Egc1 Microeconomics
EGC1 Flash Cards
Study online at quizlet.com/_etuek
1.
2.
3.
4.
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6.
7.
Although new trading and investment patterns are emerging, with which type of nations do underdeveloped nations typically trade?
Nations in which a poor business climate can be taken advantage of
Assume that a country's tax revenues have increased due to economic prosperity and the government has increased spending. How will these changes in government spending affect the country's gross domestic product
(GDP), ceteris paribus?
GDP rises because the government spends more.
Assume that interest rates have fallen significantly. How does this change affect a country's gross domestic product
(GDP), ceteris paribus?
firms invest in stocks but never capital
goods,
and the GDP rises
A company is one of hundreds of firms in the industry that produces a certain item. There are no legal, technical, or other significant obstacles that prevent entry to or exit from this industry. There are many buyers of the item and the price of the item in the marketplace is $5.00.
The maximum price that the company can sell its items for and still maximize its profits is $5.00. What market structure environment is the company operating in?
Pure competition Consider the Phillips curve. As unemployment increases, what happens to the rate of inflation in the short run?
Inflation rate decreases. A country is concerned that its imports are far in excess of its exports, creating significant cash outflow. In which way can the International Monetary Fund
(IMF) positively affect international trade activity for this country?
Lessen the disequilibrium of this country's balance of payments Economic growth in the U.S. has been extremely low. Gross domestic product
(GDP) for the preceding quarter has been estimated at a 0.5% growth rate. The
Federal Open Market Committee (FOMC) has met and determined that the U.S. economy is close to a recession. The decision to significantly increase the money supply was unanimous. To accomplish this goal, they will use monetary policy tools to cause interest rates to fall significantly. What is likely to occur in the short term as a result of the
FOMC's decision?
Business investment spending will rise significantly.
8.
9.
10.
11.
12.
13.
The European Union (EU) has passed regulations prohibiting the importation of genetically-modified corn. How should a U.S. corn exporter respond to these regulations? Develop the
Asian market
The Federal Reserve wants to significantly increase the money supply.
Which action should the Federal Reserve take? Reduce the reserve requirement
A firm is considering locating a large production facility in a developing nation. The production facility will require a large, local workforce. What is a consideration for the company in selecting a site for the facility?
Availability of health benefits for all employees
A Fortune 500 company is expanding operations into an underdeveloped country and they plan to hire from the local population. Their staffing policy is to hire and promote employees on the basis of the specific regional context in which their subsidiaries operate. Which of the following international human resource management approaches will accomplish the company's hiring objective? Polycentric
Household wealth increases tremendously as stock market portfolio values increase. How would this affect gross domestic product (GDP) based on consumer spending, ceteris paribus?
Consumers would increase spending based on new feelings of wealth, and GDP would grow
How do changes in the economic environment affect international business? International firms can be both positively and negatively affected by changes in the economic environment. 14.
15.
16.
17.
18.
19.
20.
21.
22.
How does multiple regression analysis differ from simple linear regression? multiple regression involves more independent variables than simple linear regression How is international business affected by the Internet?
Internet videoconferencing allows sellers to demonstrate their products around the world without traveling How is price level impacted when aggregate demand increases by 20% and aggregate supply also increases by 20%?
The price level increases. How is sensitivity analysis applied to an expected value payoff table?
by determining how changes in the probabilities for the states of nature affect the recommended decision alternative If a country decides to produce more of Good A, it must produce less of
Good B. What is this trade-off known as? Opportunity Cost
If the "Big Three" U.S aircraft manufacturers represent 80% of the market share, which market structure do they operate in?
Oligopoly
Labor groups have successfully lobbied the American people to buy
"Made in America" products. How does the change in consumer behavior affect the net trade (exports minus imports) sector of U.S. gross domestic product (GDP), ceteris paribus? GDP rises because imports decrease
Management is concerned that a new product just released has generated demand for only 5,000 units. The price of the product is set at $600.
According to the law of demand, what must be done to increase the quantity demanded by the public?
Decrease the price
A market situation in which one producer supplies a unique product or service and no substitute exists characterizes which market structure? Monopoly
23.
24.
25.
26.
27.
28.
29.
A nation has a revolution and adopts a communist form of government. How would a company who owns several manufacturing plants and expensive equipment in this nation respond to the change in the political/legal environment?
Develop a plan to minimize losses if the government confiscates the plants and equipment
The supply curve and the demand curve for a certain good intersect at a price of
$50. What is the $50 price identified as?
Equilibrium price Terrorism creates which challenge to global operations?
