Introduction to Economics quiz #2 Flashcards
Introduction to Economics quiz #2
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Which of these effects of expansionary spending would a government most want to avoid? A government would want to avoid excessive inflation. What are the three basic economic questions? What to produce, how to produce, and for whom to produce. Which of the following is correct regarding the small-business sector in the United States? Small businesses create many jobs and drive innovation. How do money and currency relate? Currency is a physical form of money used as a medium of exchange. An increase in inventories will increase which component of gross domestic product? An increase in inventories raises investment in GDP calculations. Which of the following are found in the product market? Goods and services are found in the product market. Which of the following is determined by an economic system? An economic system determines resource allocation and production methods. Which of the following could be considered a cost of cyclical unemployment? Lost income and reduced economic output are costs of cyclical unemployment. What does it mean to say that money is divisible? Money can be broken into smaller units for transactions. Which of the following is an example of fiscal policy? Government changing tax rates is an example of fiscal policy. What famous book did Adam Smith write? Adam Smith wrote 'The Wealth of Nations.' Michael Porter developed the five forces model to help firms do which of the following? Porter's model helps firms analyze industry competition. Which of the following is the first step of the consumer decision making process? Recognizing a need is the first step. Which of the following best defines the term commodity? A commodity is a basic good that is interchangeable with others of its kind. Who is most likely to benefit from an economy of scale? Large firms benefit from economies of scale. Why would a business want to make sure that its supply chain is diverse? A diverse supply chain reduces risk and increases reliability. Which of the following is a reason to invest in human capital? Investing in human capital increases productivity and earnings. The public power company is an example of which market structure? A public power company is typically a monopoly. Which of the following would be considered a nonrenewable resource? Coal is a nonrenewable resource. Which of the following is omitted in a barter transaction? Money is omitted in a barter transaction. Which is most useful in understanding how the cost of a college education has risen? Examining inflation rates is most useful. What are two characteristics of mixed economies? Mixed economies combine private enterprise with government regulation. Money is most likely an example of which of the following? Money is a medium of exchange. Which is the definition of holding cost in the EOQ model? Holding cost is the expense of storing unsold inventory. What does a mixed-market economy allow consumers to do? Consumers can make choices while the government regulates some activities. What is the difference between the consumer market and the business market? Consumer markets sell to individuals; business markets sell to other businesses. What is an intermediate good? An intermediate good is used as input in the production of final goods. Which of the following is a reason why a firm needs to grow? Growth can increase market share and profitability. Which of the following is a non-price determinant of demand? Consumer income is a non-price determinant of demand. Which explains why Romans were upset by the emperor’s decision to create more coins? Creating more coins led to inflation and reduced the value of money. What are the five basic channels for consumer goods? Direct, retailer, wholesaler, agent, and internet channels. Which of these best describes prices in a market economy? Prices are determined by supply and demand. When marketers seek to evaluate market attractiveness, what are they assessing? They assess potential demand, competition, and profitability. Which of the following exemplifies a microeconomic question? How does a price change affect consumer demand for a product? What is the purpose of a protective tariff? A protective tariff shields domestic industries from foreign competition. Which of the following are most likely classified by economists as consumer durable goods? Cars and refrigerators are consumer durable goods. What role do entrepreneurs play in economics? (Everfi) Entrepreneurs create businesses, drive innovation, and contribute to economic growth. What is the main reason a business operates? The main reason is to earn a profit. Which of the following is a basic characteristic of all economic systems? All economic systems must allocate scarce resources. What kind of economy does China have: developed, emerging, developing, or undeveloped? China has an emerging economy.
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