24. A natural monopoly exists because a. The firm owns natural resources b . The firm holds patents C . Economic and technical conditions permit only one efficient supplier d. The government in the only supplier 25. A market with many independent firms, low barriers to entry, and product differentiation is best classified A monopoly A natural monopoly Monopolistic competition An oligopoly 26. Which of the following is not a key assumption of perfect competition? Firms sell a homogeneous product Customers are indifferent about which firm they buy from The level of a firm's output is small relative to the industry's total output Each firm can price its product above the industry price. 27. GNP is not a very good measure of economic welfare because a. It is a monetary measure b. It takes into account pollution and abatement services c. The expenditures and income approaches to GNP yield different results because the units of measurements are not the same d. It does not include non-monetized activities. 28. National income or product means a. The amount of money received by the people over an interval of time b. The money measure of the overall flow of the final goods and services over an interval of time c. The total amount of money d. The income of the government over an interval of time 29. Real GNP and nominal GNP are similar in the sense that a. Real GNP and nominal GNP are both adjusted for changes in the price level b. They refer to all economic activities, monetized and non-monetized c. They determine the market value of all monetized goods and services produced in an economy, usually for a year d. They are good measures of the distribution of resources in the world economy. 30. NNP is a. GNP adjusted for depreciation charges b. National income plus corporate income taxes c. NI minus indirect business taxes d. NI plus personal income and disposable income 31. Personal income equals disposable income plus a. Personal income tax b. Personal savings c. Dividend payments d. Payroll taxesa. Dividends ces between personal income and personal disposable income consists of b. Consumption expenditures c. Personal savings d. Personal income taxes 33. Which of the ioiiowin a. Recession b. Expansion c. inection d. Peak 9 is not a phase of the business cycle? 34. The secular trend refers to a. Fluctuations in business activity which average 40 months in duration b. Fluctuations in business activity which occur around Christmas, Easter, and so forth ' ' ctivity which average eight or nine years in duration d. The long-term expansion or contraction of business activity which occurs over 50 or 100 years. 35. \"Stagation' refers to a. a simultaneous increase in output and the price level b. a simultaneous reduction in output and the price level c. an increase in the price level accompanied by decreases in real output and employment d. a decline in the price level accompanied by increases in real output and employment. 36. ination is undesirable because a. it arbitrary redistributes real income and wealth b. it tends to be cumulative: that is. creeping ination invariably causes hyperination. c. It always tends to make the distribution of income less equal d. It is typically accompanied by a declining real output. 37. if an increase in government purchases of goods and services of P20 billion causes an equilibrium GDP to rise by P80 billion, and if total taxes and investment are constant, the marginal propensity to consume out of disposable income is a. 0.75 b. 0.25 c. 1.25 d. 4 38. At break-even point 3. Savings is equal to zero b. Consumption is equal to disposable income 0. MP8 + MP0 = 1 d. All of the above 39. The marginal propensity to consume is the ratio of a. Total consumption to total income b. To increase in savings to an increase in income c. The increase in consumption to an increase in income d. The increase in consumption to an increase in savings 40. if MP8 is .25, the MP0 is ' a. .25 b. .25x.75 i c. .25x1 d. 1 -.25