Deck 3: Economic Challenges Facing Business Today

Question 1

Which of the following is an implication of demand curves sloping downward?

A)Buyers will purchase greater quantities of a good or service as its price falls.
B)Sellers will supply greater quantities of a good or service as its price increases.
C)Buyers will purchase greater quantities of a good or service as their incomes fall.
D)Sellers will supply greater quantities of a good or service as taxes increase.

Answer 1

A

Question 2

Most industrialized nations operate economies based on _____.

A)planned economies
B)private enterprise systems
C)communist systems
D)socialist systems

Answer 2

B

Question 3

A demand curve will shift to the left if the _____.

A)number of buyers increases
B)future expectations become more optimistic
C)buyers' incomes decrease
D)prices of substitute goods increase

Answer 3

C

Question 4

Which of these is caused by an increase in consumers' incomes?

A)Break-even point to shift to the right
B)Demand curve to shift to the right
C)Break-even point to shift to the left
D)Demand curve to shift to the left

Question 5

During an epidemic,the price of surgical masks increased.Which of the following is most likely to have been a consequence of this increase in price?

A)Decrease in the demand for surgical masks
B)Increase in the tax on surgical masks
C)Increase in the supply of surgical masks
D)Decrease in the profits from selling surgical masks

Question 6

Assume that the price of gasoline triples.What will likely happen to the demand for fuel-efficient small cars? The demand curve will shift to the _____ and demand will _____.

A)right; decrease
B)left; increase
C)right; increase
D)left; decrease

Question 7

Under which of the following conditions,the equilibrium price is established?

A)Prevailing market price of an item is same as the price at which a consumer can buy the item
B)Demand curve and the supply curve are parallel to each other
C)Opportunity cost of a product is greater than its production cost
D)Production cost of an item is greater than its selling price

Question 8

If the prices of substitute goods decrease,the demand curve will shift to the _____ and the price will _____.

A)right; fall
B)left; fall
C)right; rise
D)left; rise

Question 9

The supply curve will shift left when:

A)suppliers in the market increase.
B)taxes increase.
C)the costs of technologies decrease.
D)the costs of inputs decrease.

Question 10

As the number of suppliers of a product increases,the supply curve shifts to the _____ and the price will _____.

A)right; fall
B)right; rise
C)left; fall
D)left; rise

Question 11

As price of a good or service increases,in general,the quantity demanded:

A)declines.
B)remains the same irrespective of the product type.
C)increases.
D)first increases and then decreases irrespective of the product type.

Question 12

If the number of buyers decreases,the demand curve will shift to the _____ and the price will ____.

A)left; fall
B)right; fall
C)right; rise
D)left; rise

Question 13

An economist studies the consumer behavior in a particular area.This is an example of _____.

A)microeconomics
B)macroeconomics
C)sociology
D)psychology

Question 14

A demand curve is the schedule that shows the relationship between the price of a product and the _____.

A)overhead costs
B)social costs
C)quantity of that product buyers will purchase
D)quantity of that product manufacturers will supply

Question 15

Which of the following best describes the study of macroeconomics? It is:

A)concerned with studying a country's overall economic issues
B)primarily concerned with the economic choices and decisions of individual consumers
C)not related to microeconomics
D)not related to government decisions concerning spending and taxes

Question 16

The demand curve will shift to the _____ and the prices will _____,if buyers' incomes increase.

A)right; rise
B)left; fall
C)right; fall
D)left; rise

Question 17

In which of these systems,incentives to motivate employees to perform are at their highest level?

A)Capitalist
B)Communist
C)Socialist
D)Collectivist

Question 18

Which of the following is considered to be the BEST example of pure competition in today's business environment?

A)The steel industry
B)The market for pet food
C)The fishing industry
D)The paper industry

Question 19

In which of the following types of economic systems do entrepreneurs and investors have the most amount of freedom with regard to controlling business ownership,profits,and resource allocations?

A)Socialism
B)Capitalism
C)Communism
D)Mixed economy

Question 20

Which of these happens,according to a supply curve?

A)As prices rise,quantity of a product supplied falls
B)As prices fall,consumers will buy in smaller quantities
C)As prices rise,the quantity of a product that is supplied also rises
D)As prices rise,consumers will buy in larger quantities

Question 21

Which of the following best describes an industry where there is no direct competition,yet a firm operating in such an industry will have almost no control over pricing?

A)Monopolistic competition
B)A regulated monopoly
C)An oligopoly
D)Pure competition

Question 22

During economic recession:

A)unemployment begins to decline as business activity accelerates.
B)businesses expand by hiring more employees.
C)people turn to lower-priced retailers for the goods they need.
D)consumer confidence about the future is optimistic.

Question 23

Global Flowers Inc.(GFI),an exporter of flowers across the globe,operates in an industry where there are many sellers and buyers.This makes it difficult for any one single seller or buyer to influence the market price of the flowers.Also,it is difficult for sellers or exporters to differentiate their products from each other.What type of market structure does this illustrate?

