Deck 3: Economic Challenges Facing Todays Business

Question 1

Explain the difference between demand and supply.

Answer 1

Demand is the willingness and ability of buyers to purchase goods and services at different prices.Factors that drive demand for a good or service include customer preferences,the number of buyers and their incomes,the prices of substitute goods,the prices of complementary goods,and consumer expectations about the future.Supply is the willingness and ability of businesses to offer products for sale at different prices.Supply is determined by the cost of inputs and technology resources,taxes,and the number of suppliers operating in the market.

Question 2

List the factors that should cause a supply curve to shift to the left.

Answer 2

The factors that cause a supply curve to shift to the left are an increase in the cost of inputs,an increase in the cost of technologies,an increase in taxes,and a decrease in the number of suppliers.

Question 3

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
In a(n)_____,a single seller dominates trade in a product for which buyers can find no close substitutes.

Answer 3

o

Question 4

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ measures the monthly average change in prices of goods and services.

Question 5

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is an economic situation characterized by price increases that reduce the amount of goods and services people can purchase with a given amount of money.

Question 6

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
If the government spends more than the amount of money it raises through taxes,then a(n)_____ occurs.

Question 7

Differentiate between macroeconomics and microeconomics.What types of economic activities might be included in each category?

Question 8

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The study of small economic units,such as individual consumers,families,and businesses,is called _____.

Question 9

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The amount of goods and services for sale at different prices is known as _____.

Question 10

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is the relationship between the goods and services produced in a nation each year and the inputs needed to produce them.

Question 11

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The point where the supply and demand curves intersect is the _____.

Question 12

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
During a(n)_____,consumers frequently postpone major purchases and shift buying patterns toward basic,functional products carrying low prices.

Question 13

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ refers to the willingness and ability of buyers to purchase goods and services at different prices.

Question 14

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is a market structure in which large number of buyers and sellers exchange homogenous products and no single participant has a significant influence on price.

Question 15

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
_____ is the sum of all goods and services produced within a country's borders.

Question 16

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
A(n)_____ is a market structure characterized by relatively few sellers and barriers to entry resulting from high start-up costs.

Question 17

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
The use of government tax and spending policies to bring about desired changes in the economy is called _____.

Question 18

Describe how changes in household income affect demand.

Question 19

What is economics? Why is understanding economics important in one's life?

Question 20

Complete the following using the terms listed.
a.Consumer Price Index (CPI)
b.Inflation
c.Gross domestic product (GDP)
d.fiscal policy
e.monetary policy
f.equilibrium price
g.budget deficit
h.Pure competition
i.supply
j.Demand
k.Productivity
l.recession
m.microeconomics
n.oligopoly
o.monopoly
Attempting to bring about changes in economic activity through changes in the size of the nation's money supply is called _____.

Question 21

Explain monopolistic competition.

Question 22

Describe the four categories of unemployment.

Question 23

Describe how worker incentives vary in each of the four economic systems.

Question 24

Describe the major differences between socialism and a mixed economic system.

Question 25

Explain how the Consumer Price Index helps measure the changes in consumer prices.

Question 26

A graph showing the amount of a product that buyers will purchase at different prices is the _____ curve.

A)production possibility
B)supply
C)utility
D)demand

Question 27

Explain the difference between expansionary monetary policy and restrictive monetary policy..

Question 28

If the prices of substitute goods decrease,the demand curve will shift to the _____ and the price will _____.

A)right;fall
B)left;fall
C)right;rise
D)left;rise

Question 29

List and describe each of the four stages of the business cycle.

Question 30

List the economic challenges in today's world.

Question 31

List the four factors of production and provide an example of each factor.

Question 32

If the number of buyers decreases,the demand curve will shift to the _____ and the price will ____.

A)left;fall
B)right;fall
C)right;rise
D)left;rise

Question 33

The study of macroeconomics is _____.

A)concerned with studying a country's overall economic issues
B)primarily concerned with the economic choices and decisions of individual consumers
C)not related to microeconomics
D)not related to government decisions concerning spending and taxes

Question 34

What is a federal budget? Explain how a federal budget is framed.

Question 35

In general,as price of a good or service increases,the quantity demanded:

A)declines.
B)remains the same irrespective of the product type.
C)increases.
D)first increases and then decreases irrespective of the product type.

Question 36

Which of the following refers to the willingness and ability of buyers to purchase goods and services at different prices?

A)Socialism
B)Supply
C)Capitalism
D)Demand

Question 37

A demand curve will shift to the left if the _____.

A)number of buyers increases
B)future expectations become more optimistic
C)buyers' incomes decrease
D)prices of substitute goods increase

Question 38

If buyers' incomes increase,the demand curve will shift to the _____ and the prices will _____.

