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economics > unit 4 exam > Flashcards

unit 4 exam Flashcards

1
Q

The inverse relationship between the price of a product and the quantity that consumers will buy is known as the…. A: The Law of Demand
B: The Principle of Fair Pricing
C: The theory of efficient production
D: The concept of diminishing returns)

A

The Law of Demand

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2
Q

In a pure/perfect competition market, the number of businesses in the market is….. A: Restrained
B: Few
C: High
D: One

A

High

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3
Q

All of the following are examples of the advantages of sole proprietorship EXCEPT… A: Unlimited liability
B: Pass-through status
C: Ease of set up
D: Ease of exiting the market

A

Unlimited liability

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4
Q

What is a significant disadvantage of a General Partnership?
A: Partners have limited decision making power
B: Double taxation
C: Unlimited personal liability for business debts
D: Difficulty in dissolving the partnership

A

Unlimited personal liability for business debts

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5
Q

A company with a “right to work” law in place is facing challenges with union membership. Some workers are members of the union, while others choose not to join. However, everyone must still pay union dues. Which type of workplace arrangement is most likely described in this scenario? A: Closed Shop
B: Modified Shop
C: Agency Shop
D: Union Shop

A

Agency Shop

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6
Q

Which of the following is a key advantage of a Sole Proprietorship? A: Limited liability protection
B: Ease of formation and control
C: Ability to raise capital easily
D: Tax benefits from pass-through taxation

A

Ease of formation and control

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7
Q

True or False: Pure competition markets are easy to enter and easy to exit.

A

True

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8
Q

Which is a disadvantage of a Sole Proprietorship? A: Limited control over decision making
B: Ease of formation and control
C: Double taxation
D: Unlimited personal liability

A

Unlimited personal liability

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9
Q

In monopolistic competitions, there are… A: Only one company
B: A small number of companies
C: Many different companies
D: None of the above

A

Many different companies

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10
Q

True or False: A closed shop allows for both union and non-union workers.

A

False

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11
Q

Scenario: A group of workers in a factory negotiate with their employer for higher wages. The employer refuses to meet their demands, and the workers vote to go on strike. What action would the workers likely take to publicly demonstrate their discontent during the strike?
A: Start a boycott of the company’s products
B: Create a picket line outside the factory to protest
C: Join an independent union unrelated to their workplace
D: Immediately file a lawsuit against the employer

A

Create a picket line outside the factory to protest

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12
Q

In a Limited Liability Partnership (LLP), which of the following is true? A: Partners are personally liable for business debts
B: Partners share profits and losses equally
C: Partners are protected from personal liability for certain business obligations
D: LLPs are taxed as corporations

A

Partners are protected from personal liability for certain business obligations

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13
Q

What is an independent union? A: A union that is affiliated with a national or international labor organization
B: A union that operates without being connected to any larger union federation or organization
C: A union that represents only government employees
D: A union that only focuses on a single industry, such as healthcare/transportation

A

A union that operates without being connected to any larger union federation or organization

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14
Q

Owners of corporations have _____ liability. A: Personal
B: Unlimited
C: Free
D: Limited

A

limited

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15
Q

Which of the following is a disadvantage of a Corporation? A: No ability to raise capital
B: Limited personal liability
C: Double taxation (corporate and individual)
D: Difficulty in transferring ownership

A

Double taxation

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16
Q

Boycotting involves…. A: Picketing in front of a business
B: Sit-ins at work
C: Lockouts preventing employees from working
D: Refusing to buy products from a business

A

Refusing to buy products from a business

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17
Q

Scenario: A retail company decides to implement a “union shop” policy, requiring all new employees to join the union within 30 days of being hired. How would this policy impact employees? A: All employees must join the union before they are hired
B: Employees must pay union dues but are not required to join the union
C: Employees are only allowed to join the union if they are invited
D: All employees must join the union within 30 days after starting their job

A

All employees must join the union within 30-days after starting their job

18
Q

In a pure market economy, prices are generally determined by…A: The people who produce and sell goods
B: The government officials to set prices
C: The exchanges between buyers and sellers
D: The costs of transporting goods to consumers

A

The exchanges between buyers and sellers

19
Q

What is one of the primary advantages of forming a Corporation? A: Pass-through taxation
B: Limited liability for owners (shareholders)
C: Complete control by the owner
D: Simple tax structure

A

Limited liability for owners

20
Q

The market equilibrium price is the price at which… A: Surpluses depress the number of goods supplied
B: Shortages and surpluses will have no effect on the market
C: The government will not intervene in the market
D: The quantity demanded is the same as the quantity supplied

A

The quantity demanded is the same as the quantity supplied

21
Q

True or False: A price that both buyers and sellers can agree on is called the market clearing price.

