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31 Oct 2020

14. A complementary approach to supporting R&D that does not involve the government’s close scrutiny of specific projects is

a. to give firms technological support

b. to give firms a reduction in taxes depending on how much research and development they do.

c. to give firms a lumpsum reduction in taxes. 

d. none of the above

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Raushan Raj
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31 Oct 2020

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Related textbook solutions

Principles of Economics
2nd Edition, 2017
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ISBN: 9781947172364
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Related questions

Please circle the right answer. (two points each)

1. If the price of gasoline is $2.0, and the price elasticity of demand is 0.5, how much will a 10 % reduction in the quantity placed on the market increase the price?

a.There will be 22% increase in the price

b.There will be 5% increase in the price

c.There will be 10 % increase in price

d.There will be 20% increase in price

e. None of the above

2.The consumer's budget line

a. indicates the options from which the consumer can choose

b. identifies the optimal basket for the consumer.

c. identifies the tastes of the consumer

d. ranks the baskets of goods in the order the consumer prefers them

e. shows that the consumer prefers more better than less

3. In the long run, a profit-maximizing firm will choose to exit a market when
a. fixed costs exceed sunk costs.
b. average fixed cost is rising.
c. revenue from production is less than total costs.
d. marginal cost exceeds marginal revenue at the current level of production.

4. When a perfectly competitive firm makes a decision to shut down, it is most likely that
a. price is below the minimum of average variable cost.
b. fixed costs exceed variable costs.
c. average fixed costs are rising.
d. marginal cost is above average variable cost.


5. Which of the following will always cause the demand curve for a product to shift to the right?

a. an increase in income whether the good is a compliment or substitute

b. an increase in the price of the compliment

c. an increase in the price of a substitute

d. an increase in technology

e. a decrease in the price of the good


6. Consumers understandably like lower prices, but they should understand there is a great difference between a lower price produced by the government price ceiling and a lower price that comes about through normal market channels, one benefits the consumer, the other may not.

a. This statement is not true, Consumers are benefited when the government lowers the price and the consumers are benefited when businesses lower the price.

b. This is because when the government forces prices down, there is a shortage and reduction in total surplus. Lower prices through markets don't create shortage but they do benefit consumers.

c. this is because the government forces prices down, there is a surplus and reduction in total surplus. Lower prices through markets don't create surpluses but they do benefit consumers

d. This is because when markets force the prices down, there is a shortage and reduction in total surplus. Lower prices through government actions don't create shortages but they do benefit consumers

e. None of the above


7. How does an increase in the price of a variable input affect the AC and the MC curves?

a. MC shifts to the right and AC increases.

b. MC shifts to the left and AC increases

c. MC shifts to the right and AC does not change

d. MC does not change but AC increases

e. none of the above

 

8. Which of the following is a characteristic of a perfectly competitive market?
a. Firms are price setters.
b. There are few sellers in the market.
c. Firms can exit and enter the market freely.
d. All of the above are correct.

9. In a perfectly competitive market, the process of entry or exit ends when
a. firms are operating with excess capacity.
b. firms are making zero economic profit.
c. firms experience decreasing marginal revenue.
d. price is equal to marginal cost.

 

10. The relative price of two goods is shown by:

a. the slope of an indifference curve

b. the slope of the budget line

c. the diminishing marginal rate of substitution

d. the slope of the income-consumption curve

e. none of the above

11. When firms have an incentive to exit a competitive market, their exit will

a. drive down market prices.
b. drive down the profits of existing firms in the market.
c. decrease the number of goods supplied in the market.
d. All of the above are correct.

12. If a perfectly competitive firm currently produces where the price is greater than the marginal cost, it

a. will increase its profits by producing more.
b. will increase its profits by producing less.
c. is making positive economic profits.
d. is making negative economic profits.

 

13. Does a consumer well being vary along a demand curve?

a. Yes. When price increases, consumers move to a lower indifference curve.

b. Yes. When price increases, consumers move to a higher indifference curve.

c. No. When price increases, consumers stay on the same indifference curve.

d. No. When price increases, the higher price has no effect on budget constraints or indifference curves.

e. None of the above

 

14. If a competitive firm sets its output such that marginal revenue, marginal cost, and average total cost are equal, economic profit must be:

a. Negative

b. positive

c. Zero

d. Indeterminate from the given information

15. Which of the following is a characteristic of a perfectly competitive market?


a. Firms are price setters.

b. There are few sellers in the market.
c. Firms can exit and enter the market freely.
d. All of the above are correct.



See the question and two answers, give brief your own opinion for each answer( are you agree on disagree with the answer, why?)

Q:This week, we are discussing market types. In this forum, please pick one of the market types that are presented in your textbook and provide your own definition (use your own words) and example. What do you think are the benefits vs. deficiencies of your chosen market type?

