Economics for Business
Exam Answer Key
Course Introduction
Economics for Business provides students with a foundational understanding of economic principles and their practical applications within the business environment. The course explores key microeconomic and macroeconomic concepts such as supply and demand, market structures, price determination, consumer behavior, production costs, and government intervention. Students also analyze broader economic indicators, fiscal and monetary policies, and international trade issues as they relate to business decision-making. Through real-world examples and case studies, this course equips students with analytical tools to evaluate how economic forces impact business strategy, resource allocation, and organizational success.
Recommended Textbook
Essentials of Economics 9th Edition by
Bradley R Schiller
Available Study Resources on Quizplus
17 Chapters
2470 Verified Questions
2470 Flashcards
Source URL: https://quizplus.com/study-set/3313
Page 2
Chapter 1: The Challenge of Economics
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/65760
Sample Questions
Q1) In the model where we assume that all parcels of land are the same,the relationship between food and timber produced when all land is in use is:
A) Linear and inverse.
B) Direct and linear.
C) Inverse and nonlinear.
D) Direct and nonlinear.
Answer: A
Q2) Economic theories can be used to do all of the following EXCEPT:
A) Evaluate economic policy.
B) Design economic policy.
C) Explain consumer and market behavior.
D) Determine exact economic outcomes.
Answer: D
Q3) Explain opportunity cost.Give one example of an opportunity cost.
Answer: An opportunity cost is the value of the second best choice.Example:A student stays home to study for an exam instead of going to a movie with friends.(Answers may vary)
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: The US Economy
Available Study Resources on Quizplus for this Chatper
131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/65759
Sample Questions
Q1) Which of the following statements is true concerning income inequality?
A) Income is distributed equally in poor countries.
B) Rich countries have greater income inequality than poor countries.
C) The government has no mechanism for altering income inequality.
D) A free market economy produces an unequal distribution of income.
Answer: D
Q2) Which of the following sectors contributes the largest amount to the U.S.GDP?
A) Farming.
B) Manufacturing.
C) Services.
D) Exports.
Answer: C
Q3) In order to measure what a country produces,we:
A) Summarize total output in physical terms.
B) Count units of output.
C) Count the weight of different products.
D) Summarize the monetary value of output.
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Supply and Demand
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/65758
Sample Questions
Q1) Which of the following is not a factor of production?
A) Land.
B) Wages.
C) Labor.
D) Capital.
Answer: B
Q2) Ceteris paribus,which of the following will cause the supply of milk shakes to increase?
A) Consumer incomes increase.
B) A new diet craze suggests that people can consume milk shakes and lose weight.
C) The cost of milk,a key ingredient,decreases.
D) The wages paid to those who work on dairy farms increases.
Answer: C
Q3) Land,labor,capital and entrepreneurship are bought and sold in the product market.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Consumer Demand
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/65757
Sample Questions
Q1) Ceteris paribus,when the price elasticity of demand is unitary elastic,a decrease in:
A) Price results in no change to total revenue.
B) Total revenue indicates an increase in price.
C) Total revenue indicates a decrease in price.
D) Price results in an increase in total revenue.
Q2) Suppose a university raises its tuition by 8 percent and as a result the enrollment of students drops by 4 percent.The price elasticity of demand is closest to:
A) 8.0.
B) 4.0.
C) 2.0.
D) 0.
Q3) Suppose the local government decides to reduce traffic congestion on a bridge by imposing a toll.The toll will be most effective if the price elasticity of demand for the bridge is:
A) Inelastic.
B) Elastic.
C) Unitary.
D) Either unitary or inelastic.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Supply Decisions
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/65756
Sample Questions
Q1) The change in total output that results from one additional unit of input is the:
A) Marginal physical product.
B) Average product of the input.
C) Unit cost of the input.
D) Input price.
Q2) The most desirable rate of output is the one that:
A) Minimizes total costs.
B) Maximizes total profit.
C) Minimizes marginal costs.
D) Maximizes total revenue.
Q3) Total output may continue to rise even though marginal physical product is decreasing.
A)True
B)False
Q4) During the long run:
A) Output is limited by the law of diminishing returns.
B) The firm can build or lease any size factory.
C) Some inputs are fixed and some are variable.
D) There are no economic costs.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Competition
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/65755
Sample Questions
Q1) Which of the following market structures has the highest barriers to entry?
