FINAL ECO.

The government might be more likely to allow a corporation to form a conglomerate that to allow it to horizontally merge with another company why ?

To be able to sell and make more money then having the companies compete against and lose money

n which of the following situations would a business be wise to shut its factory?

When fixed costs exceed revenue.

If a business owner becomes aware of a shortage in the market for the good or service he or she produces, he or she is likely to

increase supply more and raise the price.

What is a disadvantage of central planning?

lack of economic efficiency

The increasing age of the American population is an example of how

changing demographics can cause demand shifts.

In economics, the concept of demand is defined as the desire to own something

combined with the ability to pay for it.

If Capeland switches from producing 0 watermelons to producing 18 million tons of watermelons, what does it give up?

6 million pairs of shoes

Which of the following is a benefit that a business is likely to attain from purchasing new equipment?

Increased productivity

What role does the profit incentive play when there is a surplus of a good?

It encourages producers to lower their prices.

If the economy were in the contracting phase of the business cycle, how might that affect your ability to find work?

It might be more difficult to find work because businesses would be less likely to hire new employees.

Which of the following explains what typically happens when a market is thrown into disequilibrium?

It moves toward a new equilibrium point as a result of the laws of supply and demand.

What distinguishes an authoritarian government from a democratic one?

It requires strict obedience from its citizens.

In general, a decrease in consumer income will have what effect on demand for normal goods?

It will cause demand to fall.

A sales clerk represents which factor of production?

Labor

What are the three factors of production?

Land, labor, capital

Why would a federal government decision to increase spending be a matter of macroeconomic policy?

Macroeconomics concerns the overall performance of the economy.

Which of the following typically happens as prices for a good or service rises?

More suppliers enter the market.

Which of the following would be an example of a fixed cost on a farm?

Mortgage on the land

Which of the following explains why a city fireworks display on the Fourth of July is provided as a public good?

Nonpayers cannot be prevented from seeing the fireworks.

What are economists referring to when they say "choosing is refusing"?

Opportunity cost

Why does demand generally become more elastic over time?

People have time to find substitutes and change behaviors.

What action by the government would most likely increase the supply of gasoline in the short term?

Reduced taxes on the refining of gasoline

Which of the following is the best example of substitute for movie tickets?

Rentals of on-demand programming

Why is there scarcity even in an affluent country like the United States?

Resources are limited but wants are unlimited.

Show how cooperatives and nonprofits are different by identifying who benefits from each type of organization.

Say that someone is making you buy something that helps you and you need it but someone is doing that for free, they just want to help. You benefit because someone is helping for free

Which of the following courses of action makes the MOST sense in today's world for manual laborers who have been replaced by robots?

Seek training in the latest technology related to a type of work they enjoy.

Which of the following is an explanation of what Adam Smith called the "invisible hand" of the marketplace?

Self-interest, competition, and incentives promote smoothly running markets.

Which of the following represents a difference between socialism and communism?

Socialism may allow some free market practices; communism does not.

Which of the following is the best argument against the rationing system used in the United States during World War II?

Some people could still get as much as they wanted through the black market.

Which of the following describes the benefits of specialization in a free market?

Specialization leads to efficient use of capital, land, and labor.

The law of supply declares which of the following?

Supply falls as price falls.

A country has two main products: hats and grapes. The country decides to start making more and more hats and fewer and fewer grapes. Why does the opportunity cost of making hats increase as more and more hats are produced?

The best resources for producing grapes are least suited to making hats.

Which of the following BEST illustrates the involvement of the U.S. government in the marketplace today?

The government requires manufacturers to issue warnings that come with new microwave ovens.

What does it mean to say that supply is unitary elastic?

The percentage change in price and in supply are the same.

In 1991, for a short time, Iraq invaded Kuwait and seized its oil fields. During that time, what impact, if any, did the invasion have on Iraq's production possibilities frontier?

The production possibilities frontier shifted to the right.

Which of the following government actions would increase the supply of cars in the United States?

The removal of car mileage regulations

A change in demand for one good will have what effect on its complement?

The same effect

If a student volunteers at a food pantry on Fridays after school, which of the following might be a negative externality?

The student's parents have to drive him or her to the food pantry.

Which of the following explains why agricultural price supports are inconsistent with free-market principles?

They allow government to influence farmers' decisions about what and how much to produce.

What is the main economic benefit of public disclosure laws?

They ensure that consumers can make informed buying decisions.

How do subsidies help producers?

They increase revenues.

Why are entrepreneurs important to the economy?

They promote economic growth.

How do self-interest and competition affect free markets?

They work together to regulate supply, demand, and prices.

Suppose demand for a product is highly elastic. What will likely happen to a company's total revenue if it raises the price of that product?

Total revenue will fall.

What are the three basic economic questions all societies must answer?

What goods and services should be produced, how should they be produced, and who will consume them?

In the free market, firms meet consumer demand through a price-based system that ensures that land, labor, and capital go to the uses consumers value most highly. This explains why in a free market resources

are allocated efficiently.

Shana continues to buy a necessary medicine even though prices for the medicine rise sharply. Shana's behavior shows how

demand for necessities is inelastic.

