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General multiple choice economics questions

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Question 21 Save

The _____ elastic a firm's demand curve, the greater its _____.

a. less; monopoly power

b. less; output

c. more; monopoly power

d. more; costs

Question 22 Save

Which of the following is not a basic feature of a monopolistically competitive industry?

a. There are many buyers and sellers in the industry

b. Each firm in the industry produces a differentiated product

c. There is free entry and exit into the industry

d. Each firm owns a patent on its product

Question 23 Save

The variance of a probability distribution is used to measure risk because a higher variance is associated with

a. a wider spread of values around the mean.

b. a more compact distribution.

c. a lower expected value.

d. both a and b

Question 24 Save

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

a. government-created monopolies.

b. resource monopolies.

c. natural monopolies.

d. monopolistic competition.

Question 25 Save

The most important factor in determining the long-run profit potential in monopolistic competition is

a. free entry and exit.

b. the elasticity of the market demand curve.

c. the elasticity of the firm's demand curve.

d. that it is in the threatener's self interest to act on the threat.

Question 26 Save

In making decisions under risk

a. maximizing expected value is always the best rule.

b. mean variance analysis is always the best rule.

c. the coefficient of variation rule is always best.

d. maximizing expected value is most reliable for making repeated decisions with identical
probabilities.

Question 27 Save

When marginal revenue equals marginal cost, total revenue is equal to total cost, therefore, the firm just "breaks even"

True

False

Question 28 Save

The following payoff matrix shows the various profit outcomes for 3 projects, A, B, and C, under 2 possible states of nature: the product price is $10 or the product price is $20.
Profit
Project P = $10 P = $20
A 20 80
B 40 60
C -26 140
Using the minimax regret rule the decision maker would choose

a. A

b. B

c. C

d. impossible to tell from the information

Question 29 Save

An oligopolistic situation involving the possible creation of barriers to entry would probably best be modeled by

a. Cooperative game.

b. Prisoner's Dilemma game.

c. Battle of the Sexes game.

d. Sequential game.

Question 30 Save

The essential characteristic of a credible threat is

a. that the threatener has a reputation for carrying out threats.

b. that the threatener ignores the costs of carrying out the threat.

c. that the threatener and the threatenee know each other well.

d. that it is in the threatener's self interest to act on the threat.

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https://brainmass.com/economics/utility-demand/general-multiple-choice-economics-questions-219322

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Solution Preview

The _____ elastic a firm's demand curve, the greater its _____.

c. more; monopoly power

Greater elasticity indicates that consumers will reduce their purchases proportionally more with price changes. So, the less elastic the firm's demand, the greater its degree of market power.

Question 22
Which of the following is not a basic feature of a monopolistically competitive industry?

d. Each firm owns a patent on its product

Monopolistic competition requires free entry and exit, which precludes having patents.

Question 23

The variance of a probability distribution is used to measure risk because a higher variance is associated with

a. a wider spread of values around the mean.

Question 24

Encouraging firms to invest in research and development and individuals to engage ...

Solution Summary

Elasticity, market structure, and other questions

$2.19
See Also This Related BrainMass Solution

Financial Accounting Multiple Choice Questions

1. The requirement that only transaction data capable of being expressed in terms of money be included in the accounting records relates to the
a. cost principle.
b. monetary unit assumption.
c. economic entity assumption.
d. both a and b above.

2. A financial statement that reports accounting data at a specific date is the
a. income statement.
b. retained earnings statement.
c. balance sheet.
d. statement of cash flows.

3. Which of the following presents key aspects of the process of accounting in the correct chronological order?
a. Communicating, recording, and identifying
b. Recording, identifying, and communicating
c. Recording, totaling, and identifying
d. Identifying, recording, and communicating

4. The process of transferring transaction effects into the appropriate accounts is referred to as
a. closing.
b. journalizing.
c. recording.
d. posting.

5. Transactions are initially recorded in the
a. general ledger.
b. trial balance.
c. general journal.
d. balance sheet.

6. For which of the following accounts is the normal balance a debit?
a. Rent Payable
b. Unearned Rent Revenue
c. Rent Revenue
d. Prepaid Rent

7. Which of the following is false with regard to a general journal?
a. It tracks the increases and decreases in an individual account.
b. It provides a chronological record of transactions.
c. It discloses in one place the complete effect of a transaction.
d. It helps to prevent errors since the debit and credit amounts in an individual entry can be readily compared.

8. Financial statements combining the operations of Sears and J. C. Penney would violate the
a. monetary unit assumption.
b. economic entity assumption.
c. cost principle.
d. both a and c above.

9. A debit will reduce _______________, but increase ______________.
a. accounts receivable; accounts payable
b. revenues; accounts payable
c. accounts payable; common stock
d. common stock; prepaid insurance

10. Which of the following entries made to record the payment of $200 on account will cause the trial balance to be out of balance?
a. No entry is recorded.
b. Cash is debited for $200 and Service Revenue is credited for $200.
c. Cash is debited for $20 and Accounts Payable is credited for $20.
d. Both Cash and Accounts Payable are credited for $200.

11. Although a separate legal entity, the transactions of the following still must be kept separate from the personal activities of the owners for accounting purposes:
a. Proprietorship.
b. Partnership.
c. Corporation.
d. Both a and b above.

12. The Retained Earnings column had a beginning total of $30,000 and an ending total of $50,000. If $10,000 of dividends were paid during the period, net income must have been
a. $20,000.
b. $40,000.
c. $10,000.
d. $30,000.

13. The matching principle states that
a. revenues should be matched with assets when they are recorded.
b. revenues should be matched with the periods when cash is collected from customers.
c. recorded values of assets should match their purchase prices.
d. none of the above.

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