Econ MT 41-60

For most products and services, increased price results in a. demand for fewer products. c. reduced demand for substitutes. b. demand for more products. d. increased demand for complements.

A. Demand for fewer products

Which of the following is NOT a nonprofit organization? a. multinational c. chamber of commerce b. producer cooperative d. labor union

A. Multinational

The local chamber of commerce works to a. promote the welfare of its members and the community. b. earn dividends for members. c. protect its members from consumer complaints. d. aid member companies in negotiating with labor unions.

A. Promote the welfare of its members and the community

All of the following are examples of the government playing a direct role in the economy EXCEPT a. public utility regulation. c. court systems. b. police and fire protection. d. libraries.

A. Public Utility Regulation

A demand schedule shows a. an upward-sloping curve that illustrates the positive relationship between price and quantity demanded. b. a listing of the various quantities demanded of a particular product at all prices that might prevail in the market. c. the fluctuations in demand that occurred over a specified period of time. d. the fluctuations in demand scheduled to occur over the following year.

B. A listing of the various quantities demanded of a particular product at all prices that might prevail in the market.

Non-profit organizations may a. issue stock. b. pay dividends. c. provide goods and services to members. d. pay income taxes.

C. Provide goods and services to members.

When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product is a. inelastic. c. unit elastic. b. elastic. d. complementary.

C. Unit Elastic

A merger of corporations involved in different steps of manufacturing or marketing is known as a a. multinational merger. c. vertical merger. b. horizontal merger. d. conglomerate.

C. Vertical Merger

An increase in the price of cameras results in a decrease in the demand for film. The two products are a. substitutes. c. unrelated. b. demand elastic. d. complements.

D. Complements

Consumers' willingness to replace a costly item with a less costly item is an example of a. the substitution effect. c. demand elasticity. b. the income effect. d. complements.

A. The substitution effect

An increase in the price of milk causes a decrease in the demand for cereal. The two products are a. substitutes. c. unrelated. b. complements. d. demand elastic.

B. Complements

When a customer's need for a product is not urgent, demand tends to be a. inelastic. c. complementary. b. elastic. d. unit elastic.

B. Elastic

Because a modest price increase has little or no effect, the demand for the product is a. complementary. c. elastic. b. inelastic. d. unit elastic.

B. Inelastic

This regulates the sale of stock in a corporation. a. labor unions c. stockbrokers b. Securities and Exchange Commission d. chamber of commerce

B. Securities and Exchange commission

Unlike a general partnership, in a limited partnership a. all partners share equal financial responsibility for the firm's decisions. b. the inactive partner has limited liability for the business's debts. c. the partners must pay special business taxes. d. the business does not end with the death of a partner.

B. The inactive partner has limited liability for the business's debts

Advertising, fashion trends, and new product introductions serve to a. create consumer needs. c. create consumer demand. b. increase income effectiveness. d. minimize the income effect.

C. Create consumer demand

An advantage of a corporation is that a. owners pay fewer taxes than owners of other forms of business. b. the business is subject to little government regulation. c. owners have limited liability for debt. d. owners have direct and immediate control over daily management of the business.

C. Owners have limited liability for debt

In its direct role as an economic organization, American government a. regulates public utilities. b. acts as an umpire to make sure the market operates smoothly. c. owns and manages public utilities. d. makes grants to people in the form of Social Security.

C. Owns and manages public utilities

In a general partnership, a. the business continues even if one partner dies. b. partners must pay specific business taxes. c. partners usually draw up legal papers called articles of partnership. d. partners are only liable for the business's debt up to the amount of their investment.

C. Partners usually draw up legal papers called articles of partnership

A business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred? a. A sharp increase in revenues demonstrated the elasticity of the product. b. A small increase in revenues demonstrated the unit elasticity of the product. c. A dramatic decline in revenues demonstrated the elasticity of the product. d. A dramatic decline in revenues demonstrated the inelasticity of the product.

D. A dramatic decline in revenues demonstrated the inelasticity of the product