Increased risk for high-level executives
To which type of problems can graphical linear programming be appropriately applied? Problems that are to be either minimized or maximized and that involve only two decision variables Two firms are competing for market share by making their warranty programs more favorable. Applying two-person, zero-sum game theory to this situation, which option is true?
Total payoff available can be increased by the combined strategies of both players.
The U.S. economy has fallen into a prolonged recession. Unemployment is at
10%. The Federal Open Market Committee
(FOMC) seeks to use open market operations to stimulate economic activity.
Which action will the FOMC take?
Buy back government bonds currently held by commercial banks and the general public. The U.S. economy has fallen into a prolonged recession. Unemployment is currently at 12%. The Federal Open Market
Committee (FOMC) has made a decision to make adjustments to the discount rate to expand the money supply in an effort to stimulate economic activity. Which action will the FOMC take?
Decrease the discount rate 30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
The U.S. has suffered a severe drought, resulting in the need to import extensive food supplies. This causes a large increase in costs to food producers. How will this affect inflation? cost-push inflation will increase
The unionized employees of a company went on strike at the company's U.S. plant just as the company was beginning to produce a new product. How should management at the company respond to this change in the domestic environment?
Increase production at the company's plant overseas What defines marginal utility?
Increase in total utility that results from the consumption of one more unit of a product 41.
42.
43.
44.
What describes a company that owns a number of overseas operations with each operation developing its own products and strategies? Transinternational company What describes the Delphi method forecasting technique?
developed through group consensus
What does a chance event node depict in a decision tree?
Uncertain future event affecting the consequences of a decision What is a barrier to entry faced by firms seeking to compete in the railroad industry?
Economies of scale
What is a benefit to a domestic company from global outsourcing?
Shortening the global supplychain between company and its supplies and customer What is a change to the total revenue resulting from the sale of one more unit of output in a perfectly competitive firm?
Marginal revenue
What is a characteristic of the monopolistic competition market structure? Product differentiation What is a common barrier facing companies who want to trade internationally? Duties
45.
46.
47.
48.
49.
50.
51.
52.
53.
What is a cultural implication for the use of technology in global business?
Technology changes the political environment by allowing people from lower socioeconomic groups to participate in government.
What is a description of a domestic business?
Business that produces products within only one country
What is a force driving U.S. firms to globalize?
Desire to increase the market for the firm's products and services
What is a reason firms in the United
States are engaging in more international trade?
To gain new market share
What is a risk of global outsourcing?
Increased exchange rate fluctuations
What is a sociocultural component?
Education
What is a way an international company can protect its traderelated intellectual property rights?
Avoid doing business with the
European Union where piracy of intellectual property is rampant Avoid doing business with the European
Union where piracy of intellectual property is rampant
What is an attribute of a cyclical component in a time series?
Recurring sequences of points fall above and below the trend line and last more than one year.
What is an impact of religion on business practices?
Religious customs determine productivity. What is an operational advantage resulting from geographic location? Proximity to raw materials
What is correct regarding waiting line models?
Service times may or may not follow the exponential probability distribution. What is defined as an increase in total production expense resulting from one more unit of output? Marginal cost
What is the definition of fiscal policy? Government policy for dealing with budget, such as taxes and borrowing
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
What is the definition of state of nature as used in decision analysis?
Possible outcomes for chance events
What is the expected affect of NAFTA on the business conduct of firms operating, for example, in the United States and
Mexico?
Exports between the two nations increase What is true about using the least squares method of plotting an estimated regression line on a scatter diagram?
general form of the estimated regression equations is y=a+bx What is true of an economy operating at full employment?
There is up to
4% or 5% unemployment in the economy. What is used to calculate inflation rates in the United States?
Consumer price index
What will happen according to the law of diminishing marginal utility upon acquiring an additional unit of a product? Consumer purchases decline
When would transportation linear programming be an appropriate technique for identifying the optimal decision alternative?
When the objective is to minimize the cost of shipping goods
Which action might Congress take to contract economic growth?
Increase the personal income tax rate. Which action would a policymaker likely take to promote economic growth?
Fund construction of a large hydroelectric dam
Which approach can a company located in the United Kingdom use to effectively forecast exchange rate fluctuations between their pound and the U.S. dollar? Efficient market approach
Which economic principle describes the imbalance between what people want and what can be produced?
Scarcity
Which economic principle states that as price falls the quantity produced falls?
Law of supply
66.
67.
68.
Which option identifies two fiscal policy tools?
Tax increases and increases in government spending
Which product type provides a competitive advantage in the global marketplace?
Monopoly products
Which situation demonstrates a potential disadvantage of offshoring? Language barriers exist between buyers and suppliers
Study online at quizlet.com/_etuek
1.
