Question 1

________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Accepted Answer

A)   Oligopoly
B)   Monopolistic competition
C)   Perfect competition
D)   Microeconomic competition

Question 2

To jump-start the economy, the Fed is likely to lower interest rates, in order to encourage individuals and businesses to spend money.

Accepted Answer

A) True 
 B)False

Question 3

The social and economic goals of ________ include private ownership of land and business.

Accepted Answer

A)   capitalism
B)   socialism
C)   communism
D)   a mixed economy

Question 4

Economist Adam Smith's important contribution was an inquiry as to why some nations are wealthy, while others remain poor.

Accepted Answer

A) True 
 B)False

Question 5

Thomas Malthus was pessimistic about the ability of a society to achieve high standards of living for most of its citizens because he believed that

Accepted Answer

A)   government has a natural tendency to run deficits that would eventually bankrupt a nation.
B)   significant population growth would result in shortages of food and resources.
C)   owners of businesses would deliberately exploit their employees in an attempt to earn greater profits, and this would ultimately lead to a worker's revolt.
D)   high tax rates would eventually undermine people's incentives to work hard and create wealth.

Question 6

The higher the measurement of productivity, the higher the likely costs of production.

Accepted Answer

A) True 
 B)False

Question 7

Microeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

Accepted Answer

A) True 
 B)False

Question 8

How is it that people working in their own self-interest produce goods, services, and wealth for others?

Accepted Answer

A)   By taking advantage of a vast supply of labor, people working in their own self-interest could hire others at very low wages.
B)   In order to earn money and produce goods that improve lives, self-directed gain would provide jobs, and subsequently wages for others.
C)   The government pays entrepreneurs in the U.S. to produce goods, services, and wealth for others.
D)   Entrepreneurs tend to include themselves in a group of people who need charitable support. A portion of the entrepreneur's profit (as required by law)  goes to the charity of one's choice to support the less fortunate.

Question 9

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Accepted Answer

A) True 
 B)False

Question 10

Cashland's banking system recently crashed. This eventually led to companies being unable to borrow money to run their businesses and employees needed to be terminated. These circumstances cut into consumer's purchasing power, causing a severe decline in the prices of goods and services, better known as ________.

Accepted Answer

A)   disinflation.
B)   deflation.
C)   contra inflation.
D)   overproduction.

Question 11

Cooper created Coop's Consulting to earn a profit, but by working hard and increasing his market share, he was able to create jobs for others. This is an example of the ________ concept.

Accepted Answer

A)   circular flow
B)   invisible hand
C)   equitable income
D)   social dividend

Question 12

The top tax rate on personal income in most socialist economies is usually lower than the top tax rate on personal income in capitalist economies.

Accepted Answer

A) True 
 B)False

Question 13

A benefit of a free market can be that

Accepted Answer

A)   businesses provide customers with quality products at fair prices.
B)   businesses all make the same amount of profit.
C)   all businesses do better with more government regulation.
D)   the government dictates the number of competitors there are in each industry.

Question 14

One of the major ways the Fed influences economic conditions is through its control of interest rates.

Accepted Answer

A) True 
 B)False

Question 15

The greed of businesspeople represents one of the greatest dangers to the operation of a free market system.

Accepted Answer

A) True 
 B)False

Question 16

In free-market economies, the government plays a major role in deciding which goods are produced and who will get them.

Accepted Answer

A) True 
 B)False

Question 17

Inflation refers to the persistent rise in the purchasing power of money.

Accepted Answer

A) True 
 B)False

Question 18

An oligopoly is a market that is characterized by

Accepted Answer

A)   one seller that totally dominates the supply of the product.
B)   a large number of small companies all producing very similar products.
C)   a few large sellers who dominate the market.
D)   several small firms that compete primarily by differentiating their products.

Question 19

Communist values are disappearing because

Accepted Answer

A)   people in communist nations are tired of the strong religious teachings of the system.
B)   communist businesses have grown too quickly and they cannot keep up with demand.
C)   communist leaders are all militaristic.
D)   food and other product shortages overwhelm citizens since the government must guess what citizens need.

