Market Structure
CPA Auditing and Attestation (AUD) · Learn by Concept
Help Questions
CPA Auditing and Attestation (AUD) › Market Structure
Which of the following segments of the economy will be least affected by the business cycle?
Machinery and equipment industry
Commercial construction industry
Healthcare industry
Residential construction industry
Explanation
Healthcare services are part of an industry that has an inelastic demand. Regardless of the status of the economy, consumers will always have the same need for healthcare service.
In the long run, a firm may experience increasing returns due to:
Comparative advantage
Law of diminishing returns
The principle of substitution
Economies of scale
Explanation
Economies of scale is the process by which the cost to produce something decreases with increased production and scale.
Elasticity of demand or supply is:
A measure of how sensitive the demand for or supply of a product is to a change in its price
A measure of how well a firm's strategic plan is able to adapt to changes in demand or supply
A measure of how flexible the demand or supply of a product is when preferences change
A measure of how flexible the firm is with respect to responding to the needs of consumers
Explanation
Elasticity of demand or supply is a measure of how sensitive the demand for or the supply of a product is to a change in its price.
Frictional unemployment refers to unemployment resulting from:
The time needed to match qualified job seekers with available jobs
A recession
The skills of workers do not correspond to the skills demanded by employers
Seasonal decreases in demand for labor
Explanation
Frictional unemployment arises from workers routinely changing jobs or from workers being temporarily laid off.
During a period of high inflation, which of the following groups in society would be most likely to gain?
Workers under contract without a cost of living adjustment
Those holding a large amount of money
Those with a fixed income
Those with a fixed amount of debt
Explanation
During a period of high inflation, those with a fixed amount of debt will repay their debt with inflated dollars and are thus likely to gain.
There are ___ methods of measuring GDP, and _____ is not a method of measuring GDP.
2, Expenditure
3, Income
2, Output
3, Expenditure
Explanation
There are 2 methods of measuring GDP, expenditure, and income approaches. There is no GDP measuring method known as the Output approach.