Perfect competition is when

many producers produce identical products with price set by supply/demand

an illegal market for goods and services

Why are goods/services like electricity, clean water, and sanitation considered a public good?

They are something everyone uses.

government rules and regulations are removed

What is the economic purpose of market regulation?

to influence the economic behavior of individuals and firms

Which of these is the best example of an externality?

You enjoy looking at your neighbor's garden.

a good or service that is used in the place of another

2 or more owners who share risks & profit

What is eminent domain?

The right of a govt body to take ownership of real estate for public use

Independent business owner being part of larger parent company

Which of these situations best illustrates market equilibrium?

The amount of soap made matches amount of soap people want to buy.

What is an oligopoly?

When a few large businesses dominate the market

rules set by the government to influence business behavior

Multinational corporations:

invest and/or operate in more than one country

What is monopolistic competition?

many companies selling similar but not identical products

The equilibrium price is the price at which

demand and supply curves intersect.

What is the usual result of setting a price ceiling on rents?

More people want to rent apartments than are available to rent.

a minimum price set by government for a good or service

A non-profit organization is one that..

Do not have the purpose of earning profits

the amount of money received when doing business

Business Type: Cooperative… means?

Organization which is owned and ran jointly by its members

the percentage of the population lives below the poverty line

are used by everyone and not always provided by markets

According to the law of supply, what happens as price increases?

The quantity supplied increases.

The purpose of rationing during World War II was to ensure that

everyone could get essential scarce goods.

How do economists think private ownership most affects property maintenance?

It is helpful because owners have an incentive to care for the property.

Which of the following best describes a monopoly?

A company that completely dominates a particular industry

studbud

Economics Unit 2 Pre-Test

35 termsStudBud Administration96 plays

Imported from external platform

Flashcards35 cardsFPractice quizPHost liveL

Questions 35

Answers

1
The degree to which the quantity demanded responds to changes in price is called
elasticity.
revenue.
schedule.
utility.
2
Perfect competition is when
the government takes private property for public use
the percentage of the population lives below the poverty line
many producers produce identical products with price set by supply/demand
two companies combine into one
3
A black market is
a maximum price set by government for a good or service
rules set by the government to influence business behavior
a minimum price set by government for a good or service
an illegal market for goods and services
4
Why are goods/services like electricity, clean water, and sanitation considered a public good?
They only work when it’s not too hot or there is not a giant ice storm.
There is not enough supply for these goods, so people do not demand them.
Not enough demand for these goods, no company/firm wants to supply them.
They are something everyone uses.
5
Deregulation is when
government rules and regulations are removed
many producers produce identical products with price set by supply/demand
two companies combine into one
the government takes private property for public use
6
What is the economic purpose of market regulation?
to assert federal economic power over the states
to influence the economic behavior of individuals and firms
to improve the United States' comparative advantage in foreign trade
to translate widely accepted economic traditions into law
7
Which of these is the best example of an externality?
You enjoy looking at your neighbor's garden.
Your new bicycle goes faster than you expected.
You decide to stop snacking between meals.
Your shoe store stops selling your favorite style.
8
Which of these is a common resource?
bread
pencils
shoes
roads
9
Which of the following questions would be most helpful in determining the market structure of a specific market?
How are the corporations organized?
How similar are the products?
How many people want to buy?
How far are goods shipped?
10
Quantity demanded moves along the demand curve in response to changes in
price.
expectations.
preferences.
income.
11
A subtitute good is
a good or service that is used in the place of another
the amount of money received when doing business
as price increases, quantity demanded decreases
as price increases, quantity supplied increases
12
Partnership:
1 owner who takes all the risks & profit
2 or more owners who share risks & profit
Person who takes risk to sell goods/service search of profit
Authorized by law regardless of # of owner, share profit
13
What is eminent domain?
The right to sell property to anyone
The right of a property owner to refuse land to the government
The right of a govt body to take ownership of real estate for public use
The right of equitable redemption
14
Business Franchise
nonprofit performing some kind of economic activity for benefit of members
business org recognized by law; seperate entity with rights of individual
business org recognized by law; seperate entity with rights of individual
Independent business owner being part of larger parent company
15
The law of demand states that as quantity demanded decreases
price increases.
quality decreases.
wages decrease.
production increases.
16
Which of these situations best illustrates market equilibrium?
The price of soap does not vary much from week to week.
Soap production ensures a good profit for the manufacturer.
Everyone who wants or needs soap can easily afford to buy it.
The amount of soap made matches amount of soap people want to buy.
17
What is an oligopoly?
When one business controls the market
When all businesses sell the same thing
When businesses try to make their product unique
When a few large businesses dominate the market
18
Regulation is
rules set by the government to influence business behavior
a minimum price set by government for a good or service
an illegal market for goods and services
a maximum price set by government for a good or service
19
Multinational corporations:
invest and/or operate in more than one country
cannot exist without global markets
are the merger of companies in two or more countries
seek to maximise profit margins in all subsidiary operations
20
A sole proprietorship is a business owned by:
a corporation
a franchise
one person
two or more people
21
What is monopolistic competition?
a company selling different products under different names
a very few companies selling identical products
a company selling identical product under different names
many companies selling similar but not identical products
22
The equilibrium price is the price at which
consumers start reducing demand.
demand and supply curves intersect.
producers' total revenue is highest.
neither demand nor supply will shift.
23
What is the usual result of setting a price ceiling on rents?
Construction jobs increase with the building of new apartment buildings.
People can find apartments but cannot afford to rent them.
More people want to rent apartments than are available to rent.
Houses are broken up into apartments to meet the demand.
24
A price floor is
a minimum price set by government for a good or service
rules set by the government to influence business behavior
an illegal market for goods and services
a maximum price set by government for a good or service
25
A non-profit organization is one that..
Sells products/services that requires payment
Do not have the purpose of earning profits
An organization that has vested interest in a company
Uses funds to acquire natural and human resources
26
Revenue is
as price increases, quantity demanded decreases
as price increases, quantity supplied increases
the amount of money received when doing business
a good or service that is used in the place of another
27
Business Type: Cooperative… means?
Organization where they suffer huge loses
A capitalist controlled business
Organization which is owned and ran jointly by its members
Organization where the community makes the rules
28
A merger is when
many producers produce identical products with price set by supply/demand
the government takes private property for public use
a percentage of the population lives below the poverty line
two companies combine into one
29
The poverty rate is
many producers produce identical products with price set by supply/demand
the percentage of the population lives below the poverty line
two companies combine into one
the government takes private property for public use
30
Public goods
a business where products are unique & single producer controls the market
are where many producers provide similar but varied products
are used by everyone and not always provided by markets
are a business owned by the public
31
According to the law of supply, what happens as price increases?
The supply curve shifts to the left.
The quantity supplied increases.
The quantity supplied decreases.
The supply curve shifts to the right.
32
The purpose of rationing during World War II was to ensure that
manufacturers could make a profit.
everyone could get essential scarce goods.
products would go to those who valued them most.
workers would have an incentive to get jobs.
33
How do economists think private ownership most affects property maintenance?
It is helpful because owners have an incentive to care for the property.
It is harmful because non-owners may throw trash on the property.
It is helpful because owners have to pay taxes on the property.
It is harmful because owners save money by letting property get run down.
34
The most important argument many economists make against price controls is that they are
unstable
inefficient
insecure
unfair
35
Which of the following best describes a monopoly?
A company that attempts to buy up as much land as possible
A company that completely dominates a particular industry
A company that solely relies on manufacturing for capital
A company that by law exists independent from its owners

Economics Unit 2 Pre-Test Flashcards | StudBud