A

True

22
Q

Which of the following is a major disadvantage of a Limited Liability Partnership? A: Difficulty in establishing the partnership agreement
B: Unlimited liability for partners
C: Limited ability to raise capital
D: Complex and costly to form

A

Limited ability to raise capital

23
Q

By definition, a Monopoly is…A: Illegal
B: A single seller of a unique product
C: A cartel controlling a market
D: None of these

A

A single seller of a unique product

24
Q

An example of a legal Monopoly in the US is…
A: DeBeers
B: Oil cartels
C: A government-regulated monopoly providing an essential service
D: Radical

A

A government-regulated Monopoly providing an essential service

25
Q

True or False: The only goal of labor unions is higher wages.

A

False

26
Q

Which of the following is a disadvantage of a Nonprofit Organization? A: Profits must be reinvested in the organization
B: The organization can be sued for debts
C: Limited access to donations
D: No tax-exempt status for charitable donations

A

Profits must be reinvested in the organization

27
Q

Scenario: The employees of a tech company decides to form their own independent union, apart from any national or international union organizations. What is the main benefit for the employees of forming an independent union rather than joining a larger, affiliated union? A: They have access to a larger pool of financial resources and legal support
B: They can negotiate terms that are more specific to their industry and workplace
C: They can receive automatic raises based on national standards
D: They can avoid paying union dues altogether

A

They can negotiate terms that are more specific to their industry and workplace

28
Q

True or False: A partnership can only be formed by two people.

A

False

29
Q

Which is an advantage of a General Partnership? A: Limited liability for each partner
B: Easy to form with minimal paperwork
C: Ability to raise large amounts of capital
D: No requirement to share profits

A

Easy to form with minimal paperwork

30
Q

True or False: A Sole proprietorship is subject to double taxation.

A

False

31
Q

True or False: Land, Buildings, Capital, Entrepreneurship are the four factors of production.

A

True

32
Q

In a Limited partnership…
A: Profits are subject to double taxation
B: One or more partners are not involved in the day-to-day management
C: All partners have unlimited liability
D: None of the above

A

One or more partners are not involved in the day-to-day management

33
Q

True or False: All partners are equally active in managing the business in a Limited partnership.

A

False

34
Q

Scenario: A group of workers in a factory is unhappy with their wages and working conditions. They decide to organize a picket line outside the factory as a part of their protest. What is the primary purpose of the workers’ picket line? A: To demand that the company immediately accepts their demands
B: To persuade others, like customers/other workers, to support their cause and join the protest
C: To negotiate directly with the company management
D: To gather legal support from external organizations

A

To persuade others, like customers/other workers, to support their cause and join the protest

35
Q

Scenario: A local factory has been experiencing safety issues, and the workers are unhappy with their current wages. What might be the first action the workers take to address these concerns?
A: Organize a boycott of the factory’s products
B: Go on strike and stop working
C: Create a picket line outside the factory
D: Form a union and begin collective bargaining

A

Form a union and begin collective bargaining

36
Q

A key advantage of a Nonprofit Organization is… A: Ability to generate profits for distribution to owners
B: Tax-exempt status
C: Limited liability for founders
D: Simple formation and low costs

A

Tax-exempt status

37
Q

Scenario: A state passes a “right to work” law that prevents employers from requiring union membership as a condition of employment. How might this law impact the power of labor unions in that state? A: It would likely increase union membership by requiring all employees to join the union
B: Lower union membership: letting workers benefit from union representation without joining
C: It would have no effect on union membership
D: It would allow unions to form only in certain industries

A

Lower union membership: letting workers benefit from union representation without joining

38
Q

True or False: Oligopoly means that there are only a few firms in an industry.

A

True

39
Q

Scenario: An employer runs a factory. The factory has a union, but not everyone has to join the union or pay the dues if they choose not to. Which of the following best describes the situation in this factory? A: Workers participate in a “right to work” law that allows them to avoid union dues
B: Workers engage in behavior typical of an “agency shop” arrangement
C: Workers are in violation of their union membership requirement
D: Workers participate in a “closed shop” policy

A

Workers participate in a “right to work” law that allows them to avoid union dues

40
Q

Scenario: A large retail chain is facing a strike by workers who demand better wages and improved working conditions. The company decides to bring in non-union workers to fill the positions temporarily. Which of the following would most likely happen if the workers in this scenario are participating in a “closed shop”?
A: Non union workers would be hired and begin work
B: The company would be forced to close its doors temporarily
C: Workers could strike, but non-union workers could still be hired without issue
D: Only union workers would be hired, and company couldn’t replace with non-union workers

A

Only union workers would be hired, and company couldn’t replace with non-union workers

economics (2 decks)

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