Question 20

When the supply curve and demand curve for a particular good are shown together on a single graph, the point at which the two curves intersect identifies the

Accepted Answer

A)   total profit earned by producers.
B)   total amount of labor that will be employed in that market.
C)   amount of time it takes to bring together the buyers and sellers of the good.
D)   equilibrium price of the good.

Exam 2: Understanding Economics and How It Affects Business

Correct Answer
verified

How is it that people working in their own self-interest produce goods, services, and wealth for others?

Correct Answer
verified

Thomas Malthus was pessimistic about the ability of a society to achieve high standards of living for most of its citizens because he believed that

Correct Answer
verified

Economist Adam Smith's important contribution was an inquiry as to why some nations are wealthy, while others remain poor.

Correct Answer
verified

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Correct Answer
verified

An oligopoly is a market that is characterized by

Correct Answer
verified

In free-market economies, the government plays a major role in deciding which goods are produced and who will get them.

Correct Answer
verified

The top tax rate on personal income in most socialist economies is usually lower than the top tax rate on personal income in capitalist economies.

Correct Answer
verified

A benefit of a free market can be that

Correct Answer
verified

To jump-start the economy, the Fed is likely to lower interest rates, in order to encourage individuals and businesses to spend money.

Correct Answer
verified

Inflation refers to the persistent rise in the purchasing power of money.

Correct Answer
verified

The higher the measurement of productivity, the higher the likely costs of production.

Correct Answer
verified

Microeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

Correct Answer
verified

The social and economic goals of ________ include private ownership of land and business.

Correct Answer
verified

________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Correct Answer
verified

Cooper created Coop's Consulting to earn a profit, but by working hard and increasing his market share, he was able to create jobs for others. This is an example of the ________ concept.

Correct Answer
verified

Communist values are disappearing because

Correct Answer
verified

One of the major ways the Fed influences economic conditions is through its control of interest rates.

Correct Answer
verified

The greed of businesspeople represents one of the greatest dangers to the operation of a free market system.

Correct Answer
verified

When the supply curve and demand curve for a particular good are shown together on a single graph, the point at which the two curves intersect identifies the

Correct Answer
verified

Exam 2: Understanding Economics and How It Affects Business

Correct AnswerverifiedShow Answer

How is it that people working in their own self-interest produce goods, services, and wealth for others?

Correct AnswerverifiedShow Answer

Thomas Malthus was pessimistic about the ability of a society to achieve high standards of living for most of its citizens because he believed that

Correct AnswerverifiedShow Answer

Economist Adam Smith's important contribution was an inquiry as to why some nations are wealthy, while others remain poor.

Correct AnswerverifiedShow Answer

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Correct AnswerverifiedShow Answer

An oligopoly is a market that is characterized by

Correct AnswerverifiedShow Answer

In free-market economies, the government plays a major role in deciding which goods are produced and who will get them.

Correct AnswerverifiedShow Answer

The top tax rate on personal income in most socialist economies is usually lower than the top tax rate on personal income in capitalist economies.

Correct AnswerverifiedShow Answer

A benefit of a free market can be that

Correct AnswerverifiedShow Answer

To jump-start the economy, the Fed is likely to lower interest rates, in order to encourage individuals and businesses to spend money.

Correct AnswerverifiedShow Answer

Inflation refers to the persistent rise in the purchasing power of money.

Correct AnswerverifiedShow Answer

The higher the measurement of productivity, the higher the likely costs of production.

Correct AnswerverifiedShow Answer

Microeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

Correct AnswerverifiedShow Answer

The social and economic goals of ________ include private ownership of land and business.

Correct AnswerverifiedShow Answer

________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Correct AnswerverifiedShow Answer

Cooper created Coop's Consulting to earn a profit, but by working hard and increasing his market share, he was able to create jobs for others. This is an example of the ________ concept.

Correct AnswerverifiedShow Answer

Communist values are disappearing because

Correct AnswerverifiedShow Answer

One of the major ways the Fed influences economic conditions is through its control of interest rates.

Correct AnswerverifiedShow Answer

The greed of businesspeople represents one of the greatest dangers to the operation of a free market system.

Correct AnswerverifiedShow Answer

When the supply curve and demand curve for a particular good are shown together on a single graph, the point at which the two curves intersect identifies the

Correct AnswerverifiedShow Answer

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verified

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