What is the benefity of a natural monopoly?

it uses resources more efficiently

What is one reason the U.S. government regulates US car manufacturing?

to offset the pollution cause by cars

A market failure occurs when a free market is unable to

distribute resources efficiently

If a sole proprietorship fails, the owner of the business

must pay all the business debts

What happens when the price of Item A increases?

Consumers buy the cheaper Item B as a subsitute for Item A

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End of Year Review - Economics

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Questions 15

Answers

1
To offset rising benefit costs, many employers
hire independent contractors
close one day a week
fire immigrant workers
cut wages by 50 percent
2
What is the benefity of a natural monopoly?
It takes advantage of market power
it uses resources more efficiently
it keeps the quantity of goods low
it keeps the quality of goods high
3
What is one reason the U.S. government regulates US car manufacturing?
to keep US car prices competitive
to protect market competition
to keep out foreign made cars
to offset the pollution cause by cars
4
What is one reason government gives farmers subsidies?
to keep food supplies up
to help people forget past shortages
to increase the cost of production
to help farmers pay back debts
5
Hot chocolate is a luxury which means it is...
elastic
inelastic
6
A market failure occurs when a free market is unable to
meet government regulations
provide open opportunity
encourage innovation
distribute resources efficiently
7
The city airport open a new runway. Neighbors complain about the noise. Noise is an example of?
market failure
positive externality
free rider problem
negative externality
8
What typically happens to the inflation rate when unemployment falls to a very low level?
it falls
it rises
it stays the same
it will rise or fall but not with the unemployment rate
9
People use mortgages to buy
college supplies
automobiles
technology
homes
10
Which one is NOT a factor of production?
work
labor
capital
land
11
Which cause of inflation occurs when the demand for goods exceeds the existing supply?
changes in aggregate supply
Growth in the money supply
changes in aggregate demand
growth in interest rates
12
If a sole proprietorship fails, the owner of the business
must pay all the business debts
must wait 10 business days before starting another business
must pay off the investors
has to do a lot of legal work to close the business
13
If prices rise but income stays the same, what is the effect on the quantity demanded?
more good are bought
fewer goods are bought
quantity demanded increases
demand stays the same
14
What happens when the price of Item A increases?
Consumers buy the cheaper Item B as a subsitute for Item A
the substitues for Item A also increase in price
Item A becomes more popular
Consumers buy Item A even if they dont want it
15
How are natural monopolies helpful to the public?
they have high quality goods
they use resources efficiently
they have market power
they keep quantities low

End of Year Review - Economics Flashcards | StudBud