Unit 4 Test
When an unsettling international event occurs, it can cause traders to feel fearful and buy only currencies that are considered strong and stable. These currencies are often called
"Safe havens"
A restaurant's total cost of selling eight hamburgers is $10.00. Its total cost of selling nine hamburgers is $11.00. What is the marginal cost?
$1.00
Your total revenue for one product is $10.00. Your total revenue for two products is $20.00. What is your marginal revenue?
$10.00
If a company's marginal revenue is always $6.00, what does the marginal cost have to be for the company to earn the maximum amount of profit?
$6.00
A factory produces 20 parts with two employees. With three employees, it produces 45 parts. What is its marginal product?
25 parts
Which of the following is an example of a "leakage" in the circular flow of income model:
A business retaining earnings to pay off debt
Which of the following examples best exhibits a job task with high depth and low scope:
A manager selects the products to be sold for a business and selects the employees who will work in each business activity
Teresa received a raise this year, so she will pay taxes at a higher rate than she did last year. This is an example of
A progressive tax structure
An exchange rate indicates one currency's value in relation to
Another currency
To increase in value
Appreciate
Ratio of imports to exports
Balance of trade
In the exchange rate quotation USD / EUR = 0.73, USD is the __________ currency.
Base
The currency on the left side of the slash in an exchange rate quotation
Base currency
When tax revenue is not enough to cover government expenditures, the government must
Borrow funds
A state of having more expenditures than revenues
Budget deficit
An accurate statement concerning labor specialization would be that it
Can be of different types
The use of robots in assembly-line work is a form of specialization involving
Capital goods
A government's main monetary authority
Central bank
Governments participate in the foreign exchange market through their
Central banks
Which of the following is a political influence that can affect currency value:
Change in executive leadership
The biggest traders of currency on the foreign exchange market are
Commercial and investment banks
Corporations participate in the foreign exchange market so that they can
Complete transactions with foreign businesses smoothly
What may occur when employees do not see the outcome of their part in the whole job process?
Decreased pride in work
Which of the following is most likely to result from specialization of labor:
Decreased training time
To lose value
Depreciate
A bakery hires more employees and, at first, the number of baked goods it produces rises quite quickly. However, as more and more employees are hired, it starts to slow down. This is an example of the law of __________ returns.
Diminishing
An exchange rate quotation that uses domestic currency as the base currency is known as a(n) __________ quotation.
Direct
A person who sells casual sportswear and can also sell formal clothing is an example of
Ease of transferring to other like jobs
Which of the following is an example of an expenditure for which a state/local government uses tax revenue:
Education
Which of the following is a true statement regarding an employer's tax obligations:
Employers pay a matching amount of employees' Social Security and Medicare taxes
How do societies that specialize in producing certain goods obtain the other goods that they need?
Exchange
The measure of one currency's value in terms of another currency
Exchange rate
With each employee that a company hires, its marginal product is greater. Which stage of production is this company in?
First
Pegged currency is also known as __________ currency.
Fixed
The most goods and services are produced when people use their skills and abilities to do the jobs
For which they are best suited
A contract to buy/sell currency at an agreed-upon rate
Forward
Almost every major economy in the world has __________ currency.
Free-floating
Currency with a value determined by the foreign exchange market
Free-floating currency
Which of the following economic factors strengthens currency value:
High interest rates
A business's profits are subject to __________ taxes.
Income
Increased repetition of the same job task can result in
Increased employee boredom
What is a negative result of an employee's doing just one part of a total job?
Increased interdependency
Which of the following is an advantage of specialization of labor:
Increased production
According to the law of diminishing returns, what will happen to the output of a taco truck if it continues to hire employees?
Increases in output will eventually decline
What technique is a company using to combat the disadvantages of labor specialization when it expands job tasks to include other like tasks?
