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Introduction to Economics quiz #19

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  • The inflation tax refers to
    Loss of purchasing power due to inflation.
  • A joint product is
    A product produced together with another.
  • A firm has market power if it can
    Influence prices.
  • Firms are willing to offer generous rebates because
    They stimulate sales.
  • It is costly to hold money because
    It earns no interest.
  • A decrease in business taxes will tend to
    Increase investment and output.
  • The basic principles of economics suggest that
    People respond to incentives.
  • The bargaining power of suppliers increases as
    The number of suppliers decreases.
  • An office desk is an example of:
    A durable good.
  • Entrepreneurs are willing to take on ______ in the hope of earning a high income.
    Risk.
  • Investors face various choices regarding what they can invest in
    True.
  • A pharmaceutical company buys marketing rights to sell a drug exclusively in East Asian markets.
    Market entry strategy.
  • Expansion of competition which provides customers with many choices is called a
    Competitive market.
  • The supply of money increases when
    Banks make more loans.
  • A command economic system is characterized by
    Government control of resources.
  • Why must total spending be equal to total income in an economy?
    Because every expenditure is someone else's income.
  • A tax where the marginal tax rate increases as income rises is a(n)
    Progressive tax.
  • A regressive tax is one in which the average tax rate (increases/decreases) as income increases.
    Decreases.
  • In developing economic theories, principles, or models, economists
    Make simplifying assumptions.
  • To be considered part of a market, an individual must
    Have willingness and ability to buy.
  • The goal of market segmentation is to
    Identify target customer groups.
  • Tomatoes represent a small subset of food, so tomatoes are:
    A niche product.
  • Federal, state, and local entities are considered markets.
    True.
  • A constant-cost industry is an industry in which:
    Costs do not change as output increases.
  • The essential feature of the market mechanism is the signal. (Enter one word in the blank.)
    Price.
  • In general, the supply chain starts with
    Raw materials.
  • A benefit of free markets is that it
    Promotes efficiency.
  • Fixed costs are often more controllable than variable costs. True or false question.
    False.
  • Costs that do not change with the amount of produced are fixed costs.
    True.
  • When a few buyers purchase large amount from a single seller, they are said to gain buyer's
    Power.
  • The rationing function of prices refers to the:
    Allocation of scarce resources.
  • You go to the gas station and see that the price of gasoline is unchanged
    Supply and demand are balanced.
  • Buying goods or services instead of producing or providing them in-house is called
    Outsourcing.
  • When society has a higher level of capital per person, it is called ______________.
    Capital deepening.
  • A tax designed to reduce the disparities in wealth between the rich and poor is called a(n)
    Wealth tax.
  • Today, the economic systems of most nations could most accurately be classified as
    Mixed economies.
  • Specialization—the division of labor—enhances productivity and efficiency by:
    Allowing workers to focus on specific tasks.
  • Economies of scale means using
    Larger production to lower costs.
  • The degree to which a firm or project relies on fixed costs is called the ______ leverage.
    Operating.
  • Sunk costs are costs that
    Cannot be recovered.