Answer 1)

Perfect Competition

This kind of market type stipulates the overall advantage that a market has. In this market, there are many sellers and buyers.These players do not control the price of commodities or services but the prices are controlled by the demand and supply of goods and services. As a result of this, no one can determine the market price of commodities because customers will switch to the next best alternative. All the market players in this sense are price takers and the customers that subscribe to these goods have a lot of experience about the goods offered. It means therefore that they have adequate information about the goods available, which means, therefore, they are aware of the prices that are being charged. All the firms that exist in this kind of market type have a relatively small market share because of the existence of so many of them. The market is also characterized by free entry and exit of firms. New firms can enter the market if they so wish and create competition to the existing firms. Due to this nature of many firms, most of them only earn enough to keep them on the market and nothing more for these firms (Makowski & Ostroy, 2001).

Answer 2)

The Oligopoly; best recognized by few sellers, identical (or similar) products, and its difficult entryinto the market. A good way to determine if a market has an oligopoly is if the change in one seller, causes its "competition" to change likewise. Automotive, cell phone industries, and aviation are some examples of markets that have an oligopoly. In the automotive industry, if one vehicle producer (lets say Chevrolet) changes the body style of its line up, other "completion" is soon to follow. Notice how cars these days are getting nicer and nicer for the base model? Research and Development is greatly valued in an industry that has an oligopoly. This is because if a seller lowers prices, they understand that its competitors will soon follow with ease. But, if they develop a better improvement over its last model in technology, it is much harder to follow than just a reduction in price.

The advantage of an oiligolpoly is that the leaders can set prices instead of take them. Which leads to those that are in charge having the ability to increase profit margins above what they would be in a truly free market.

The disadvantage is that for those looking to try to get into the market will have much difficulty because of the common huge capitol expenditures required to actually compete with the big boys.

2. Which one of the following statements does not indicate an important difference between traditional economics and ecological economics?

Ecological economics places greater emphasis on the importance of energy resources

Ecological economics places greater emphasis on the carrying capacity of the environment

Ecological economics places greater emphasis on the scale of economic activity

Ecological economics places greater emphasis on the importance of natural laws

Ecological economics places greater emphasis on the flow of goods between households and firms

3. The ability of the environment to absorb and render harmless the by-products of human activity is called ...

Carrying capacity

The sink function

Depletion

Throughput

The source function

4. Which of the following is an example of the source function of the environment?

Trees absorb some of the carbon dioxide emitted by human activity

Wetlands reduce the pollution levels in water

Winds carry air pollution away from a city

Humans harvest fish from the oceans

Bacteria break down discarded wastes

5. Which one of the following relationships is not included in the standard circular flow model?

The flow of goods and services from firms to households

The flow of labor from households to firms

The flow of pollution from firms to households

The flow of money from households to firms

The flow of wages from firms to households

6. What statement below best describes how the environment is incorporated into the standard circular flow model?

The long-term availability of natural resources is considered

The pollution generated by firms and households is considered

The input of solar energy is considered

Natural resources are considered as inputs into the production process

The build-up of waste heat is considered

7. What is the primary external input into the broader ecological circular flow model?

Pollution

Solar energy

Fossil fuels

Geophysical cycles

Factors of production

8. What is the only net output of the broader ecological circular flow model?

Goods and services

Solar energy

Factors of production

Geophysical cycles

Waste heat

9. What is the standard economic technique used to compare present and future benefits and

costs?

Property rights

Microeconomics

Externalities

Macroeconomics

Discounting

10. Human activity is producing changes in which cycle that may lead to significant changes in the global climate?

Carbon cycle

Nitrogen cycle

Water cycle

Phosphorus cycle

Organic cycle

11. The Malthusian hypothesis ...

Has proven to be remarkably accurate

Is irrelevant for studying modern environmental problems

Has continuing implications for the debate on current environmental issues

Applies only to developing countries

Applies only to developed countries

12. What is the key to escaping the Malthusian trap?

Increasing productivity per capita

Increasing population

Increasing natural capital

Increasing population density

Definition of property rights

13. Real GNP per capita is defined as ...

GNP divided by population

GNP adjusted for inflation

GNP adjusted for capital depletion divided by population

GNP adjusted for inflation divided by population

GNP adjusted for depreciation divided by population

14. What two factors do standard economics consider as the most important in explaining productivity increases?

Increasing energy supplies and technological progress

Increasing capital stock and technological progress

Increasing energy supplies and increasing natural resources

Increasing capital stock and increasing energy supplies

Increasing capital stock and increasing natural resources

15. Which one of the following statements about sustainable development is false?

Sustainable development requires all energy to be derived from solar energy

Sustainable development considers the scale of the macro-economy

Sustainable development requires a population level below carrying capacity

Sustainable development combines modern and traditional agricultural techniques

Sustainable development requires some type of population policy

16. Which one of the following statements about sustainable development is false?

Some people have complained that sustainable development is a term devoid of specific content

Some people consider sustainable development just a slightly modified form of traditional economic growth

Sustainable development should provide for human needs without undermining the global ecosystem

Sustainable development would redefine economic goals

Sustainable development will require increased resource consumption

17. Which one of the following is an example of demand-side management?

Building a new nuclear power plant

Increasing oil exploration in the Arctic

Building a new solar energy plant

Replacing incandescent with compact fluorescent light bulbs

Increasing reliance on domestic oil sources rather than imports

18. The standard economic approach to pollution control

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