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Exam 2: Understanding How Economics Affects Business

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Question 121

Multiple Choice

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One of the greatest concerns associated with capitalism is that:

A) It is not very successful at creating wealth.
B) Some businesspeople may let greed guide their behavior.
C) The amount of economic freedom enjoyed by consumers is very limited.
D) Producers are unlikely to supply the goods and services that consumers value the most.

E) None of the above
F) B) and C)

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Question 122

Multiple Choice

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An oligopoly is a market that is characterized by:

A) One firm that totally dominates the supply of the product.
B) A large number of small firms all producing very similar products.
C) A few large sellers who dominate the market.
D) Several small firms that compete primarily by differentiating their products.

E) B) and C)
F) All of the above

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Question 123

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A depression is a severe recession that is often accompanied by deflation. Level of Learning 1: Knowledge of key terms

Macroeconomics is the economic perspective that looks at the operation of a nation's economy as a whole. Level of Learning 1: Knowledge of key terms

Which of the following statements most accurately identifies a limitation of the free-market economic system?

The consumer price index (CPI)measures what is happening to prices at the wholesale level. Level of Learning 1: Knowledge of key terms

Global economics and politics have no significant influence on businesses in the United States. Level of Learning 1: Knowledge of key terms

As indicated by the Making Ethical Decisions box,activities that lead to corruption can destroy free economic opportunities because they interfere with the right to freely compete. Level of Learning 3: Application of principles

Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a specific time. Level of Learning 1: Knowledge of key terms

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions. Level of Learning 1: Knowledge of key terms

Jorge Martinez is a well-educated entrepreneur who operated a small business in his home country of Florentina.At the encouragement of his American relatives,Jorge recently immigrated to the United States and applied for U.S.citizenship."In Florentina,tax rates were very high," Jorge complained."The government used the taxes I paid to finance all sorts of social programs to help the less fortunate.While this is a noble goal,it has really undermined the profit incentive of individuals such as me.I really feel that these high taxes have stifled economic growth." Jorge's comments illustrate the reason many socialist countries are experiencing a(n) :

A major premise of a socialist system is:

Fiscal policy involves the federal government's efforts to stabilize the economy by increasing or decreasing taxes and/or government spending. Level of Learning 1: Knowledge of key terms

Economics is the study of how a society _________________.

A command economic system is characterized by:

Workers in nations who are strong proponents of communism work much harder and longer hours. Level of Learning 2: Understanding of concepts and principles

Robin just graduated from college and is seeking her first job.She received a degree in engineering at a prestigious university.Robin has several leads and has heard that the market for engineers is very strong,so she is convinced that she should locate a good job in the near future.Robin's current situation is an example of structural unemployment. Level of Learning 3: Application of principles

Which of the following would be a topic emphasized in a microeconomics class?

The measure used to report price changes at the wholesale level is the:

__________ is a condition in which the price increases are slowing.