Question 1

Under a capitalistic system,decisions such as what goods and services to produce,what to charge,and how much to import or export are made by:

Accepted Answer

A) A variety of government agencies. 
B) Individuals. 
C) A central planning board that consists of legislators and attorneys. 
D) Majority rule,with everyone receiving an equal vote. 
A) A variety of government agencies. 
B) Individuals. 
C) A central planning board that consists of legislators and attorneys. 
D) Majority rule,with everyone receiving an equal vote.

Question 2

Monetary policy is directly under the control of the U.S.Department of the Treasury.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 3

Jill owns a bakery that specializes in cheesecakes.Until recently,Jill charged a price of $12 for each cheesecake.At this price Jill's customers bought an average of 84 cheesecakes each week.For the last few weeks,she has reduced her price to $10.50 per cheesecake,and her customers have purchased an average of 96 cheesecakes each week.These results are consistent with the economic concept of demand.
Level of Learning 3: Application of principles

Accepted Answer

A) True 
 B)False

Question 4

Current measures of productivity in the service sector provide an accurate measure of changes in the quality of output.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 5

Microeconomics focuses on the decisions and behavior of people and organizations in particular markets.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 6

Abby left her native land in Eastern Europe in order to become a nanny for a family in a western suburb of Chicago,Illinois.One of the benefits of her arrangement was that she could attend the community college near her family's residence.When she arrived at her new job,she experienced the differences from a predominately socialist nation and a capitalist nation.Abby noted that public transportation in northern Illinois was limited and expensive,making it difficult to get to school.For a negligible fee,the government in her native country provided public transportation for everyone.Abby's native country's economic system was more characteristic of socialism.
Level of Learning 3: Application of principles

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about productivity in the service sector of the U.S.economy is most accurate?

Accepted Answer

A) Productivity in the service sector has increased much more rapidly than productivity in the manufacturing sector. 
B) Improving productivity in the service sector is much less important than improving productivity in the manufacturing sector,because the service sector does not really produce anything. 
C) Productivity in the service sector is easier to measure than productivity in agriculture. 
D) Measures of productivity in the service sector do a poor job of taking quality improvements into account. 
A) Productivity in the service sector has increased much more rapidly than productivity in the manufacturing sector. 
B) Improving productivity in the service sector is much less important than improving productivity in the manufacturing sector,because the service sector does not really produce anything. 
C) Productivity in the service sector is easier to measure than productivity in agriculture. 
D) Measures of productivity in the service sector do a poor job of taking quality improvements into account.

Question 8

Communist values are disappearing because:

Accepted Answer

A) People in communist nations are tired of the strong religious teachings of the system. 
B) Communist businesses have grown too quickly and they cannot keep up with demand. 
C) Communist leaders are all militaristic. 
D) Shortages abound due to the fact that the government cannot rely on good information. 
A) People in communist nations are tired of the strong religious teachings of the system. 
B) Communist businesses have grown too quickly and they cannot keep up with demand. 
C) Communist leaders are all militaristic. 
D) Shortages abound due to the fact that the government cannot rely on good information.

Question 9

__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Accepted Answer

A) Oligopoly 
B) Monopolistic competition 
C) Perfect competition 
D) Microeconomic competition 
A) Oligopoly 
B) Monopolistic competition 
C) Perfect competition 
D) Microeconomic competition

Question 10

Chase is a recent college graduate with a new job as an engineering trainee for a large defense company.Now that he is making good wages,he hopes to start saving for his first house and also contribute toward the company retirement plan.As he looks over his monthly bills,Chase is concerned about ever getting ahead of the game.His food bill,car payment,and mounting gasoline payments keep him in the "just making ends meet" category.As his mind wanders back to the good old college days,he reflects on a time when gas and food seemed a lot more reasonable.Chase is experiencing the effects of:

Accepted Answer

A) Inflation 
B) Conditions of low demand 
C) Involuntary CPI 
D) Cyclical unemployment 
A) Inflation 
B) Conditions of low demand 
C) Involuntary CPI 
D) Cyclical unemployment

Question 11

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 12

In the United States,laws prohibit the creation of most types of monopolies.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 13

In capitalist countries,the government decides what to produce and how the goods and services will be produced.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 14

Most communist countries today are suffering from severe economic problems.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 15

If consumers see a measurable increase in the price of coffee,they are likely to change their consumption to less expensive tea.These substitutions would show-up in the ____________.