In the aftermath of a hurricane, clean water became scarce, and the price of bottled water skyrocketed. This is an example of the role of price in

distributing scarce resources efficiently.

Key advantages of free market economic systems include

economic efficiency, economic freedom, economic growth, and variety of goods.

An economy that maximizes its scarce resources and can deliver the right goods in the right quantity to the right people at the right price has achieved which economic goal?

efficiency

Which basic economic goal is most easily achieved in a traditional economy?

equity

A government hiring freeze would directly impact what aspect of the circular flow model of a mixed economy?

factor market

Market failure occurs whenever

free markets fail to distribute resources efficiently.

Which of the following is typical of a centrally planned economy?

government control

Government involvement in a modern economy is generally defended because

governments are more able than firms to meet some needs and wants of society.

What might be the economic benefit of the government providing a public good rather than the private sector?

greater efficiency in providing the good

If the cost of gasoline increases sharply and continues to rise, how does this development affect the demand curve for cars?

he demand curve for gas-guzzlers shifts to the left, and the demand curve for fuel-efficient cars shifts to the right.

"Ceteris paribus" means demand will change when price changes

if other market factors remain constant.

The profit motive drives business owners to

make sure their firm is operating at its highest level of efficiency.

In general, it is a bad move for a company to produce more of a good or service if, by doing so,

marginal cost exceeds marginal revenue.

A basketball coach is performing a cost/benefit analysis in order to determine if more hours of practice would help the team score more points. The coach's action is an example of

marginal thinking.

Private property ownership and some government regulation of the economy are basic characteristics of which economic system?

mixed economy

The phrase "guns or butter" expresses the idea that

overnment decisions involve trade-offs between military and domestic needs.

In determining the optimal level of output, a firm should aim for the

point of maximum profitability for the company.

Suppose Congress passed a bill funding research into alternative sources of energy. What best describes this government action?

promoting innovation and invention to help maintain technological advantage

The due process clauses of the Constitution

protect Americans' private property rights.

To increase marginal return, a company might consider

purchasing more machinery.

Juanita has noticed that the price of bagels has gone up. Because of this, she has decided to buy a less expensive yogurt every morning for her breakfast. This is an example of the

substitution effect.

An entrepreneur can BEST be characterized as someone who

takes risks in order to acquire profits.

An opportunity cost is

the best alternative that is given up when a decision is made.

How is the economic right to start a sole proprietorship connected to the economic responsibility of starting a sole proprietorship ?

the economic right is different by the resposibility by having the doing to actually do and keep up with paymenets.Everyone has the economic right but can't do the economic resposibilty

Suppose the price of a good rises. In general, how does the percentage of your budget you spend on that good affect the elasticity of your demand for goods overall?

the higher the percentage of your budget a good represents, the more elastic your overall demand.

If Tino responds to a sharp increase in his transportation costs by buying fewer clothes, he is demonstrating

the income effect.

What ethical responsibilities do general partners have to each other ?

they contribute to launching the partnership.They share proportionately in the rewards from the business.

Which is an example of why the U.S. government makes transfer payments?

to support retired people

Because of scarcity, every decision involves a

trade-off.

What is critical in determining whether something is produced as a public good?

whether the benefits to society are greater than the total cost

The distribution of income received in the form of rent, wages, or interest is the main factor that determines

who consumes goods and services.

Which of these is an example of restrictions that government places on the use of business property?

zoning laws

Do higher prices lead to increased revenues for a company?

Sometimes

A new film company's decision to locate its operations in the film-production center of Southern California is most similar to which of the following?

A firm locating close to the inputs of its product

Which of the following is an example of imperfect information?

A firm receives faulty data from stores on consumer demand for its product.

Which factor would shift the supply curve for ethanol in the United States to the right?

A trade agreement with Brazil opening U.S. markets to imported ethanol

Consider each of these business activities. For which do you think supply would be most elastic in the short term?

Baking cupcakes

Which of the following describes a way that the minimum wage and rent control are similar?

Both involve government intervention in the marketplace.

How were the Soviet Union and communist China similar?

Both suffered from severe economic problems as a result of central planning.

How has the Internet dramatically reduced search costs?

By eliminating the need to travel to stores to shop.

A shift in the demand curve has led to a shortage of rice. How can this problem be resolved most quickly?

By increasing the price of rice

How would a bicycle producer likely react to a shortage of its product?

By raising prices and increasing supply.

What is the effect of lower input costs?

Decreased marginal cost

How is gross domestic product used to monitor the business cycle?

GDP indicates whether the nation's economy is expanding or contracting.

Marty just finished creating a market demand schedule for his hardware store. Which of the following is he most likely trying to determine?

How many tools are sold to all consumers in the market at various prices.

What does a firm's supply schedule show?

How price changes affect supply for a market

How does innovation promote economic growth?

by introducing new goods and services that create new markets

How do patents act as an incentive to technological innovation?

by protecting a patent holder's right to profit from his or her creativity

In a free market system, the concept of consumer sovereignty means that

consumers have the power to decide through their actions what goods and services get produced.

According to the law of demand, when the price of pizza goes up,

consumers will buy less pizza.