Unit 4 Test

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When an unsettling international event occurs, it can cause traders to feel fearful and buy only currencies that are considered strong and stable. These currencies are often called

"Safe havens"

A restaurant's total cost of selling eight hamburgers is $10.00. Its total cost of selling nine hamburgers is $11.00. What is the marginal cost?

$1.00

Your total revenue for one product is $10.00. Your total revenue for two products is $20.00. What is your marginal revenue?

$10.00

If a company's marginal revenue is always $6.00, what does the marginal cost have to be for the company to earn the maximum amount of profit?

$6.00

A factory produces 20 parts with two employees. With three employees, it produces 45 parts. What is its marginal product?

25 parts

Which of the following is an example of a "leakage" in the circular flow of income model:

A business retaining earnings to pay off debt

Which of the following examples best exhibits a job task with high depth and low scope:

A manager selects the products to be sold for a business and selects the employees who will work in each business activity

Teresa received a raise this year, so she will pay taxes at a higher rate than she did last year. This is an example of

A progressive tax structure

An exchange rate indicates one currency's value in relation to

Another currency

To increase in value

Appreciate

Ratio of imports to exports

Balance of trade

In the exchange rate quotation USD / EUR = 0.73, USD is the __________ currency.

Base

The currency on the left side of the slash in an exchange rate quotation

Base currency

When tax revenue is not enough to cover government expenditures, the government must

Borrow funds

A state of having more expenditures than revenues

Budget deficit

An accurate statement concerning labor specialization would be that it

Can be of different types

The use of robots in assembly-line work is a form of specialization involving

Capital goods

A government's main monetary authority

Central bank

Governments participate in the foreign exchange market through their

Central banks

Which of the following is a political influence that can affect currency value:

Change in executive leadership

The biggest traders of currency on the foreign exchange market are

Commercial and investment banks

Corporations participate in the foreign exchange market so that they can

Complete transactions with foreign businesses smoothly

What may occur when employees do not see the outcome of their part in the whole job process?

Decreased pride in work

Which of the following is most likely to result from specialization of labor:

Decreased training time

To lose value

Depreciate

A bakery hires more employees and, at first, the number of baked goods it produces rises quite quickly. However, as more and more employees are hired, it starts to slow down. This is an example of the law of __________ returns.

Diminishing

An exchange rate quotation that uses domestic currency as the base currency is known as a(n) __________ quotation.

Direct

A person who sells casual sportswear and can also sell formal clothing is an example of

Ease of transferring to other like jobs

Which of the following is an example of an expenditure for which a state/local government uses tax revenue:

Education

Which of the following is a true statement regarding an employer's tax obligations:

Employers pay a matching amount of employees' Social Security and Medicare taxes

How do societies that specialize in producing certain goods obtain the other goods that they need?

Exchange

The measure of one currency's value in terms of another currency

Exchange rate

With each employee that a company hires, its marginal product is greater. Which stage of production is this company in?

First

Pegged currency is also known as __________ currency.

Fixed

The most goods and services are produced when people use their skills and abilities to do the jobs

For which they are best suited

A contract to buy/sell currency at an agreed-upon rate

Forward

Almost every major economy in the world has __________ currency.

Free-floating

Currency with a value determined by the foreign exchange market

Free-floating currency

Which of the following economic factors strengthens currency value:

High interest rates

A business's profits are subject to __________ taxes.

Income

Increased repetition of the same job task can result in

Increased employee boredom

What is a negative result of an employee's doing just one part of a total job?

Increased interdependency

Which of the following is an advantage of specialization of labor:

Increased production

According to the law of diminishing returns, what will happen to the output of a taco truck if it continues to hire employees?

Increases in output will eventually decline

What technique is a company using to combat the disadvantages of labor specialization when it expands job tasks to include other like tasks?

