Exam 1: The Foundations of Business

When the overall price level of consumer goods goes up, we have _____; when they go down, we have _____.

SCENARIO-BASED 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.

Polaroid is a classic example of a firm that enjoyed a patent-based _____ for years in instant-film technology.

A monopoly exists when there is only one seller in the market.

What is the consumer confidence index

Perfect competition exists when many consumers are buying standardized products from a few small businesses.

Scalpers sell tickets for such events as the World Series and the Super bowl for prices many times the amount printed on the tickets. This situation is an example of which of the following conditions

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

All of the following are macroeconomic concerns except (select one):

Museums and almost all colleges and universities are not-for-profit organizations.

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.

One way that economists measure the performance of an economy is by looking at a widely used measure of total output called gross price stability.

SCENARIO-BASED 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. -In determining the quantity of drugs that it will be willing to sell at different prices, New Age management will actually be developing a demand curve.

The term laissez-faire means that:

When the Fed believes that deflation is a problem, it will use contractionary policy to decrease the money supply and raise interest rates.

If the government spends more than it takes in, we have a budget _____.

Demand is the quantity of product that buyers are willing to purchase at various prices.

What is an oligopoly

_____ involve(s) the design and management of the processes that transform resources into goods or services.

SCENARIO-BASED 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. -Because it's set up to make profits while meeting people's needs, New Age stands to make larger profits when prices fluctuate.