A)Oligopoly
B)Pure competition
C)Monopoly
D)Monopolistic competition

Question 24

United States of Mahan (USM)is a nation in which industries like steel,communications,electricity,railways,education,and health care are owned by the government.The leaders of the nation believe that it is detrimental to the public's interest to allow such core industries to be owned by private firms.However,private ownership is encouraged in industries like restaurants,entertainment,and retail shops,which have a lower impact on social welfare.Which of the following economic systems has USM adopted?

A)Capitalism
B)Socialism
C)Individualism
D)Communism

Question 25

During an economic recession,consumer spending _____ and unemployment _____.

A)increases; increases
B)increases; decreases
C)decreases; increases
D)decreases; decreases

Question 26

In which of these,a local,state,or federal government grants exclusive rights in a certain market to a single firm.

A)Pure competition
B)Oligopolies
C)Regulated monopolies
D)Monopolistic competition

Question 27

During a recession,which of the following businesses is most likely to do well?

A)North Sun Ships,a luxury cruise service
B)Red Couture Inc.,a designer store for clothes and accessories
C)Save Market,a chain of discount stores
D)Ink Theory,a store that sells premium pens

Question 28

Under the economic system of communism,_____.

A)individual rights to profits are not allowed
B)government interference is limited
C)employees have the complete freedom to choose their own occupation
D)businesses are owned by individuals

Question 29

A particular industry has many competitors,each of whom has no significant control over price.In addition,it is fairly easy to enter the industry.This industry is an example of _____.

A)pure competition
B)monopolistic competition
C)an oligopoly
D)a pure monopoly

Question 30

Quinn cultivates and sells sugarcane to a sugar manufacturing company.Brett is a retailer for pet food.Which of the following is a difference between Quinn's and Brett's businesses?

A)Unlike John,David has very few competitors.
B)Unlike John,David is eligible for tax exemptions.
C)Unlike John,David has no control over the pricing of his product.
D)Unlike John,David can patent his product.

Question 31

Which of the following is an economic system in which the government owns all of a nation's major industries but still allows private ownership in less crucial areas?

A)Communism
B)Socialism
C)Capitalism
D)Ethnocentrism

Question 32

A country has a strong private sector,along with publicly-owned enterprises.Entrepreneurs and private-sector investors are entitled to profits after paying taxes,and even state-owned enterprises are expected to generate returns.What type of economic system does this country have?

A)Mixed economy
B)Communism
C)Socialism
D)Self-managed economy

Question 33

The state of Brookcliff has granted exclusive rights to the BC Electricity Board for the supply of electricity.This is an example of a(n)_____.

A)fiscal policy
B)regulated monopoly
C)mixed market economy
D)oligopoly

Question 34

Monopolistic competition has _____.

A)many buyers and sellers,who have some control over price
B)few sellers,but only one major buyer
C)many sellers,who sell a homogeneous product
D)no barriers to keep out new competitors

Question 35

Pure competition is different form monopolistic competition in that:

A)buyers in pure competition see little difference between the goods offered by competitors
B)new competitors cannot easily enter a purely competitive market
C)buyers in monopolistic competition have no control over prices
D)sellers in monopolistic competition can never exit the industry

Question 36

A particular industry has only a few competitors,who have some control over price.However,high start-up costs make entry into the industry difficult.This industry is an example of _____.

A)pure competition
B)monopolistic competition
C)an oligopoly
D)a pure monopoly

Question 37

_____ has a blend of both planned economy and private enterprise system.

A)Capitalism
B)Communism
C)A mixed market economy
D)A free market economy

Question 38

Consumers can choose from hundreds of different kinds and producers of cheese,each with a slightly different flavor and texture.This type of market structure is known as _____.

A)pure competition
B)monopolistic competition
C)a monopoly
D)an oligopoly

Question 39

In the country of ABC,the government owns the public transportation,basic services like energy supply and communication,and the core manufacturing firms.Small businesses are privately owned.What type of economic system does ABC have?

A)Capitalism
B)Communism
C)Socialism
D)Individualism

Question 40

Ogechi ventures into a new business with few competitors and requires a huge investment.Soon after entering the business,one of Ogechi's competitors introduces a price cut that forces Ogechi to reduce the prices of her products as well.In this scenario,Ogechi has ventured into _____.

A)oligopoly
B)pure competition
C)monopoly
D)monopolistic competition

Question 41

Magnus has been unemployed for a long time because he has not been able to find a job in which he can apply his specialized knowledge about the Robostic Data System (RDS),a computer system that is now obsolete.What type of unemployment is Magnus facing?

A)Structural unemployment
B)Frictional unemployment
C)Seasonal unemployment
D)Cyclical unemployment

Question 42

Which of these is caused by increases in the prices of raw materials and other factors of production?

A)Negative amortization
B)Supply-side deflation
C)Cost-push inflation
D)Price penetration

Question 43

In the context of fiscal policy,increased taxes and reduced government spending:

A)restrict economic activities.
B)create more profits for firms.
C)increase a nation's gross domestic product
D)cut unemployment rates.

Question 44

The purpose of an expansionary monetary policy is to:

A)limit entrepreneurial activities.
B)increase the money supply.
C)increase the cost of borrowing.
D)curb rising prices.