A)right;rise
B)left;fall
C)right;fall
D)left;rise

Question 39

Explain oligopoly.

Question 40

An economist studies the consumer behavior in a particular area.This is an example of _____.

A)microeconomics
B)macroeconomics
C)sociology
D)psychology

Question 41

Incentives to motivate employees to perform at their highest level are strongest in _____ systems.

A)capitalist
B)communist
C)socialist
D)collectivist

Question 42

Assume that the price of gasoline triples.What will likely happen to the demand for fuel-efficient small cars? The demand curve will shift to the _____ and demand will _____.

A)right;decrease
B)left;increase
C)right;increase
D)left;decrease

Question 43

The equilibrium price is established when the _____.

A)prevailing market price of an item is same as the price at which a consumer can buy the item
B)demand curve and the supply curve are parallel to each other
C)opportunity cost of a product is greater than its production cost
D)production cost of an item is greater than its selling price

Question 44

David cultivates and sells sugarcane to a sugar manufacturing company.John is a retailer for pet food.Which of the following is a difference between David's and John's businesses?

A)Unlike John,David has very few competitors.
B)Unlike John,David is eligible for tax exemptions.
C)Unlike John,David has no control over the pricing of his product.
D)Unlike John,David can patent his product.

Question 45

Monopolistic competition has _____.

A)many buyers and sellers,who have some control over price
B)few sellers,but only one major buyer
C)many sellers,who sell a homogeneous product
D)no barriers to keep out new competitors

Question 46

If the cost of producing a good or service increases,the supply curve will shift to the _____ and the price will _____.

A)right;fall
B)right;rise
C)left;fall
D)left;rise

Question 47

Flora Cult Inc. ,an exporter of flowers across the globe,operates in an industry where there are many sellers and buyers.This makes it difficult for any one single seller or buyer to influence the market price of the flowers.Also,it is difficult for sellers or exporters to differentiate their products from each other.What type of market structure does this illustrate?

A)Oligopoly
B)Pure competition
C)Monopoly
D)Monopolistic competition

Question 48

According to a supply curve,_____.

A)as prices rise,quantity of a product supplied falls
B)as prices fall,consumers will buy in smaller quantities
C)as prices rise,the quantity of a product that is supplied also rises
D)as prices rise,consumers will buy in larger quantities

Question 49

Henry ventures into a new business with few competitors and requires a huge investment.Soon after entering the business,one of Henry's competitors introduces a price cut that forces Henry to reduce the prices of his products as well.In this scenario,Henry has ventured into _____.

A)oligopoly
B)pure competition
C)monopoly
D)monopolistic competition

Question 50

An increase in consumers' incomes causes the _____.

A)break-even point to shift to the right
B)demand curve to shift to the right
C)break-even point to shift to the left
D)demand curve to shift to the left

Question 51

A particular industry has many competitors,each of whom has no significant control over price.In addition,it is fairly easy to enter the industry.This industry is an example of _____.

A)pure competition
B)monopolistic competition
C)an oligopoly
D)a pure monopoly

Question 52

The three major types of economic systems are _____.

A)collectivism,developed economies,and oligopoly
B)individualism,developing economies,and duopoly
C)ethnocentrism,cultural relativism,and polycentrism
D)capitalism,planned economies,and mixed economies

Question 53

Which of the following is an implication of demand curves sloping downward?

A)Buyers will purchase greater quantities of a good or service as its price falls.
B)Sellers will supply greater quantities of a good or service as its price increases.
C)Buyers will purchase greater quantities of a good or service as their incomes fall.
D)Sellers will supply greater quantities of a good or service as taxes increase.AACSB Analytical thinking BT: K

Question 54

Which of the following is considered to be the BEST example of pure competition in today's business environment?

A)The steel industry
B)The market for pet food
C)The fishing industry
D)The paper industry

Question 55

As the number of suppliers of a product increases,the supply curve shifts to the _____ and the price will _____.

A)right;fall
B)right;rise
C)left;fall
D)left;rise

Question 56

During an epidemic,the price of surgical masks increased.Which of the following is most likely to have been a consequence of this increase in price?

A)Decrease in the demand for surgical masks
B)Increase in the tax on surgical masks
C)Increase in the supply of surgical masks
D)Decrease in the profits from selling surgical masks

Question 57

Most industrialized nations operate economies based on _____.

A)planned economies
B)private enterprise systems
C)communist systems
D)socialist systems

Question 58

In which of the following types of economic systems do entrepreneurs and investors have the most amount of freedom with regard to controlling business ownership,profits,and resource allocations?

A)Socialism
B)Capitalism
C)Communism
D)Mixed economy

Question 59

The supply curve will shift left when:

A)suppliers in the market increase.
B)taxes increase.
C)the costs of technologies decrease.
D)the costs of inputs decrease.

