Quiz Ch1 BA 1301

People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs.

true

The situation in which the average of all prices of products is rising is called inflation.

true

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. Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin. Purdue's patents acted as a(n) _____ and prevented Endo from entering the market.

barrier to entry

A "mixed economy" is an economic system that:

combines private and government ownership of the factors of production

For most agricultural products, farmers produce homogeneous products, sell them to a common market, and generally cannot affect prices greatly. This is an example of which kind of market structure?

monopolistic competition

As a factor of production, capital includes money.

false

It takes four consecutive quarters of decline in the GDP for economists to consider the economy to be

false

The most basic measure of economic growth is the:

gross domestic product

Which of the following is an example of a factor of production?

labor

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

lower interest rates

Within the music industry, four companies (UMG, Sony-BMG, EMI, and Warner) control 90 percent of the music you hear. The music industry operates in a(n) _____ market structure.

oligopoly

_____ is the money a company earns from providing services or selling goods to customers.

profit

When the price of gasoline rises by 40 percent, but your salary remains the same, it is an example of a decline in your

purchasing power

Which of the following is NOT an example of a good that would be sold in a department store?

the advice of a wedding planner

Market equilibrium is:

the point at which quantity supplied equals quantity demanded