| 1 |
A local garbage disposal company increased its profitability even though it reduced its prices in order to attract new customers. This was made possible through the use of automated trucks, thereby reducing the number of workers needed per truck. The company also switched from a concentration on household hauling to a concentration on commercial hauling. As a result of its experience, company management planned to replace all their old trucks and increase the overall size of the truck fleet, doubling hauling capacity. The company's plan as outlined above, takes into consideration each of the following except:
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A. Commercial clients have more potential than household customers.
B. The demand for garbage removal services is sensitive to price.
C. Demand for garbage removal services would increase in the future.
D. Doubling of capacity would not encessitate; a substantial increase in the work force.
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| 2 |
Professor Akram told his class that the method of student evaluation of teachers is not a valid measure of teaching quality. Students should fill out questionnaires at the end of the semester when courses have been completed. Which of the following, if true, provides support for Professor Akram proposal ?
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A. Professor Akram received low ratings from his students.
B. Students filled out questionnaires after the midterm exam.
C. Students are interested in teacher evaluation.
D. Teacher are not obligated to use the survey results.
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| 3 |
Forty years after African colonies began emerging as nations, modern loyalties still often go first to the tribe. From Angola to Ethiopia, ethnic hatred has forced hundreds of thousands of people to flee their homes, making Africa the continent with the world's largest number of refugees. Which of the following statements best summarizes the above ?
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A. Africa is best characterized ethnic fractionalization.
B. Angola and Ethiopia have the worst record of inter ethnic strife in Africa.
C. Continued warfare has made Africa a nation of refugees.
D. Africa is best characterized as a federation of many states.
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| 4 |
An economist was quoted as saying that the Consumer Price Index (CPI) will go up next month because of a recent increase in the price of fruit and vegetables. Which of the following cannot be inferred from the statement ?
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A. The cost of fruits and vegetables has risen sharply.
B. Consumers have decreased their consumption of fruits and vegetables.
C. The cost of fruit and vegetables is a major item in the CPI.
D. Food cost changes are reflected quickly in the CPI.
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| 5 |
Most large retail stores hold sales in the month of January. The original idea of price reduction campaigns in January became popular when it was realized that sales or products would generally slow down following the Christmas rush, were it no for some incentive. The lack of demand could be solved by the simple solution of reducing prices. There is now an increasing tendency among major department stores in large urban centers to have their January sales being before Christmas, some time before the end of the calendar year. The idea behind this trend is to endeavor to sell the maximum amount of stock at a profit, even if that may not be at the maximum profit. Which of the following conclusions cannot be drawn from the above ?
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A. The incidence of early January sales results in the lower holdings of stocks with the corollary of lower stock holding costs.
B. Demand is a function of price; as you lower price, demand increases.
C. Major stores seem to think it makes sense to have to January sales campaigns pre-Christmas.
D. It is becoming less popular to star the January sales in the New Year.
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| 6 |
The President lobbied for passage of his new trade bill which would liberalize trade with industrialized countries such as Japan, members of the European Community, and Canad. Each of the following, if true, could account for the above, except:
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A. The President is up for re-election and needs to show results.
B. Labour unions have petitioned the President to provide more local jobs.
C. The trade agreement could bring a quid pro quo on pending negotiations.
D. Economists claimed that the passage of the bill would increase the country trade deficit.
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| 7 |
During 1999, advertising expenditures on canned food products increased by 20 percent, while canned food consumption rose by 25 percent. Each of the following, if true, could help explain the increase in food consumption except:
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A. Advertising effectiveness increased.
B. Canned food prices decreased relative to substitutes.
C. Canned food products were available in more stores.
D. Can opener production doubled.
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| 8 |
Significant beneficial effect of smoking occur primarily in the area of mental health, and the habit originates in a search for contentment. The life expectancy of our people has increased greatly in recent years; it is possible that the relaxation and contentment and enjoyment produced by smoking has lengthened many lives. Smoking is beneficial. Which of the following, it true, weaken the above conclusion ?
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A. That cigarettes are a major health hazard cannot be traced to the willfull act of any human or organization.
B. The government earns millions of dollars from the tobacco tax and tens of thousands of civilians are employed in the tobacco industry.
C. The evidence cited in the statement covers only one example of the effects of cigarette smoking.
D. No mention is made of possible harmful side-effects of smoking.
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| 9 |
The director of the customs service suggested that customs taxes on automobiles not be reduced as planned by the government because of the high incidence of traffic accidents last year. Which of the above statements weakens the argument above ? 1. Although the traffic accident rate last year was high, it was not appreciably higher than previous years and anyway, compulsory insurance covered most physical damage to automobiles and property. 2. A Commerce Department report showed that the demand for automobiles was highly inelastic. That is, as dealers lowered their prices, sales did not increase appreciably. 3. A study by the Economics Department at Classics University found that most traffic accidents had been caused by human error although it also concluded that an inadequate road network contributed to at least 40 percent of passenger injuries.
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A. I, but not II and not III.
B. II, but not I and not III.
C. I and III, but not II.
D. II and III, but not I.
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| 10 |
Opponents of the new legislation could defend themselves against the author's strategy by arguing that:
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A. the fact that past trade legislation improved the trade balance does not mean that the present bill will do the same.
B. economists are not always right.
C. the united states had a trade deficit both in the 1930s and at the time of the new bill.
D. the new law is not as strong as the 1930s bill.
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