BUS 121 Midterm Study Sheet
What occurs when the quantity demanded exceeds the quantity supplied?
A) demand deficit
B) surplus
C) equilibrium point
D) shortage
E) supply schedule
Explanation: D) When demand exceeds supply, there will not be enough goods available to meet the demand for them. This is known as a shortage.Page Ref: 12
Which of the following does NOT represent a degree of competition in a private enterprise system?
A) oligopoly
B) socialism
C) monopoly
D) perfect competition
E) monopolistic competition
Explanation: B) Competition is the economic condition in which there are certain demands that can be met by more than one business, so businesses in the same industry
compete for the same resources or customers. Page Ref: 14
Which of the following exists when an industry or market has only one producer?
A) competition
B) oligopoly
C) monopoly
D) communism
E) socialism
C) A monopoly is a market or industry in which there is only one producer that supplies a certain product. Monopolies in the United States economy are either discouraged or
regulated so that prices are not too high. Page Ref: 16
Which term refers to the pattern of short-term ups and downs in an economy?
A) aggregate output
B) business cycle
C) standard of living
D) balance of payments
E) demand and supply schedule
B) The business cycle is the short-term pattern of economic expansions and contractions. Page Ref: 17
Which term refers to the total quantity and quality of goods and services that people living in an economic
system can purchase?
A) business cycle
B) demand and supply schedule
C) standard of living
D) aggregate output
E) consumer price index
C) The standard of living is the total quantity and quality of goods and services that people can purchase with the currency used in their economic system. Standard of living is determined by economic
conditions such as inflation and purchasing power. Page Ref: 17
Which term refers to the total value of all goods and services produced within a given period by a national
economy?
A) standard of living
B) aggregate output
C) gross domestic product
D) gross national produce
E) purchasing power parity
C) Gross domestic product is the total value of all goods and services produced within a given period by a national economy through domestic factors of production. Page Ref: 17
Which of the following measures indicates the prices of typical products purchased by American consumers
living in urban areas?
A) GDP per capita
B) standard of living
C) consumer price index
D) purchasing power parity
, E) Big Mac index
C) The consumer price index is a measure of the prices of typical products purchased by consumers living in urban areas. It is used as a comparative standard, to tell whether inflation or deflation is
occurring, for example. Page Ref: 22
What does productivity measure?
A) the total value of all goods and services produced by a national economy
B) how much a system produces with the resources needed to produce it
C) how much output is necessary to produce a certain level of demand
D) the standard of living relative to purchasing power parity
E) how much gross national product results from inputs of labor
Explanation: B) Productivity is a measure of economic growth that compares how much a system produces with the resources needed to produce it. Page Ref: 19
What is the economic condition characterized by widespread increased prices without increased purchasing
power?
A) unemployment
B) inflation
C) expansion
D) deflation
E) recession
Explanation: B) Inflation is the condition that occurs when widespread price increases are present throughout an economic system. This happens when the amount of money in the economy grows faster
than the amount of products available to buy. Page Ref: 21-22
What is the condition in an economic system in which the amount of money available and the number of goods
and services produced are growing at about the same rate?
A) unemployment
B) stability
C) deflation
D) inflation
E) oversupply
Explanation: B) Economic stability happens when the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate. When this
occurs, there is neither inflation nor deflation. Page Ref: 23
What are profits?
A) total money taken in by a corporation
B) increases in income from year to year
C) increases in a corporation's stock price
D) revenue generated by goods and services
E) difference between revenues and expenses
Explanation: E) Profits represent the difference between an organization's revenues and its expenses; profits are the goal of most businesses and allow people to open and expand businesses. Page Ref: 4
How do top managers best demonstrate a commitment to ethical business practices?
A) by adopting written codes of ethics
B) by reading employees' e-mails
C) by decentralized decision-making practices
D) by cooperating with other companies
E) by monitoring employees' Web searches
Explanation: A) A common approach to formalizing top management commitment to ethical business practices is the adoption of a written code of ethics.Page Ref: 36
Which statement about codes of ethics is FALSE?
A) Fewer and fewer companies are adopting codes of ethics.
B) Codes of ethics are determined by company managers.
C) Some ethical responses can be learned through experience.
D) Social responsibility involves providing quality products and pricing products fairly.
E) Core principles and values should remain a constant characteristic of a company.
Explanation: A) The number of companies adopting an ethical code has risen sharply in the last thirty years.Page Ref: 37
Which of the following statements is most likely to be included in a company's code of ethics?
A) We reward high achievers.
B) We strive for domination in the market.
C) We achieve our objective by raising capital.
D) We believe in our company brand.
E) We reward all valuable contributions.
