Question

chapter 5 review

1. which of the following best explains the difference between monopoly and competition?

a. monopoly is characterized by innovation, while competition is characterized by barriers to entry.
b. competition leads to product scarcity and higher prices, while monopoly keeps prices low through high production levels.
c. monopoly offers consumers a range of products and prices, while competition forces consumers to compete for a limited supply of one product at one price.
d. competition is characterized by a variety of sellers offering similar products or services, and monopoly is characterized by one seller controlling most of the market.

1. what is the main motivation for us companies that move their production to another country?

a. to lower their production costs
b. to take advantage of favorable exchange rates
c. to provide their employees with better working conditions
d. to offer their customers lower prices for higher quality goods

1. why do companies offer their employees the chance to learn new job skills?

a. to boost employee morale
b. to decrease their production costs
c. to avoid having to hire more workers
d. to encourage them to look for other jobs

1. if the economy is suffering from inflation, what action will the government probable take?

a. it will lower interest rates and place more money in circulation.
b. it will lower interest rates and take money out of circulation.
c. it will raise interest rates and place more money in circulation.
d. it will raise interest rates and take money out of circulation.

1. in the united states, who is responsible for monetary policy?

a. congress
b. the president
c. the treasury secretary
d. the federal reserve system

1. which statement about credit card use is true?

a. using a credit card is cheaper than using cash.
b. using a credit card is more expensive than using cash.
c. when you buy something using a credit card, the credit card company is giving you a loan.
d. when you buy something using a credit card, you will have to pay late fees a high rate of interest.

1. when a company gets a report on your credit score, what do they learn about

a. how much you owe
b. whether you pay bills on time
c. what you buy regularly
d. where you have used your credit

Explanation:

1. Monopolies have a single dominant seller, while competitive markets have multiple sellers with similar offerings.
2. US companies offshoring production primarily seek to reduce labor, operational, and material costs.
3. Training employees in new skills reduces the need to recruit and hire external workers, saving on hiring and onboarding costs.
4. To fight inflation, governments/central banks reduce money supply and raise interest rates to cool demand.
5. The U.S. Federal Reserve System is the independent body tasked with setting and executing monetary policy.
6. Credit card purchases are essentially short-term loans from the card issuer to the cardholder for the transaction amount.
7. Credit scores primarily reflect a person's history of making timely bill payments, which is key information for companies evaluating financial trustworthiness.

Answer:

1. D. Competition is characterized by a variety of sellers offering similar products or services, and monopoly is characterized by one seller controlling most of the market.
2. A. to lower their production costs
3. C. to avoid having to hire more workers
4. D. It will raise interest rates and take money out of circulation.
5. D. the Federal Reserve System
6. C. When you buy something using a credit card, the credit card company is giving you a loan.
7. B. whether you pay bills on time