A) Perfect competition
B) Monopoly
C) Monopolistic competition
D) Oligopoly
Q2) Refer to Figure 6.2 for a perfectly competitive firm.If price is $6,the firm is:
A) Earning an economic profit.
B) Unable to sell any output.
C) Maximizing efficiency.
D) Earning an economic loss.
Q3) Which of the following is characteristic of perfectly competitive markets?
A) Differentiated products
B) A large number of firms
C) Price below marginal cost
D) Significant barriers to entry
Q4) A perfectly competitive firm is a price taker because:
A) It has no control over the market price of its product.
B) It has market power.
C) Market demand is downward sloping.
D) Its products are differentiateD.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Monopoly
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65754
Sample Questions
Q1) If the entire output of a market is produced by a single seller,the firm:
A) Is a monopoly.
B) Is competitive.
C) Is an oligopolist.
D) Faces a perfectly vertical demand curve.
Q2) Monopolies tend to inhibit technology and innovation by keeping competition out of the market.
A)True
B)False
Q3) As noted in the text,which of the following was used by Nintendo to control the video game market?
A) A natural monopoly.
B) Economies of scale.
C) A government franchise.
D) Exclusive licensing.
Q4) Monopoly may not be a problem in contestable markets if:
A) The structure of a market is competitive.
B) Firms can exit from the market.
C) Antitrust regulations are enforced.
D) Potential competition exists.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: The Labor Market
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65753
Sample Questions
Q1) A firm should continue to hire workers until the:
A) MRP is equal to demand.
B) MPP is equal to the number of workers hired.
C) MRP is equal to the market wage rate.
D) MRP is equal to zero.
Q2) Refer to Figure 8.2.A minimum wage of W<sub>2</sub> will result in a surplus of ____ workers.
A) 1950
B) 1350
C) 1050
D) 900
Q3) Generally,as the number of hours worked increases,the marginal utility of leisure time tends to:
A) Increase.
B) Remain the same.
C) Decrease.
D) Become zero or less.
Q4) Since people are paid wages to work,the opportunity cost of working is zero.
A)True
B)False
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Government Intervention
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/65752
Sample Questions
Q1) In Table 9.2,which firm has the lowest absolute level of costs borne directly by the producer?
A) Firm A
B) Firm B
C) Firm C
D) Firm D
Q2) Which of the following does not explain why the market sometimes fails to produce the optimal mix of output?
A) Some producers have market power.
B) Public goods can have free-riders.
C) Private goods cannot be consumed jointly.
D) There are externalities associated with production.
Q3) Income transfers are designed to address the issue of market power.
A)True
B)False
Q4) The free-rider problem arises because:
A) Private goods are not available.
B) Most public goods involve illegal activity.
C) People prefer private goods.
D) Public goods can be jointly consumed.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: The Business Cycle
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65751
Sample Questions
Q1) When construction workers seek work because the ground is covered in snow and ice,the unemployment rate goes up.This situation is an example of:
A) Frictional unemployment.
B) Seasonal unemployment.
C) Structural unemployment.
D) Cyclical unemployment.
Q2) If the population of a country is 1,000,000 people,its labor force consists of 500,000,and 40,000 people are unemployed,the unemployment rate is:
A) 50.0 percent.
B) 8.0 percent.
C) 7.4 percent.
D) 4.0 percent
Q3) If the CPI is 112 in Year Z,then it costs _______ in Year Z to buy the same market basket that cost _______ in the base period.
A) $112;$100
B) $12;$100
C) $100;$112
D) $112;$12
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Aggregate Supply and Demand
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65750
Sample Questions
Q1) Which of the following will occur if the price level is below the equilibrium level?
A) Consumers will bid the price level up by competing for goods
B) The quantity demanded will increase as the price level increases
C) The quantity supplied will decrease as the price level increases
D) Producers will bid the price level down by competing for buyers
Q2) In Figure 11.2,at which of the following price levels would a shortage occur?
A) P<sub>2</sub>
B) P<sub>3</sub>
C) P<sub>4</sub>
D) P<sub>5</sub>
Q3) External shocks to an economy include:
A) Innovation,population growth,and spending behavior.
B) Disruptions in trade,wars,and natural disasters.
C) Tax policy,government spending,and the availability of money.
D) Jobs,prices,and growth.
Q4) Most modern economists believe the economy performs best without government intervention in the form of policy levers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/65749
Sample Questions
Q1) Which of the following does not meet the economic definition of saving?
