Microeconomics Principles and Policy 13th Edition by William J. Baumol – Test Bank

Microeconomics Principles and Policy 13th Edition by William J. Baumol – Test Bank

Chapter 08

True / False

1. Once a firm has selected a price for its product, quantity is decided by consumers and their demand curves.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Supply and demand
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Supply and demand
TOPICS: Price and Quantity: One Decision, Not Two
KEYWORDS: BLOOM’S: Comprehension

2. Price and output decisions are two aspects of the same choice.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Supply and demand
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Supply and demand
TOPICS: Price and Quantity: One Decision, Not Two
KEYWORDS: BLOOM’S: Comprehension

3. Economists assume that business firms attempt to maximize their profits.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: Supply and demand
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Supply and demand
TOPICS: Price and Quantity: One Decision, Not Two
KEYWORDS: BLOOM’S: Comprehension

4. Economists assume that business firms have many goals, and profit maximization is just one of them.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: Supply and demand
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: Supply and demand
TOPICS: Price and Quantity: One Decision, Not Two
KEYWORDS: BLOOM’S: Comprehension

5. A firm’s total profit is the difference between its sales and what it pays out in costs.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: The study of economics, an – DISC: The study of economics, and definitions in economics
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: The study of economics, and defi – The study of economics, and definitions of economics
TOPICS: Total Profit: Keep Your Eye on the Goal
KEYWORDS: BLOOM’S: Knowledge

6. Economists and accountants have very different definitions of profit.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: The study of economics, an – DISC: The study of economics, and definitions in economics
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: The study of economics, and defi – The study of economics, and definitions of economics
TOPICS: Economic Profit and Optimal Decision Making
KEYWORDS: BLOOM’S: Comprehension

7. Economists and accountants use the same definition of profit.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: DISC: The study of economics, an – DISC: The study of economics, and definitions in economics
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: The study of economics, and defi – The study of economics, and definitions of economics
TOPICS: Economic Profit and Optimal Decision Making
KEYWORDS: BLOOM’S: Comprehension

8. Accounting profit is usually larger than economic profit.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: The study of economics, an – DISC: The study of economics, and definitions in economics
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: The study of economics, and defi – The study of economics, and definitions of economics
TOPICS: Economic Profit and Optimal Decision Making
KEYWORDS: BLOOM’S: Comprehension

9. Accounting profit is usually smaller than economic profit.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: The study of economics, an – DISC: The study of economics, and definitions in economics
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: The study of economics, and defi – The study of economics, and definitions of economics
TOPICS: Economic Profit and Optimal Decision Making
KEYWORDS: BLOOM’S: Comprehension

10. A firm that is earning zero economic profit should go out of business.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: DISC: The study of economics, an – DISC: The study of economics, and definitions in economics
NATIONAL STANDARDS: United States – BPROG: Analytic
ACCREDITING STANDARDS: The study of economics, and defi – The study of economics, and definitions of economics
TOPICS: Economic Profit and Optimal Decision Making
KEYWORDS: BLOOM’S: Comprehension