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Exam 2 Review Flashcards | StudBud
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Exam 2 Review
Exam 2 Review
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Flashcards
25 cards
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Questions
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Answers
1
Every single business depends on...
strength
management
marketing
finance
2
Increase in income causes increase in which type of goods?
common goods
normal goods
regular goods
inferior goods
3
The Marginal Search/Cost benefit analysis graph represents...
that search begins being beneficial past the point MC=MB
that search is pointless
That gains from search is to the right of the marginal search benefit curve
that search stops being beneficial past the point MC=MB
4
An increase in the quantity demanded of one complementary good usually has what effect on the other good?
Increase supply
increase demand
5
When discussing income elasticy, Ey=(%change in Q)/(%change in P) for normal goods is...
greater than 0
greater than 1
equal to 1
less than 0
6
Derived demand is the idea that entrepreneurs plan for future changes in demand and therefore plan demand of resources
True
False
7
Market share elasticity is...
greater than total market elasticity
equal to total market elasticity
less than total market elasticity
worthless
8
On the production possibility frontier which point is impossible?
E
A
c
D
9
In the cq part of the profit equation, what causes c (cost) to increase?
right shift in supply for resource markets
right shift in demand for resource markets
lower demand for finished good
higher supply in resource market
10
Consumer sovereignty means
consumers buy what they wish
consumers have no choices
consumers are told what to buy
consumers do not matter
11
All of the following are components of a failed market except...
ignorance/misinformation
High entry/exit barriers
high elasticity
high transaction cost
12
Goods that are inelastic tend to respond to changes in price with major changes in quantity
True
False
13
What type of economy does the U.S. have
mixed economy
command economy
pure market economy
traditional economy
14
Income elasticity represents the degree of response to changes against purchases to changes in income
False
True
15
Coase's theory argues that with mostly competitive markets you have...
government interference
an unstable economy
a stable economy
nothing
16
Competitive markets are typically efficient markets
False
True
17
With lower incomes people tend to purchase more...
inferior goods
luxury goods
irregular goods
normal goods
18
At which point of the pictured graph does elasticity equal 1?
The points with a price greater than $30
none of the points
all of the points
The points with a quantity greater than $30
19
On the provided productions possibility curve an increase in supply of pizza would cause...
decrease in production of sugar
production does not matter
nothing would change
decrease in production of pizza
20
The best kinds of profits go to which type of people
wealthy people
informed consumers
alert entrepreneurs
21
When supply shifts to the right (pictured) who has the bargaining power?
consumers
economist
entrepreneurs
stores
22
Shifts in different curves of derived demand depends on the point of view of...
consumers
producers
markets your examining
upstream
23
Changes in price of each derived demand market causes changes in cost for the markets as well
False
True
24
On the productions possibility frontier, which point represents fairly equal production
C
E
A
B
25
Accidental discoveries come as freebies to entrepreneurs
False
True
