a. employs resources to produce goods and services and distribute them among competing
groups and individuals.
b. employs statistical techniques to make predictions about the evolution of society over the
c. governs itself for the good of its citizens.
a. Adapting to changes in demand is easy for businesses to do;
b. Demand refers to the quantity of a good that consumers are willing and able to buy at
different prices at a specific time;
c. In the long run, the actual market price tends to adjust toward the equilibrium point;
d. Price is the key factor that determines both quantity supplied and quantity demanded; e. Under the basic principle of supply, as the price goes down, manufacturers and suppliers
of a product tend to supply less of the product to the market.
the market price of a good is below the equilibrium price, and all other determinants are
a. Sellers cannot keep up with market demand. b. Suppliers are not producing enough product. c. The government determined that the product was not worth the price tag that the producer
was asking. d. The product has competition at the equilibrium price. e. None of the above.
17. Perfect competition
a. A few large sellers who dominate a market. b. A large number of firms produce goods that are similar but are perceived by buyers as
c. The entire demand for a good is controlled by a single buyer.
d. The entire supply of a good is controlled by a single seller.
e. There are many sellers in a market and no seller is large enough to dictate the price of a
19. Corn growers in Iowa; 20. Town of Ithaca Water;
21. U.S.A. automobile industry.
19. (d) Perfect competition
20. (b) monopoly
21. (c) oligopoly
23. CollegeTown Bagel, one of the eateries in the Collegetown district of Ithaca;
24. Cornell University, a member of the highly esteemed Ivy League university conference;
25. People selling or renting in Craigslist in Ithaca.
a. Monopolistic competition
d. Perfect competition
29. Perfect competition
a. High differentiation, high size/economies of scale
b. High differentiation, small size/economies of scale
c. Low differentiation, large size/economies of scale
d. Low differentiation, small size/economies of scale
32. Focuses on differentiation
33. Relies on innovation 34. Inhibits amount of investment
32. b. monopolistic competition
33. a. oligopoly
34. c. perfect competition
c. Unemployment rate d. All of the above are major indicators
e. None of the above is a major indicator
a. Asset profitability
b. Gross domestic product
c. Price indexes
d. Unemployment rate e. All of the above are important indicators for the economy as a whole.
47. As a result of the dot.com crisis, 9/11, the Afghanistan and Irak wars, and the financial crisis of September 2008, the United States have maintained consistent deficit spending for the last twelve years;
48. The Federal Reserve has purchased an additional $600 billion in US Treasuries, on the hope to increase liquidity in the U.S. economy, using a mechanism called quantitative easing;
49. The Obama administration, upon arriving in power, instituted a stimulus package worth $787 billion, known as the “American Recovery and Reinvestment Act of 2009”, that was intended to create jobs and promote investment and consumer spending during the recession;
50. The Troubled Asset Relief Program, a program of the United States government to purchase assets and equity from financial institutions to strengthen the U.S. financial sector, signed into law on October 2008. Institutions who benefited from the program have by now mostly repayed these investments.
a. Fiscal policy
b. Monetary policy
c. National debt management