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| Section | Objectives |
|---|---|
| Topic 1: Competency 3: Economic Decision-Making by Firms and Customers | - Consumer Behavior (Budget Constraint, Indifference Curves) - Firm Behavior Under Different Market Structures (Perfect Competition, Monopoly, Oligopoly) |
| Topic 2: Key Topics Across All Competencies | - Currency Appreciation and Depreciation - Elastic vs. Inelastic Goods - Supply and Demand Shifts - Foreign Direct Investment (FDI) Impacts - International Trade Policies (Tariffs, Quotas) - Global Business Strategies and Porter's Framework |
| Topic 3: Competency 1: International Trade and Currency Exchange | - Introduction to International Trade Theories - Currency Exchange Rate Determination - Impact of Interest Rates on Financial Flows and Exchange Rates |
| Topic 4: Competency 2: Political and Economic Forces | - Market Economy vs. Command Economy - Property Rights and the Rule of Law |
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NEW QUESTION # 122
What is an example of goods that tend to have negative cross-price elasticities?
Answer: C
Explanation:
InGlobal Economics for Managers,complementary goodshavenegative cross-price elasticity, making option C correct.
When the price of one good rises, demand for its complement falls. Examples include cars and gasoline or printers and ink.
Substitutes have positive cross-price elasticity. Inferior and luxury goods relate to income elasticity, not cross- price elasticity.
Thus, option C is correct.
NEW QUESTION # 123
Which characteristics are attributed to a democracy? (Choose THREE.)
Answer: A,B,C
Explanation:
InGlobal Economics for Managers, democracies are characterized bycivil liberties, economic freedoms, and relatively lower political risk, making options A, C, and D correct.
Democracies protect freedom of expression and organization, allow domestic and foreign firms to operate, and provide stable institutional environments with predictable rules.
Options B and E describe authoritarian systems, not democracies.
Thus, A, C, and D correctly describe democratic systems.
NEW QUESTION # 124
Which term best describes a market structure of limited competition in which the market is shared by a small number of sellers?
Answer: B
Explanation:
InGlobal Economics for Managers, anoligopolyis defined as a market structure characterized bylimited competition in which a small number of sellers dominate the market, making option C the correct answer.
These firms collectively control a large share of total market output, and each firm's actions significantly influence the behavior and profitability of the others.
Oligopolistic markets are common in industries with high barriers to entry, such as automobiles, airlines, telecommunications, and energy. Barriers may include economies of scale, high capital requirements, technological advantages, or government regulation. Because only a few firms operate in the market, strategic decision making becomes critical.
Option A, monopoly, involves a single seller. Option B, monopolistic competition, includes many sellers offering differentiated products. Option D, perfect competition, involves many sellers with no market power.
Global Economics for Managersemphasizes that oligopolies are marked by strategic interaction, where firms must anticipate competitors' reactions when setting prices, output, advertising, or investment levels. This interdependence distinguishes oligopoly from other market structures.
Thus, option C accurately describes a market structure with limited competition and a small number of sellers.
NEW QUESTION # 125
Which statement characterizes an institution-based view of global business?
Answer: D
Explanation:
The institution-based view of global business argues that firm behavior and strategy are shaped by the interaction between firms and institutions. Option A is correct because it captures the central proposition:
firms do not make decisions in isolation; they operate within formal and informal institutional constraints.
Formal institutions include laws, regulations, property rights, and political systems. Informal institutions include norms, ethics, customs, and cultural expectations. These institutions reduce uncertainty and influence what strategies are acceptable, legitimate, and profitable. Option B is too narrow because institutions include more than government regulation. Option C is incorrect because firms still make strategic choices. Option D is wrong because financial motivations remain important, but they operate within institutional limits.
NEW QUESTION # 126
What is a key feature of an oligopoly?
Answer: C
Explanation:
A key feature of oligopoly is the tension between cooperation and self-interest. Option A is correct because oligopolistic markets contain only a few major sellers, so each firm's pricing, output, and advertising decisions affect rivals. Firms may benefit collectively from cooperation, such as keeping prices high, but each firm also has an incentive to undercut rivals and gain market share. This creates strategic interdependence.
Option B is wrong because oligopoly firms are not independent like perfectly competitive firms; they must anticipate competitor reactions. Option C is also wrong because one seller's actions can significantly affect other sellers' profits. Option D is incorrect because oligopoly firms often have strong motivation to cooperate, whether formally or tacitly, though explicit collusion may be illegal.
NEW QUESTION # 127
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