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Econ Unit 2 - Microeconomics Flashcards | StudBud
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Econ Unit 2 - Microeconomics
Econ Unit 2 - Microeconomics
27 terms
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supply, demand, circular flow, biz orgs, mkt structures
Flashcards
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Questions
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Answers
1
Steel Beam Inc. purchases a new steel-processing machine. In the circular flow diagram, this transaction takes place in
Consumer Sector
Product Market
Business Sector
Factor Market
2
In the circular-flow diagram,
spending on goods flows from firms to households.
goods and services flow from households to firms.
income from factors flows from firms to households.
factors of production flow from firms to households.
3
Unlimited life is an advantage of what type of business
sole proprietorship
corporation
partnership
4
The supply curve of a product normally decreases if:
the price of the product increases
taxes on the product increase
the cost of inputs decreases
more producers enter the market
5
Why would a business want to differentiate their product?
to provide their customers with a better product
to attract customers
to charge a higher price for their good
to force competitors out of business
6
What economic situation is represented in the graph?
price floor; surplus
price floor; shortage
price ceiling; shortage
price ceiling; surplus
7
This market that has a few large suppliers of goods.
monopoly
oligopoly
monopolistic competition
pure/perfect competition
8
If the price of coffee decreases from $2 to $1, what will be the result?
quantity demanded will increase from 30 to 40
demand will decrease from 50 to 30
demand will increase from 30 to 50
quantity demanded will increase from 30 to 50
9
Lack of expertise in different areas is a major disadvantage for which form of business
partnership
sole proprietorship
corporation
10
In the product market businesses…..
sell goods and the households purchase the goods
buy the factors of production and households sell them.
sell the factor of production and households purchase them
buy the factors of production and households sell products
11
The supply curve is generally:
perfectly horizontal
negatively sloping (downward)
completely vertical
positively sloping (upward)
12
Why would a partnership have greater access to financial capital than a sole proprietorship?
A partnership can sell stock.
they last longer so banks are more willing to lend them $$
A partnership can sell bonds in order to raise cash.
Each partner invests money into the partnership.
13
Unlimited liability is best represented by which letter
D
B
C
A
14
This market structure has complete control over the market.
monopoly
oligopoly
pure/perfect competition
monopolistic competition
15
To be considered part of a perfectly competitive market,
your pricing has no impact on the amount you can sell.
your actions are quickly followed by competitors.
your actions essentially have no effect on the market price.
incr in price of your product have an impact on mkt price
16
Which line on the Circular Flow Diagram? Jane pays $30 for a pair of shoes.
3
1
4
2
17
The easiest and most simple way to start a business is in the form of a ______?
non profit
sole proprietorship
corporation
partnership
18
As an investor you can buy part ownership in the corporation, by obtaining
bond
certificate of ownership
dividend
common stock
19
This type of market structure has many buyer and sellers of identical products
monopoly
oligopoly
pure/perfect competition
monopolistic competition
20
Dividends are taxed both as corporate & personal income to stockholders is a major disadv of
corporations
sole proprietorships
partnerships
21
What would happen to the graph for Coca-Cola if the price of Coca-Cola goes up from $1 to $1.25
There would be no shift
Demand would shift left
Supply would shift left
Demand would shift right
22
Which of the following would cause the demand curve for a product to shift to the right?
an increase in the price of a complement
an increase in population of Forsyth County
a decrease in the price of a substitute
decrease in popularity of milk
23
Refer to the diagram. Line (6) represents:
goods and services.
consumer expenditures.
land, labor, capital, and entrepreneurial ability.
wage, rent, interest, and profit income.
24
A decrease in resource prices will:
Decrease equilibrium price and quantity
Increase equilibrium price and quantity
Increase equilibrium price and decrease equilibrium quantity
Decrease equilibrium price and increase equilibrium quantity
25
What is the relationship between quantity supplied and price?
They are directly related.
They are not related.
They are inversely related.
They are related through demand.
26
What is the economic situation created in the graph below?
Price Ceiling; Shortage
Price Floor: Shortage
Price Floor; Surplus
Price Ceiling; Surplus
27
Which type of business incurs double taxation
sole proprietorship
partnership
corporation
