Question 1

The factors of production include natural resources, labor, government assistance, and entrepreneurship.

Accepted Answer

A) True 
 B)False

Question 2

Tim Garner owns and operates his own small automobile repair shop.However, the prices he can charge are fixed, and he rents his land and building from the government.Most of his friends work for industries owned by the government.Tim's country is most likely a(n) ____ economy.

Accepted Answer

A)  market 
B)  communist 
C)  socialist 
D)  industrialized 
E)  capitalist 
A)  market 
B)  communist 
C)  socialist 
D)  industrialized 
E)  capitalist

Question 3

The relationship between sales and profits can be written as

Accepted Answer

A)  Sales revenues + expenses = profit. 
B)  Loss + profit = sales revenue. 
C)  Profit - expenses = sales revenue. 
D)  Expenses + loss = sales revenue + profit. 
E)  Sales revenue - expenses = profit. 
A)  Sales revenues + expenses = profit. 
B)  Loss + profit = sales revenue. 
C)  Profit - expenses = sales revenue. 
D)  Expenses + loss = sales revenue + profit. 
E)  Sales revenue - expenses = profit.

Question 4

According to Adam Smith, under laissez-faire capitalism, each person should be allowed to work toward his or her own economic gain without government interference.

Accepted Answer

A) True 
 B)False

Question 5

The purpose of specialization is to

Accepted Answer

A)  reduce productivity. 
B)  increase the efficiency of industrial workers. 
C)  boost the morale of an employee because he or she is special. 
D)  relieve boredom. 
E)  make the nature of the work more general. 
A)  reduce productivity. 
B)  increase the efficiency of industrial workers. 
C)  boost the morale of an employee because he or she is special. 
D)  relieve boredom. 
E)  make the nature of the work more general.

Question 6

A legal monopoly is often referred to as a natural monopoly.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would not be included in the gross domestic product of the United States?

Accepted Answer

A)  the value of tax return services performed by H&R Block 
B)  the value of BMW automobiles manufactured in Alabama 
C)  the total value of Procter & Gamble products produced in Michigan 
D)  the value of medical care services rendered in the United States 
E)  the value of McDonald's sales for their Tokyo locations 
A)  the value of tax return services performed by H&R Block 
B)  the value of BMW automobiles manufactured in Alabama 
C)  the total value of Procter & Gamble products produced in Michigan 
D)  the value of medical care services rendered in the United States 
E)  the value of McDonald's sales for their Tokyo locations

Question 8

Because e-businesses use the Internet, there is no need to meet the needs of customers.

Accepted Answer

A) True 
 B)False

Question 9

What resource tells the managers of a business how effectively other resources are being combined and used?

Accepted Answer

A)  technical 
B)  human 
C)  financial 
D)  material 
E)  informational 
A)  technical 
B)  human 
C)  financial 
D)  material 
E)  informational

Question 10

The four resources that a business must use to operate successfully include material resources, human resources, financial resources, and operational resources.

Accepted Answer

A) True 
 B)False

Question 11

The producer price index is an accurate predictor of

Accepted Answer

A)  future changes in the consumer price index. 
B)  the level of unemployment. 
C)  prime interest rates. 
D)  Internet business activity. 
E)  an individual's standard of living. 
A)  future changes in the consumer price index. 
B)  the level of unemployment. 
C)  prime interest rates. 
D)  Internet business activity. 
E)  an individual's standard of living.

Question 12

In a communist country such as Cuba, emphasis is placed on producing what type of goods?

Accepted Answer

A)  goods needed by the government 
B)  consumer goods 
C)  goods for export 
D)  perishable goods such as food 
E)  durable goods such as machinery 
A)  goods needed by the government 
B)  consumer goods 
C)  goods for export 
D)  perishable goods such as food 
E)  durable goods such as machinery

Question 13

The rivalry among businesses for sales to potential customers

Accepted Answer

A)  is an unfair business practice. 
B)  is a necessary part of a command economy. 
C)  is referred to as competition. 
D)  is typical in a communist nation. 
E)  doesn't exist in the real world. 
A)  is an unfair business practice. 
B)  is a necessary part of a command economy. 
C)  is referred to as competition. 
D)  is typical in a communist nation. 
E)  doesn't exist in the real world.

Question 14

The Federal Reserve uses ____ when it lowers the interest rate charged to banks on short-term loans.

Accepted Answer

A)  monetary policy 
B)  national debt 
C)  inflation 
D)  fiscal policy 
E)  competition 
A)  monetary policy 
B)  national debt 
C)  inflation 
D)  fiscal policy 
E)  competition

Question 15

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about both how and what his company would produce.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
-Refer to Satellite Communications.Jonathan's success will contribute to society.This is referred to as the _____.

Accepted Answer

A)  objective 
B)  market economy 
C)  business cycle 
D)  invisible hand 
E)  standard of living 
A)  objective 
B)  market economy 
C)  business cycle 
D)  invisible hand 
E)  standard of living

Question 16

Xerox Company exchanges its copiers and service contracts for _____.

