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Various economic multiple choice questions

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1.The opportunity cost of receiving 100 dollars in the future as opposed to getting that 100 dollars today
a.The foregone interest that could be earned if you had the money today.
b.The taxes paid on any earnings.
c.The value of $100 relative to the total income of that person.
d.The value of $100 relative to the total income of all persons.
2. If firms in the pizza industry are earning negative economic profits, which of the following will most likely occur in the future?
a.Some firms will exit the market
b.The economic profits of the firms in the industry will rise
c.The market price for pizza will rise
d.All of the above
3.The economic principle that producers are willing to produce more output when price is high is depicted by the:
a.Upward slope of the supply curve
b.Extreme steepness of the supply curve.
c.Downward slope of the supply curve.
d.Interaction of the supply and demand curves.

4.Because of consumer-consumer rivalry, the price will tend to:
a.Be driven to a lower price.
b.Rise up to the maximum price the consumers are willing and able to pay.
c.Be the same as the competitive price.
d.Be the same as the monopoly price.

5.Opportunity cost differs from accounting costs because of
a.Implicit costs
b.Accounting profits
c.Economic profits
d.Explicit costs
6.If A and B are substitutes, an increase in the price of good A would:
a.Have no effect on the quantity demanded of B.
b.Lead to an increase in demand for B.
c.Lead to a decrease in demand for B.
d.None of the statements associated with this question are correct.

7.Which of the following increases the potential for sustainable long-run industry profits?
b.The availability of multiple substitute
c.Presence of complements
d.None of the above
8.Negotiations between the buyer and seller of a new car is an example of:
a.Consumer-consumer rivalry.
b.Consumer-producer rivalry
c.Producer-producer rivalry.

9.Property owners move scarce resources towards the production of goods most valued by society because
a.Government controls the allocation of resources.
b.Consumers demand inexpensive goods and services.
c.Managers are solely pursuing the interests of society.
d.Firms attempt to maximize profits.

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Solution Summary

The problem set deals with questions under finance: The solution would be useful to students of accounting and economics.