Increasing job scope

A general increase in the prices of goods and services over time

Inflation

Capital and labor are both examples of

Inputs

The production function explains the relationship between

Inputs and outputs

A medium used for borrowing purposes

Instrument

Which of the following is a duty of the Internal Revenue Service:

Issuing tax refunds

Which of the following is an advantage of strong currency:

It boosts consumer confidence

Which of the following is an advantage of weak currency:

It boosts exports

Currency speculation is risky because

It can lead to high inflation

Which of the following is a disadvantage of strong currency:

It creates a drop in export sales

Which of the following is a true statement about the foreign exchange market:

It is a decentralized market

Which of the following is a disadvantage of weak currency:

It makes acquiring foreign companies more expensive.

Which of the following is true of marginal product:

It will eventually decrease as inputs are added

A worker who sorts all of a business's mail every day is performing a task that has

Low depth and low scope

Deducting expenses helps businesses save on taxes by

Lowering taxable income

Marginal cost is inversely related to

Marginal product

If you divide the change in total revenue by the change in quantity sold, you'll find

Marginal revenue

Maximum profit is achieved when

Marginal revenue equals marginal cost

The overall attitude toward the market

Market psychology

The circular flow of income model is a simplified depiction of

Money flowing through a market economy

A manager, whose workers perform specialized job tasks, decides to offer employees cash bonuses for suggesting ways to improve the work environment. Offering bonuses is one way to increase employee

Motivation

Ski instructors in Colorado are examples of workers whose jobs involve specialization by

Natural resources

A right—but not an obligation—to exchange currency at an agreed-upon rate

Option

The tomatoes that a farm produces are considered the farm's

Outputs

Which of the following is a tax on employment:

Payroll tax

Currency fixed to the value of something else

Pegged currency

The basis of a market economy is

Private enterprise

Q = f(L,K) is an equation that expresses the __________ function.

Production

Mom 'n' Pop's Bakery earned $250,000 in profits and paid $52,500 in taxes. Duchess Baking Co. earned $60 million in profits and paid $12.6 million in taxes. What tax structure is in place?

Proportional

In the exchange rate quotation GBP / JPY = 171.93, JPY is the __________ currency.

Quote

The currency on the right side of the slash in an exchange rate quotation

Quote currency

Property taxes most often apply to a business's

Real estate

When lower income groups are more affected by a tax than higher income groups, the tax structure in place is

Regressive

As a management trainee in a large business, Ron spends three weeks working in each of the various departments. This is an example of job

Rotation

A currency considered to be strong and stable

Safe Haven

Which stage of production involves diminishing returns?

Second

Anita is self-employed. Which of the following is a true statement regarding her tax obligations:

She must pay the entire amount of her payroll taxes.

Which of the following taxes is proportional to a point, but ultimately a regressive tax:

Social Security tax

Many different workers are needed to carry out the steps in processing milk before it can be distributed to consumers. This is an example of

Specialization by stage of production or task

Buying, selling, and holding currency in an effort to profit through exchange rate fluctuations

Speculation

The role of government in a market economy is to

Spend the money it receives in tax revenue

An agreement to buy/sell currency at the current exchange rate

Spot

An employee in a gift store is assigned to receive products in the warehouse, while another is assigned to sell the products. This is considered to be specialization by

Stage of production or task

Currency with a generally high value

Strong currency

Which of the following is a true statement regarding excise taxes:

They are built into the overall price of a product

Which of the following is a true statement about sales taxes:

They are levied by state and local governments

Which of the following is true of employees whose jobs have high depth:

They set their own pace

A company is facing negative returns. Which stage of production is the company in?

Third

Which of the following is a reason for pegging currency:

To stabilize currency

If you multiply price by quantity sold, you'll find

Total revenue

In one day of selling pizzas, a pizza parlor takes in $1,500. This is the pizza parlor's

Total revenue

Bricklayers, science teachers, dentists, and truck drivers are examples of specialization of labor by

Trade or profession

Forwards and options are types of

Trading instruments

In the United States, payroll taxes are used as

Trust funds

Currency with a generally low value

Weak currency

Which of the following formulas would you use to find marginal cost:

∆TC ÷ ∆O


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