal-using industries.
compare the likely reductions in medical expenditures on diseases caused by smog. -
ANSWER-B

Use the following two statements to answer this question:
I. Economic theories are developed to explain observed phenomena by deducing from a
set of basic rules and assumptions.
II. Economic theories use value judgments to determine which people ought to pay
more taxes.
A. Both I and II are false.
B. I is false, and II is true.
C. I is true, and II is false.
D. Both I and II are true. - ANSWER-C

The textbook argues that one of the trade-offs workers make is working for a small
company or a large company. The small companies offer:
A.benefits that appeal to the workers that do not include job security or career
advancement.
B. job security but limited potential for advancement.
C. both job security and ample potential for advancement.
D. more potential for advancement but limited job security. - ANSWER-D

Which of the following is a positive statement?
A. The minimum wage should not be increased because this action would increase
unemployment.
B. Smoking should be restricted on all airline flights.

,ECON 6115- Test Bank with 105 A+
PASS!!!
C. All automobile passengers should be required to wear seatbelts in order to protect
them against injury.
D. Intermediate microeconomics should be required of all economics majors in order to
build a solid foundation in economic theory.
E. none of the above - ANSWER-E

The basic premise behind worker trade-offs in a market economy is that:
A. workers decide how to allocate their time between work and leisure.
B. workers don't decide how much leisure to have. The amount of leisure depends on
the number of hours they must work, which is determined by the firm.
C. the trade-off between work and leisure is determined by factors other than what
workers or firms would determine to be optimal.
D. firms decide how much workers must work and workers decide how much leisure to
have. - ANSWER-A

Use the following statements to answer this question:
I. If the extent of a market is broader, it is less likely that firms in the market can
influence the market price.
II. In determining whether two different products belong to the same market, it is
necessary to know whether the two products can be used as substitutes for each other.
A. I and II are both true.
B. I is true, and II is false.
C. I and II are both false.
D. I and II are both false. - ANSWER-A

Although there are many reasons why a market can be non-competitive, the principal
economic difference between a competitive and a non-competitive market is:
A. the number of firms in the market.
B. the annual sales made by the largest firms in the market.
C. the size of the firms in the market.

D the extent to which any firm can influence the price of the product.
E the presence of government intervention. - ANSWER-D

Although the U. S. airline industry has only a relatively small number of sellers, the
market is nevertheless highly competitive. The reason is that:
A. the number of buyers is very large.
B. due to fierce competition, no firm has significant control over the quantity supplied.
C. most airline routes are served by relatively many sellers.
D. due to fierce competition, no firm has significant control over prices. - ANSWER-D

Which of the following statements about markets and industries is TRUE?
A.A market includes buyers but not sellers.
B. An industry includes buyers but not sellers.

, ECON 6115- Test Bank with 105 A+
PASS!!!
C.A market includes sellers but not buyers.
D. An industry includes sellers but not buyers. - ANSWER-D

Boeing Corporation and Airbus Industries are the only two producers of long-range
commercial aircraft. This market is not perfectly competitive because:
A. Airbus cannot sell aircraft to the United States government.
B. each company has annual sales over $10 billion.
C.Airbus receives subsidies from the European Union.
D. all of the above
E. each company can significantly affect prices. - ANSWER-E

Which of the following features are relevant for determining the extent of a market?
A. Its geographical boundaries
B. Technological innovations that would reduce the cost of
production
C. The range of products to be included in it
D. both A and C
E. both A and B
F. both A and C - ANSWER-D

The price elasticity of gasoline supply in the U.S. is 0.4. If the price of gasoline rises by
8%, what is the expected change in the quantity of gasoline supplied in the U.S.?
A. +32.0%
B. +0.32%
C.-3.2%
D. +3.2% - ANSWER-D

The income elasticity of demand refers to:
A. a change in income following a change in quantity demanded.
B. the change in income required for quantity demanded to change by 1%.
C. the substitution of one good for another as income changes.
D. the percentage change in quantity demanded resulting from a 1-percent increase in
income. - ANSWER-D

To evaluate the potential impact of introducing the hybrid Prius auto into the U.S.
market, Toyota Motor Corporation would use:
A. normative economic analysis.
B. positive economic analysis.
C. forensic analysis.
D. negative economic analysis. - ANSWER-B

The cross-price elasticity of demand refers to:
A. the substitution of one good for another as the prices of two goods change.