Intro to Business Exam 1

When the Federal Reserve implements a _____, it tightens the money supply by selling government securities or raising interest rates.

contractionary policy

When Raoul Welsh is evaluating the construction industry in terms of interest rates, employment cycles, and the rate of new home building nationwide, he is looking at microeconomics.

False

No true examples of a pure monopoly exist today.

False

Which of the following is an example of a factor of production? economy of scale competition free market labor mass production

labor

Which of the following factors would most likely result in a dramatic change in supply?

a change in the price of raw materials used in the production process

The unemployment rate is the percentage of the total work force that is not working but is:

actively looking for work

Corrine Attlee has always enjoyed cooking more than doing anything else. Atlee has decided to quit her job as a college professor and invest her life savings in starting a restaurant. Attlee is an example of a(n):

entrepreneur

Baby boomers are Americans that are retiring or near-retirement age.

True

Belinda Asher works in a vegetable processing plant and is out of work about six months a year due to the periodic harvest times. She can be described as seasonally unemployed.

True

Business owners and managers have a great deal of control over the internal environment of business, which covers the day-to-day business decisions.

True

Factors of production are common to all productive activities, regardless of the economic system.

True

Monopolistic competition is a market structure in which entry is easy.

True

Which of the following is the best example of a service?

the pleasure you derive from seeing a good play

An increase in the price of crude oil could trigger cost-push inflation.

true

At the equilibrium point, quantity demanded equals quantity supplied.

true

Economics is the study of a society's financial institutions.

true

Freida Bida lost her job as a result of a recession and would be described as experiencing cyclical unemployment.

true

When Congress passes a law to raise individual tax rates, it is creating fiscal policy.

true

The slope of the supply curve is:

upward and to the right

Successful owners and managers must continually study which of the following elements of the environment to remain successful?

Demographic change Social change Evolving economic systems Emerging technology All of the above

In a _____, the factors of production are owned collectively rather than individually, and no incentives to work harder or to produce quality products are provided.

communist economic system

_____ combine the inputs in the production of goods and services for what are intended to be profitable ventures.

entrepreneurs

Demography is the study of how people use their free time, how people integrate their hobbies and their vocations, and how people make their purchase decisions.

false

Legal challenges arising from laws designed to control anticompetitive behavior occur in monopolistic competition.

false

Because the government owns the factors of production in public lands, postal service, and some water resources, Great Britain is considered a(n):

mixed economy

_____ refers to a government's programs for controlling the amount of money in circulation.

monetary policy

The economic system under which basic industries are operated by the government or owned by the private sector under strong government control is called:

socialism

PGE supplies all of the electricity to Portland, Oregon. PGE is an example of:

pure monopoly

When determining the GDP in 2006 for Chile, the economists adjusted the current market prices by 3.1 percent to correct for inflated values. This adjusted GDP is called the nation's _____ GDP.

real

As soon as any nation has experienced two consecutive quarterly declines of its gross domestic product, that nation will be in a(n):

recession

In 2005, the government of Bangladesh spent $8.59 billion on government programs, and had revenues of $5.993 billion. This indicates that Bangladesh like the United States can have a(n):

budget deficit

The implementation of a contractionary policy by the Federal Reserve would result in:

lower inflation

The implementation of an expansionary policy by the Federal Reserve would result in:

lower interest rates

federal reserve system cant

lower taxes

In 1947, the largest brewer in the U.S., Schlitz, had a 4.57 percent share of the domestic market. (Anheuser-Busch was number four in those days). The top ten brewers, including the number one brewer, had 29.29 percent of the domestic market. Over 70 percent of the domestic market was controlled by "all other" brewers. By the year 2001 the largest brewer was Anheuser-Busch, with a 54.76 share of the domestic market. The top ten brewers held 97.04 percent share of the domestic market in 2001. Thus, the brewing industry in the U.S. became a(n) _____ market structure.

oligopoly

n the middle of the desert in Arizona, there are five service stations competing for all the business that exists in this isolated location. When one service station lowers its price on gas, all must follow suit. These service stations are operating in a(n) _____ market structure. Group of answer choices

oligopoly

The _____ measures prices paid by producers and wholesalers for commodities, including raw materials and finished products.

producer price index

In 1993, Purdue Pharmaceuticals of Stamford, Conn. applied for the first in a series of patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. As a result of the patent Purdue was the only company that could sell Oxycontin. Thus, Purdue became an example of which of the following market structures?

pure monopoly

What is the primary difference between a good and a service?

A good is tangible, and a service is intangible.

Which of the following statements about the interaction of demand and supply is true?

At prices below equilibrium, demand exceeds supply.

_____ inflation is triggered by increases in production costs which increase the costs of final goods and services.

Cost-push

The national debt is the:

cumulative total of past national deficits

A key element in capitalism is:

individual ownership of property

Which of the following words best describes the business environment? tangible static dynamic fixed stagnant

dynamic

Some global corporations are large enough to create major changes in the external environment.

false

The Federal Reserve System can print money and raise taxes.

false

When the government raises taxes on consumers and businesses, it is dealing with _____ policy.

fiscal

Avery Lutz quit his landscaping job in Florida and has moved to British Colombia, where he is actively seeking employment in the real estate industry. This is an example of _____ unemployment.

frictional

For the past ten years, Lou Lopez has been a welder for Ford Motor Company. This morning her boss informed her a robot would replace her. Lopez's unemployment is an example of _____ unemployment.

structural

The laborers displaced due to assembly line automation at the textile plant may not have the skills needed to operate the computerized machines that replaced them. This is an example of _____ unemployment.

structural