Understanding Economics And How It Affects Business Test Questions – Flashcards
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America's business success is largely due to an economic and social climate that allows businesses to operate freely.
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True
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Global economics and politics have no significant influence on businesses in the United States.
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False
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The study of how society chooses to employ resources to produce goods and services and to distribute them for consumption among various competing groups and individuals is known as sociology.
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False
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Economists study how people use resources to produce and distribute goods and services for consumption among competing groups and individuals.
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True
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Macroeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.
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True
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Microeconomics focuses on the decisions and behavior of people and organizations in particular markets.
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True
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Resource development is concerned with finding the best way to utilize the fixed amount of resources a society has available.
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False
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Resource development is the study of how to increase resources and to create the conditions that will make better use of those resources.
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True
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Peace and prosperity will flourish if we can find the one best way to divide existing resources among nations.
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False
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In developing nations of the world, population has leveled off and is not expected to increase dramatically in the future.
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False
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Studies about the effects of population growth on the economy are part of macroeconomics.
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True
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Economic progress can occur when business owners provide jobs and economic growth for their employees, their communities, and themselves.
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True
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Economist Adam Smith's important contribution was an inquiry as to why some nations are wealthy, while others remain poor.
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True
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14. Adam Smith believed the self-interest of businesspeople would lead them to create needed goods, services, and jobs.
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True
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The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.
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True
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According to Adam Smith, the "invisible hand" refers to the government's effort to always keep a check on the wealth creation of individuals, so that no one business would control a market for a particular good or service.
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False
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A contemporary economic challenge is creating profitable businesses by selling goods and services that contribute toward a healthier environment.
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True
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An economist is examining how consumers in the automobile market have responded to recent price increases by car manufacturers. He is examining a microeconomic situation.
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True
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Macroeconomics looks at long run economic problems while microeconomics examines short run economic problems.
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False
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The point of intersection between the supply and demand curves is called the stress point.
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True
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In the long run, the market price tends to adjust toward the equilibrium point.
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True
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Socialists believe that the primary economic function of the government is to promote rapid economic growth.
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False
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In socialist economies, the government owns some, if not most basic businesses such as telecommunications systems and utilities.
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True
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24. One drawback of socialism is that it may result in a reduction in the individual's incentive to work hard.
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True
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Most communist countries today are suffering from severe economic problems.
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True
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Economics is the study of how a society...
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employs resources to produce goods and services and distribute them among competing groups and individuals.
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is the study of how a society employs its limited resources to produce goods and services and how it distributes them among competing groups and individuals.
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Economics
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studies the operation of a nation's economy as a whole
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Macroeconomics
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looks at the behavior of individual people and organizations in specific markets.
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Microeconomics
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Resource development is
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The study of how to increase the amount of available resources and create conditions that will make better use of these resources
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The study of how to increase the amount of available resources and create conditions that will make better use of these resources is known as
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resource development
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is considered by some to be the father of modern economics
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Adam Smith
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Which of the following is an important premise of Smith's conclusions about economic prosperity?
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Individual freedom is necessary if a society is to prosper.
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Which of the following would be a topic emphasized in a macroeconomics course?
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Factors that determine how fast a nation's economy is growing.
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Which of the following would be a topic emphasized in a microeconomics class?
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How market conditions determine the price of a specific product.
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Adam Smith believed that countries would prosper if businesspeople were free to start and run their own businesses. Businesspeople would make a profit by providing the goods, services and ideas that others in the economy wanted, and they would hire others to help increase those profits, leading to social and economics benefits for many. This idea was called the
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invisible hand.
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Which of the following statements would a follower of Adam Smith be most likely to make?
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. If people are given the freedom to follow their own interests, theoretically their efforts will lead to economic growth that benefits society as a whole.
