busn chapter 1

In perfect competition, there is:

a large number of sellers producing nearly identical products

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

a person's age

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

Monetary policy

Curtiss Anaya is planning to sell kites on the beach this summer to pay for next year's school expenses. _____ refers to the potential that Curtiss will lose money and waste his time and end up at the end of the summer with not enough money to cover his expenses.

Risk

Which of the following businesses provides its customers with a good?

bicycle manufacturer

An economic system based on complete freedom of trade and little, if any, government control is known as:

capitalism

Understanding the external business environment requires marketers to be aware of:

changes in the law which impact how business is conducted

The average price of construction materials increased by 8.1 percent in 2005. The head of the Home Builders Association said it was due totally to increases in lumber, metal, and labor costs. The 8.1 percent increase is probably an example of:

inflation

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

labor

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

lower interest rates

Martha Maguire recently was laid off from her telemarketing job for a large catalog retailer. Each January, Maguire is laid off as soon as the Christmas season is over. She will be hired back sometime during the summer. In terms of unemployment, Maguire is a good example of _____ unemployment.

seasonal

A(n)_____ occurs if a country's total expenditures are higher than the revenues received from the taxes it gathers.

federal budget deficit

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

the pleasure you derive from seeing a good play

In 2005, more than two-thirds of population of Haiti were not working, but were actively seeking employment. This 66.67 percent represents the nation's:

unemployment rate

The slope of the supply curve is:

upward and to the right

Last year, a mother in a small African nation could buy a pound of flour for the U.S. equivalent of $1.30. Six months ago, an identical pound of flour costs $3.40. Today she would need $5.60 to buy that pound of flour. This example of the general upward movement of prices is called:

inflation

In a large metropolitan market, it is relatively easy to set up a law office. The ease of entry explains why you will find hundreds of lawyers listed in the New York City phone book. Each lawyer is a close substitute for another but with slight differences. Which of the following market structures best describes the one in which lawyers operate?

monopolistic competition

Think about all the restaurants that are located near your campus. You have probably noted some new ones appearing, and others closing because of lack of business. What type of competition exists in the restaurant business?

monopolistic competition

Thom Nielssen owns 500 acres of woodland. His forest is an example of which factor of production?

natural resources

An industry in which a few firms produce most or all of the output of a product and in which large amounts of capital are needed is called a(n):

oligopoly

In a(n) _____, a few sellers can exert substantial control over prices.

oligopoly

Demography is the study of:

people's vital statistics

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

The _____ GDP takes inflation into account and uses adjusted market prices.

real

A decline in real GDP that lasts for two consecutive quarters is called a(n):

recession

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

A good is tangible, and a service is intangible.

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

An expectations about future prices

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

The _____ of any country is measured by the output of goods and services people can buy with the money they have.

standard of living

Iris Souza started the summer with $30. She took $10 and made signs for her dog walking service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. What was Souza's profit for her summer job?

$125

_____ is the quantity of a good or service that people are willing to buy at various prices.

Demand

The government does not consider full employment to mean 100 percent of its citizens are employed because:

all of the above conditions can and do exist

Which of the following factors would most likely result in a shift in the supply curve?

an increase in the price of raw materials used in the production process

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

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

With a communist economy system:

consumers can expect a mixed economic reaction there are strong incentives for workers basic industries such as railroads and utilities are owned by government, while other industries are owned by the private sector there is complete freedom of trade none of the above is true

One of the reasons for the growing inflation rate in Argentina is due to increases in production costs of goods and services which occurred as a result of a decline in a suitable labor force. This would be an example of a _____ inflation.

cost-push

When the economy is in a recession, many companies must lay off workers, which causes _____ unemployment

cyclical

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

producer price index

Hudson Kling mows yards during the summer. Which of the following is an example of revenue for Kling?

the $10 tip Mrs. Pierre gave him for doing such a fine job of mowing her yard