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econ quiz #3

Total questions: 63

Worksheet time: 52mins

Name
Class
Date
1.
What does this curve represent?
a)
demand
b)
supply
c)
equilibrium
d)
shortage
2.
What does this curve represent?
a)
supply
b)
equilibrium
c)
demand
d)
surplus
3.
Assume the image is showing the market for apples.  Which of the headlines could indicate the pictured shift is occurring in the market?
a)
Pesticides on apples linked to mouth cancer.
b)
Storms destroy apple orchards.
c)
An apple a day really does keep the doctor away.
d)
New genetic strain leads to apple trees that produce twice as many apples.
4.
If a consumer knows that a product will be going on sale this week, how will his/her CURRENT demand be affected?
a)
it will go up
b)
it will go down
c)
it will stay the same
d)
what does this have to do with the price of tea in China?
5.
Generally speaking, the lower the price, the greater the quantity demand.
a)
True
b)
False
6.
For the law of demand, as price rises, what happens to quantity demanded?
a)
it goes up
b)
it goes down
c)
it stays the same
d)
it is not effected
7.
This type of business is owned by one person.
a)
Partnership
b)
Sole Proprietorship
c)
Corporation
d)
Franchise
8.
This type of business is owned by two or more people.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
9.
This type of business is owned by many people called stockholders.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
10.
Nike, Google and Apple are examples of.....
a)
Sole Proprietorships
b)
Partnerships
c)
Corporations
d)
Franchises
11.
Law firms and doctor's offices are examples of.....
a)
Sole Proprietorships
b)
Partnerships
c)
Corporations
d)
Franchises
12.
Advantages of this business type are that the owner is their own boss and gets to keep all the profits.
a)
Partnership
b)
Sole Proprietorship
c)
Corporation
d)
Franchise
13.
Disadvantages for this type of business include: owner pays for everything, hard to get money to start from the bank, owner might lack skills & unlimited liability.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
14.
Advantages of this business include: easier to get money from the bank to start, share skills and share risks.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
15.
Disadvantages of this business type include: needs a partnership agreement, partners might not get along, owners share profits, unlimited liability.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
16.
Advantages of this type of business include: selling stock to raise money, limited liability.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
17.
Disadvantages of this type of business include: company is taxed on profits, regulated by the government, and hard to start.
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
d)
Franchise
18.
How is a corporation different from a sole proprietorship?
a)
Corporations are owned by only one person
b)
Corporations can sell stock to raise money for the business. 
c)
Sole proprietorships have limited liability for the owners.
d)
Sole proprietorships require a legal charter to start the business.
19.
When comparing the four main types of business organization, which type protects owners the MOST from personal financial liability due to being sued by a customer?
a)
Corporation
b)
Franchise
c)
Partnership
d)
Sole proprietorship
20.
A business owned by only one person is called a 
a)
Corporation
b)
Sole Proprietorship
c)
Partnership
d)
Soley
21.
A business owned and controlled by at least two people who have entered into a written agreement.
a)
proprietorship
b)
partnership
c)
corporation
d)
conglomerate
22.
Which of the following is an advantage of sole proprietorships:
a)
Limited liability
b)
Unlimited financial power
c)
Dual taxation
d)
Quick decision making
23.
Which of the following is a disadvantage of sole proprietorships:
a)
Limited capital
b)
Control 
c)
Privacy
d)
Tax liability
24.
Which of the following is a disadvantage of corporations:
a)
High taxes
b)
Unlimited life
c)
Unlimited liability
d)
financial power
25.
A business owner who prefers to maintain complete control of all business activities might consider structuring the venture as a(n)
a)
sole proprietorship
b)
general partnership.
c)
franchise
d)
 corporation.
26.
Disadvantages include double taxation and more government regulation
a)
Sole Propriotorship
b)
Partnership
c)
Corporation
27.
This type of business organization can be owned by two or more people who share unlimited liability for business debts
a)
Sole Propriotorship
b)
Partnership
c)
Corporation
28.
The disadvantages of this business organization include unlimited liability, difficulty raising financial capital, difficulty attracting qualified employees, and having a limited life
a)
Sole Propriotorship
b)
Partnership
c)
Corporation
29.
If you want to form this type of business organization, you will have to get permission from a state or national government.  This can be costly and require a lawyer.
a)
Sole Propriotorship
b)
Partnership
c)
Corporation
30.
Advantages include limited liability for owners, unlimited life, and ease of transfer of ownership. 
a)
Sole Propriotorship
b)
Partnership
c)
Corporation
31.
Of the three types of businesses, which one provides the most jobs? (Hint:  Which one is the most common?)
a)
Corporation
b)
Partnership
c)
Sole proprietorship
d)
None of these are correct
32.
A partnership could have
a)
60 owners
b)
1 owner
c)
a maximum of 2 owners
d)
none of these are correct
33.
How is a corporation different from a sole proprietorship?
a)
Corporations are owned by only one person
b)
Corporations can sell stock to raise money for the business. 
c)
Sole proprietorships have limited liability for the owners.
d)
Sole proprietorships require a legal charter to start the business.
34.
Guy and his brothers want to start a plumbing business together. What is an advantage of organizing the business as a partnership rather than a corporation?
a)
Partnerships can be started up quickly.
b)
Partnerships can issue stock to raise money.
c)
Partnerships have limited legal liability.
d)
Partnerships need a legal charter to begin.
35.
How are sole proprietorships and partnerships alike?
a)
Contracts are needed to start the businesses.
b)
Owners have complete control of the business.
c)
Owners have limited legal liability.
d)
The businesses are owned by one person.
36.

If the entire output of a market is produced by a single seller, the firm

a)

Is a monopoly.

b)

Faces perfectly inelastic demand.

c)

Can charge any price it wants and not lose customers.

d)

Is producing a new product.

37.

If a monopolist is producing a level of output where MR exceeds MC, then it should

a)

Raise its price.

b)

Increase its output.

c)

Lower its output.

d)

Shift its marginal cost curve upward.

38.

The only market structure in which there is significant interdependence among firms with regard to their pricing and output decisions is

a)

Monopolistic competition.

b)

Monopoly.

c)

Oligopoly.

d)

Perfect competition.

39.

The concentration ratio measures the

a)

Number of plants owned by an oligopoly.

b)

Percentage of total profits made by a firm in a specific market.

c)

Proportion of total output produced by the four largest producers in a specific market.

d)

Relative size of a firm compared to other industries.

40.

The demand curve will be kinked if rival oligopolists

a)

Match price increases but not price reductions.

b)

Match price reductions but not price increases.

c)

Match both price increase and price reductions.

d)

Do not match price changes at all.

41.

If there are many firms in an industry producing goods that are similar but slightly different, this is an example of

a)

Perfect competition.

b)

Monopolistic competition.

c)

Oligopoly.

d)

Monopoly.

42.

A monopolistically competitive industry is characterized by ________ concentration ratios and ________ entry barriers.

a)

high; high

b)

high; low

c)

low; high

d)

low; low

43.

Product differentiation refers to

a)

Features that make one product appear different from competing products in the same market.

b)

Different prices for the same product in a certain market.

c)

The selling of identical products in different markets.

d)

The charging of different prices for the same product in different markets.

44.

A monopolistically competitive firm maximizes profits or minimizes losses in the short run by

a)

Setting price equal to marginal cost.

b)

Producing at the output level where ATC is minimized.

c)

Producing at the output level where MR equals MC.

d)

Producing at the output level where MC equals ATC.

45.

Which of the following characterizes monopolistic competition?

a)

Price leadership.

b)

Zero long-run profit.

c)

Retaliation.

d)

Marginal cost pricing.

46.

Which of the following characterizes monopolistic competition?

a)

Price leadership.

b)

Zero long-run profit.

c)

Retaliation.

d)

Marginal cost pricing.

47.
The value of the output of all final goods and services produced within a country in a year.
a)
total ouput
b)
Gross Domestic Product
c)
national income
d)
net domestic product
48.
What type of GDP uses a base year's prices in order to make fair comparisons?
a)
GDP per capita
b)
Real GDP
c)
Nominal GDP
49.
Expectant parents buy supplies for the nursery.  Would this be included in GDP? 
a)
Yes - Consumer Spending
b)
Yes - Investment 
c)
No - Intermediate goods
d)
No - Non-market activity
50.
GDP is calculated by
a)
adding up the cost of goods used in producing the item
b)
subtracting all costs from total revenue
c)
adding consumption + investment +government spending+ (exports sold - imports bought)
51.
a)
A = Recession
b)
A = Peak/Boom
c)
A = Expansion
d)
A = Trough
52.
a)
D = Recovery/Expansion
b)
D = Recession
c)
D = Peak/Boom
d)
D = Trough 
53.
Goods, services, and intermediate products produced in other countries.
a)
import
b)
export
54.
The village of Menomonee Falls purchases a new fire truck.  Where would this show up in GDP formula?
a)
Consumption
b)
Investment
c)
Government Spending
d)
Exports-Imports
55.
 A firm in South Korea buys 20 Caterpillar machines for the construction of a new skyscraper. Where would this show up in the GDP formula?
a)
Consumption
b)
Investment
c)
Government Spending
d)
Exports-Imports
56.
Which is the more accurate, and widely used, measure of economic growth? 
a)
Nominal GDP
b)
Real GDP
57.
A rise in general price levels or too many dollars chasing too few goods are definitions of 
a)
unemployment
b)
recession
c)
inflation
d)
welfare
58.
GDP stands for...
a)
Gross Domestic Price
b)
Gross Domestic Product
c)
Given Domestic Price
d)
Given Domestic Product
59.
Remember: there are four "pieces" of GDP: C, I, G, and (Ex-Im). 
If you spend $20,000 on a vehicle, which piece are you affecting?
a)
C
b)
I
c)
G
d)
(Ex-Im)
60.
Remember: there are four "pieces" of GDP: C, I, G, and (Ex-Im). 
When the government spends money to  build new public schools, which piece is affected?
a)
C
b)
I
c)
G
d)
(Ex-Im)
61.
If C=5, I=5, G=5, Ex=5, and Im=0, what is GDP?
a)
625
b)
20
c)
15
d)
5
62.
Remember: there are four "pieces" of GDP: C, I, G, and (Ex-Im). When the owner of a snow cone business buys more ice for his machine, which piece is affected?
a)
C
b)
I
c)
G
d)
(Ex-Im)
63.
If C=10, I=5, G=3, Ex=2, and Im=5, what is GDP?
a)
28
b)
25
c)
21
d)
15

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