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Exam 2: How Economic Issues Affect Business

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Question 81

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Socialism and communism are both variations of a free-market economy.

A) True
B) False

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Question 82

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Kathleen manages a manufacturing plant for ScanRite,Inc. ,a producer of scanners and other input devices connected to computers.About six months ago,Kathleen asked an assistant to keep track of both work hours and output at her plant.She has compared these figures,and has found that even though the number of workers (and the hours they worked) remained relatively steady over the past six months,the plant's output increased significantly.This indicates that:

A) ScanRite prices have increased faster than the wages it pays to its workers.
B) Kathleen should hire more workers.
C) the productivity of workers at the ScanRite plant has increased.
D) the ScanRite plant must have sold off some of its excess inventory.

E) A) and C)
F) All of the above

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Question 83

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Most communist countries today are suffering from severe economic problems.

In capitalist countries,the government decides what to produce and how the goods and services will be produced.

In the small nation of Equalia,the government owns all of the key businesses.There are severe shortages of many key items,such as food.These features of Equalia's economy are consistent with a communist economic system.

Followers of Malthus today believe that there are too many people in the world.

One drawback of socialism is that it may result in a reduction in the individual's incentive to work hard.

is a condition in which the rate of inflation is declining.

Under socialism:

The CPI is based on what is happening to the prices of a "basket" of goods and services for an average family.

In perfect competition,each firm produces a product that is clearly differentiated from the products of other firms in the same market.

According to Adam Smith,the best way for the government to encourage the creation of jobs and the production of the products most wanted by consumers would be to:

In Canada,massive government support was needed to build our first national rail line.

The primary difference between macroeconomics and microeconomics is that macroeconomics looks at long run economic problems while microeconomics examines short run economic problems.

Fatma is a citizen of a country that has an economic system that is primarily based on free market capitalism.Fatma is likely to have the freedom to buy and sell property.

Microeconomics focuses on the decisions and behaviour of people and organizations in particular markets.

The Canadian economy is a service economy.

When the economy is weak,government revenues in Canada

An oligopoly is a market that is characterized by:

Some communist countries have not allowed their citizens to practice certain religions or change jobs.