Exam 1: Taking Risks and Making Profits Within the Dynamic Business Environment

If they wish to create more wealth, poor nations should focus on policies that increase entrepreneurship and the effective use of knowledge.

In today's competitive environment, good value means:

One way for a government to actively promote entrepreneurship is to establish a currency that's tradable in world markets so that you can buy and sell goods anywhere in the world using that currency.

It was reported by a Beijing newspaper that China succeeded in improving its people's standard of living and establishing a relatively affluent society in the past seven years. This report clearly indicates that both income levels and the price of goods and services rose significantly during that time period.

Eve and her three college friends enjoy perfumes. As a special gift to each of them last holiday season, Eve found a way to make scented candles with each friend's favorite perfume scent. The three friends loved her gift idea and encouraged Eve to create more and sell them on the Internet. Recently, she is filling orders from her website, and turning a profit. Eve is proof that:

Two factors of production that seem to contribute the most to a nation's ability to create wealth are:

Jay and Jim Spears own a lawn irrigation system business. They perform installations and maintenance of these systems. Several of their customers are golf courses, but they serve a large group of residential customers as well. When they started the business ten years ago, they made a pact to always operate within the legal limits of the law, but lately, the competition is eating them alive. Local competitors have hired illegal immigrants to perform the manual labor. They do not pay taxes on these employees - they just pay them in cash at the end of the week. Employment taxes are a burden for small businesses. Jay and Jim do not want to hire illegal workers. There's a risk if you permit an illegal worker to drive a truck; or, if he/she has an accident on the job. You have just studied business ethics in your class. You inform this partnership that:

Technology refers to everything that makes business operations more effective, efficient, and productive.

Max is in charge of production for a family-owned firm that makes and sells sports gloves including baseball gloves, softball gloves, golf gloves, and more. He has stated that speed of delivery is the most important factor for success in the competitive environment. Which of the following would be the best response to Max?

means producing items using the least amount of resources.

The resources that contribute to the creation of wealth are known as .

Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable.

In rich countries such as the United States, changes in the level of taxation have little impact on the incentives of entrepreneurs.

Andy Blake got a call yesterday from Planet Bank, the company that issued his credit card inquiring about an $85.00 charge made in Caracas, Venezuela. Upon learning that Andy had not made this purchase, the Bank quickly took steps to cancel the card and issue a new one. Given the circumstances that Andy's credit card number had an illegal transaction, Andy may also want to:

China is a nation with a vast amount of land and a very large population. Another characteristic of this nation is its people's affinity for saving money. Referring to the five factors of production, the government of China has made significant progress in building its business environment by focusing on factors that needed improvement. It's strategy was to:

Ross wants to invest some money that he just inherited. He found that his bank offers a savings account paying a guaranteed 3% rate of return. However, he would like to earn a higher return. Ross should keep in mind that to earn a higher return on his money he:

means producing the desired result.

In an effort to increase wealth and their country's standard of living, many governments are taking over major industries and operating them as nonprofit organizations.

Taxes and government regulations are part of the environment of business.

is illegally obtaining and illegally using private information about a person, such as using someone's credit card number.