Economics and Correct Answer

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The assumption of rationality in economics implies that:
Answer

Selected Answer:

people make choices with an eye toward attaining objectives they have chosen.
Correct Answer:

people make choices with an eye toward attaining objectives they have chosen.
Question 2

0 out of 10 points

Carla had received very low annual return from her investment portfolio comprising of stocks of five companies for two years. Her decision to continue holding the same portfolio of assets will be an example of: Answer

Selected Answer:

bounded rationality.

Correct Answer:

systematically missed opportunities.

Question 3

10 out of 10 points

Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such a setback will be accounted as the merchant’s: Answer

Selected Answer:

sunk cost.

Correct Answer:

sunk cost.

Question 4
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0 out of 10 points

The economic value which can be created by a transaction between two people, Ed (seller) and Luis (buyer), is $50 as Ed’s opportunity cost of selling is $135 and Luis’ valuation of the good is $185. If each gains $25 from this transaction, which of the following conclusions can be drawn? Answer

Selected Answer:

Ed has higher bargaining power than Luis.

Correct Answer:

Transaction costs are zero.

Question 5

0 out of 10 points

If the production of 2,000 cars and 500 tons of corn during a year is economically efficient for a country which produces only these two products, which of the following conclusions can be drawn? Answer

Selected Answer:

It satisfies domestic demand completely.

Correct Answer:

The production of cars cannot be increased without reducing the production of corn.

Question 6

10 out of 10 points

Reducing _____ the benefits available to the buyer and seller and might also enable them to make exchanges that were previously impossible. Answer

Selected Answer:

transaction costs increases

Correct Answer:

transaction costs increases
Question 7
.

10 out of 10 points

Which of the following is a property of a forward contract?
Answer

Selected Answer:

The value of future delivery depends on the market price of the commodity.
Correct Answer:

The value of future delivery depends on the market price of the commodity.

Question 8
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10 out of 10 points

If cheese spreads and butter are substitutes, an increase in the price of butter will: Answer

Selected Answer:

shift the demand curve for cheese spreads upward.

Correct Answer:

shift the demand curve for cheese spreads upward.

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Question 9
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0 out of 10 points

Which of the following commodities can be considered as an inferior good? Answer

Selected Answer:

Eating out at an upscale restaurant

Correct Answer:

Dwelling in a small apartment located in a suburb

Question 10
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10 out of 10 points

_____ is the locus of the minimum points of various short-run average cost curves depicting different plant sizes. Answer

Selected Answer:

Long-run average cost

Correct Answer:

Long-run average cost

.

Question 11
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0 out of 10 points

The cheapest way to produce a certain amount of output may vary between the short and long-run because: Answer

Selected Answer:

prices increase over the long-run.

Correct Answer:

all inputs can be adjusted in the long run.

.

Question 12
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0 out of 10 points

Refer to Figure 4-2. What does the area ABCD signify?

Figure 4-2
The following figure shows the cost curves of a firm producing good X.

Answer

Selected Answer:

The total revenue earned when the market price is $5 per unit of X.

Correct Answer:

The total profit earned when the...
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