Question 45

The recent recession has left Brionna,a manager previously in a restaurant,unemployed.This is an example of_____.

A)cyclical unemployment
B)frictional unemployment
C)structural unemployment
D)seasonal unemployment

Question 46

Business borrowing becomes more difficult when the _____.

A)federal government reduces taxes
B)federal government increases spending
C)Federal Reserve decreases the money supply
D)Federal Reserve reduces interest rates

Question 47

Gross domestic product (GDP)is based on the _____ of a country.

A)allocative efficiency
B)per-capita output
C)factor income
D)net asset value

Question 48

Which of the following should developing countries follow to modernize their economies?

A)Increase their tax rates
B)Allow citizens to own property
C)Restrict new businesses
D)Increase trade barriers

Question 49

According to the annual World Economic Forum,all of the following are key challenges facing business today's economy EXCEPT ________.

A)increasing younger workforce
B)asset bubbles in a major economy
C)Illicit trade
D)failure/shortfall of critical infrastructure

Question 50

All of the following are part of the national debt EXCEPT:

A)Corporate taxes
B)Treasury bills
C)Treasury notes
D)Federal bonds

Question 51

Which of these is an economic situation characterized by soaring prices?

A)Hyperinflation
B)Deflation
C)Budget surplus
D)Balanced budget

Question 52

In the Midwest part of the United States,farm laborers are out of work for some months after they have harvested and sold their produce.This is an example of _____.

A)structural unemployment
B)cyclical unemployment
C)seasonal unemployment
D)frictional unemployment

Question 53

If the government of a country takes in more money than it spends,it is said to have a _____.

A)trade deficit
B)budget surplus
C)balanced budget
D)negative balance of payment

Question 54

In the context of fiscal policy,lower taxes and increased government spending:

A)cut unemployment rates.
B)limit economic expansion.
C)reduce inflation.
D)reduce the profits of a business.

Question 55

Which of the following is NOT a source of government funds to cover the annual budget?

A)Taxes
B)Fees
C)Subsidiaries
D)Borrowing

Question 56

Assume that the number of people wanting to buy houses in your locality increases sharply.This will cause the price of houses to increase,which is an example of _____.

A)demand-pull inflation
B)cost-push inflation
C)supply-side deflation
D)credit deflation

Question 57

_____ occurs when workers lack the necessary skills for available jobs or because the skills they have are no longer in demand.

A)Structural unemployment
B)Cyclical unemployment
C)Seasonal unemployment
D)Frictional unemployment

Question 58

In the United States,the _____ is responsible for formulating and implementing the nation's monetary policy.

A)Federal Reserve System
B)Department of the Treasury
C)Department of Commerce
D)Federal Executive Institute

Question 59

Many of the gains in U.S.productivity can be attributed to _____.

A)technology
B)deflation
C)inexpensive labor
D)budget surplus

Question 60

Which of these is a commonly used measure of nation's total productivity?

A)Gross domestic product
B)Product mix ratio
C)Contribution margin
D)Break-even point

Question 61

If number of buyers increase,the demand curve for most products will shift to the left.

Question 62

Not-for-profit organizations must also make economic decisions just like other business organizations.

Question 63

Microeconomics examines not just the economic policies of individual nations,but the ways in which those individual policies affect the overall world economy.

Question 64

Taxing and spending decisions made by governments are part of macroeconomics.

Question 65

Research finds that decisions made by individual consumers and businesses have an insignificant impact on overall economic conditions.

Question 66

Under which types of competition,individual firms have some control over price?

A)pure competition and a monopoly
B)monopolistic competition and an oligopoly
C)an oligopoly and pure competition
D)a pure monopoly and monopolistic competition

Question 67

Assume electric water heaters and gas water heaters are interchangeable,and assume the price of natural gas rises sharply relative to the price of electricity.The demand curve for electric water heaters should shift to the right.

Question 68

The price of gasoline rises sharply.One likely outcome is that the demand curve for hybrid vehicles should shift to the left.

Question 69

As prices of goods and services rise,the quantity demanded will generally decline.

Question 70

Two goods are ________ good if an increase in the price of one causes a fall in demand for the other.

A)substitute
B)complementary
C)supply-driven
D)opposite

Question 71

A demand curve is the graph showing the relationship between different prices and the quantities of a good or service that sellers will offer for sale.

Question 72

The demand curve will shift to the right if consumers have more money to spend.

Question 73

A local fitness center is an example for which type of competition?

A)Pure competition
B)Monopolistic competition
C)An oligopoly
D)Monopoly

Question 74

________ amounts to a balance between what we want and what we can afford.

A)Economics
B)Marketing
C)Sociology
D)Psychology

Question 75

Two goods are substitute goods if an increase in the price of one causes a fall in demand for the other.

Question 76

Changes in overall government spending have a macroeconomic effect.

Question 77

Microeconomics and macroeconomics have no correlation.

Question 78

The prevailing market price at which consumers can buy an item is called the equilibrium price.

Question 79

For most of us,economics amounts to a balance between what we want and what we can afford.

Question 80

When Vincent,a manager at Beauty Products International,tries to evaluate the price and the quantity of a product that will be sold,he is dealing with microeconomics.