66 free flashcards covering all 5 units. Study key concepts, terms, and exam-relevant topics.
Define 'opportunity cost' in economics.
The value of the next best alternative foregone when a decision is made.
Understanding opportunity cost helps assess trade‑offs, a core concept tested on the DSST exam.
What happens to quantity demanded when the price of a good increases, assuming all else equal?
Quantity demanded decreases, following the law of demand.
The law of demand is foundational for supply and demand analysis, a key area on the exam.
Compare a perfectly competitive market to a monopoly.
Perfect competition features many firms, free entry, identical products, no pricing power; a monopoly has one firm, high barriers to entry, product differentiation, and sets prices.
Knowing market structure differences is essential for interpreting economic scenarios in the exam.
Give an example of a command economic system.
Planned economies, like the former Soviet Union, where the state controls production and prices.
Identifying economic systems is a possible answer choice in the exam's multiple‑choice questions.
Apply the concept of elasticity to a scenario where a 10% price increase causes a 5% drop in quantity demanded.
Demand is inelastic, with an elasticity of –0.5.
Calculating elasticity demonstrates analytical skills the exam expects for interpreting market responses.
Define the primary difference between management and leadership.
Management involves planning, organizing, and controlling resources to achieve organizational goals. Leadership focuses on influencing, motivating, and inspiring people to pursue a shared vision.
Distinguishing these roles helps identify responsibilities in business units.
Give an example of a situational leadership decision a manager might make.
A manager facing low-performing employees may adopt a directive style to set clear expectations, then shift to supportive coaching as competence improves.
Applying situational theory tests your ability to adapt leadership under different employee states.
Compare and contrast transformational and transactional leadership.
Transformational leaders inspire change and innovate, focusing on followers' growth. Transactional leaders rely on rewards and punishments to manage compliance and performance.
Understanding these contrasts clarifies which style fits particular organizational cultures.
What is the core idea behind Maslow's hierarchy of needs as a motivation theory?
Human motivation progresses through five levels—physiological, safety, love/belonging, esteem, self-actualization—each level must be satisfied before the next drives behavior.
Recognizing this hierarchy aids in designing employee motivation strategies.
Explain how a structured decision-making model can improve workplace efficiency.
A structured model clarifies objectives, gathers options, evaluates alternatives, and implements chosen solutions, reducing bias and saving time through systematic analysis.
Showcasing structured decision-making illustrates effective management processes.
What is the Law of Diminishing Marginal Utility?
The law that states as consumption increases, marginal utility decreases.
This concept is crucial for understanding consumer behavior and demand. It helps students analyze how consumers make decisions about what goods and services to purchase.
If a company increases production, what happens to its marginal cost?
Marginal cost increases as production increases.
This question requires students to apply their understanding of production costs and the law of diminishing returns. It helps them analyze the relationship between production and costs in different market structures.
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