Econ Unit 2
The Latin term ceteris paribus can best be translated as follows:
"Other things being equal."
Top executives in a corporation are typically hired by:
A board of directors.
A good used in the production of other goods or services is known as:
A commodity.
Milk would be an example of the following type of good in relation to breakfast cereal:
A complementary good.
A company that owns a controlling stake in a number of smaller companies, all of which conduct business separately, is known as:
A conglomerate.
A distribution of part of a company's earnings to its shareholders is known as:
A dividend.
A business arrangement where private entrepreneurs purchase the rights to open and run a location of a larger company is known as:
A franchise.
A partnership where profits, liability, and management duties are divided equally among partners is known as:
A general partnership.
A higher price will generally lead to the following:
A higher quantity supplied.
The U.S. Postal Service would be an example of:
A legal monopoly
A monopoly created by a government that prohibits competition by other companies is known as:
A legal monopoly.
A market situation in which there is only one buyer with many sellers of a particular product is known as:
A monopsony.
In the case of a company that controls virtually all of the supply of a critical resource (like aluminum in the case of ALCOA) we would use the following term to describe the situation:
A natural monopoly
In the case of a company that controls virtually all of the supply of a critical resource (like aluminum in the case of ALCOA) we would use the following term to describe the situation:
A natural monopoly.
A good for which demand increases when income increases is known as:
A normal good.
A government license giving the holder exclusive rights to a process, design, or new invention for a designated period of time is known as:
A patent
A company that must accept the prevailing prices in the market, since its own activity is unable to affect the market price is known as:
A price taker
A company that must accept the prevailing prices in the market, since its own activity is unable to affect the market price is known as:
A price taker.
The type of business structure owned and operated by one person is typically known as:
A sole proprietorship.
A share of a company held by an individual or group is known as:
A stock.
All of the following could affect the cost of production of a good EXCEPT for:
An increase in consumer demand.
A good that decreases in demand when consumer income rises is known as:
An inferior good
Generic corn flake cereal would be an example of the following type of good as compared with Kellogg's Frosted Flakes®:
An inferior good
A firm's first sale of stock to investors is called:
An initial public offering.
A situation in which there are many sellers but few buyers is known as:
An oligopsony
A situation in which there are many sellers but few buyers is known as:
An oligopsony.
An above-equilibrium price of gasoline would most likely lead to the following situation:
Buyers will be discouraged from purchasing more gasoline.
A below-equilibrium price of gasoline would most likely lead to the following situation:
Buyers will be encouraged to purchase more gasoline.
Profits from the sale of property, stocks, or bonds are known as:
Capital gains.
All of the following might shift demand for a good EXCEPT for the following:
Changes in the number of suppliers
The law of demand indicates that - all else being equal - as the price of a product increases, the quantity demanded:
Decreases.
Which of the following would NOT be an example of a barrier to market entry for a company trying to enter a given market?
Demand by consumers for a certain good.
If the price of a certain brand of athletic shoes doubles, we should expect:
Demand to fall.
The degree to which supply or demand changes in response to a change in price is known as:
Elasticity.
The term used to describe the only price where quantity demanded is equal to quantity supplied is known as:
Equilibrium.
A partnership agreement should list all of the following EXCEPT:
How the partners buy and sell company stock.
When the price of gasoline rises, oil companies would be encouraged to do all of the following EXCEPT:
Increase investment in alternative forms of energy.
The law of supply indicates that - all else being equal - as the price of a product increases, the quantity of goods or services that suppliers offer will:
Increase.
In the case of a monopoly, the following is true:
One firm produces all of the output in a market
Which of the following would NOT be a condition associated with monopolistic competition?
One producer controls most of the market.
Sole proprietorships are a popular business form due to all of the following EXCEPT:
Owners are exempt from taxes.
A conspiracy between business competitors to set prices to buy or sell goods or services at a certain point is known as:
Price-fixing.
If demand for a new model of Ford vehicles suddenly doubles, we should expect that:
Prices will rise.
Demand curves typically:
Slope downward from left to right.
Supply curves typically:
Slope upward from left to right.
The following term describes when a government pays a firm directly or reduces the firm's taxes if the firm carries out certain actions:
Subsidy
An unexpected event that changes the supply of a product or commodity is known as:
Supply shock
If the price of new Blue-Ray DVDs suddenly falls in half, we should expect that:
Supply will decrease.
If the price of a certain popular designer shirt triples, we should expect that:
Supply will increase.
Which of the following is NOT a condition associated with perfect competition?
The government intervenes to make sure competition is fair and equitable.
The following statement best reflects the legal requirements of a partnership:
The partnership must be registered with the state.
The following statement best reflects the name used by a sole proprietorship:
This can either be the legal name or a trade name