Explanation: E) This statement reflects a strong corporate value and a high ethical standard. Page Ref: 37-38
What occurs when the quantity demanded exceeds the quantity supplied?
A) demand deficit
B) surplus
C) equilibrium point
D) shortage
E) supply schedule
Explanation: D) When demand exceeds supply, there will not be enough goods available to meet the demand for them. This is known as a shortage.Page Ref: 12
Which of the following does NOT represent a degree of competition in a private enterprise system?
A) oligopoly
B) socialism
C) monopoly
D) perfect competition
E) monopolistic competition
Explanation: B) Competition is the economic condition in which there are certain demands that can be met by more than one business, so businesses in the same industry
compete for the same resources or customers. Page Ref: 14
Which of the following exists when an industry or market has only one producer?
A) competition
B) oligopoly
C) monopoly
D) communism
E) socialism
C) A monopoly is a market or industry in which there is only one producer that supplies a certain product. Monopolies in the United States economy are either discouraged or
regulated so that prices are not too high. Page Ref: 16
Which term refers to the pattern of short-term ups and downs in an economy?
A) aggregate output
B) business cycle
C) standard of living
D) balance of payments
E) demand and supply schedule
B) The business cycle is the short-term pattern of economic expansions and contractions. Page Ref: 17
Which term refers to the total quantity and quality of goods and services that people living in an economic
system can purchase?
A) business cycle
B) demand and supply schedule
C) standard of living
D) aggregate output
E) consumer price index
C) The standard of living is the total quantity and quality of goods and services that people can purchase with the currency used in their economic system. Standard of living is determined by economic
conditions such as inflation and purchasing power. Page Ref: 17
Which term refers to the total value of all goods and services produced within a given period by a national
economy?
A) standard of living
B) aggregate output
C) gross domestic product
D) gross national produce
E) purchasing power parity
C) Gross domestic product is the total value of all goods and services produced within a given period by a national economy through domestic factors of production. Page Ref: 17
Which of the following measures indicates the prices of typical products purchased by American consumers
living in urban areas?
A) GDP per capita
B) standard of living
C) consumer price index
D) purchasing power parity
, E) Big Mac index
C) The consumer price index is a measure of the prices of typical products purchased by consumers living in urban areas. It is used as a comparative standard, to tell whether inflation or deflation is
occurring, for example. Page Ref: 22
What does productivity measure?
A) the total value of all goods and services produced by a national economy
B) how much a system produces with the resources needed to produce it
C) how much output is necessary to produce a certain level of demand
D) the standard of living relative to purchasing power parity
E) how much gross national product results from inputs of labor
Explanation: B) Productivity is a measure of economic growth that compares how much a system produces with the resources needed to produce it. Page Ref: 19
What is the economic condition characterized by widespread increased prices without increased purchasing
power?
A) unemployment
B) inflation
C) expansion
D) deflation
E) recession
Explanation: B) Inflation is the condition that occurs when widespread price increases are present throughout an economic system. This happens when the amount of money in the economy grows faster
than the amount of products available to buy. Page Ref: 21-22
What is the condition in an economic system in which the amount of money available and the number of goods
and services produced are growing at about the same rate?
A) unemployment
B) stability
C) deflation
D) inflation
E) oversupply
Explanation: B) Economic stability happens when the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate. When this
occurs, there is neither inflation nor deflation. Page Ref: 23
What are profits?
A) total money taken in by a corporation
B) increases in income from year to year
C) increases in a corporation's stock price
D) revenue generated by goods and services
E) difference between revenues and expenses
Explanation: E) Profits represent the difference between an organization's revenues and its expenses; profits are the goal of most businesses and allow people to open and expand businesses. Page Ref: 4
How do top managers best demonstrate a commitment to ethical business practices?
A) by adopting written codes of ethics
B) by reading employees' e-mails
C) by decentralized decision-making practices
D) by cooperating with other companies
E) by monitoring employees' Web searches
Explanation: A) A common approach to formalizing top management commitment to ethical business practices is the adoption of a written code of ethics.Page Ref: 36
Which statement about codes of ethics is FALSE?
A) Fewer and fewer companies are adopting codes of ethics.
B) Codes of ethics are determined by company managers.
C) Some ethical responses can be learned through experience.
D) Social responsibility involves providing quality products and pricing products fairly.
E) Core principles and values should remain a constant characteristic of a company.
Explanation: A) The number of companies adopting an ethical code has risen sharply in the last thirty years.Page Ref: 37
Which of the following statements is most likely to be included in a company's code of ethics?
A) We reward high achievers.
B) We strive for domination in the market.
C) We achieve our objective by raising capital.
D) We believe in our company brand.
E) We reward all valuable contributions.
Explanation: E) This statement reflects a strong corporate value and a high ethical standard. Page Ref: 37-38
