Question 1

Free-market capitalism has made it more difficult for individuals to gain wealth.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 2

One way to lessen the U.S.government budget deficit is to:

Accepted Answer

A) cut spending. 
B) increase spending. 
C) call-in government savings bonds. 
D) increase government social programs such as welfare,food-stamps,and Medicare. 
A) cut spending. 
B) increase spending. 
C) call-in government savings bonds. 
D) increase government social programs such as welfare,food-stamps,and Medicare.

Question 3

Patrick just landed a job working for a major online gaming company in Silicon Valley.In a lot of ways,this is his dream job come true - the chance to work for a company that makes gaming software and live in California at the same time.As his plane lands at San Jose International,he pictures a snazzy apartment with a palm tree right outside the front door.A few hours later,as he meets a property manager of a large apartment complex,his heart sinks.The price of apartments is out of sight! Back at the hotel,he logs on to the Bureau of Labor Statistics to try to get a better picture of why the cost of housing is so high in this region of the U.S.Which factors may be causing the rise in the price of housing?

Accepted Answer

A) Low Unemployment rate and increasing GDP 
B) High consumer's marginal index and low PPI 
C) Low CPI and high state tax rate 
D) Decreasing Disruptive Technologies Index and high unemployment 
A) Low Unemployment rate and increasing GDP 
B) High consumer's marginal index and low PPI 
C) Low CPI and high state tax rate 
D) Decreasing Disruptive Technologies Index and high unemployment

Question 4

In an effort to promote rapid growth,the government of Goldinia has kept taxes low,done little to regulate business activities,and implemented only modest social programs.The government is now facing political pressure to do more to clean up the environment and to reduce the inequalities of income and wealth.Which of the following statements is most accurate? Goldinia's government is currently taking:

Accepted Answer

A) A purely capitalist approach to achieve its economic goals,and is likely to continue doing so in the future. 
B) A purely socialist approach to achieve its economics goals,and is likely to continue doing so in the future. 
C) A predominately socialist approach to achieving economic goals,but the current pressures it faces suggest it is likely to adopt a more capitalist approach in the future. 
D) A predominately capitalist approach toward achieving economic goals,but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future. 
A) A purely capitalist approach to achieve its economic goals,and is likely to continue doing so in the future. 
B) A purely socialist approach to achieve its economics goals,and is likely to continue doing so in the future. 
C) A predominately socialist approach to achieving economic goals,but the current pressures it faces suggest it is likely to adopt a more capitalist approach in the future. 
D) A predominately capitalist approach toward achieving economic goals,but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future.

Question 5

Structural unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills or location of job seekers and the requirements or location of available jobs.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 6

__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

Accepted Answer

A) Frictional 
B) Structural 
C) Cyclical 
D) Seasonal 
A) Frictional 
B) Structural 
C) Cyclical 
D) Seasonal

Question 7

___________ exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.

Accepted Answer

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

Question 8

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Accepted Answer

A) Total profit earned by producers. 
B) Total amount of labor that will be employed in that market. 
C) Amount of time it takes to bring together the buyers and sellers of the good. 
D) Equilibrium price of the good. 
A) Total profit earned by producers. 
B) Total amount of labor that will be employed in that market. 
C) Amount of time it takes to bring together the buyers and sellers of the good. 
D) Equilibrium price of the good.

Question 9

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship.
Level of Learning 2: Understanding of concepts and principles

Accepted Answer

A) True 
 B)False

Question 10

Brain drain has has occurred in many socialistic nations because:

Accepted Answer

A) Socialism encourages an unequal distribution of income,leaving many without medical and social services. 
B) The government does little to protect the natural environment. 
C) Workers tend to have to work longer hours and receive fewer benefits under socialism. 
D) Tax rates on well-respected professionals such as doctors tend to be very high. 
A) Socialism encourages an unequal distribution of income,leaving many without medical and social services. 
B) The government does little to protect the natural environment. 
C) Workers tend to have to work longer hours and receive fewer benefits under socialism. 
D) Tax rates on well-respected professionals such as doctors tend to be very high.

Question 11

Although mixed economies tend to improve economic conditions,moral values prevent communist nations such as China and Vietnam from progressing in this direction.Overall,economic progress continues to be very slow in these nations.
Level of Learning 2: Understanding of concepts and principles

Accepted Answer

A) True 
 B)False

Question 12

Sue is a gifted cook.She plans to open a restaurant in which she will be the head chef.Sue is willing to work long hours because she believes that her culinary talents and hard work will allow her business to succeed and earn her sizeable profits.Sue's efforts are most consistent with the economic theory developed by:

Accepted Answer

A) Thomas Malthus. 
B) Karl Marx. 
C) Adam Smith. 
D) David Ricardo. 
A) Thomas Malthus. 
B) Karl Marx. 
C) Adam Smith. 
D) David Ricardo.

Question 13

The "Spotlight on Small Business" box in Chapter 2 is titled,"The Key to Capitalism is Capital." Which of the following statements best describes the message of this story?

Accepted Answer

A) This box explains that the only important factor of production for most businesses is capital. 
B) This story explains that loans for large capital investments come with sizeable interest rates,but usually produce better results. 
C) Corruption has prevented goodwill institutions from making large capital investments in developing countries. 
D) Micro-lending has proven to lift impoverished entrepreneurs to a better standard of living. 
A) This box explains that the only important factor of production for most businesses is capital. 
B) This story explains that loans for large capital investments come with sizeable interest rates,but usually produce better results. 
C) Corruption has prevented goodwill institutions from making large capital investments in developing countries. 
D) Micro-lending has proven to lift impoverished entrepreneurs to a better standard of living.

