Deck 3: Economic Challenges Facing Contemporary Business

Question 1

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is a market structure in which large number of buyers and sellers exchange homogenous products and no single participant has a significant influence on price.

Answer 1

h

Question 2

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The use of government tax and spending policies to bring about desired changes in the economy is called _____.

Answer 2

d

Question 3

What is economics? Why is understanding economics important in one's life?

Answer 3

Economics is a social science that analyzes the choices made by individuals and organizations in allocating scarce resources. It affects each of us because everyone is involved in producing, distributing, or simply consuming goods and services. In fact, your life is affected by economics every day. Understanding how the activities of one industry affect those of other industries, and how they relate in the overall economic status of a country, is an important part of understanding economics.
Businesses and not-for-profit organizations also make economic decisions when they choose how to use human and natural resources; invest in equipment, machinery, and buildings; and form partnerships with other firms.

Question 4

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
A(n) _____ is a market structure characterized by relatively few sellers and barriers to entry resulting from high start-up costs.

Question 5

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
Attempting to bring about changes in economic activity through changes in the size of the nation's money supply is called _____.

Question 6

Describe what drives demand.

Question 7

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ measures the monthly average change in prices of goods and services.

Question 8

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ refers to the willingness and ability of buyers to purchase goods and services at different prices.

Question 9

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
In a(n) _____, a single seller dominates trade in a product for which buyers can find no close substitutes.

Question 10

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is the sum of all goods and services produced within a country's borders.

Question 11

List the factors that should cause a demand curve to shift to the right.

Question 12

List the factors that should cause a supply curve to shift to the left.

Question 13

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The point where the supply and demand curves intersect is the _____.

Question 14

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
During a(n) _____, consumers frequently postpone major purchases and shift buying patterns toward basic, functional products carrying low prices.

Question 15

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is an economic situation characterized by price increases that reduce the amount of goods and services people can purchase with a given amount of money.

Question 16

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The amount of goods and services for sale at different prices is known as _____.

Question 17

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is the relationship between the goods and services produced in a nation each year and the inputs needed to produce them.

Question 18

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
If the government spends more than the amount of money it raises through taxes, then a(n) _____ occurs.

Question 19

Differentiate between macroeconomics and microeconomics. What types of economic activities might be included in each category?

Question 20

MATCHING
Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The study of small economic units, such as individual consumers, families, and businesses, is called _____.

Question 21

_____ refers to the willingness and ability of buyers to purchase goods and services at different prices.

A) Need
B) Utility
C) Supply
D) Demand

Question 22

True Market, a research firm, was hired by a discount superstore to provide a detailed evaluation on how demand is affected by consumer preferences. True Market's analysis can be narrowed down to the study of _____.

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

Question 23

_____ is the study of the economic choices of individual consumers, families, or businesses.

A) Macroeconomics
B) Microeconomics
C) Sociology
D) Statistics

Question 24

List and describe each of the four stages of the business cycle.

Question 25

List the four factors of production and provide an example of each factor.

Question 26

What is monetary policy? What governmental agency controls monetary policy? Describe actions that are used to influence economic activity.

Question 27

Describe the four categories of unemployment.

Question 28

Define pure competition.

Question 29

Describe how worker incentives vary in each of the four economic systems.

Question 30

Describe the relationship between productivity and Gross Domestic Product (GDP).

Question 31

In general, as price of a good or service increases, 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 32

The study of macroeconomics 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 33

Describe how changes in household income affect demand.

Question 34

List four challenges to maintain global competitiveness.

Question 35

Briefly describe budget deficit, national debt, budget surplus, and balance budget and how the terms relate to the government finances.

Question 36

Describe the major differences between socialism and a mixed economic system.

Question 37

Which of the following fields is concerned with understanding the choices people make in using scarce resources?

A) Sociology
B) Statistics
C) Economics
D) Accounting

Question 38

Distinguish between demand-pull inflation and cost-push inflation. Give an example of each.

Question 39

The willingness and ability of sellers to provide goods and services for sale at different prices is referred to as _____.

A) want
B) demand
C) utility
D) supply

Question 40

The management of Harvey Inc. is trying to decide the appropriate prices for various products the company sells. This is a focus of _____.

A) microeconomics
B) macroeconomics
C) fiscal policy
D) monetary policy

Question 41

Incentives to motivate employees to perform at their highest level are strongest in _____ systems.

A) capitalist
B) communist
C) socialist
D) collectivist

Question 42

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 43

Most industrialized nations operate economies based on _____.

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

Question 44

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

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

Question 45

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 46

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 47

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 prices fall.
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.

Question 48

If the cost of producing a good or service increases, the supply curve will shift to the _____ and the price will _____.

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

Question 49

An increase in consumers' incomes causes the _____.

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 50

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 51

The three major types of economic systems are _____.

A) collectivism, developed economies, and oligopoly
B) individualism, developing economies, and duopoly
C) ethnocentrism, cultural relativism, and polycentrism
D) capitalism, planned economies, and mixed economies

Question 52

A graph showing the amount of a product that buyers will purchase at different prices is the _____ curve.

A) production possibility
B) supply
C) utility
D) demand

Question 53

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 54

The equilibrium price is established when the _____.

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 55

All of the following can shift the demand curve to either the right or left EXCEPT a change in the _____.

A) number of buyers
B) attitudes of buyers about the future
C) income of buyers
D) opportunity cost of suppliers

Question 56

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 57

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 58

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 59

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

Question 60

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 61

_____ 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 62

Flora Cult Inc., 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 63

In a particular country, 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 this country have?

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

Question 64

Unless it is regulated or only temporary, the market situation called _____ is prohibited in the United States through antitrust legislation.

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

Question 65

_____ 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 66

There is no direct competition in a particular industry, yet a firm operating in such an industry will have almost no control over pricing. This industry is an example of _____.

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

Question 67

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 68

The conversion of government-owned and operated postal service into a privately held business would be an example of _____.

A) nationalization
B) government appropriation
C) commercialization
D) privatization

Question 69

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 70

Which of the following market structures best describes the U.S. aircraft industry?

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

Question 71

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 72

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 73

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 74

United Narva 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 United Narva adopted?

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

Question 75

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 76

Before the patent on its allergy medicine expired, Renova Pharma Inc. was able to set its own market price for the drug. From which type of market structure did the company benefit?

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

Question 77

In a pure monopoly:

A) demand and supply are regulated by the government.
B) buyers have complete control over prices.
C) barriers to prevent entry by would-be competitors are high.
D) sellers typically market homogenous products.

Question 78

In _____, 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 79

_____ is an economic system in which private property is eliminated.

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

Question 80

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