Multiple Choice #1
The amount of a good available is defined as?
A. Supply
B. Elasticity
C. Demand
D. Inelasticity
A. Supply
People buy less of a needed item when its price rises without increasing purchases of other items. This describes?
A. Income Effect
B. Law of Diminishing Marginal Utility
C. Substitution Effect
D. Law of Demand
D. Law of Demand
What term describes the removal of some government controls over a business?
Deregulation
Mutual reliance between two or more groups is called?
Interdependency
All sellers of Happy Chains increase the price of each chain. This describes which market structure?
A. Monopolistic Competition
B. Pure (Perfect) Competition
C. Monopoly
D. Oligopoly
D. Oligopoly
This determinant refers to how consumers' expectations affect demand when they anticipate higher future prices.
A. Consumer expectations
B. Income
C. Tastes and advertising
D. Price of related goods
A. Consumer expectations
Which market structure has no barriers to entry or exit?
A. Pure (Perfect) Competition
B. Oligopoly
C. Monopolistic Competition
D. Monopoly
A. Pure (Perfect) Competition
Which term refers to the Government's role in business that affects production?
Regulation
A situation in which demand exceeds supply is known as?
Shortage
These types of business organizations have greater access to start-up funds but face a higher risk of conflict. (Type of business)
Partnerships
Choo-Choo Chains enters the market with a cheaper product; Happy Chains lowers its per-unit cost. This best reflects which determinant?
A. Number of sellers
B. Government regulations
C. Producer expectations
D. Input costs
A. Number of sellers
Which market structure has the strongest price controls?
A. Pure (Perfect) Competition
B. Oligopoly
C. Monopoly
D. Monopolistic Competition
C. Monopoly
What is the point where supply and demand curves meet called?
Equilibrium
A situation in which supply exceeds demand is called?
Surplus
Which business form is easiest to start but has limited life and unlimited liability?
Sole-Proprietorships
As price increases, production tends to increase. This is described by which law?
A. Law of Diminishing Marginal Utility
B. Law of Elasticity
C. Law of Supply
D. Law of Demand
C. Law of Supply
If sellers differentiate products by quality or branding, this best fits which market structure?
A. Pure (Perfect) Competition
B. Monopolistic Competition
C. Monopoly
D. Oligopoly
B. Monopolistic Competition
Demand that does not react to a change in price is described as?
Inelastic
People swap a more expensive item for a less expensive one describes which effect?
Substitution Effect
If price ceilings are set below equilibrium, what is likely to occur?
Shortage
Which concept explains the increase in production when the price of a good rises, given demand remains constant?
A. Law of Demand
B. Opportunity Costs
C. Law of Supply
D. Law of Diminishing Marginal Utility
A. Law of Demand
The Law of Demand is best described as?
A. When an item’s price is stable, people will not purchase it.
B. When an item’s price is unstable, people will not purchase it.
C. When an item’s price is lower, people will purchase more of it.
D. When an item’s price is higher, people will purchase more of it.
B. When an item’s price is unstable, people will not purchase it.
What is demand that reacts to a change in price called?
Elastic
Wanting/needing something and being able to buy it is described as?
Demand
Explain the three main types of businesses.
#1 - Corporation
#2 - Partnership
#3 - Sole-Proprietorship
Corporation - A corporation is a legal entity separate from its owners (shareholders).
Partnership - A partnership is an unincorporated business shared by two or more people.
Sole Proprietorship - A business owned and operated by a single individual with no legal separation between the owner and the business.