Question 1

Scarcity creates competition for resources,and forces trade-offs on the part of every participant in the economy.

Accepted Answer

Scarcity has two powerful effects:It creates competition for resources, and it forces trade-offs on the part of every participant in the economy.

Question 2

Movement along the supply curve typically slopes upward.

Accepted Answer

Movement along the supply curve typically slopes upward:As prices rise, the quantity that sellers are willing to supply also rises. Similarly, as prices decline, the quantity that sellers are willing to supply declines.

Question 3

The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.

Accepted Answer

The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.

Question 4

Capitalism is a term used to describe the free-market system,one in which private parties own and operate the majority of businesses and where competition,supply,and demand determine which goods and services are produced.

Accepted Answer

Capitalism is a term used to describe the free-market system, one in which private parties own and operate the majority of businesses and where competition, supply, and demand determine which goods and services are produced.

Question 5

Capital is the collective intelligence of an organization.

Accepted Answer

Capital includes money, computers, machines, tools, and buildings that a business needs in order to produce goods and services.

Question 6

In practice,no economy is truly a free-market economy.

Accepted Answer

Free market economy is a situation in which so many buyers and sellers exist that no single buyer or seller can individually influence market prices. In practice, no economy is truly a free-market economy.

Question 7

A deep and prolonged recession can be considered as a depression.

Accepted Answer

A deep and prolonged recession can be considered a depression, which doesn't have an official definition but is generally considered to involve a catastrophic collapse of financial markets.

Question 8

As social equality is a major goal of planned systems,private enterprise and the pursuit of private gain are encouraged.

Accepted Answer

In a planned system, governments largely control the allocation of resources and limit freedom of choice in order to accomplish government goals. Private enterprise and the pursuit of private gain are not encouraged in such a system.

Question 9

By taking an ownership of 60% in General Motors in 2009, the U.S.nationalized the automaker.

Accepted Answer

Nationalizing refers to a government's takeover of selected companies or industries. In the given situation, the government has attained a majority stake and the situation is an example of nationalization.

Question 10

Frictional unemployment is caused by economic fluctuations.

Accepted Answer

Frictional unemployment refers to the natural flow of workers into and out of jobs, such as when a person leaves one job without first lining up a new job.

Question 11

Macroeconomics studies economic behavior among consumers,businesses,and industries that collectively determine the quantity of goods and services demanded and supplied at different prices.

Accepted Answer

The study of a country's larger economic issues, such as how firms compete, the effect of government policies, and how an economy maintains and allocates its scarce resources, is termed macroeconomics.

Question 12

Capital includes land and minerals that a business needs in order to produce goods and services.

Accepted Answer

Capital includes money, computers, machines, tools, and buildings that a business needs in order to produce goods and services.

Question 13

Deflation is an economic condition in which prices fall steadily throughout the economy.

Accepted Answer

Deflation is an economic condition in which prices fall steadily throughout the economy.

Question 14

Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.

Accepted Answer

Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.

Question 15

The demand curve will shift to the left if the price of substitute products increases.

Accepted Answer

The demand curve will shift to the right if the price of substitute products increases.

Question 16

The point at which quantity of a good or service equals the quantity demanded is known as the equilibrium point.

Accepted Answer

The point at which quantity of a good or service equals the quantity demanded is known as the equilibrium point.

Question 17

The supply curve of a firm will shift to the right if technology increases the firm's production costs.

Accepted Answer

The supply curve of a firm will shift to the left if technology increases the firm's production costs.

Question 18

Deciding how much money to spend on new manufacturing equipment versus launching a new advertising campaign is described as opportunity cost.

Accepted Answer

Opportunity cost refers to the value of the most appealing alternative from all those that weren't chosen. In other words, opportunity cost is a way to measure the value of what you gave up when you pursued a different opportunity.

Question 19

Demand refers to the quantities of a good or service that producers will provide on a particular date at various prices.

Accepted Answer

Demand refers to buyers' willingness and ability to purchase products at various price points.

Question 20

Cyclical unemployment is caused by a mismatch between workers' skills and current employer needs.

Accepted Answer

Cyclical unemployment refers to seasonal unemployment caused by economic fluctuations. When demand for goods and services drops, businesses reduce production, thereby requiring fewer workers.

Quiz 2: Understanding Basic Economics

Scarcity creates competition for resources,and forces trade-offs on the part of every participant in the economy.

Movement along the supply curve typically slopes upward.

The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.

Capitalism is a term used to describe the free-market system,one in which private parties own and operate the majority of businesses and where competition,supply,and demand determine which goods and services are produced.

Capital is the collective intelligence of an organization.

In practice,no economy is truly a free-market economy.

A deep and prolonged recession can be considered as a depression.

As social equality is a major goal of planned systems,private enterprise and the pursuit of private gain are encouraged.

By taking an ownership of 60% in General Motors in 2009, the U.S.nationalized the automaker.

Frictional unemployment is caused by economic fluctuations.

Macroeconomics studies economic behavior among consumers,businesses,and industries that collectively determine the quantity of goods and services demanded and supplied at different prices.

Capital includes land and minerals that a business needs in order to produce goods and services.

Deflation is an economic condition in which prices fall steadily throughout the economy.

Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.

The demand curve will shift to the left if the price of substitute products increases.

The point at which quantity of a good or service equals the quantity demanded is known as the equilibrium point.

The supply curve of a firm will shift to the right if technology increases the firm's production costs.

Deciding how much money to spend on new manufacturing equipment versus launching a new advertising campaign is described as opportunity cost.

Demand refers to the quantities of a good or service that producers will provide on a particular date at various prices.

Cyclical unemployment is caused by a mismatch between workers' skills and current employer needs.