Economics Review pt 1

The definition of perfect pure competition would have included the following phrase:

• Businesses are able to beat out all similar types of companies

• Individual firms can affect the money supply of companies.

• Products produced by rival business are perfect substitutes.

• Entry and exit of the free market is heavily restricted.

A disadvantage to a corporation is that-

• decision making is no longer controlled by the original entrepreneur

• bond holder have first claim to a corporation's profits.

• dividends are taxed twice, once as a corporate income and once as personal income.

• stockholders demand and get large dividends if any profits are made

Authorization to start a business issued by the local government is called a/an

• IPO

• Liability

• Royalty

• Business license

Why might you choose an investment with high risk instead of one with low risk?

• To provide greater safety for the investor.

• For a potentially higher return.

• To avoid losing money from your investment.

• For a potentialyl lower return.

A depreciating U.S. dollar will-

• Reduce the competitiveness of exporting firms

• Provide lower import costs for firms importing raw materials

• Makes exports cheaper and exporting firms will benefit

• Mostly reduce the prices of foreign-made goods

The main reason that a government taxes is so-

• Are set evenly so everyone is treated equal.

• Discourage competition among businesses

• Generate revenue to fund government programs.

• Prevent the formation of a middle class

Technology influences economic growth by-

• Encouraging the birth of a one-class society which would be economics class.

• Makes prices go up to make more money.

• Causing unexpected, negative externalities and uplifting negativity.

• Using machines to make production more efficient.

The law of supply is

• Enough will always be made to meet demand.

• When prices rise producers make more of a product

• Prices reduce as efficiency increases

• Diminishing returns reduce profit for producers

A monopoly is

• A game that is never won by competing firms

• When nobody else wants to make a product.

• A kind of market that has only one large firm that supplies all of the outputs

• A disease that makes joints turn into polymers.

What financial liability does Robert have now that he bought a house and moved out of his apartment?

• He no longer needs to buy home insurance

• His utility bills will be reduced

• He is directly responsible for property taxes.

• To have the carpets professionally cleaned at his old apartment.