Exam 1: The Foundations of Business

The inflation rate is the percentage change in a price index.

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

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. -New Age's customers will typically be willing to buy more of a product when prices are coming down and less when they're on the rise.

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

The United States federal government influences economic activity by two means, including _____.

The U.S. leading index combines all economic indicators.

_____ study the interactions between households and businesses and the ways in which the factors of production are combined to produce goods and services.

Which of the following is an example of a service company

Among free market theorists, the principle of laissez-faire means _____.

A supply curve shows the relationship between the:

Because the government limits them by law, there are few _____ in the United States.

According to economists, we're entering a period of prosperity when GDP goes down for two consecutive quarters.

_____ occurs when the average of the prices for goods and services either does not change or changes very little.

_____ refers to the quantity of a product that sellers are willing to sell at various prices

Previously communist economies, such as those of Eastern Europe, are becoming more mixed as they adopt capitalist characteristics and convert previously government-owned businesses to private ownership.

We call it "full employment" when _____ percent of those who want to work are employed.

Explain monopolistic competition.

Differentiated products are those that serve several different purposes for different consumers.

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

When government-owned businesses convert to private ownership, they go through a process called _____.