Question 14

__________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

Accepted Answer

A) Frictional 
B) Structural 
C) Cyclical 
D) Seasonal 
A) Frictional 
B) Structural 
C) Cyclical 
D) Seasonal

Question 15

As of 2010,total GDP in the United States was around $14 trillion.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 16

The price of iPhones™ is falling.In a free-market economic system where everything else is equal,the most likely explanation is:

Accepted Answer

A) Suppliers are not producing enough product. 
B) Sellers cannot keep up with market demand. 
C) The government determined that the product was not worth the price tag that the producer was asking. 
D) The product has competition at the equilibrium price. 
A) Suppliers are not producing enough product. 
B) Sellers cannot keep up with market demand. 
C) The government determined that the product was not worth the price tag that the producer was asking. 
D) The product has competition at the equilibrium price.

Question 17

Mike spends a lot of time blogging.Yesterday,he left the following comment on a site where participants were discussing the pros and cons of healthcare: "If you think healthcare is expensive now,wait until it is free.The problem with free rides is,eventually everyone piles on the bus and no one is left to push it.Then the system collapses." He was responded to by Martha,who added,"Universal healthcare is not a dirty word.It's the salvation for many people.If I have to pay a little more in taxes and know that my neighbor's kids have good pre-school and can see the doctor when needed,it's worth it to me." Mike and Martha are discussing the benefits and drawbacks of:

Accepted Answer

A) Healthcare under communism. 
B) Healthcare under capitalism. 
C) Healthcare under socialism 
D) Healthcare under nationalism. 
A) Healthcare under communism. 
B) Healthcare under capitalism. 
C) Healthcare under socialism 
D) Healthcare under nationalism.

Question 18

A __________ is a very severe recession that is usually accompanied by deflation.

Accepted Answer

A) stagflation 
B) retraction 
C) depression 
D) dissolution 
A) stagflation 
B) retraction 
C) depression 
D) dissolution

Question 19

Monetary policy is implemented to ease the up and down swings of business cycles,while fiscal policy is implemented to create swings when the cycle is stalled in an economic boom.
Level of Learning 2: Understanding of concepts and principles

Accepted Answer

A) True 
 B)False

Question 20

One of the benefits of a free market is that:

Accepted Answer

A) Businesses provide customers with quality products at fair prices. 
B) Businesses all make the same amount of profit. 
C) Businesses do better with more government regulation. 
D) The government dictates the number of competitors there are in each industry. 
A) Businesses provide customers with quality products at fair prices. 
B) Businesses all make the same amount of profit. 
C) Businesses do better with more government regulation. 
D) The government dictates the number of competitors there are in each industry.

Free-market capitalism has made it more difficult for individuals to gain wealth. Level of Learning 1: Knowledge of key terms

One way to lessen the U.S.government budget deficit is to:

Structural unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills or location of job seekers and the requirements or location of available jobs. Level of Learning 1: Knowledge of key terms

__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

___________ exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship. Level of Learning 2: Understanding of concepts and principles

Brain drain has has occurred in many socialistic nations because:

Although mixed economies tend to improve economic conditions,moral values prevent communist nations such as China and Vietnam from progressing in this direction.Overall,economic progress continues to be very slow in these nations. Level of Learning 2: Understanding of concepts and principles

The "Spotlight on Small Business" box in Chapter 2 is titled,"The Key to Capitalism is Capital." Which of the following statements best describes the message of this story?

__________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

As of 2010,total GDP in the United States was around $14 trillion. Level of Learning 1: Knowledge of key terms

The price of iPhones™ is falling.In a free-market economic system where everything else is equal,the most likely explanation is:

A __________ is a very severe recession that is usually accompanied by deflation.

Monetary policy is implemented to ease the up and down swings of business cycles,while fiscal policy is implemented to create swings when the cycle is stalled in an economic boom. Level of Learning 2: Understanding of concepts and principles

One of the benefits of a free market is that:

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

Free-market capitalism has made it more difficult for individuals to gain wealth. Level of Learning 1: Knowledge of key terms

One way to lessen the U.S.government budget deficit is to:

Structural unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills or location of job seekers and the requirements or location of available jobs. Level of Learning 1: Knowledge of key terms

__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

___________ exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship. Level of Learning 2: Understanding of concepts and principles

Brain drain has has occurred in many socialistic nations because:

Although mixed economies tend to improve economic conditions,moral values prevent communist nations such as China and Vietnam from progressing in this direction.Overall,economic progress continues to be very slow in these nations. Level of Learning 2: Understanding of concepts and principles

The "Spotlight on Small Business" box in Chapter 2 is titled,"The Key to Capitalism is Capital." Which of the following statements best describes the message of this story?

__________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

As of 2010,total GDP in the United States was around $14 trillion. Level of Learning 1: Knowledge of key terms

The price of iPhones™ is falling.In a free-market economic system where everything else is equal,the most likely explanation is:

A __________ is a very severe recession that is usually accompanied by deflation.

Monetary policy is implemented to ease the up and down swings of business cycles,while fiscal policy is implemented to create swings when the cycle is stalled in an economic boom. Level of Learning 2: Understanding of concepts and principles

One of the benefits of a free market is that:

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