Economics for Manager Candidate

What are the characteristics of a perfectly competitive market?

• Few buyers and sellers, different products

• High barriers to entry or exit, imperfect information

• Characteristics of a perfectly competitive market include many buyers and sellers, identical products, no barriers to entry or exit, and perfect information.

• Identical products, no competition

Explain the concept of economies of scale and how it affects the cost of production.

• Economies of scale leads to an increase in the average cost of production as the level of production increases.

• As the level of production increases, the average cost of production remains the same due to factors such as spreading fixed costs over a larger output.

• Economies of scale refers to the cost advantages that a business can achieve by increasing its scale of production. As the level of production increases, the average cost of production decreases due to factors such as spreading fixed costs over a larger output, bulk purchasing discounts, and specialization of labor.

• Economies of scale refers to the cost disadvantages that a business can achieve by increasing its scale of production.

What are the four phases of the business cycle?

• Expansion, Peak, Contraction, Trough

• Upsurge, Zenith, Downturn, Base

• Rise, Apex, Decrease, Low

• Growth, Summit, Decline, Bottom

How does expansionary monetary policy affect the economy?

• It reduces inflation by decreasing the money supply.

• It stimulates economic growth by encouraging borrowing and spending.

• It leads to higher unemployment by discouraging investment.

• It has no impact on the economy as it only affects interest rates.

Discuss the concept of comparative advantage in international trade.

• International trade is not beneficial for countries and should be avoided

• Countries should specialize in the production of goods and services in which they have a comparative advantage and trade with other countries to obtain goods and services in which they have a comparative disadvantage.

• Comparative advantage means that countries should only focus on producing goods they are already good at

• Countries should produce all goods and services domestically to avoid trade with other countries

What are the main characteristics of a monopolistic competition market?

• Small number of firms, differentiated products, easy entry and exit of firms, and price competition

• Large number of firms, identical products, difficult entry and exit of firms, and non-price competition

• Small number of firms, identical products, difficult entry and exit of firms, and price competition

• Large number of firms, differentiated products, easy entry and exit of firms, and non-price competition

Define and differentiate between fixed costs and variable costs in production.

• Fixed costs are temporary and can be easily adjusted, while variable costs are permanent

• Fixed costs decrease as production increases, while variable costs remain constant

• Fixed costs remain constant regardless of the level of production, while variable costs change with the level of production.

• Fixed costs are directly related to the level of production, while variable costs are unrelated

What are the causes of inflation in an economy?

• Increase in the money supply, demand-pull inflation, cost-push inflation, and built-in inflation are the causes of inflation in an economy.

• Decrease in the money supply

• Stable demand and supply

• Deflation in other countries

Explain the tools used by central banks to implement monetary policy.

• Fiscal policy, quantitative easing, and interest rate caps

• Open market operations, reserve requirements, and discount rates

• Foreign exchange interventions, stock market regulations, and tax policies

• Government spending, inflation targeting, and trade agreements

Discuss the impact of tariffs on international trade.

• Tariffs have no impact on prices for consumers, do not affect international trade, and are welcomed by trading partners.

• Tariffs can lead to lower prices for consumers, increased international trade, and appreciation from trading partners.

• Tariffs can lead to higher prices for consumers, reduced international trade, and potential retaliation from trading partners.

• Tariffs result in lower prices for consumers, increased international trade, and no reaction from trading partners.