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Econ Final Exam 2021 Flashcards | StudBud
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Econ Final Exam 2021
Econ Final Exam 2021
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1
What is demand elasticity?
The need for elastic if supply changes.
Degree to which demand for a product is affected by price.
The amount of money that a company can use to change taxes
How demand for a product changes
2
If a demand curve shifts to the right, there would be
An increase in demand
Equilibrium of demand
Marginal cost of demand
Decrease in demand
3
What is an example of Complement goods?
Gas grill and a propane tank
None of the above
Couch and a TV
A brush and a book
4
Why do producers raise prices when there's a shortage?
to separate the quantity supplied and demanded
to raise the quantity demanded
to lower the quantity supplied
to equalize the quantity supplied & demanded
5
If price decreases...
Then quantity stays the same
Then quantity demanded decreases
There will be no demand
Then quantity demanded increases
6
The quantity theory of money suggests that a decrease in the money supply will usually
lead to forest fires.
lead to an increase in interest rates.
lead to an increase in prices.
lead to a drop in prices.
7
What is a Corporation?
A business owned by a board of directors.
A business owned and run by one person.
A business that has stockholders, but they do not own it.
A business owned by stockholders.
8
When the government deregulates a product or service, what happens to it?
Government control over the industry is stopped.
Some government regulations over the industry are eliminated
The product or service is available to more people.
The product or service becomes cheaper.
9
Avocados would fall under which of the following market structures?
perfect competition
monopoly
monopsony
monopolistically competitive
10
Which of the following market structures has complete ability to set price
Economy
Monopoly
Oligopoly
Perfect Competition
11
in an oligopoly barriers to entry are...
few
little
none
high
12
Which of the following market structures consists of a few very large firms?
Pure competition
Oligopoly
Monopolistic Competition
Monopoly
13
cartels are difficult to operate because
firms lose money
firms have to agree to output and price levels
cartels always exist in perfectly competitive markets
they are illegal throughout the world
14
How does the demand curve move when demand decreases?
To the left
Downwards
Upwards
To the right
15
The points on the production possibilities frontier in this chart allrepresent
D. two different types ofresources.
A. opportunity costs.
B. underutilization of resources.
C. efficient use of resources.
16
Which of the following is a function of households in the market economy?
They send land and captal to frms through the product market
They supply firms with goods and services.
They supply firms with the factors of production.
They send money to firms through the factor market.
17
What is non-price competition not based on?
Quality of good/services
Percentage of sale/ money off a product
Location
Reputation
18
Why do all economic decisions involve tradeoffs?
Scarcity
Proft
Level of Efficiency
Opportunity Costs
19
What is an Oligopoly?
A market dominated by a small number of firms
A market dominated by many firm
A market dominated by a single firm
All of the above
20
What happens to a monopolistically competitive firm that charges a high price for its product?
Consumers will boycott the product.
Consumers will substitute a rival's product .
The firm will go out of business.
The government will regulate the price.
21
Why are cartels difficult to operate?
they are illegal worldwide
they only supply a product that is inelastic
they are very costly
they only work if everyone cooperates
22
The production set by a monopolist is at a level where marginal cost is equal to:
marginal cost
marginal revenue
average revenue
average total cost
23
What is one kind of monopoly that the U.S. government generally permits?
certain kinds of medications
professional sports leagues
the telephone company
low-price gasoline
24
Which of the following will not shift the supply curve?
an increase in taxes
change in the number of producers
change in resource cost
change in consumer taste
25
When is a buyer NOT willing to spend a lot of time and energy researching the market?
when prices vary but quality is the same
when buying a large quantity of goods
when there are many identical products available
when the savings to be made are small
26
According to the law of supply, what happens as price decreases?
The quantity supplied decreases.
The quantity supplied increases.
The supply curve shifts to the right.
The supply curve shifts to the left.
27
If technology decreases production costs and increases supply at all price levels the effect is
leftward shift in supply curve
increase demand shifting demand curve
rightward shift in supply curve
a movement along the supply curve
28
What is a price ceiling?
A funky new jig.
A method of measuring a nation's overall income.
A maximum price level set by the government.
A minimum price level set by the government.
29
What did the Sherman Anti Trust Act do?
provided job security to all factory workers
outlawed selling and consumption of alcoholic beveraged
made government regulation illegal
promoted fair business and broke up monopolies
30
The factors of production are...
land, labour, money and capital
land, labour, capital and elephants
land, labour, friendship and hardwork
land, labour, capital and enterpreneurship
31
Which of the following is NOT a condition for perfect competition?
