IVY SOFTWARE MBA PREPWORKS FUNDAMENTALS OF
ECONOMICS LATEST EXAM 2024 REAL EXAM QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+|| BRAND NEW!
The main concept demonstrated in the production possibilities frontier is -
Correct Answer - Opportunity cost
whenever marginal cost is higher than average variable cost or average
total cost, the average variable cost or average total cost must
increase
decrease
stay the same - Correct Answer - increase
whenever marginal cost is lower than average variable cost or average
total cost, then the average variable cost or the average total cost must
increase
decrease
stay the same - Correct Answer - decrease
whenever the marginal cost curve crosses the average variable or total
cost curve then the values are
higher
lower
equal - Correct Answer - equal
pg. 1
,The accountants hired BBB law firm have calculated that at the profit
maximizing quantity total fixed costs equal $56,272,000 total variable costs
equal $213,235,000 and total revenue equals $213,236,000. Because of
this information BBB law firm decides
A. to exit the industry
B. to shut down
C. decides to stay open because shutting down would be more expensive
D. decides to stay open because they are making an economic profit -
Correct Answer - C. decides to stay open because shutting down would be
more expensive. Because total variable cost is less than total revenue,
BBB Law Firm should stay open.
The accountants hired by Truscott and Associates have calculated that at
the company's current production level, total fixed costs to equal $21,000,
total variable costs to equal $42,000 and total revenue to equal $45,000.
Because of this information Truscott & Associates decide
A) to exit the industry
B) to shut down
C) to stay open because shutting down would be more expensive
D) to stay open because they are making an economic profit - Correct
Answer - C. to stay open because shutting down would be more expensive
The profit maximizing rule states that a business maximizes profits when it
produces where marginal revenue equals average variable cost. T/F -
Correct Answer - False
Real Gross Domestic Product (GDP) - Correct Answer - a measure of the
market value of the production of the final goods and services after an
adjustment has been made for changes in the price level
= Nominal GDP / Price level index * 100
pg. 2
,when the Federal Reserve desides to sell government securities (ie:
treasury bills) it is choosing to ________ the money supply
increase decrease - Correct Answer - decrease
An increase in the required reserve deposit ration will lead to a _________
in the money supply
increase/decrease - Correct Answer - decrease
a decrease in the required reserve deposit ratio will lead to a _____ in the
money supply
increase/decrease - Correct Answer - increase
A bank borrows from the Federal Reserve when - Correct Answer - it has
too few reserves to meet reserve requirements
an increase in the discount rate____________ the quantity of reserves in
the banking system which in turn ______________ the money supply -
Correct Answer - reduces/reduces
A decrease in the discount rate, encourages borrowing reserves from the
Federal Reserve, which in turn _______ the money supply - Correct
Answer - increases
As the overall level of prices increases, the value of a unit of money -
Correct Answer - decreases
Money's basic function is:
a medium of exchange
pg. 3
, a store of value
a unit of account
all of the above - Correct Answer - all of the above
An item that buyers give sellers when they want to purchase goods and
services is called:
a medium of exchange
a unit of account
liquidity - Correct Answer - a medium of exchange
A decrease in the value of money from one period to the next is called:
deflation
inflation
an expansion
unemployment - Correct Answer - inflation
An increase in the required reserve deposit ratio causes the money supply
to:
increase
decrease
not change
not enough info - Correct Answer - decrease
in a perfectly competitive industry, market prices are determined by -
Correct Answer - the interaction of the market demand and market supply
curves
pg. 4
ECONOMICS LATEST EXAM 2024 REAL EXAM QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+|| BRAND NEW!
The main concept demonstrated in the production possibilities frontier is -
Correct Answer - Opportunity cost
whenever marginal cost is higher than average variable cost or average
total cost, the average variable cost or average total cost must
increase
decrease
stay the same - Correct Answer - increase
whenever marginal cost is lower than average variable cost or average
total cost, then the average variable cost or the average total cost must
increase
decrease
stay the same - Correct Answer - decrease
whenever the marginal cost curve crosses the average variable or total
cost curve then the values are
higher
lower
equal - Correct Answer - equal
pg. 1
,The accountants hired BBB law firm have calculated that at the profit
maximizing quantity total fixed costs equal $56,272,000 total variable costs
equal $213,235,000 and total revenue equals $213,236,000. Because of
this information BBB law firm decides
A. to exit the industry
B. to shut down
C. decides to stay open because shutting down would be more expensive
D. decides to stay open because they are making an economic profit -
Correct Answer - C. decides to stay open because shutting down would be
more expensive. Because total variable cost is less than total revenue,
BBB Law Firm should stay open.
The accountants hired by Truscott and Associates have calculated that at
the company's current production level, total fixed costs to equal $21,000,
total variable costs to equal $42,000 and total revenue to equal $45,000.
Because of this information Truscott & Associates decide
A) to exit the industry
B) to shut down
C) to stay open because shutting down would be more expensive
D) to stay open because they are making an economic profit - Correct
Answer - C. to stay open because shutting down would be more expensive
The profit maximizing rule states that a business maximizes profits when it
produces where marginal revenue equals average variable cost. T/F -
Correct Answer - False
Real Gross Domestic Product (GDP) - Correct Answer - a measure of the
market value of the production of the final goods and services after an
adjustment has been made for changes in the price level
= Nominal GDP / Price level index * 100
pg. 2
,when the Federal Reserve desides to sell government securities (ie:
treasury bills) it is choosing to ________ the money supply
increase decrease - Correct Answer - decrease
An increase in the required reserve deposit ration will lead to a _________
in the money supply
increase/decrease - Correct Answer - decrease
a decrease in the required reserve deposit ratio will lead to a _____ in the
money supply
increase/decrease - Correct Answer - increase
A bank borrows from the Federal Reserve when - Correct Answer - it has
too few reserves to meet reserve requirements
an increase in the discount rate____________ the quantity of reserves in
the banking system which in turn ______________ the money supply -
Correct Answer - reduces/reduces
A decrease in the discount rate, encourages borrowing reserves from the
Federal Reserve, which in turn _______ the money supply - Correct
Answer - increases
As the overall level of prices increases, the value of a unit of money -
Correct Answer - decreases
Money's basic function is:
a medium of exchange
pg. 3
, a store of value
a unit of account
all of the above - Correct Answer - all of the above
An item that buyers give sellers when they want to purchase goods and
services is called:
a medium of exchange
a unit of account
liquidity - Correct Answer - a medium of exchange
A decrease in the value of money from one period to the next is called:
deflation
inflation
an expansion
unemployment - Correct Answer - inflation
An increase in the required reserve deposit ratio causes the money supply
to:
increase
decrease
not change
not enough info - Correct Answer - decrease
in a perfectly competitive industry, market prices are determined by -
Correct Answer - the interaction of the market demand and market supply
curves
pg. 4