Accepted Answer

A) Chained Consumer Price Index 
B) Remedial Price Index 
C) Core Inflation Index 
D) Numerical Cost Index 
A) Chained Consumer Price Index 
B) Remedial Price Index 
C) Core Inflation Index 
D) Numerical Cost Index

Question 16

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

Accepted Answer

A) Monetary policy 
B) Incomes policy 
C) Fiscal policy 
D) Cyclical policy 
A) Monetary policy 
B) Incomes policy 
C) Fiscal policy 
D) Cyclical policy

Question 17

Adam Smith believed that incentives to seek personal gain would create wealth,but that the government must then step in to make sure that this wealth is equitably distributed.
Level of Learning 3: Application of principles

Accepted Answer

A) True 
 B)False

Question 18

When the market price of a good is above its equilibrium value,and all other determinants are unchanged:

Accepted Answer

A) A shortage will exist in the market. 
B) The quantity demanded will exceed the quantity supplied. 
C) Both the supply curve and the demand curve will shift to the right. 
D) A surplus will exist in the market. 
A) A shortage will exist in the market. 
B) The quantity demanded will exceed the quantity supplied. 
C) Both the supply curve and the demand curve will shift to the right. 
D) A surplus will exist in the market.

Question 19

The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

Accepted Answer

A) The right to own private property. 
B) Freedom of expression. 
C) Freedom of choice. 
D) Freedom of competition. 
A) The right to own private property. 
B) Freedom of expression. 
C) Freedom of choice. 
D) Freedom of competition.

Question 20

The PowerHouse Utility Company recently built a nuclear power plant in a southern state and started competing against BXY Utility Company that has served customers in that region for 65 years.Due to deregulation,consumers now have a choice among utility companies in this area.Although PowerHouse has made a sizeable capital investment,if it successfully grows market share,eventually prices for electricity may stabilize or fall.
Level of Learning 3: Application of principles

Accepted Answer

A) True 
 B)False

Under a capitalistic system,decisions such as what goods and services to produce,what to charge,and how much to import or export are made by:

Monetary policy is directly under the control of the U.S.Department of the Treasury. Level of Learning 1: Knowledge of key terms

Current measures of productivity in the service sector provide an accurate measure of changes in the quality of output. Level of Learning 1: Knowledge of key terms

Microeconomics focuses on the decisions and behavior of people and organizations in particular markets. Level of Learning 1: Knowledge of key terms

Which of the following statements about productivity in the service sector of the U.S.economy is most accurate?

Communist values are disappearing because:

__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition. Level of Learning 1: Knowledge of key terms

In the United States,laws prohibit the creation of most types of monopolies. Level of Learning 1: Knowledge of key terms

In capitalist countries,the government decides what to produce and how the goods and services will be produced. Level of Learning 1: Knowledge of key terms

Most communist countries today are suffering from severe economic problems. Level of Learning 1: Knowledge of key terms

If consumers see a measurable increase in the price of coffee,they are likely to change their consumption to less expensive tea.These substitutions would show-up in the ____________.

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

Adam Smith believed that incentives to seek personal gain would create wealth,but that the government must then step in to make sure that this wealth is equitably distributed. Level of Learning 3: Application of principles

When the market price of a good is above its equilibrium value,and all other determinants are unchanged:

The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

Taking Risks and Making Profits Within the Dynamic Business Environment

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money,financial Institutions,and the Federal Reserve

Bonus A: Using Technology to Manage Information

Bonus B: Managing Risk

Bonus C: Managing Your Personal Finances

Appendix: Working Within the Legal Environment

Filters

Exam 2: Understanding How Economics Affects Business

Under a capitalistic system,decisions such as what goods and services to produce,what to charge,and how much to import or export are made by:

Monetary policy is directly under the control of the U.S.Department of the Treasury. Level of Learning 1: Knowledge of key terms

Current measures of productivity in the service sector provide an accurate measure of changes in the quality of output. Level of Learning 1: Knowledge of key terms

Microeconomics focuses on the decisions and behavior of people and organizations in particular markets. Level of Learning 1: Knowledge of key terms

Which of the following statements about productivity in the service sector of the U.S.economy is most accurate?

Communist values are disappearing because:

__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition. Level of Learning 1: Knowledge of key terms

In the United States,laws prohibit the creation of most types of monopolies. Level of Learning 1: Knowledge of key terms

In capitalist countries,the government decides what to produce and how the goods and services will be produced. Level of Learning 1: Knowledge of key terms

Most communist countries today are suffering from severe economic problems. Level of Learning 1: Knowledge of key terms

If consumers see a measurable increase in the price of coffee,they are likely to change their consumption to less expensive tea.These substitutions would show-up in the ____________.

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

Adam Smith believed that incentives to seek personal gain would create wealth,but that the government must then step in to make sure that this wealth is equitably distributed. Level of Learning 3: Application of principles

When the market price of a good is above its equilibrium value,and all other determinants are unchanged:

The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

Taking Risks and Making Profits Within the Dynamic Business Environment

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money,financial Institutions,and the Federal Reserve

Bonus A: Using Technology to Manage Information

Bonus B: Managing Risk

Bonus C: Managing Your Personal Finances

Appendix: Working Within the Legal Environment

Filters