Many buyers and sellers participate in the market.
Sellers offer a wide variety of products.
Buyers and sellers are well informed about products.
Sellers are able to enter and exit the market freely.
32
Why does the government sometimes give monopoly power to a company by issuing a patent?
The company pays the government for the patent
The company can then profit from their research without comp
The government does not want competition for the product
33
What effect does the availability of substitutes have a monopolistically competitive firm?
Such firms face high barriers to entry
Such firms must achieve economies of scale
Such firms have limited control over price
Such firms have high start-up costs
34
Which of the following is generally true after a shift in supply or demand?
Equilibrium is gradually restored.
Equilibrium price moves down the demand curve.
Demand falls as prices rise.
Supply rises along with demand.
35
what is Monopolistic Competition?
companies sell products that are similar but not identical
None of the above
demand curve
supply curve
36
What is Economic Efficiency?
How engines work
An efficient economy that makes the most of resources.
The cost of machines.
All of the above
37
If price rises but not income, what is the effect on demand?
fewer goods are bought
quantity demanded increases
demand stays the same
more goods are bought
38
The reason the Federal Reserve does not like to increase the money supply too much is:
it could cause a recession
it could cause inflation
it could cause a trade surplus
it could cause deflation
39
How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
by changing the product and selling a lesser one to people with less money
by charging each customer the maximum amount they are willing to pay
by allowing rebates to some preferred customers who buy a lot of goods
charging different prices according to the group to which the buyer belongs
40
Why did local phone companies have a natural monopoly before the arrival of cellular technology
local govts did not want to pay more than one company
Only one company was large enough to provide to everyone
inefficient for more than one company to run the wires
Fed Government chose one company to provide service to areas
41
Why do U.S. economic policies seek to achieve the goal of maximum employment?
High employment is a signal to producers to lower prices
The Constitution guarantees a job to Americans
more people employed means more secure stock market
When more people work, the economy is more productive
42
What kind of market runs most efficiently when one large firm supplies all of the output?
A natural monopoly
perfect competition
imperfect competition
a network
43
What is an example of non-price competition?
A summer sale
A product discount
Marking down items
Changing the product design
44
If demand is inelastic, the absolute value of the price elasticity of demand is
greater than the absolute value of the slope of the D curve.
one
greater than one.
less than one.
45
All are shifters of demand EXCEPT
resource prices
price
price of capital goods
consumer expectations
46
Barriers to entry
Factors that make old firms fall apart.
Factors that make it difficult for new firms to enter a market.
Factors that make it easier for new firms to enter a market.
Factors that make new firms compete with old firms.
47
All of the features are perfect competition except
Ease of entry
No control over price
Most competitive
Unique products (differentiated)
48
What is collusion?
When rival companies won't cooperate making them worse off
When rival firms work together for mutual benefit
All of the above
When friendly companies work separately for personal benefit
49
What is Eminent Domain?
Prohibiting prayer in schools.
When the government seizes property for public purpose.
None of the above.
When the government takes land without repayment.
50
Which is NOT an advantage of a sole proprietorship:
Lower taxes
Limited liability
Easy to start the business
Control over management of business
51
What are the two common barriers to entry?
start up costs and technology
stock market and investements
Time and savings
employees and down payment
52
Economies of scale
led to the collapse of the American economy
led to lower costs and more goods produced
resulted in a wider variety of products
resulted in higher costs and higher prices
53
What is Monopolistic Competition?
Selling identical products, many competitors
Selling different products, market sets the price
Selling different products, many competitors
Selling identical products, market sets the price
54
What is opportunity cost?
Buying anything
Finding out the cost based on benefit
What you give up to make another choice
Choosing between two goods
55
Which in not a shifter of supply?
Opportunity Cost
Number of Suppliers
Income
Technology
56
Who owns the factors of production?
the market
firms
households
government
57
In perfect competition, sellers offer a wide variety of products.
False
True
58
If the point elasticity of demand is
0.8...
the demand is elastic
I don´t know
the demand has unit elasticity
the demand is inelastic
59
How does a government subsidy for rice farmers affect the market for rice?
increase supply by increasing demand for rice
increase supply by reducing farmers' costs
decrease supply by encouraging farmers to grow another crop
decrease supply by increasing farmers' production costs
