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Exam 2: Understanding Economics and How It Affects Business

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Question 131

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During the recent recession,the administrations of Presidents George W.Bush and Barack Obama flooded several banking,financial services,and insurance firms with government funds in exchange at least temporarily) for government ownership rights.The unprecedented move signaled the government's concern that the global banking system might collapse if these firms ended up in bankruptcy.The decision for active government involvement in the operations of these firms demonstrates:

A) The unforgiving nature of capitalism.
B) The desire for more individuals in the U.S.to live under a socialist system.
C) The trend toward mostly capitalist nations to move toward socialism.
D) The freedoms the U.S.government has under capitalism.

E) All of the above
F) C) and D)

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Question 132

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On its website,Papa John's Pizza compares itself to the competition with the following message: "better ingredients,better pizza".The company wants to achieve:

A) Product differentiation.
B) An equilibrium price.
C) A monopoly.
D) A perfectly competitive market.

E) A) and C)
F) A) and B)

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Question 133

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In recent years,U.S.manufacturing sector has experienced ___________ productivity.

One of the greatest concerns associated with capitalism is that:

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Sue is a gifted cook.She plans to open a restaurant in which she will be the head chef.Sue is willing to work long hours because she believes that her culinary talents and hard work will allow her business to succeed and earn her sizeable profits.Sue's efforts are most consistent with the economic theory developed by:

Mike spends a lot of time blogging.Yesterday,he left the following comment on a site where participants were discussing the pros and cons of healthcare: "If you think healthcare is expensive now,wait until it is free.The problem with free rides is,eventually everyone piles on the bus and no one is left to push it.Then the system collapses." He was responded to by Martha,who added,"Universal healthcare is not a dirty word.It's the salvation for many people.If I have to pay a little more in taxes and know that my neighbor's kids have good pre-school and can see the doctor when needed,it's worth it to me." Mike and Martha are discussing the benefits and drawbacks of:

The PowerHouse Utility Company recently built a nuclear power plant in a southern state and started competing against BXY Utility Company that has served customers in that region for 65 years.Due to deregulation,consumers now have a choice among utility companies in this are A.Although PowerHouse has made a sizeable capital investment,if it successfully grows market share,eventually prices for electricity may stabilize or fall.

Which of the following indicators provides the clearest indication that an economy is experiencing deflation?

An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.

Thomas Malthus was pessimistic about the ability of a society to achieve high standards of living for most of its citizens because he believed that:

_________ is considered by some to be the father of modern economics.

History shows that free-market capitalism leads to a fair and equitable distribution of wealth.

On average,what percentage of the GDP does the U.S.government collects through taxes?

A key to economic growth and development is to:

Over the past decade,socialist economies have proven to be more successful at creating wealth and jobs than capitalist economies.

A __________ is a very severe recession that is usually accompanied by deflation.

A simple supply curve shows that an increase in the price of a good will cause the quantity supplied to:

The U.S.national debt equals the sum of all recorded years of deficits.

In developing nations of the world,population has leveled off and is not expected to increase dramatically in the future.