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Introduction to Economics quiz #8 Flashcards

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Introduction to Economics quiz #8
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  • What is one benefit of a dual-income household?
    Higher total income and financial stability.
  • Which basic economic goal is most easily achieved in a traditional economy?
    Stability and meeting basic needs.
  • Why are entrepreneurs important in a private enterprise system?
    They drive innovation and create jobs.
  • Why do we study economics?
    To understand resource allocation and make informed choices.
  • Which situation is the best example of regulation in an economic system?
    Government setting safety standards for products.
  • What does it mean for a city to have a cost of living index that is above or below 100?
    Above 100 means higher than average costs; below 100 means lower.
  • What is commodity money?
    Commodity money is money with intrinsic value, like gold.
  • What is a test market?
    A test market is a small area used to try out a new product.
  • What is the laissez-faire policy?
    It is a policy of minimal government intervention in the economy.
  • What is a planned economy regulated by?
    A planned economy is regulated by the government.
  • Which body or group is most able to use money to influence the economy?
    The central bank.
  • Which type of investment would a person with a high risk tolerance likely choose?
    Stocks or commodities.
  • Which is an economic system? a. monarchy c. dictatorship b. democracy d. market
    d. market
  • When money is used for exchanges, what function is it serving?
    Money is serving as a medium of exchange.
  • Advertising which informs consumers about a new product is an example of which of the following?
    Informative advertising.
  • Which nation has a communist command economy: Norway, North Korea, South Korea, or the United States?
    North Korea has a communist command economy.
  • In which of the following elements of economic foreign policy can Congress participate?
    Congress can participate in trade agreements.
  • The U.S. consumer market is large. What does this mean for businesses?
    It offers many opportunities for sales and growth.
  • Which of the following is not a goal of supply chain management?
    Increasing product prices is not a goal.
  • Which kind of economy is most common in the world today?
    Mixed economies are most common.
  • Which best describes how producers benefit from specialization?
    Specialization increases efficiency and output.
  • Which of the following was an economic cause of imperialism?
    Desire for new markets and resources.
  • What kind of economy does Nigeria have: developed, emerging, developing, or undeveloped?
    Nigeria has a developing economy.
  • At what points will Al be producing the most equal amounts of sandwiches and salads?
    When the quantities of both are the same.
  • Which of these statements is true according to Adam Smith's theories?
    Self-interest can lead to societal benefits.
  • Which type of risks occur from fluctuations in business conditions?
    Systematic risks.
  • When the buyer and seller both have costs to pay, what is this called?
    A transaction.
  • Why do high start-up costs serve as a barrier to market entry?
    They prevent new firms from entering the market.
  • In a voluntary exchange, what do both parties expect?
    Both expect to benefit.
  • Which is not a stage of the business cycle?
    Stagnation is not a stage.
  • What is one major advantage localized economies have over more globalized economies?
    Local economies can respond quickly to local needs.
  • Which of these scenarios best represents a traditional economic system?
    A village trading goods based on customs.
  • Amy is buying a new blouse for a party. What kind of good is the blouse?
    A consumer good.
  • Which of the following best describes a society that uses pure capitalism as its economic system?
    Private ownership and minimal government intervention.
  • What incentive do banks have for lending money to homebuyers?
    Banks earn interest income.
  • What does new technology generally do to production?
    It increases efficiency and lowers costs.
  • What determines the difference between one market structure and another?
    Number of firms and product differentiation.
  • What is the source of demand for dollars in the foreign-currency exchange market in an open economy?
    Foreigners buying U.S. goods and assets.
  • Which economic goal does this exchange at an outdoor food stand best represent?
    Economic efficiency.
  • What is a major advantage of piece wages?
    They reward productivity.