Unit 2: Quiz

an electronics company is trying to decide how many new computers it should produce to export to China. Which factor would most likely cuz the comedy to produce a large number of computers? A. Chinese consumers believe that computer prices will rise in the future. B. Few Chinese consumers are interested in buying foreign computers C. Shipping costs to China have increased greatly in recent years. D. The Chinese government has recently raised taxes on foreign goods.

Not A, maybe C

Which development would most likely cause the supply of a product to increase? A. Government regulations increase the cost of making the product B. Fewer workers receive the education needed to create the product. C. Companies expect the selling price of the product to rise significantly D. Reliance on old technology leads to higher production costs for the product

Not B,

Which situation best illustrates an effect of the law of demand? A. a theater sells more popcorn after it lowers the price of popcorn B. A restaurant loses customers when a similar restaurant opens nearby C. A shop orders more computers when they're selling prices increases D. The a car company increases sales when incomes rise in the city

Not C ( maybe B)

Which development would most likely cause the demand for a product to increase? A. Consumer demand for a complementary good decreases. B. The number of consumers in a market increases. C. Consumer preferences shift away from the product. D. Consumers expect the price to fall in the near future.

not B

which option is best described as a complementary good for trucks? A. Truck blocks. B. Truck fuel. C. Truck factories. D. Truck regulations

B

Governments can cause the supply of a good to increase by: A. lowering taxes on the good, B. creating new regulations on the good. C. warning companies that the good is dangerous. D. raising taxes on the good.

A

Monopolistic competition has which advantage compared to pure competition? A. It provides a greater variety of consumer products B. It forces companies to sell goods at a lower price C. It allows fewer new businesses to enter a market D. It offers more capital for expensive research projects

A

Monopolistic competition is a market condition with which major feature? A. Different businesses compete to sell similar products B. A few huge businesses control an industry C. Only one business control an entire industry D. Many businesses freely product the same product

A

One major advantage of pure competition to a monopoly is that: A. businesses have more incentives to keep prices low B. more capital is available for research and development C. consumers have to make fewer economic choices D. economies of scale become less important

A

What is one major disadvantage of corporations compared to other types of business organizations? A. Corporations are more complex to start than other businesses B. Corporations have a less stable life span than other businesses C. Corporations have more legal liability for owners than other businesses D. Corporations are less likely to have specialized workers than other businesses

A

Which situation best illustrates an effect of the law of supply? A. A factory stops making a brand of phone after the phone's price decreases B. A theme park gains customers after it lowers its ticket prices C. A car company increases sales when incomes rise in a city D. A food truck shuts down after a better food truck opens nearby

A

Which statement best illustrates the relationship between three different elements of the circular flow of product? A. Resource markets sell materials to businesses, which use them to make goods sold to households B. Businesses provide goods to resource markets, which sell them directly to households C. Households design new products for businesses, which market them using resource market D. Product markets create new goods for households, which purchase them directly from businesses

A

Which statement best summarizes the law of demand? A. Buyers are more interested in purchase product as those products decline in price B. Sellers only supply goods that are in high demand from buyers C. buyers are more likely to buy a product that is supplied in large quantities D. Sellers can easily substitute a product in high demand with another product

A

A product's price will increase the most if: A. its supply and demand both fall at the same rate. B. its supply declines while its demand goes up. C. its demand remains the same but its supply goes up. D. its supply remains the same but its demand goes down.

B

A shoe factory sells a certain brand of shoes for $50 per pair. After a celebrity is seen wearing the shoes at an awards show, demand for the shoes goes up rapidly. As a result, the factory is able to increase the price to $300 per pairs. According to the law of supplies, what would you expect to happen next? A. The factory would decrease the number of shoes it produces. B. The factory would increase the number of shoes it produces. C. The factory would attempt to reduce the demand for the shoes. D. The factory was set a new equilibrium price for the shoes.

B

Governments are most likely to intervene in a market in which situation? A. A large corporation wants to more similar businesses to form B. A group of companies competes while making similar but distinct products C. A pure competition market has too many producers making the same product D. A single business has created a monopoly to dominate an industry

D

How do consumer expectations affect the demand for a product? A. By connecting demand for a good to the availability of complementary goods B. By increasing the demand for goods expected to become more expensive later C. By reducing the supply of a good as demand for the good increases over time D. By lowering the good's equilibrium price to better reflect growing consumer demand

B

One major advantage of organization a business as a sole proprietorship is that: A. the company has a nearly unlimited life span B. the owner can keep all the company's profit C. it is easy to quickly raise large amounts of capital D. risk and liability are split among many people

B

What is one advantage corporations have over other types of businesses? A. Corporations are the easiest businesses to set up. B. Corporations have a nearly unlimited life span. C. Corporations have fewer legal regulations to follow. D. Corporations are controlled by only one person.

B

Which situation best illustrates the role of businesses in the circular flow of goods? A. A factory produces plastic used to make toys. B. A company designs a new line of laptops. C. A supermarket sells goods made all over the country D. A fisherman sells the fish he catches to a local market .

B

Which statement best describes the relationship between businesses and other parts of the circular flow of goods? A. businesses make it easier for households to access resource markets B. businesses create the goods that product markets sell C. businesses make rules about what resources will be available D. businesses sell the goods produced in households

B

what does the law of supply suggest? A. The equilibrium price for a product is decided only by sellers. B. the amount of product sellers create is based on the product's price. C. The amount of product buyers purchase is based on the product's price. D. The equilibrium price for a product is decided only by buyers

B

which statement best describes the economic relationship between household and product markets? A. Product markets purchase resources from households. B. Households buy goods from product markets. C. Households provide goods to product markets. D. Product markets supply households with natural resources.