Accepted Answer

A)  labor 
B)  natural resources 
C)  sales revenue 
D)  taxes 
E)  profit 
A)  labor 
B)  natural resources 
C)  sales revenue 
D)  taxes 
E)  profit

Question 17

According to economists, inflation is

Accepted Answer

A)  a general decrease in the level of prices. 
B)  a general rise in the level of prices. 
C)  unavoidable, and therefore something beyond the control of government. 
D)  eliminated by the government. 
E)  a general problem for countries with command economies. 
A)  a general decrease in the level of prices. 
B)  a general rise in the level of prices. 
C)  unavoidable, and therefore something beyond the control of government. 
D)  eliminated by the government. 
E)  a general problem for countries with command economies.

Question 18

Which of the following defines deflation?

Accepted Answer

A)  It is a typical economic event in the U.S.economy. 
B)  It is scheduled by the nation's economists to make economic corrections. 
C)  It occurs only in command economies. 
D)  It is a general decrease in the level of prices. 
E)  It is characteristic of a mixed economy. 
A)  It is a typical economic event in the U.S.economy. 
B)  It is scheduled by the nation's economists to make economic corrections. 
C)  It occurs only in command economies. 
D)  It is a general decrease in the level of prices. 
E)  It is characteristic of a mixed economy.

Question 19

____ resources include the funds needed to pay wages, purchase raw materials, and operate a business.

Accepted Answer

A)  Human 
B)  Financial 
C)  Information 
D)  Major 
E)  Material 
A)  Human 
B)  Financial 
C)  Information 
D)  Major 
E)  Material

Question 20

Which of the following pairs are most likely to be competitors?

Accepted Answer

A)  Saturn and Rolls Royce 
B)  General Electric and IBM 
C)  Starbucks and Red Lobster 
D)  Kellogg's and General Mills 
E)  Macy's Department Store and Dollar General 
A)  Saturn and Rolls Royce 
B)  General Electric and IBM 
C)  Starbucks and Red Lobster 
D)  Kellogg's and General Mills 
E)  Macy's Department Store and Dollar General

The factors of production include natural resources, labor, government assistance, and entrepreneurship.

Tim Garner owns and operates his own small automobile repair shop.However, the prices he can charge are fixed, and he rents his land and building from the government.Most of his friends work for industries owned by the government.Tim's country is most likely a(n) ____ economy.

The relationship between sales and profits can be written as

According to Adam Smith, under laissez-faire capitalism, each person should be allowed to work toward his or her own economic gain without government interference.

The purpose of specialization is to

A legal monopoly is often referred to as a natural monopoly.

Which of the following would not be included in the gross domestic product of the United States?

Because e-businesses use the Internet, there is no need to meet the needs of customers.

What resource tells the managers of a business how effectively other resources are being combined and used?

The four resources that a business must use to operate successfully include material resources, human resources, financial resources, and operational resources.

The producer price index is an accurate predictor of

In a communist country such as Cuba, emphasis is placed on producing what type of goods?

The rivalry among businesses for sales to potential customers

The Federal Reserve uses ____ when it lowers the interest rate charged to banks on short-term loans.

Xerox Company exchanges its copiers and service contracts for _____.

According to economists, inflation is

Which of the following defines deflation?

____ resources include the funds needed to pay wages, purchase raw materials, and operate a business.

Which of the following pairs are most likely to be competitors?

Being Ethical and Socially Responsible

Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Understanding Information and E-Business

Using Accounting Information

Mastering Financial Management

Filters

Exam 1: Exploring the World of Business and Economics

The factors of production include natural resources, labor, government assistance, and entrepreneurship.

Tim Garner owns and operates his own small automobile repair shop.However, the prices he can charge are fixed, and he rents his land and building from the government.Most of his friends work for industries owned by the government.Tim's country is most likely a(n) ____ economy.

The relationship between sales and profits can be written as

According to Adam Smith, under laissez-faire capitalism, each person should be allowed to work toward his or her own economic gain without government interference.

The purpose of specialization is to

A legal monopoly is often referred to as a natural monopoly.

Which of the following would not be included in the gross domestic product of the United States?

Because e-businesses use the Internet, there is no need to meet the needs of customers.

What resource tells the managers of a business how effectively other resources are being combined and used?

The four resources that a business must use to operate successfully include material resources, human resources, financial resources, and operational resources.

The producer price index is an accurate predictor of

In a communist country such as Cuba, emphasis is placed on producing what type of goods?

The rivalry among businesses for sales to potential customers

The Federal Reserve uses ____ when it lowers the interest rate charged to banks on short-term loans.

Xerox Company exchanges its copiers and service contracts for _____.

According to economists, inflation is

Which of the following defines deflation?

____ resources include the funds needed to pay wages, purchase raw materials, and operate a business.

Which of the following pairs are most likely to be competitors?

Being Ethical and Socially Responsible

Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Building Customer Relationships Through Effective Marketing

Creating and Pricing Products That Satisfy Customers

Distributing and Promoting Products

Understanding Information and E-Business

Using Accounting Information

Mastering Financial Management

Filters