BUS 121 Midterm Study Sheet

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