A) A graduate assistant spends all of his income on tuition
B) A student deposits money in her savings account
C) A professor spends less than he makes each month
D) The president's secretary puts cash under her mattress
Q2) In a graph of the aggregate demand curve,an increase in investment by businesses is represented by a:
A) Movement down the curve.
B) Movement up the curve.
C) Rightward shift of the curve.
D) Leftward shift of the curve.
Q3) Based on Table 12.1,what is the marginal propensity to consume?
A) 0.60
B) 0.75
C) 0.80
D) 0.85
Q4) The four components of aggregate demand are consumption,investment,government expenditures,and net exports.
A)True
B)False
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Money and Banks
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65748
Sample Questions
Q1) If you deposit $1,000 in your checking account,your bank is only required to hold a portion of the deposit and is allowed to lend out the balance.This illustrates the concept known as:
A) Split reserves.
B) Money laundering.
C) Fractional reserves.
D) Demand deposits.
Q2) Suppose the entire banking system has $10 million in excess reserves and a required reserve ratio of 5 percent.The deposit-creation potential of the banking system is:
A) $5 million
B) $10 million
C) $100 million
D) $200 million
Q3) An increase in the amount of bank loans should shift the aggregate:
A) Supply curve to the left.
B) Supply curve to the right.
C) Demand curve to the left.
D) Demand curve to the right.
Q4) How do banks create money?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Monetary Policy
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/65747
Sample Questions
Q1) The chairman of the Federal Reserve Board of Governors:
A) Is elected by U.S.voters.
B) Will typically change following each presidential election.
C) Serves a four-year term and can be reappointed.
D) Is always closely tied to the same political party as the president.
Q2) Using Figure 14.2,a shift in aggregate demand from AD<sub>3</sub> to AD<sub>4</sub> will cause,ceteris paribus:
A) An increase in real output and an increase in the price level.
B) An increase in real output,but no change in the price level.
C) An increase in the price level,but no change in real output.
D) A decrease in the price level,but no change in real output.
Q3) A decrease in the reserve requirement will cause a decrease in the money multiplier.
A)True
B)False
Q4) Considering only the information in Table 14.1,the basic money supply is:
A) $120 billion.
B) $800 billion.
C) $920 billion.
D) $1 trillion.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Economic Growth
Available Study Resources on Quizplus for this Chatper
131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/65746
Sample Questions
Q1) Growth in GDP per capita has allowed Americans to live longer and consume more goods and services.
A)True
B)False
Q2) When corporate managers reduce investment spending,long-run profitability is likely to increase.
A)True
B)False
Q3) Short-run economic growth comes from:
A) Expanding the production possibilities curve.
B) A rightward shift of aggregate supply.
C) Increased or more efficient use of existing resources.
D) A population decrease which increases output per person.
Q4) In order to maximize the potential of workers,managers should:
A) Watch workers closely so they don't become lazy.
B) Offer incentives to workers.
C) Require a certain level of productivity from each worker.
D) Limit coffee breaks and shorten lunch hours.
Q5) Discuss the reason labor productivity increases when more units of output are produced per unit of labor.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Theory and Reality
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65745
Sample Questions
Q1) Which of the following is consistent with the argument for hands-off policy?
A) Fixed policy rules.
B) Fine-tuning.
C) Discretionary fiscal policy.
D) Discretionary monetary policy.
Q2) If a president promises to increase spending,cut taxes and reduce the budget deficit,this is an example of:
A) A design problem.
B) A measurement problem.
C) A goal conflict.
D) An implementation problem.
Q3) Automatic stabilizers tend to smooth out the business cycle because they respond counter-cyclically to changes in national income.
A)True
B)False
Q4) Supply-side policy tools to deal with stagflation include:
A) A reduction in government spending.
B) A decrease in the discount rate.
C) A reduction in tax rates.
D) An increase in the reserve requirement.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: International Trade
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/65744
Sample Questions
Q1) If a country pursues its comparative advantage:
A) Prices will rise throughout the world.
B) Total world population will increase.
C) Market power will rise throughout the world.
D) Total world output will increase.
Q2) If the countries are at points A and B in Figure 17.1 and do not trade,what is the total number of DVD players produced per day?
A) 1,000.
B) 2,000.
C) 3,000.
D) 4,000.
Q3) Which of the following groups does not have an interest in restricting free trade?
A) People who buy the imported product.
B) Producers in import-competing markets.
C) Communities where workers in import-competing markets live.
D) Workers in import-competing markets.
Q4) A quota is a tax on specific goods.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19