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Introduction to Economics quiz #6 Flashcards

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Introduction to Economics quiz #6
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  • Which of the following is an objective of protectionism?
    Protectionism aims to shield domestic industries.
  • What is a general factor that contributes to the success of small businesses?
    Flexibility and innovation.
  • A form of pricing high is called what?
    Premium pricing.
  • Which items represent an implicit cost to a business owner?
    Foregone income from alternative employment.
  • Which of the following reasons explain why a natural monopoly might exist?
    High fixed costs and economies of scale.
  • Which level of the global wealth pyramid represents the largest number of people?
    The base level represents the largest number.
  • Which of the following industries has the lowest barrier to entry?
    Retail has low barriers to entry.
  • Which factor is likely to make a country a more attractive location for international business?
    Stable political environment.
  • Which one of the following is not one of the four product characteristics that R&D can set?
    Location is not a product characteristic.
  • Which of the following is not one of the sources of natural market power?
    Low fixed costs are not a source.
  • Why can a small business owner make decisions quicker than a big business?
    Fewer layers of management allow faster decisions.
  • Which of the following describes economies of scope?
    Producing multiple products more efficiently together.
  • Which of the following is a simpler medium of exchange than bartering?
    Money is a simpler medium of exchange.
  • Which of the following institutions do economists see as necessary for economic growth?
    Stable financial institutions.
  • In which of the following circumstances would a principal–agent problem occur?
    When managers' interests differ from owners'.
  • Which of these scenarios is not an example of a barrier to entry?
    Low start-up costs are not a barrier.
  • Which of the following statements is accurate about most economies?
    Most economies are mixed systems.
  • Which of the following is not economic investment?
    Buying stocks is not economic investment.
  • Which topic below best applies to microeconomics?
    Consumer decision-making.
  • Which of the following statements best describes the study of economics?
    Economics studies how societies allocate scarce resources.
  • Which of the following lists the functions of money?
    Medium of exchange, unit of account, store of value.
  • Suppose the government decreases taxes. What will happen to disposable income and consumer spending?
    Disposable income and consumer spending will increase.
  • Everything else equal, what does this phrase mean in economics?
    It means holding other factors constant.
  • Other things the same, what does this phrase mean in economics?
    It means assuming all other variables are unchanged.
  • Which best describes how a recession develops as demand and production decrease?
    Falling demand leads to lower production and rising unemployment.
  • Why do you think banks will try to sell you credit cards or personal loans?
    Banks earn interest and fees from these products.
  • How does the government pay for roads?
    The government pays for roads using tax revenue.
  • What can be traded in a commodities market?
    Basic goods like oil, gold, and wheat.
  • What is an example of a market economy?
    The United States is an example of a market economy.
  • Which type of trade barrier is explicitly used for political purposes?
    An embargo is used for political purposes.
  • What is a primary characteristic of commodities as an investment vehicle?
    Commodities are standardized and traded in bulk.
  • What does cost of living refer to?
    Cost of living is the amount needed to cover basic expenses.
  • Why do countries provide financial incentives?
    To attract investment and stimulate economic activity.
  • Which describes a type of tax that people pay on money they earn?
    An income tax.
  • What is the economic system in the United States?
    The United States has a mixed-market economy.
  • Which of these situations are more likely to happen in a good economy?
    Job growth and rising incomes.
  • Why do economists study the data of economic indicators?
    To analyze and predict economic trends.
  • What is an oligarchy?
    An oligarchy is a government ruled by a small group.
  • What type of economy does the United States have?
    The United States has a mixed-market economy.