Reference no: EM131316426

ECONOMICS FOR MANAGERS ASSESSMENT: EXAM

Question 1
Which of the following economic systems abolishes all private property?

communism
socialism
fascism
all of the above

Question 2
The profit motive is one characteristic of a command economy.

True
False

Question 3
In a market system, the government enforces laws ensuring that private enterprises and conditions of competition will prevail.

True
False

Question 4
The most common type of business in the United States is the corporation.

True
False

Question 5
Laissez-faire is a policy of no government intervention in the economic activities of individuals and businesses.

True
False

Question 6
In a partnership, each partner's liability is limited to his or her contribution to the partnership.

True
False

Question 7
There are no government-regulated markets in the U.S. economy.

True
False

Question 8
Which of the following is not among the United States' economic goals?

full employment
stable prices
healthy economic growth
equal distribution of income

Question 9
Under the U.S. market system, land and capital goods are owned mainly by

the federal government
individuals and firms
local governments
state governments

Question 10
The biggest disadvantage of a sole proprietorship is the lack of distinction between the business and the owner.

True
False

Question 11
In the United States, marketing cooperatives are most commonly found in the agriculture industry.

True
False

Question 12
Self-interest is a major tenet of economic liberalism.

True
False

Question 13
Which of the following is considered a command economy?

communism
socialism
fascism
all of the above

Question 14
Economics is considered a physical science.

True
False

Question 15
The difference between a capital good and a consumer good depends on

the purpose for which it is used
how it was produced
what it is
how quickly it is used up

Question 16
Positive economics deals with "what is" as opposed to "what ought to be."

True
False

Question 17
Production is the creation or addition of utility.

True
False

Question 18
Consumption is the ultimate end of economic activity.

True
False

Question 19
The relationship between the price of a book and the number of volumes purchased would be an example of microeconomics.

True
False

Question 20
An example of a macroeconomic model is

the price of chicken influences the quantity of chicken bought
the size of the total national output depends on the size of total spending
the output of a product is influenced by the cost of production for the product
all of the above

Question 21
The largest share of the total income of the United States is currently being distributed in the form of

interest
rent
wages
profits

Question 22
Which of the following areas of study is included in the field of macroeconomics?

electricians' wage rates
monopolistic pricing
price of automobiles
general price level

Question 23
The total value of the goods and services produced over a period of time represents an economy's

planned savings
total income
total wealth
capital

Question 24
Stocks and bonds are counted as part of total wealth.

True
False

Question 25
The stock of labor talents and skills is known as

a public good
the functional distribution
human capital
enterprise

Question 26
One cause for the uneven standard of living throughout the world is the uneven distribution of resources.

True
False

Question 27
In exercising the principle of comparative advantage, a nation with no absolute advantage should produce a commodity in which it faces a lower opportunity cost than its trading partners face.

True
False

Question 28
Government regulations which affect entrepreneurial activities within a nation also affect total output and the standard of living.

True
False

Question 29
A need to make choices exists because of

scarcity of resources
the abundance of goods
unlimited human needs and wants
both (a) and (c)

Question 30
The principle of comparative advantage applies to

individuals only
business firms only
nations only
individuals, businesses, and nations

Question 31
Economics can be defined as the study of choices.

True
False

Question 32
Suppose that Country A has an absolute advantage over country B in the production of both wheat and cloth. The opportunity cost of 1 unit of wheat is 2 units of cloth in Country A and 3 units of cloth in Country B. If each country specializes in producing the good in which it is relatively more efficient and then trades for the other good, it follows that

all the resulting gains in consumption will go to Country A
all the resulting gains in consumption will go to Country B
each country will experience half the resulting gains in consumption
the allocation of the resulting consumption gains will be determined by bargaining between the two countries.

Question 33
Exercising the principle of comparative advantage between nations primarily involves

specialization
transportation costs
currency exchange rates
domestic income tax rates

Question 34
An example of technological development is to increase output through

raising pay
working longer hours
hiring more workers
using better machines

Question 35
An economy's production possibilities curve could shift outward as a result of a(n)

increased level of technology
reduction in the quantity of capital goods
decrease in the production of goods
decrease in the amount of available resources

Question 36
A nation needs an abundance of all productive resources in order to attain a high standard of living.

True
False

Question 37
To solve their basic long-term economic problems, developing countries primarily need

food
clothing
technical assistance
shelter

Question 38
A surplus quantity will occur when

quantity demanded is greater than quantity supplied
price is above equilibrium
demand is elastic
price is below equilibrium

Question 39
A change in demand would be illustrated by

a drop in price, which causes people to buy more
an increase in price, which causes people to buy less
a change in people's preferences that causes them to buy either more or less than before
all of the above

Question 40
If 12 units of a good are sold when the price is $1 per unit, and 8 units are sold at a price of $1.50 per unit, then demand is

elastic
inelastic
of indeterminate elasticity
unit elastic

Question 41
The more substitutes for a good, the more elastic its demand tends to be.

True
False

Question 42
A demand curve generally

is a straight horizontal line
is a straight vertical line
slopes downward to the right
slopes downward to the left

Question 43
The quantity supplied and price tend to vary

inversely
independently
in an unrelated fashion
directly

Question 44
Price elasticity of demand tends to be greater for substitute items than for complementary goods.

True
False

Question 45
To maintain a price below the equilibrium price,

demand must increase
supply must increase
the government must set a ceiling price
supply must decrease

Question 46
An increase in demand will cause the demand curve to

move to the right
move to the left
become more vertical
become more horizontal

Question 47
Price ceilings usually create surpluses since supply is increased.

True
False

Question 48
Price floors can create shortages if price floors are above market prices.

True
False

Question 49
When the supply of a product increases but the demand for the product remains unchanged, the equilibrium price of the product will

fall, and equilibrium quantity will decrease
be unaffected
first rise and then return to the original price level
fall, and equilibrium quantity will increase

Question 50
On a price/quantity graph, a straight horizontal demand curve

has zero price elasticity
is perfectly elastic
is perfectly inelastic
is perfectly unit elastic