Question 60

A demand curve is the schedule that shows the relationship between the price of a product and the _____.

A)overhead costs
B)social costs
C)quantity of that product buyers will purchase
D)quantity of that product manufacturers will supply

Question 61

There is no direct competition in a particular industry,yet a firm operating in such an industry will have almost no control over pricing.This industry is an example of _____.

A)monopolistic competition
B)a regulated monopoly
C)an oligopoly
D)pure competition

Question 62

In _____,a local,state,or federal government grants exclusive rights in a certain market to a single firm.

A)pure competition
B)oligopolies
C)regulated monopolies
D)monopolistic competition

Question 63

A particular industry has only a few competitors,who have some control over price.However,high start-up costs make entry into the industry difficult.This industry is an example of _____.

A)pure competition
B)monopolistic competition
C)an oligopoly
D)a pure monopoly

Question 64

Consumers can choose from hundreds of different kinds and producers of cheese,each with a slightly different flavor and texture.This type of market structure is known as _____.

A)pure competition
B)monopolistic competition
C)a monopoly
D)an oligopoly

Question 65

_____ has a blend of both planned economy and private enterprise system.

A)Capitalism
B)Communism
C)A mixed market economy
D)A free market economy

Question 66

Pure competition is different form monopolistic competition in that:

A)buyers in pure competition see little difference between the goods offered by competitors
B)new competitors cannot easily enter a purely competitive market
C)buyers in monopolistic competition have no control over prices
D)sellers in monopolistic competition can never exit the industry

Question 67

Under the economic system of communism,_____.

A)individual rights to profits are not allowed
B)government interference is limited
C)employees have the complete freedom to choose their own occupation
D)businesses are owned by individuals

Question 68

During a recession,which of the following businesses is most likely to do well?

A)North Sun Ships,a luxury cruise service
B)Red Couture Inc. ,a designer store for clothes and accessories
C)Save Market,a chain of discount stores
D)Ink Theory,a store that sells premium pens

Question 69

During economic recession:

A)unemployment begins to decline as business activity accelerates.
B)businesses expand by hiring more employees.
C)people turn to lower-priced retailers for the goods they need.
D)consumer confidence about the future is optimistic.

Question 70

Harlson Inc.is the sole supplier of cosmetic nose implants.Which of the following market structures does Harlson exhibit?

A)Pure competition
B)Monopolistic competition
C)Oligopoly
D)Monopoly

Question 71

_____ is an economic system in which the government owns all of a nation's major industries but still allows private ownership in less crucial areas.

A)Communism
B)Socialism
C)Capitalism
D)Ethnocentrism

Question 72

A country has a strong private sector,along with publicly-owned enterprises.Entrepreneurs and private-sector investors are entitled to profits after paying taxes,and even state-owned enterprises are expected to generate returns.What type of economic system does this country have?

A)Mixed economy
B)Communism
C)Socialism
D)Self-managed economy

Question 73

Among the types of competition in a private enterprise system,control over price by individual firms is high in a(n)_____.

A)mixed economy
B)regulated monopoly
C)oligopoly
D)pure monopoly

Question 74

_____ is an economic system in which private property is eliminated.

A)Socialism
B)Capitalism
C)Individualism
D)Communism

Question 75

United Narva is a nation in which industries like steel,communications,electricity,railways,education,and health care are owned by the government.The leaders of the nation believe that it is detrimental to the public's interest to allow such core industries to be owned by private firms.However,private ownership is encouraged in industries like restaurants,entertainment,and retail shops,which have a lower impact on social welfare.Which of the following economic systems has United Narva adopted?

A)Capitalism
B)Socialism
C)Individualism
D)Communism

Question 76

The state of Brookcliff has granted exclusive rights to the BC Electricity Board for the supply of electricity.This is an example of a(n)_____.

A)fiscal policy
B)regulated monopoly
C)mixed market economy
D)oligopoly

Question 77

Before the patent on its allergy medicine expired,Renova Pharma Inc.was able to set its own market price for the drug.From which type of market structure did the company benefit?

A)Oligopoly
B)Pure competition
C)Monopolistic competition
D)Monopoly

Question 78

The conversion of government-owned and operated postal service into a privately held business would be an example of _____.

A)nationalization
B)government appropriation
C)commercialization
D)privatization

Question 79

In a particular country,the government owns the public transportation,basic services like energy supply and communication,and the core manufacturing firms.Small businesses are privately owned.What type of economic system does this country have?

A)Capitalism
B)Communism
C)Socialism
D)Individualism

Question 80

During an economic recession,consumer spending _____ and unemployment _____.

A)increases;increases
B)increases;decreases
C)decreases;increases
D)decreases;decreases