Question 1

A trade deficit occurs when:

Accepted Answer

A)  a country imposes a price floor.
B)  a country's imports exceed its exports.
C)  a country imposes a price ceiling.
D)  a country's exports exceed its imports.
E)  when the domestic product market is in disequilibrium.

Question 2

In a market system, which of the following factors determines a consumers's ability to pay for a good or service?

Accepted Answer

A)  Technology
B)  Consumer's income
C)  Cost of production
D)  Consumer's wants
E)  Market supply

Question 3

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Accepted Answer

A)  $1, 000.
B)  $100.
C)  $10, 000
D)  $50.
E)  $5, 000.

Question 4

A person obtains income is obtained by selling the services of the resources that he or she owns.

Accepted Answer

A) True 
 B)False

Question 5

The wireless communication business has changed dramatically since the 1980s, going from mobile phones to smartphones.This was only possible because:

Accepted Answer

A)  of the persuasive advertising campaigns undertaken by firms in the wireless communication industry.
B)  consumers welcomed the changes and were willing and able to pay for them.
C)  of the dot-com stock market bubble that lasted from 1995 to 2000.
D)  the government tightly regulated the wireless communication industry with regulations and taxes.
E)  businesses needed to produce these products in order to recoup their investment in research and development.

Question 6

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 2 which of the following situations will be observed? A) People would be willing and able to purchase 75 units while only 60 units would be available. B) People would be willing and able to purchase only 60 units while 75 units would be available. C) People would be willing and able to purchase 75 units while only 50 units would be available. D) People would be willing and able to purchase 75 units while only 25 units would be available. E) People would be willing and able to purchase 50 units and producers would supply exactly 50 units." class="answers-bank-image d-inline" rel="preload" > Refer to Figure 4.1.If the price in the Delivery Meals market remains at $10 but demand shifts to D2 which of the following situations will be observed?

Accepted Answer

A)  People would be willing and able to purchase 75 units while only 60 units would be available.
B)  People would be willing and able to purchase only 60 units while 75 units would be available.
C)  People would be willing and able to purchase 75 units while only 50 units would be available.
D)  People would be willing and able to purchase 75 units while only 25 units would be available.
E)  People would be willing and able to purchase 50 units and producers would supply exactly 50 units.

Question 7

In a market system, consumer demands dictate _____ and the search for profit defines _____.

Accepted Answer

A)  for whom goods and services are produced;how goods and services are produced
B)  what is produced;for whom goods and services are produced
C)  where goods and services are produced;for whom goods and services are produced
D)  what is produced;where goods and services are produced
E)  what is produced;how goods and services are produced

Question 8

A surplus in a country's trade balance means that:

Accepted Answer

A)  net exports exceed transfer payments.
B)  the country's currency is over-valued.
C)  the value of net exports is positive.
D)  imports into the country exceed exports.
E)  domestic savings exceeds domestic investment.

Question 9

Total government spending in the U.S.economy was around _____ of GDP in the financial year 2010.

Accepted Answer

A)  5 percent
B)  36 percent
C)  25 percent
D)  44 percent
E)  16 percent

Question 10

Consumption or household spending of an economy comprises of both consumer spending and business spending.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of Western Europe, Japan, Canada, Mexico, and China taken together?

Accepted Answer

A)  All these countries are classified as high-income countries by the World Bank.
B)  They are all members of the North American Free Trade Agreement [NAFTA].
C)  All these countries are considered developed countries by the World Bank.
D)  They are collectively the largest trade partners of the U.S.
E)  They are the five largest exporters of agricultural produce in the world.

Question 12

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate units in many different countries, they are categorized as:

Accepted Answer

A)  joint ventures.
B)  sole proprietorship firms.
C)  partnership firms.
D)  multinational firms.
E)  co-operative firms.

Question 13

The term consumer sovereignty refers to:

Accepted Answer

A)  the fact that consumers' choices are limited to what the producers decide to produce.
B)  a situation in which the government decides what is produced.
C)  the idea that consumers ultimately determine what is produced.
D)  the idea that consumers try to maximize their utility.
E)  the idea that the preferences of both producers and the government ultimately determine what is produced.

Question 14

When the government sector is included in the circular flow diagram, the total value of private production will equal the value of household income.

Accepted Answer

A) True 
 B)False

Question 15

The figure given below represents the circular flow of income between households, firms, financial intermediaries, and foreign countries. Figure 4.2  Refer to Figure 4.2.Assume investment spending decreases by $4, 000.Everything else being the same, what must be the new value of net trade flows in order to maintain total expenditures on business firms' output at $35, 000?

Accepted Answer

A)  -$2, 500
B)  -$1, 500
C)  $3, 500
D)  $6, 500
E)  $7, 500

Question 16

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1  Refer to Figure 4.1.In which direction will the resources flow following a shift in the demand for Restaurant Meals and Delivery Meals as represented by the figure?

Accepted Answer

A)  Resources flow from where they are more highly valued to where they are less highly valued in order to make the consumer better off.
B)  Resources flow from where they are more highly valued to where they are less highly valued in order to reduce prices.
C)  Resources flow from where they are more highly valued to where they are less valued in order to reduce costs.
D)  Resources flow from Restaurant production and sales to Delivery production and sales.
E)  Resources flow to Restaurant production and sales and away from Delivery production and sales.