B

A U.S. business sells milk to Consumers in France. Which situation would most likely cause demand for milk to rise in France? A. A popular French nutrition author claims that milk is bad for people's health. B. The French population declines steadily due to years of economic problems C. Cheese and other products made from milk become more popular in France D. French consumers expect the price for milk to increase in the future.

C

A business would like to increase consumer demand for a product that has not been selling well. According to the law of demand, how would the business up accomplish this goal? A. By decreasing the supply of the product. B. By selling a product at a higher price. C. By selling the product at a lower price. D. By selling the supply of the product.

C

A government may create and regulate natural monopolies because: A. they create competition between monopolies in different industries B. they encourage private businesses in invest in the government C. they can handle the cost of providing essential services D. they maximize the profits a business can make from a certain good

C

A market condition featuring one producer controlling the entire supply of a good is called ______________ A. an oligopoly B. monopolistic competition C. a monopoly D. pure competition

C

An inventor wants to start a new business selling her products but isn't sure how to organize it. She is most concerned with being in complete control of all decisions that the business makes. She does not want other people ruining her plans by insisting on doing things their own way. Which business organization would best meet her needs? A. partnership B. Firm C. Sole proprietorship D. Corporation

C

Household are a necessary part of the circular flow of goods because they: A. provide services that businesses cannot. B. sell resources directly to businesses C. reduce the influence of resource markets. D. buy the goods sold at product markets.

D

How do supply and demand work together to influence the price of a product? A. Sellers create large supplies on products to keep prices low, while consumers lower demand to increase prices. B. Buyers create high demand for products with a large supply, which causes the products' prices to drop. C. Sellers supply a certain amount of a product based on how much demand they believe it will have at a particular price. D. Buyers set a supply of a good buy purchasing it at a specific price, which creates demand among sellers to the decrease the price

C

What is the similar characteristic of corporation and partnership? A. Complex regulations to start B. Owner is free to make all decisions C. Liability divided among owners D. Few resources to hire employees

C

Which benefit is shared by both monopolies and oligopolies? A. They are highly regulated by the government groups that control them B. They provide consumers with a wide range of choices for products C. They have access to enough capital to operate in high-cost industries D. They drive down prices by competing for them same consumers

C

Which conclusion does this graph most support? 100Product A75Demand50Product B250$10 $15 $20Price$25 A. Product A is closer to equilibrium price than product B. B. Product B is closer to equilibrium price than product A. C. Product A has more elastic demand than product B. D. Product A has more inelastic demand than product B.

C

Which problem is more likely to affect a partnership than a corporation? A.) It is overly expensive and complicated to get started. B.) Shareholders may remove the owners from the company. C.) The business may end if one owner chooses to leave. D.) There are too many legal regulations controlling the business.

C

Which statement best summarizes the role of businesses in the flow of goods? A. businesses sell goods that are created in product markets B. businesses consume goods produced by households C. businesses earn revenue by providing services D. businesses provide natural resources to product market

C

Which term best completes the diagram? Household -> resource market (productive resources) Resource market -> household (?) A. natural resources B. Goods C. Wages D. Capital

C

Which type of business is owned by shareholders who buy stock in the company? A. Sole proprietorship B. Partnership C. Corporation D. Firm

C

A country might prefer a monopoly to pure competition if it seeks to: A. achieve the lowest level of investment in research B. provide consumers with the most possible choices C. reduce the sale price of goods to the lowest level D. have goods produced at the lowest possible cost

D

A person works as a cashier in a major supermarket. She sells vegetables to customers, including local restaurants that use these ingredients to make meals for their customers. The supermarket pays the cashier wages for her work, which she uses to buy her own groceries and pay bills. When the supermarket in the passage sells groceries to the cashier, it takes on which role in the circular flow of goods? A. Business B. Resource market C. Household D. Product market

D

Read the passage and then answer the question: A business has been researching sales data on its latest product. The data show that a lot of customers want to buy its product but can't afford to at its current price. The business decides to lower the price resulting in a huge increase in sales. The situation described in the passage most reflects the impact of which concept? A. The income effect B. The substitution effect C. The law of supply D. The law of demand

D

What is one major advantage of a partnership compared to a corporation? A. A partnership divides risk between more people than a corporation. B. A partnership has more shareholders than a corporation. C. A partnership has access to more resources than a corporation. D. A partnership is easier to set up than a corporation.

D

What is one of the biggest drawbacks to starting a sole proprietorship? A. It is extremely complicated to set up. B. There is likely to be conflict between owners. C. Shareholders can remove the owner from the company D. The owner takes on all risk and liability.

D

Which diagram arranges the types of business organizations from the most liability for each owner to the least liability for each owner ? A. Corporation -> sole proprietorship -> Partnership B. Corporation -> partnership -> sole proprietorship C. Partnership -> sole proprietorship -> corporation D. Sole proprietorship -> Partnership -> Corporation

D

Which situation is the best example of a pure competition market? A. one company control every steel mill in a country B. two companies own every high-speed Internet in a country C. several computer companies sell laptops with unique features D. two gas stations operate on the same busy intersection

D

Which statement best summarizes the role of households in the flow of goods? A. Household manufacture goods for product markets B. Households transport products created in resource markets C. Households establish rules and regulations for businesses D. Households consume product made by businesses

D

a large software company has developed the most popular word processor on the market. Almost every consumer and business in the country uses its product, which has forced most of its competitors out of business. If a new company tries to promote an innovative word processor of its own, the large company usually buys that business right away to eliminate the competition This situation best illustrates which market condition? A. pure competition B. Monopolistic competition C. Oligopoly D. Monopoly

D

which situation best illustrates the role of household in the circular flow of goods? A. A company designs a new type of laptop. B. A factory produces screws used to build furniture. C. A website sells cheap books and magazines. D. A runner buys a new pair of athletic shoes

D