Question 1

Troboli is a North American country. The total value of all final goods and services produced in Troboli in the last fiscal year was 3.3% more than the year before that. This growth placed Troboli in a better position compared with most of its allies. In this scenario, the total value of all final goods and services through which the economic condition of Troboli was assessed is known as _____.
A)net present value
B)gross domestic product
C)profit margin
D)windfall profit

Accepted Answer

The total value of all final goods and services produced in a country in a given time period is known as its Gross Domestic Product (GDP). In this scenario, the economic condition of Troboli was assessed based on its GDP, which grew by 3.3% compared to the previous fiscal year. Therefore, the correct answer is B - Gross Domestic Product.

Question 2

Loger's, a high-end apparel company in Bruslon, an Asian country, cuts back on production as consumers start turning to basic products such as food because of the economic downturn in the country. The company also lays off many of its employees to further cut down expenses. In this scenario, Loger's has implemented these cost-cutting measures to accommodate the phase of _____ in Bruslon.
A)economic recovery
B)economic contraction
C)economic integration
D)economic expansion

Accepted Answer

Loger's is cutting back production and laying off employees due to the economic downturn in Bruslon, indicating a phase of economic contraction. Economic recovery would involve an upturn in the economy and increasing consumer confidence and spending. Economic integration refers to the process of countries interconnectedness through free trade agreements and policies. Economic expansion denotes growth and expansion in the economy.

Question 3

Microeconomics focuses on:
A)the employment rate in a country.
B)individual businesses.
C)the gross domestic product of a country.
D)taxation policies.

Accepted Answer

Microeconomics is the study of individual economic behavior and decision-making in specific markets, such as businesses, households, and industries. It analyzes how individuals and firms allocate resources and interact with each other in the market.

Question 4

In a business cycle, the__________is a period of robust economic growth and high employment.
A)expansion
B)recovery
C)disinflation
D)contraction

Accepted Answer

Expansion is a period of robust economic growth and high employment in a business cycle. During this phase, there is an increase in production, sales, and incomes. The economy is growing and businesses are thriving, leading to job creation and consumer spending. Expansion typically follows a recovery phase and lasts until it reaches its peak, after which it begins to slow down and eventually lead to a contraction phase.

Question 5

In the context of the fundamental principles of a free market system, which of the following statements is true of the equilibrium price?
A)Market prices adjust toward the point where the supply curve and the demand curve intersect.
B)The break-even point denotes the profit margin that a seller makes over the cost price of a product.
C)It is the point at which the final cost of production equals the price of the raw materials used for a product.
D)It refers to a situation where the cost price of a product is equal to its selling price.

Accepted Answer

The equilibrium price is the price point where the supply of a product or service matches the demand of buyers. In a free market system, market prices adjust toward the point where the supply curve and the demand curve intersect. Therefore, option A is the correct statement. Option B refers to the break-even point, which is not the same as the equilibrium price. Option C refers to variable costs, whereas the equilibrium price is related to supply and demand dynamics. Option D is also incorrect because if the cost price is equal to the selling price, there would be no profit, and therefore no equilibrium price.

Question 6

Which of the following is a difference between the supply curve and the demand curve?
A)The supply curve maps price on the y-axis, whereas the demand curve maps quantity on the y-axis.
B)Unlike the demand curve, the supply curve for most goods and services slopes downward as it moves to the right.
C)The supply curve maps quantity on the x-axis, whereas the demand curve maps price on the x-axis.
D)Unlike the supply curve, the demand curve for most goods and services slopes downward as it moves to the right.

Accepted Answer

The answer of Which of the following is a difference...

Question 7

The economic system of the United States is called _____.
A)capitalism
B)communism
C)socialism
D)mercantilism

Accepted Answer

The United States has a capitalist economic system, which is characterized by private ownership of the means of production and the creation of goods and services for profit. This system allows for individual initiative and competition in the marketplace.

Question 8

The cosmetics industry in the district of Dunkenburg has many competing companies that sell personal care products. However, each company manufactures products that correspond to different income groups. The products are also different in terms of their uses. Which of the following market structures is existent in the cosmetics industry in Dunkenburg?
A)Pure competition
B)Monopoly
C)Monopolistic competition
D)Oligopoly

Accepted Answer

The existence of competing companies and differentiation of products based on income and uses indicates monopolistic competition. This market structure involves a large number of firms competing with differentiated products.

