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Exam 2: Understanding Economics and How It Affects Business

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Question 151

True/False

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Resource development is the study of how to increase resources and to create the conditions that will make better use of those resources.

A) True
B) False

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Question 152

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Which of the following would be a topic emphasized in a macroeconomics course?

A) The factors that determine how fast a nation's economy is growing
B) How a company decides the amount it will charge for one of its products
C) How a consumer chooses which goods to buy
D) The factors that determine the wages for labor in the mining industry

E) None of the above
F) All of the above

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Question 153

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Adam Smith's research focused on determining the best way to distribute a fixed amount of resources, rather than on how to create more wealth.

Disinflation refers to a situation in which prices continue to rise, but not at the rate they were rising previously.

Under capitalism,

Colby is a new college graduate who just started a job as an engineering trainee for a sizeable defense company. Now that he is earning good money, he hopes to start saving for his first house and also make contributions to his retirement plan. As he looks over his monthly bills, Colby is concerned that he'll never get ahead of the game. His grocery bill, car payment, and mounting gas payments keep him in the "just making ends meet" group. As his mind wonders back to his college days, he reflects on a time when gas and food seemed a lot more reasonable. Chase is experiencing the effects of

________ studies the operation of a nation's economy as a whole.

Like most nations, the United States has a mixed economy.

An oligopoly is a market that is characterized by

In a mixed economy, the government's goal is to grow the economy and maintain some measure of social equality.

Both socialism and communism are variations of

One strength of a free-market economic system is that it emphasizes the fair and humane treatment of the less fortunate in society.

________ refers to a general rise in the price level of goods and services over time.

Studies about the effects of population growth on the economy are part of macroeconomics.

If the quantity supplied in a market exceeds the quantity demanded, a shortage will exist.

Javier left his home country to become a gardener for a family in a suburb of San Francisco, California. One of the benefits of his new job is he can attend the community college near the family's home. However, when he arrived, he experienced the differences from a predominately socialist nation and a capitalist nation. Javier was dismayed to learn that public transportation in California was limited and expensive, making it difficult to get to school. For a negligible fee, the government in his home country provided public transportation for everyone. Javier's home country's economic system was more characteristic of ________.

The major benefit of socialism is that it creates strong incentives to work hard and take the risks associated with starting and operating a business.

In free-market economies, the government plays a major role in deciding which goods are produced and who will get them.

When the market price of a good is above its equilibrium value, and all other determinants are unchanged

A young couple living in rural west-central Missouri heard about the closing of a local grocery store. Although a small operation, it served a small community that would now have to travel another 20 miles to the nearest grocery store. With help from a local realtor and banker, the couple purchased the store, remodeled it, and reopened it. As new storeowners, they had to carefully watch cash flow. As their customer base began to grow, they began offering hot food, and hired others to help with the operation. The economic benefit created in this story is called: