Business Economics
Midterm Exam
Course Introduction
Business Economics is a course that explores the application of economic theories and principles to real-world business decision-making. Students will learn how concepts such as demand and supply, market structures, production and cost analysis, and market equilibrium influence the strategic choices of firms. The course also examines the impact of government policies, globalization, and macroeconomic factors on business environments. By integrating economic reasoning with practical business issues, Business Economics equips students with analytical tools to assess market opportunities, optimize resource allocation, and develop effective strategies for achieving organizational objectives.
Recommended Textbook Microeconomics Brief Edition 2nd Edition by
Campbell R. McConnell
Available Study Resources on Quizplus
13 Chapters
1963 Verified Questions
1963 Flashcards
Source URL: https://quizplus.com/study-set/3259
Page 2
Chapter 1: Limits, Alternatives, and Choices
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/64726
Sample Questions
Q1) The process of developing hypotheses,testing them against facts,and using the results to construct theories is called:
A) opportunity cost calculation.
B) the scientific method.
C) marginal analysis.
D) microeconomics.
Answer: B
Q2) Which of the following is not a central focus of the "economic perspective"?
A) Scarcity and choice
B) The scientific method
C) Purposeful behavior
D) Marginal analysis
Answer: B
Q3) The overallocation of resources by society to a product means that the:
A) marginal benefit is greater than the marginal cost.
B) marginal cost is greater than the marginal benefit.
C) entrepreneurs are making too much profit in the economy.
D) workers are not being paid adequate wages and salaries.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: The Market System and the Circular Flow
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/64725
Sample Questions
Q1) Issues of the distribution of goods and services and incomes in a competitive market system are the primary topic of which fundamental question?
A) What goods and services will be produced?
B) How will the goods and services be produced?
C) How will the system promote progress?
D) Who will get the goods and services?
Answer: D
Q2) Which statement best describes a capitalist economy?
A) Society determines production and the allocation of goods and services only through markets.
B) Government policies determine the production and the allocation of goods and services.
C) Government policies determine the production,but not the allocation,of goods and services.
D) The role of individual self-interest is relatively unimportant because government makes most economic decisions.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Demand, Supply, and Market Equilibrium
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/64724
Sample Questions
Q1) The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.
A) direct,inverse
B) inverse,direct
C) inverse,inverse
D) direct,direct
Answer: A
Q2) In presenting the model of a demand curve,economists presume the most important variable in determining the quantity demanded is:
A) the price of the product itself.
B) consumer income.
C) the prices of related goods.
D) consumer tastes.
Answer: A
Q3) A price floor in a competitive market will result in persistent shortages of a product.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Elasticity of Demand and Supply
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/180065
Sample Questions
Q1) Sony is considering a 10 percent price reduction on its LCD television sets.If the demand for sets in this price range is inelastic:
A) revenues from LCD sets will remain constant.
B) revenues from LCD sets will decrease.
C) revenues from LCD sets will increase.
D) the number of LCD sets sold will decrease.
Q2) A positive income elasticity of demand coefficient indicates that:
A) a product is an inferior good.
B) a product is a normal good.
C) two products are substitute goods.
D) two products are complementary goods.
Q3) Which of the following pairs of goods is most likely to have a positive cross-price-elasticity of demand?
A) Steak and hamburger.
B) Fighter jets and pencils.
C) Hamburgers and hamburger buns.
D) College professors and textbooks.
Q4) Product demand is more elastic the longer the time period under consideration.
A)True
B)False
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Market Failures: Public Goods and Externalities
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/64722
Sample Questions
Q1) It has been proposed that a government agency be charged with the responsibility for determining the amount of pollution that the atmosphere or a body of water can safely recycle,and selling these limited rights to polluters.From an economist's perspective,what would be the advantage of such a market for pollution rights?
A) Government agencies can make a great deal of money.
B) Pollution would be eliminated because nobody would want to pay for such a right.
C) The quality of water or air can be maintained at some acceptable standard through economic incentives.
D) The social consciousness of people would be raised as they obtain more appreciation for the importance of conservation.
Q2) Suppose that people want bike paths through town,but no private individual or business is willing to build it.This is an example of:
A) negative externalities.
B) government failure.
C) market failure.
D) productive inefficiency.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Businesses and Their Costs
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/64721
Sample Questions
Q1) The law of diminishing returns explains diseconomies of scale.
A)True
B)False
Q2) If you operated a small bakery,which of the following would be a variable cost in the short run?
A) Baking ovens
B) Interest on business loans
C) Annual lease payment for use of the building
D) Baking supplies (flour,salt,etc. )
Q3) Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year.If the firm sold 100,000 units of its output at $50 per unit,its accounting:
A) profits were $100,000 and its economic profits were zero.
B) losses were $500,000 and its economic losses were zero.
C) profits were $500,000 and its economic profits were $1 million.
D) profits were zero and its economic losses were $500,000.
Total revenue was 100,000 * $50 = $5,000,000 and explicit costs were also $5,000,000.So the firm lost its implicit costs for an economic loss of $500,000.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Pure Competition
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/64720
Sample Questions
Q1) Which statement is correct? The long-run supply curve for a purely competitive:
A) decreasing-cost industry is upsloping.
B) increasing-cost industry is perfectly elastic.