2.
3.
4.
5.
6.
7.
Although new trading and investment patterns are emerging, with which type of nations do underdeveloped nations typically trade?
Nations in which a poor business climate can be taken advantage of
Assume that a country's tax revenues have increased due to economic prosperity and the government has increased spending. How will these changes in government spending affect the country's gross domestic product
(GDP), ceteris paribus?
GDP rises because the government spends more.
Assume that interest rates have fallen significantly. How does this change affect a country's gross domestic product
(GDP), ceteris paribus?
firms invest in stocks but never capital
goods,
and the GDP rises
A company is one of hundreds of firms in the industry that produces a certain item. There are no legal, technical, or other significant obstacles that prevent entry to or exit from this industry. There are many buyers of the item and the price of the item in the marketplace is $5.00.
The maximum price that the company can sell its items for and still maximize its profits is $5.00. What market structure environment is the company operating in?
Pure competition Consider the Phillips curve. As unemployment increases, what happens to the rate of inflation in the short run?
Inflation rate decreases. A country is concerned that its imports are far in excess of its exports, creating significant cash outflow. In which way can the International Monetary Fund
(IMF) positively affect international trade activity for this country?
Lessen the disequilibrium of this country's balance of payments Economic growth in the U.S. has been extremely low. Gross domestic product
(GDP) for the preceding quarter has been estimated at a 0.5% growth rate. The
Federal Open Market Committee (FOMC) has met and determined that the U.S. economy is close to a recession. The decision to significantly increase the money supply was unanimous. To accomplish this goal, they will use monetary policy tools to cause interest rates to fall significantly. What is likely to occur in the short term as a result of the
FOMC's decision?
Business investment spending will rise significantly.
8.
9.
10.
11.
12.
13.
The European Union (EU) has passed regulations prohibiting the importation of genetically-modified corn. How should a U.S. corn exporter respond to these regulations? Develop the
Asian market
The Federal Reserve wants to significantly increase the money supply.
Which action should the Federal Reserve take? Reduce the reserve requirement
A firm is considering locating a large production facility in a developing nation. The production facility will require a large, local workforce. What is a consideration for the company in selecting a site for the facility?
Availability of health benefits for all employees
A Fortune 500 company is expanding operations into an underdeveloped country and they plan to hire from the local population. Their staffing policy is to hire and promote employees on the basis of the specific regional context in which their subsidiaries operate. Which of the following international human resource management approaches will accomplish the company's hiring objective? Polycentric
Household wealth increases tremendously as stock market portfolio values increase. How would this affect gross domestic product (GDP) based on consumer spending, ceteris paribus?
Consumers would increase spending based on new feelings of wealth, and GDP would grow
How do changes in the economic environment affect international business? International firms can be both positively and negatively affected by changes in the economic environment. 14.
15.
16.
17.
18.
19.
20.
21.
22.
How does multiple regression analysis differ from simple linear regression? multiple regression involves more independent variables than simple linear regression How is international business affected by the Internet?
Internet videoconferencing allows sellers to demonstrate their products around the world without traveling How is price level impacted when aggregate demand increases by 20% and aggregate supply also increases by 20%?
The price level increases. How is sensitivity analysis applied to an expected value payoff table?
by determining how changes in the probabilities for the states of nature affect the recommended decision alternative If a country decides to produce more of Good A, it must produce less of
Good B. What is this trade-off known as? Opportunity Cost
If the "Big Three" U.S aircraft manufacturers represent 80% of the market share, which market structure do they operate in?
Oligopoly
Labor groups have successfully lobbied the American people to buy
"Made in America" products. How does the change in consumer behavior affect the net trade (exports minus imports) sector of U.S. gross domestic product (GDP), ceteris paribus? GDP rises because imports decrease
Management is concerned that a new product just released has generated demand for only 5,000 units. The price of the product is set at $600.
According to the law of demand, what must be done to increase the quantity demanded by the public?
Decrease the price
A market situation in which one producer supplies a unique product or service and no substitute exists characterizes which market structure? Monopoly
23.
24.
25.
26.
27.
28.
29.
A nation has a revolution and adopts a communist form of government. How would a company who owns several manufacturing plants and expensive equipment in this nation respond to the change in the political/legal environment?
Develop a plan to minimize losses if the government confiscates the plants and equipment
The supply curve and the demand curve for a certain good intersect at a price of
$50. What is the $50 price identified as?
Equilibrium price Terrorism creates which challenge to global operations?