Question 9

In 1982, the total expenditure of the government of Kargenia, a European country, exceeded its revenue by a substantial amount. This forced the government of Kargenia to borrow funds to meet its legal obligations. In this scenario, the government of Kargenia incurred a _____ in 1982.
A)revenue deficit
B)budget deficit
C)debt brake
D)revenue backlog

Accepted Answer

A budget deficit occurs when the government's total expenditure exceeds its revenue. This forces the government to borrow funds, as in the case of Kargenia's government in 1982. A revenue deficit refers to a situation where only the revenue side of the budget is in deficit, and a debt brake is a legal mechanism to limit government debt accumulation. Revenue backlog is not a term commonly used in public finance.

Question 10

Rochester, an Asian country, follows an economic system that facilitates private ownership. The country's economy is based on economic freedom and fair competition. Given this information, the economic system followed by Rochester is _____.
A)socialism
B)totalitarianism
C)capitalism
D)communism

Accepted Answer

The economic system followed by Rochester is capitalism, as it is based on private ownership, economic freedom, and fair competition. Socialism and communism, on the other hand, promote public ownership and control of resources, while totalitarianism refers to a political system, not an economic system.

Question 11

The West Asian country of Quinland is experiencing an economic downturn because of a decrease in its gross domestic product for two consecutive quarters. In this scenario, Quinland is most likely facing an _____.
A)economic recession
B)economic expansion
C)economic depression
D)economic integration

Accepted Answer

The decrease in Quinland's gross domestic product for two consecutive quarters indicates a slowdown in economic activity. This situation is commonly referred to as an economic recession. Option B (economic expansion) is opposite to the situation described in the scenario. Option C (economic depression) implies a much more severe and prolonged economic downturn compared to a recession. Option D (economic integration) refers to the process of countries integrating their economies to promote trade and commerce and is not related to Quinland's current economic situation.

Question 12

In the context of planned economies, countries that adopted communism most likely developed:
A)individualism and narcissistic values among people.
B)a plethora of choices regarding jobs and buying options.
C)a free market system for services.
D)crippling shortages and surpluses.

Accepted Answer

Countries that adopted communism in the context of planned economies often faced crippling shortages and surpluses. This is because the government controls the allocation of resources and sets production targets, which can result in shortages of certain products and overproduction of others. The lack of market signals and competition also tends to stifle innovation and efficiency, leading to an inefficient allocation of resources. Individualism and a free market system are typically discouraged in communist countries, and while job choices may be plentiful in theory, they are often determined by the state rather than by individual preference.

Question 13

The district of Dansas in Nerito, a European country, is a major producer of walnuts. All producers in the district sell packaged walnuts. The market structure is flexible enough for producers to enter and leave the market as and when they wish, but no single producer has control over the prices of the product. Which of the following market structures is existent in Dansas?
A)Pure competition
B)Monopoly
C)Monopolistic competition
D)Oligopoly

Accepted Answer

The market structure described is pure competition, where there are many producers, no single producer can control prices, and there is free entry and exit in the market.

Question 14

Olivia is a part-time worker at a jam-producing company in her village. Her job entails plucking and cleaning grapefruits. Because grapefruits grow only in winter, Olivia is unemployed for most part of the year. The given scenario exemplifies _____.
A)seasonal unemployment
B)frictional unemployment
C)classical unemployment
D)cyclical unemployment

Accepted Answer

This scenario exemplifies seasonal unemployment, which occurs due to fluctuations in demand for labor based on seasonal variations in production or demand for certain goods or services. In this case, Olivia is only employed during the winter when grapefruits are in season, and is unemployed for the remainder of the year.

Question 15

Which of the following is a similarity between socialism and communism?
A)They both allow freedom in work choices for the people.
B)They are both strongly involved with the government.
C)They both allow free market systems.
D)They both have low taxation policies.

Accepted Answer

Both socialism and communism involve a strong role for the government in society and the economy.

