Business in Action, 7e (Bovee/Thill)
Chapter 2 Understanding Basic Economics

1) Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.
Answer: TRUE
Explanation: Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.
Diff: 1
AACSB: Application of knowledge
Chapter LO: 1
Course LO: Compare and contrast different economic systems
Classification: Concept

2) Macroeconomics studies economic behavior among consumers, businesses, and industries that collectively determine the quantity of goods and services demanded and supplied at different prices.
Answer: FALSE
Explanation: The study of a
Similarly, as prices decline, the quantity that sellers are willing to supply declines.
Diff: 2
AACSB: Analytical thinking
Chapter LO: 3
Course LO: Explain how economic performance is monitored
Classification: Concept
14) The supply curve of a firm will shift to the right if technology increases the firm's production costs.
Answer: FALSE
Explanation: The supply curve of a firm will shift to the left if technology increases the firm's production costs.
Diff: 2
AACSB: Analytical thinking
Chapter LO: 3
Course LO: Explain how economic performance is monitored
Classification: Application

15) The equilibrium point is the point at which quantity of a good or service equals the quantity demanded.
Answer: TRUE
Explanation: The point at which quantity of a good or service equals the quantity demanded is known as the equilibrium point.
Diff: 1
AACSB: Application of knowledge
Chapter LO: 3
Course LO: Explain how economic performance is monitored
Classification: Concept

16) The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.
Answer: TRUE
Explanation: The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly.
Diff: 1
AACSB: Application of knowledge
Chapter LO: 4
Course LO: Compare and contrast different economic