Exam 1: The Foundations of Business

Businesses such as hospitals,insurance companies,financial institutions,and attorneys convert resources into _____ products.

The most widely publicized measure of inflation is the consumer price index,which is reported every five years by the Bureau of Labor Statistics.

The equilibrium price is a point at which buyers' demand for a product and sellers' supply of it are in balance.

Generally speaking,economic systems can be divided into _____ and _____ systems.

In marketing,supply and demand interact to create a(n)_____price-the price at which buyers are willing to purchase the amount that sellers are willing to sell.

Generally speaking,we find products more attractive at higher prices because we believe that other people find value in them.

Under monopolistic (differentiated)competition,large companies exercise control over prices.

One way that economists measure the performance of an economy is by looking at a widely used measure of total output know as the _____.

Economists study the interactions between households and businesses and look at the ways in which the factors of production are combined to produce the goods and services that people need.

A demand curve shows the _____ of a product that will be demanded at different prices.

Because they operate in a(n)_____ industry,a fare decrease at American Airlines will likely result in decreases at other carriers.

External forces play a role in determining whether more people or fewer people eat at fast-food restaurants.

If,in any given year,the government takes in more money than it spends on goods and services,the result is a budget _____.

New Age Pharmaceuticals Inc. produces two limited lines of drugs—one for common maladies and one for rarer conditions and diseases. The majority of its business comes from the tried-and-true drugs that most Americans have been using for many years, but the new growth area in the pharmaceutical industry is in high-priced new drugs. New Age management believes that the company’s research-and-development operations are sufficiently effective and efficient enough to develop six new prescription drugs that will start showing a profit within 12 months of their roll-outs. Currently more than 4 million people use New Age products. -An exception to the New Age demand curve may occur if diabetes patients are willing to pay the price for an effective new drug regardless of the supply that New Age makes available.

During periods of _____ money,interest rates are down,it's cheaper to borrow money,and banks are more willing to make loans.

The study of the economic choices made by individual consumers or businesses is called _____.

Having plotted both the supply curve and the demand curve for a drug on one graph,New Age executives can determine its equilibrium price.At this point,all patients will be equally able to pay for the drug regardless of the quantity supplied by the company.

A _____ is any activity that provides goods or services to consumers for the purpose of making a profit.

A demand curve shows the relationship between the:

In practice,we have "full employment" when about 95 percent of those desiring to work are employed.