Questions from General Economics

Q: The approval process for new drugs, if governed by economic thinking

The approval process for new drugs, if governed by economic thinking, should set stringency standards so that the __________ equals the ___________. a) total cost; total benefit b) average cost; ave...

Q: An increase in which of the following determinants of demand will have

An increase in which of the following determinants of demand will have an ambiguous (uncertain) effect on price? a) Taste b) Price of a complement c) Income d) Price of a substitute

Q: When a firm chooses to shut down, it is a

When a firm chooses to shut down, it is a) making a poor decision because it should always produce where marginal cost equals marginal revenue. b) making a poor decision because it should always pro...

Q: Using an interest rate of 5%, which figure has the smallest

Using an interest rate of 5%, which figure has the smallest present value? a) $5,000 b) $5,050 to be received two years from now c) $5,075 to be received three years from now d) $5,500 to be recei...

Q: The introduction of e-cigarettes provides a substitute for regular cigarettes

The introduction of e-cigarettes provides a substitute for regular cigarettes. The result is likely that the a) elasticity of supply increases. b) elasticity of supply decreases. c) elasticity of...

Q: The evidence on most environmental pollutants (lead in the air and

The evidence on most environmental pollutants (lead in the air and water, sulfur in the air, etc.) is that a) they are not nearly as harmful as once thought. b) they are increasing at an alarming ra...

Q: Imagine an economist ordering pizza by the slice. When deciding how

Imagine an economist ordering pizza by the slice. When deciding how many slices to order she would pick that number where the enjoyment of the _____ equals the enjoyment she could get from using the m...

Q: If supply and demand are lines then at equilibrium consumer and producer

If supply and demand are lines then at equilibrium consumer and producer surplus are both a) equal. b) shown as squares. c) shown as trapezoids. d) shown as triangles.

Q: An indicator of the degree of competition in an industry is the

An indicator of the degree of competition in an industry is the concentration ratio. It measures a) the percentage of sales in the industry by the largest firms. b) the percentage of profit in the i...

Q: In 2005, General Motors announced a 20 percent reduction in its

In 2005, General Motors announced a 20 percent reduction in its staffing levels and the closure of many assembly plants. Those laid off as a result would likely be classified as a) seasonally unemplo...