Ch. 9 & 11 Review

Carolyn spends $8.50 for a hamburger at a restaurant. Which of the following would be included in the gross domestic product?

• The $8.50 Carolyn spends for the hamburger 

• The price the restaurant paid for the meat in the hamburger
• The price the restaurant paid for the bun
• The price the restaurant paid for the condiments

The standard of living in the United States is most accurately measured by

• dividing corporate profits by the number of workers.
• dividing the value of real gross domestic product by total population.
• multiplying the number of people who are working by average amount they save.
• dividing the amount of government expenditures by the total population.

When Ike sells 100 ice cream cones per day, his average fixed cost is $0.50 and his average total cost is $1.50. What is Ike’s average variable cost at this rate of production? 

• $0.50
• $1.00 
• $2.00
• There is not enough information to determine his cost.

Nike competes against other shoe makers by making its products different, by advertising, by price, and by other means. This means that Nike is a

• conglomerate.
• monopoly.
• price taker.
• price searcher.

A firm with many competitors that advertises it uses higher-quality materials and provides better service and warranties than its competitors is operating in a market classified as

•  monopolistic competition.
   
• pure price competition. 
• oligopoly.
• monopoly.

Monopolistic competition and pure monopoly

• mean the same thing.
• differ from one another because pure monopolies usually have fewer barriers to entry. 
• are both price takers.
• differ from one another in the size and number of businesses in their markets.

Which business or industry is most likely to exist in a market with pure price competition? 

• A grain exchange
• The defense industry.
• An electric power plant
• The automobile industry

A nation’s productivity is directly affected by

• The education of its labor force.
• The efficiency of its machinery. 
• The effectiveness of its management strategies. 
• All of the above.

Which expense is most likely a fixed cost?

• Rent for the company’s headquarters building 
• Per unit shipping cost
• Wages for workers
• Cost of a part used in producing a product

Which of the following would enable most people in a nation to consume more goods and services over a period of time?

• The government distributes more money for people to spend
• Businesses spend less on new capital resources
• Technological change diminishes
• Labor productivity increases