Module 2 Quiz

The study of how a society uses scare resources to produce and distribute goods and services is

• central planning.

• profit motive.

• balance of trade.

• economics.

Supply and demand are the driving forces in a __________ economy.

• communist

• market

• command

• socialist

The law of supply says

• demand will INCREASE as price INCREASES.

• demand will DECREASE as price INCREASES.

• supply will INCREASE as price INCREASES.

• supply will DECREASE as price INCREASES.

The law of demand says

• supply will DECREASE as price DECREASES.

• demand will DECREASE as price INCREASES.

• demand will DECREASE as price DECREASES.

• supply will INCREASE as price DECREASES.

According to Table 2.5 in your Skyepack course, which factor will cause demand to INCREASE?

• The number of buyers decreases.

• Buyers’ incomes decrease.

• Prices of substitutes increase.

• Preference for the product decreases.

How does a business figure profit?

• subtract costs from revenue

• add costs and revenue

• divide cost by revenue

• divide revenue by cost

The point at which supply equals demand is

• equilibrium.

• NFPO.

• an unfavorable balance of trade.

• profit motive.

Which economic utility refers to benefits gained from owning a product?

• place

• possession

• time

• form

How can a tariff help businesses within a country?

• opening new overseas markets for exported goods

• opening new markets for goods imported into a country

• making foreign competitors’ goods more expensive

• limiting the number of imports that a country will accept

A(n) __________ is used when converting one country’s currency into another country’s currency.

• quota

• export management company

• export trading company

• exchange rate