prelim2 answer key - AEM220 Introduction to Business...

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AEM220 Spring 2006 Introduction to Business Management Pedro David Pérez Prelim #2 FORM A 1. This exam is composed of 100 questions, a mixture of multiple choice, matching, and true/false questions. You will have exactly 90 minutes to complete the exam. Please allocate your time accordingly. 2. Make sure you leave yourself enough time at the end to have the bubble sheet completely filled out before time is called. No additional time will be allocated for this activity. 3. If you have questions about anything, do not hesitate to ask. Just raise your hand and we will come to your seat. 4. After you have completed your exam , print your name in the space below, sign and date the Honor Code. GOOD LUCK!!! Name (please print) _______________________________________________________ Student ID Number _____________________________ Honor Code : I affirm that I have abided by the guidelines set forth in the Cornell University Code of Conduct: Signature ________________________________________________________________ Date ________________________________
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1. Which of the following statements about Adam Smith’s contribution to economics is true? a. Adam Smith believed that an economic system couldn’t truly prosper unless people were taught to value the welfare of others above their own personal gain b. Adam Smith believed that the key to creating rising standards of living was to limit population growth c. Adam Smith felt that the government must step in to make sure wealth is equitably distributed. d. Adam Smith insisted that incentives to seek personal gain would insure the creation of wealth e. The “invisible hand” in Adam Smith’s theory refers to the efforts of the government to control the operation of markets 2. Product differentiation is a key to success in monopolistic competition a. True b. False 3. A major distinction between capitalism and socialism concerns how incomes are distributed among the population a. True b. False 4. How would you characterize the economic organization of the USA? a. Communist b. Socialist c. Mixed d. Capitalist e. Oligopolist 5. The national deficit is the difference between a nation’s exports and imports a. True b. False 6. In order to restrict spending by businesses and households, the Fed would take measures designed to lower interest rates a. True b. False 7. Under capitalism a. Businesses receive economic support from the government b. Markets operate to carry out decisions made by central planners c. Most of the means of production and distribution are privately owned and operated for profit d. The primary function of the government is to distribute wealth more evenly e. Utilities, health care, education, and other services are controlled by the government.
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8. A typical supply curve shows that an increase in the price of a good will cause the quantity supplied to a. Increase b. Decrease c. Remain constant d. Fluctuate around an equilibrium value e. Disappear 9. When prices are free to adjust over time, the market price of a good tends to
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prelim2 answer key - AEM220 Introduction to Business...

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