Increased risk for high-level executives
To which type of problems can graphical linear programming be appropriately applied? Problems that are to be either minimized or maximized and that involve only two decision variables Two firms are competing for market share by making their warranty programs more favorable. Applying two-person, zero-sum game theory to this situation, which option is true?
Total payoff available can be increased by the combined strategies of both players.
The U.S. economy has fallen into a prolonged recession. Unemployment is at
10%. The Federal Open Market Committee
(FOMC) seeks to use open market operations to stimulate economic activity.
Which action will the FOMC take?
Buy back government bonds currently held by commercial banks and the general public. The U.S. economy has fallen into a prolonged recession. Unemployment is currently at 12%. The Federal Open Market
Committee (FOMC) has made a decision to make adjustments to the discount rate to expand the money supply in an effort to stimulate economic activity. Which action will the FOMC take?
Decrease the discount rate 30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
The U.S. has suffered a severe drought, resulting in the need to import extensive food supplies. This causes a large increase in costs to food producers. How will this affect inflation? cost-push inflation will increase
The unionized employees of a company went on strike at the company's U.S. plant just as the company was beginning to produce a new product. How should management at the company respond to this change in the domestic environment?
Increase production at the company's plant overseas What defines marginal utility?
Increase in total utility that results from the consumption of one more unit of a product 41.
42.
43.
44.
What describes a company that owns a number of overseas operations with each operation developing its own products and strategies? Transinternational company What describes the Delphi method forecasting technique?
developed through group consensus
What does a chance event node depict in a decision tree?
Uncertain future event affecting the consequences of a decision What is a barrier to entry faced by firms seeking to compete in the railroad industry?
Economies of scale
What is a benefit to a domestic company from global outsourcing?
Shortening the global supplychain between company and its supplies and customer What is a change to the total revenue resulting from the sale of one more unit of output in a perfectly competitive firm?
Marginal revenue
What is a characteristic of the monopolistic competition market structure? Product differentiation What is a common barrier facing companies who want to trade internationally? Duties
45.
46.
47.
48.
49.
50.
51.
52.
53.
What is a cultural implication for the use of technology in global business?
Technology changes the political environment by allowing people from lower socioeconomic groups to participate in government.
What is a description of a domestic business?
Business that produces products within only one country
What is a force driving U.S. firms to globalize?
Desire to increase the market for the firm's products and services
What is a reason firms in the United
States are engaging in more international trade?
To gain new market share
What is a risk of global outsourcing?
Increased exchange rate fluctuations
What is a sociocultural component?
Education
What is a way an international company can protect its traderelated intellectual property rights?
Avoid doing business with the
European Union where piracy of intellectual property is rampant Avoid doing business with the European
Union where piracy of intellectual property is rampant
What is an attribute of a cyclical component in a time series?
Recurring sequences of points fall above and below the trend line and last more than one year.
What is an impact of religion on business practices?
Religious customs determine productivity. What is an operational advantage resulting from geographic location? Proximity to raw materials
What is correct regarding waiting line models?
Service times may or may not follow the exponential probability distribution. What is defined as an increase in total production expense resulting from one more unit of output? Marginal cost
What is the definition of fiscal policy? Government policy for dealing with budget, such as taxes and borrowing
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
What is the definition of state of nature as used in decision analysis?
Possible outcomes for chance events
What is the expected affect of NAFTA on the business conduct of firms operating, for example, in the United States and
Mexico?
Exports between the two nations increase What is true about using the least squares method of plotting an estimated regression line on a scatter diagram?
general form of the estimated regression equations is y=a+bx What is true of an economy operating at full employment?
There is up to
4% or 5% unemployment in the economy. What is used to calculate inflation rates in the United States?
Consumer price index
What will happen according to the law of diminishing marginal utility upon acquiring an additional unit of a product? Consumer purchases decline
When would transportation linear programming be an appropriate technique for identifying the optimal decision alternative?
When the objective is to minimize the cost of shipping goods
Which action might Congress take to contract economic growth?
Increase the personal income tax rate. Which action would a policymaker likely take to promote economic growth?
Fund construction of a large hydroelectric dam
Which approach can a company located in the United Kingdom use to effectively forecast exchange rate fluctuations between their pound and the U.S. dollar? Efficient market approach
Which economic principle describes the imbalance between what people want and what can be produced?
Scarcity
Which economic principle states that as price falls the quantity produced falls?
Law of supply
66.
67.
68.
Which option identifies two fiscal policy tools?
Tax increases and increases in government spending
Which product type provides a competitive advantage in the global marketplace?
Monopoly products
Which situation demonstrates a potential disadvantage of offshoring? Language barriers exist between buyers and suppliers