Increasing job scope
A general increase in the prices of goods and services over time
Inflation
Capital and labor are both examples of
Inputs
The production function explains the relationship between
Inputs and outputs
A medium used for borrowing purposes
Instrument
Which of the following is a duty of the Internal Revenue Service:
Issuing tax refunds
Which of the following is an advantage of strong currency:
It boosts consumer confidence
Which of the following is an advantage of weak currency:
It boosts exports
Currency speculation is risky because
It can lead to high inflation
Which of the following is a disadvantage of strong currency:
It creates a drop in export sales
Which of the following is a true statement about the foreign exchange market:
It is a decentralized market
Which of the following is a disadvantage of weak currency:
It makes acquiring foreign companies more expensive.
Which of the following is true of marginal product:
It will eventually decrease as inputs are added
A worker who sorts all of a business's mail every day is performing a task that has
Low depth and low scope
Deducting expenses helps businesses save on taxes by
Lowering taxable income
Marginal cost is inversely related to
Marginal product
If you divide the change in total revenue by the change in quantity sold, you'll find
Marginal revenue
Maximum profit is achieved when
Marginal revenue equals marginal cost
The overall attitude toward the market
Market psychology
The circular flow of income model is a simplified depiction of
Money flowing through a market economy
A manager, whose workers perform specialized job tasks, decides to offer employees cash bonuses for suggesting ways to improve the work environment. Offering bonuses is one way to increase employee
Motivation
Ski instructors in Colorado are examples of workers whose jobs involve specialization by
Natural resources
A right—but not an obligation—to exchange currency at an agreed-upon rate
Option
The tomatoes that a farm produces are considered the farm's
Outputs
Which of the following is a tax on employment:
Payroll tax
Currency fixed to the value of something else
Pegged currency
The basis of a market economy is
Private enterprise
Q = f(L,K) is an equation that expresses the __________ function.
Production
Mom 'n' Pop's Bakery earned $250,000 in profits and paid $52,500 in taxes. Duchess Baking Co. earned $60 million in profits and paid $12.6 million in taxes. What tax structure is in place?
Proportional
In the exchange rate quotation GBP / JPY = 171.93, JPY is the __________ currency.
Quote
The currency on the right side of the slash in an exchange rate quotation
Quote currency
Property taxes most often apply to a business's
Real estate
When lower income groups are more affected by a tax than higher income groups, the tax structure in place is
Regressive
As a management trainee in a large business, Ron spends three weeks working in each of the various departments. This is an example of job
Rotation
A currency considered to be strong and stable
Safe Haven
Which stage of production involves diminishing returns?
Second
Anita is self-employed. Which of the following is a true statement regarding her tax obligations:
She must pay the entire amount of her payroll taxes.
Which of the following taxes is proportional to a point, but ultimately a regressive tax:
Social Security tax
Many different workers are needed to carry out the steps in processing milk before it can be distributed to consumers. This is an example of
Specialization by stage of production or task
Buying, selling, and holding currency in an effort to profit through exchange rate fluctuations
Speculation
The role of government in a market economy is to
Spend the money it receives in tax revenue
An agreement to buy/sell currency at the current exchange rate
Spot
An employee in a gift store is assigned to receive products in the warehouse, while another is assigned to sell the products. This is considered to be specialization by
Stage of production or task
Currency with a generally high value
Strong currency
Which of the following is a true statement regarding excise taxes:
They are built into the overall price of a product
Which of the following is a true statement about sales taxes:
They are levied by state and local governments
Which of the following is true of employees whose jobs have high depth:
They set their own pace
A company is facing negative returns. Which stage of production is the company in?
Third
Which of the following is a reason for pegging currency:
To stabilize currency
If you multiply price by quantity sold, you'll find
Total revenue
In one day of selling pizzas, a pizza parlor takes in $1,500. This is the pizza parlor's
Total revenue
Bricklayers, science teachers, dentists, and truck drivers are examples of specialization of labor by
Trade or profession
Forwards and options are types of
Trading instruments
In the United States, payroll taxes are used as
Trust funds
Currency with a generally low value
Weak currency
Which of the following formulas would you use to find marginal cost:
∆TC ÷ ∆O