C) increasing-cost industry is upsloping.
D) increasing-cost industry is less elastic than the industry's short-run supply curve.
Q2) Which is true for a purely competitive firm in short-run equilibrium?
A) The firm is making only normal profits.
B) The firm's marginal cost is greater than its marginal revenue.
C) The firm's marginal revenue is equal to its marginal cost.
D) A decrease in output would lead to a rise in profits.
Q3) One explanation for the existence of an increasing-cost industry is:
A) increasing marginal returns to labor occur.
B) firms produce beyond the point of minimum long-run average total costs.
C) perfectly elastic long-run supply schedules are observed in the industry.
D) as the industry expands,input prices are bid up for some factor of production.
Q4) In short-run equilibrium,a competitive firm cannot earn economic profits.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Pure Monopoly
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/64719
Sample Questions
Q1) Which antitrust act provided that parties could sue for and,if successful,collect triple damages from monopolistic firms?
A) Wheeler-Lea Act
B) Clayton Act
C) Sherman Act
D) Celler-Kefauver Act
Q2) A pure monopoly firm will never charge a price in the inelastic range of its demand curve because lowering price to get into this region will:
A) increase total revenue,increase total cost,and decrease profit.
B) decrease total revenue,increase total cost,and decrease profit.
C) increase total revenue,decrease total cost,and decrease profit.
D) decrease total revenue,total cost,and profit.
Q3) Electric utilities sometimes charge higher prices for electricity used for illumination and lower prices for electricity used for heat.These lower prices for electric heat result primarily from:
A) the existence of good heating substitutes.
B) economies of scale in electric heat generation.
C) prices for electric heat being set at the socially optimal level.
D) strict government regulation of the price charged for electric heat.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/64718
Sample Questions
Q1) One difference between monopolistic competition and pure competition is that:
A) products can be standardized or differentiated in pure competition.
B) there is some control over price in monopolistic competition.
C) monopolistic competition has significant barriers to entry.
D) firms differentiate their products in pure competition.
Q2) Pure competition results in a lower price but identical output level compared to those in monopolistic competition.
A)True
B)False
Q3) OPEC is a classic example of a kinked-demand curve oligopoly.
A)True
B)False
Q4) Which would make an individual firm's demand curve less elastic?
A) The purchase of more efficient machinery
B) A reduction in the price of the firm's product
C) Increased brand loyalty toward the firm's product
D) A reduction in advertising expenditures by the firm
Q5) The steel industry is an example of a homogeneous oligopoly.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Wage Determination
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/64717
Sample Questions
Q1) Other things being equal,the wages of clerical workers would tend to decrease if there was an increase in:
A) the marginal revenue product of clerical workers.
B) the minimum entry requirements for clerical work.
C) the period of training required for clerical work.
D) nonmonetary benefits available to clerical workers.
Q2) Which is an example of a change in productivity that decreases labor demand?
A) A financial crisis in Asian nations reduces the demand for exports to Asia,thus decreasing the demand for domestic workers in the computer industry.
B) Tattoos fade in popularity,thus decreasing the demand for tattoo artists.
C) More government regulation decreases output per worker in the fast food industry,thus decreasing demand for fast food workers.
D) An increase in the price of construction equipment reduces the demand for construction equipment operators.
Q3) Increased resource productivity will,ceteris paribus,increase a firm's demand for an input.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Income Inequality and Poverty
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/64716
Sample Questions
Q1) Which of the following provides retirement income to qualified retirees?
A) Medicare
B) Supplemental Security Income (SSI)
C) Social Security
D) SNAP
Q2) The percentage of the population living in poverty during the 1959 to 1969 period:
A) decreased.
B) increased.
C) remained relatively constant.
D) both increased and decreased.
Q3) About one-fourth of all American households have annual incomes of $100,000 or more.
A)True
B)False
Q4) The lower the benefit-reduction rate,the greater are the incentives to earn additional income.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Public Finance: Expenditures and Taxes
Available Study Resources on Quizplus for this Chatper
140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/64715
Sample Questions
Q1) The equations for the demand and supply curves for a particular product are P = 10.4Q and P = 2 + .4Q,where P is price and Q is quantity expressed in units of 100.After an excise tax is imposed on the product,the supply equation is P = 3 + .4Q.The equilibrium quantity after the excise tax is imposed is:
A) 750 units.
B) 850 units.
C) 875 units.
D) 950 units.
Q2) A tax is progressive if the average tax rate rises as income increases.
A)True
B)False
Q3) The benefits-received principle of taxation is used to support corporate and personal income taxes.
A)True
B)False
Q4) About two-thirds of all federal spending is for national defense.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: International Trade and Exchange Rates
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/64714
Sample Questions
Q1) The World Trade Organization:
A) is also known as the International Monetary Fund (IMF).
B) is also known as NAFTA.
C) was established to resolve disputes arising under world trade rules.
D) enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.
Q2) One of the causes of the trade deficits of the late 1990s has been a declining saving rate in the United States.
A)True
B)False
Q3) The major difference between a tariff and a quota on an imported product is that a tariff produces revenue for the government.
A)True
B)False
Q4) Tariffs and import quotas meant to increase domestic employment also eliminate domestic jobs in export industries.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15