Question 16

Prior to formulating its annual budget, the government of the Asian country of Florenesia employs a number of individuals to look into the overall productivity of the country. These individuals are responsible for studying the economy in terms of goods and services, revising some of the taxation policies, and gauging the employment rate. Given this information, these individuals are studying _____.
A)heterodox economics
B)managerial economics
C)microeconomics
D)macroeconomics

Accepted Answer

The individuals employed by the government of Florenesia are studying the overall productivity of the country, which includes factors such as the economy, taxation policies, and employment rate. These are macroeconomic factors, which means that the individuals are studying macroeconomics. Therefore, the correct answer is D) macroeconomics.

Question 17

Keltica, a country in Asia, enjoyed a period of great economic boom in the 1980s. The country had robust economic growth, high employment, and abundant business investments during this period. In the context of the business cycle, the economy of Keltica was in _____ during the 1980s.
A)a depression
B)the contraction phase
C)a recession
D)the expansion phase

Accepted Answer

The economy of Keltica in the 1980s had robust economic growth, high employment, and abundant business investments, indicating a period of expansion in the business cycle.

Question 18

The term _____ refers to the quantity of products that producers are willing to offer for sale at different market prices.
A)repository
B)stockpile
C)supply
D)cache

Accepted Answer

The term "supply" refers to the quantity of products that producers are willing to offer for sale at different market prices. The other options - repository, stockpile, and cache - are not relevant to this economic concept.

Question 19

The _____ was an $825 billion economic stimulus package, passed by Congress, designed to turn the economy by cutting taxes, building infrastructure, and investing in green energy.
A)American Recovery and Reinvestment Act
B)Troubled Assets Relief Program
C)Clayton Antitrust Act
D)NCUA Corporate Stabilization Program

Accepted Answer

The American Recovery and Reinvestment Act was a stimulus package aimed at boosting the economy by providing a mix of tax cuts, infrastructure spending, and investments in renewable energy. The package was worth $825 billion and was passed by Congress in 2009 in response to the Great Recession.

Question 20

A giant telecommunications company that was previously owned by the government of Sunzabia, a European country, is sold to an independent industrialist to ensure that the company is handled in a more efficient way. This scenario exemplifies _____.
A)privatization
B)globalization
C)a joint venture
D)a coalition

Accepted Answer

The scenario exemplifies privatization because the telecommunications company, previously owned by the government, is sold to a private industrialist.

Quiz 2: Economics: the Framework for Business

Microeconomics focuses on:

In a business cycle, the__________is a period of robust economic growth and high employment.

In the context of the fundamental principles of a free market system, which of the following statements is true of the equilibrium price?

Which of the following is a difference between the supply curve and the demand curve?

The economic system of the United States is called _____.

In 1982, the total expenditure of the government of Kargenia, a European country, exceeded its revenue by a substantial amount. This forced the government of Kargenia to borrow funds to meet its legal obligations. In this scenario, the government of Kargenia incurred a _____ in 1982.

Rochester, an Asian country, follows an economic system that facilitates private ownership. The country's economy is based on economic freedom and fair competition. Given this information, the economic system followed by Rochester is _____.

The West Asian country of Quinland is experiencing an economic downturn because of a decrease in its gross domestic product for two consecutive quarters. In this scenario, Quinland is most likely facing an _____.

In the context of planned economies, countries that adopted communism most likely developed:

Olivia is a part-time worker at a jam-producing company in her village. Her job entails plucking and cleaning grapefruits. Because grapefruits grow only in winter, Olivia is unemployed for most part of the year. The given scenario exemplifies _____.

Which of the following is a similarity between socialism and communism?

Keltica, a country in Asia, enjoyed a period of great economic boom in the 1980s. The country had robust economic growth, high employment, and abundant business investments during this period. In the context of the business cycle, the economy of Keltica was in _____ during the 1980s.

The term _____ refers to the quantity of products that producers are willing to offer for sale at different market prices.

The _____ was an $825 billion economic stimulus package, passed by Congress, designed to turn the economy by cutting taxes, building infrastructure, and investing in green energy.

A giant telecommunications company that was previously owned by the government of Sunzabia, a European country, is sold to an independent industrialist to ensure that the company is handled in a more efficient way. This scenario exemplifies _____.