Question 17

The replacement of film-based still cameras by digital cameras and recently by digital SLR cameras exemplifies creative destruction.

Accepted Answer

A) True 
 B)False

Question 18

Mark's ability to purchase goods and services depends on:

Accepted Answer

A)  his aesthetic sense.
B)  his ability to hunt out the best bargains.
C)  the amount of information that he has.
D)  his money income.
E)  his intelligence level.

Question 19

Which of the following institutions form the private sector in an economy?

Accepted Answer

A)  Only households
B)  Households and the government
C)  Households, businesses, and foreign firms
D)  Households and businesses only
E)  Foreign investors and foreign governments

Question 20

A household consists of only related family members like a father, mother, and children and not unrelated members like two students sharing a rented apartment.

Accepted Answer

A) True 
 B)False

Exam 5: The Market System and the Private and Public Sector

A trade deficit occurs when:

Correct Answer
verified

Which of the following is true of Western Europe, Japan, Canada, Mexico, and China taken together?

Correct Answer
verified

Correct Answer
verified

A household consists of only related family members like a father, mother, and children and not unrelated members like two students sharing a rented apartment.

Correct Answer
verified

Which of the following institutions form the private sector in an economy?

Correct Answer
verified

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Correct Answer
verified

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.In which direction will the resources flow following a shift in the demand for Restaurant Meals and Delivery Meals as represented by the figure?

Correct Answer
verified

The term consumer sovereignty refers to:

Correct Answer
verified

The wireless communication business has changed dramatically since the 1980s, going from mobile phones to smartphones.This was only possible because:

Correct Answer
verified

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate units in many different countries, they are categorized as:

Correct Answer
verified

When the government sector is included in the circular flow diagram, the total value of private production will equal the value of household income.

Correct Answer
verified

In a market system, which of the following factors determines a consumers's ability to pay for a good or service?

Correct Answer
verified

In a market system, consumer demands dictate _ and the search for profit defines _.

Correct Answer
verified

Total government spending in the U.S.economy was around _____ of GDP in the financial year 2010.

Correct Answer
verified

Mark's ability to purchase goods and services depends on:

Correct Answer
verified

Consumption or household spending of an economy comprises of both consumer spending and business spending.

Correct Answer
verified

A person obtains income is obtained by selling the services of the resources that he or she owns.

Correct Answer
verified

A surplus in a country's trade balance means that:

Correct Answer
verified

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.If the price in the Delivery Meals market remains at $10 but demand shifts to D₂ which of the following situations will be observed?

Correct Answer
verified

The replacement of film-based still cameras by digital cameras and recently by digital SLR cameras exemplifies creative destruction.

Correct Answer
verified

Exam 5: The Market System and the Private and Public Sector

A trade deficit occurs when:

Correct AnswerverifiedShow Answer

Which of the following is true of Western Europe, Japan, Canada, Mexico, and China taken together?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A household consists of only related family members like a father, mother, and children and not unrelated members like two students sharing a rented apartment.

Correct AnswerverifiedShow Answer

Which of the following institutions form the private sector in an economy?

Correct AnswerverifiedShow Answer

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Correct AnswerverifiedShow Answer

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.In which direction will the resources flow following a shift in the demand for Restaurant Meals and Delivery Meals as represented by the figure?

Correct AnswerverifiedShow Answer

The term consumer sovereignty refers to:

Correct AnswerverifiedShow Answer

The wireless communication business has changed dramatically since the 1980s, going from mobile phones to smartphones.This was only possible because:

Correct AnswerverifiedShow Answer

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate units in many different countries, they are categorized as:

Correct AnswerverifiedShow Answer

When the government sector is included in the circular flow diagram, the total value of private production will equal the value of household income.

Correct AnswerverifiedShow Answer

In a market system, which of the following factors determines a consumers's ability to pay for a good or service?

Correct AnswerverifiedShow Answer

In a market system, consumer demands dictate _____ and the search for profit defines _____.

Correct AnswerverifiedShow Answer

Total government spending in the U.S.economy was around _____ of GDP in the financial year 2010.

Correct AnswerverifiedShow Answer

Mark's ability to purchase goods and services depends on:

Correct AnswerverifiedShow Answer

Consumption or household spending of an economy comprises of both consumer spending and business spending.

Correct AnswerverifiedShow Answer

A person obtains income is obtained by selling the services of the resources that he or she owns.

Correct AnswerverifiedShow Answer

A surplus in a country's trade balance means that:

Correct AnswerverifiedShow Answer

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.If the price in the Delivery Meals market remains at $10 but demand shifts to D2 which of the following situations will be observed?

Correct AnswerverifiedShow Answer

The replacement of film-based still cameras by digital cameras and recently by digital SLR cameras exemplifies creative destruction.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

In a market system, consumer demands dictate _ and the search for profit defines _.

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.If the price in the Delivery Meals market remains at $10 but demand shifts to D₂ which of the following situations will be observed?

Correct Answer
verified

Correct Answer
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