Microeconomics review

With respect to the circular flow model, businesses provide households with which of the following?

• taxes and interest

• labor and taxes

• goods, services, and incomes

• public goods and transfer payments

A volcano erupts in Hawaii that destroys or damages many of the orchards that supply the U.S. with pineapples. What will be the effect on price and quantity of pineapples sold, assuming all else is equal?

• Price will rise and quantity will also rise.

• Price will drop and quantity will also drop.

• Price will drop but quantity will rise.

• Price will rise but quantity will drop.

The use of money in an economy solves which of the following problems?

• scarcity

• the condition of opportunity cost

• an efficient means of economic exchange

• trade barriers

With respect to raising funds, the primary difference between a corporation and other types of businesses is that

• they can sell shares of the company to the general public.

• they obtain loans from banks.

• they always have collateral, but other businesses do not.

• they can more easily make decisions about whether to seek a loan.

A market that has few barriers to entry, in which products that are not of identical quality and style are sold, and, therefore, firms can make greater-than-normal profits for short periods of time, is BEST described as

• monopolistic.

• oligopolistic.

• perfectly competitive.

• monopolistically competitive

A breakthrough in nanotechnology allows silicon chips for computers to be produced much more quickly and cheaply. If demand for computers remains unchanged, what will be the effect upon market price and supply?

• Both price and supply will rise.

• Both price and supply will fall.

• The supply will rise while the price falls.

• The supply will fall while the price rises.

All of the following are characteristics of perfectly competitive markets EXCEPT

• the firm's prices are kept confidential.

• production is similar in quality.

• there is a large number of buyers and sellers.

• there are few barriers to entering the market.

A market structure in which only one producer supplies a good that is in demand, thereby permitting them to set the price by how much they supply, is called

• competition.

• monopoly.

• oligopoly.

• conglomerate.

George has just saved enough money to buy the car he's dreamed of. He puts down $5,000 in cash and finances the rest through his local credit union. George's car is

• a consumer good.

• a capital good.

• a production cost.

• a renewable resource.

The price at which total supply equals total demand is known as

• the middle price.

• the consumer price.

• consumer demand.

• the equilibrium price.