Answers Personal Finance - EL3403Case Study: Starting a Business

Case Study: Starting a Business — Unit test Answers

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Which quality best describes a producer with an absolute advantage?

efficient

fast

accurate

prolific

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What is the difference between marginal cost and marginal revenue?

Marginal cost is the money a producer earns from selling one more unit, while marginal revenue is the money a producer pays for making one more unit.

Marginal cost is the money a producer pays for making one more unit, while marginal revenue is the money a producer earns from selling one more unit.

Marginal cost is the money a producer actually earns from selling more units, while marginal revenue is the money a producer might earn from one more unit.

Marginal cost is the money a producer might earn from one more unit sold, while marginal revenue is the money a producer will earn from one more unit.

Look at the chart comparing the price of graphic T-shirts to the quantity supplied.

demand curve.

demand schedule.

supply curve.

supply schedule.

Which statement best explains the role of producers in economics?

Producers supply goods and services.

Producers purchase goods and services.

Producers create theories about the market.

Producers sell shares for companies in the market.

A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take?

The store owner would most likely raise the price of the spring jeans to encourage producers.

The store owner would most likely lower the price of the spring jeans to encourage producers.

The store owner would most likely raise the price of the spring jeans to encourage consumers.

The store owner would most likely lower the price of the spring jeans to encourage consumers.

This table shows the number of employees needed to fill lunch orders at several food trucks.Food Truck Number of Lunch Orders Number of Employees Frank’s Falafels 20 per hour 2 Kimchi Kim’s 25 per hour 3 Deli Delight 30 per hour 3 Lunch on the Go 25 per hour 2 Which food truck has the absolute advantage?

Frank’s Falafels

Kimchi Kim’s

Deli Delight

Lunch on the Go

When prices drop below the point where supply and demand meet, it results in

coordination.

disequilibrium.

equilibrium.

production.

When supply is higher than demand, prices will

rise until the demand falls.

rise until the supply falls.

fall until the demand rises.

fall until the supply rises.

What are the factors of production in business?

land, labor, and capital

land, capital, and interest

land, labor, and customer base

capital, customer base, and interest

Why is pure competition considered an unsustainable system?

Price differentiation is often too minimal to matter.

Few barriers exist to entry, meaning that the market inevitably floods.

Consumers cannot distinguish between products.

Producers cannot make a profit if they keep dropping their prices.

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Case Study: Starting a Business — Unit test Answers

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