Wendy's restaurants must decide whether to grow their own potatoes for French fries or buy them. If they buy rather than grow, then they have opted to
a. integrate horizontally
b. allow market prices to guide resource allocation
c. integrate vertically
d. allow hierarchical control to guide resource allocation
e. form an authority relation
B
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Refer to Sales Tax. Area C + D + F + G
The following questions refer to the accompanying diagram which shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
a. the total value that consumers receive from their purchases.
b. the tax revenue collected by the government.
c. the fall in producers' surplus.
d. the deadweight loss due to the tax.
Which of the following is NOT a component of gross domestic product?
A) purchases by consumers of used goods B) government purchases C) net exports D) purchases by consumers of finished goods
Managerial economics is best defined as
A) the study of economics by managers. B) the study of the aggregate economic activity. C) the study of how managers make decisions about the use of scarce resources. D) All of the above are good definitions.
There may be other goals an entrepreneur pursues, but the primary goal of the entrepreneur is to maximize
a. market share b. production c. the difference between price and cost d. profit e. size of the firm's plant