Exam 1: The U.S.Business Environment

How does the external environment affect business?

The political-legal environment reflects the relationship between the business and ________.

"A nation's economic system is its system for allocating its resources among its citizens,both individuals and organizations." Comment.

Businesses seek to be close to customers,establish strong relationships with suppliers,and distinguish themselves from competitors.

Profits from an American-owned automobile factory in Brazil are included in the GDP of Brazil.

The Gross National Product (GNP)is the total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located.

________ occurs when two or more businesses vie for the same resources or customers.

Which of the following is an example of a natural monopoly?

If productivity increases,prices charged to consumers will tend to increase as well.

Explain what is meant by the term profits.

The consumer price index measures the prices of typical products purchased by consumers living in urban areas.

U.S.agriculture is a good example of ________.

Differentiate between gross national product (GNP)and gross domestic product (GDP).

Which of the following is NOT a characteristic of perfect competition?

Which of the following best describes the term gross national product?

Inflation refers to widespread price increases in an economic system.

When the quantity demanded exceeds the quantity supplied,a(n)________ will result.

When plotted on a graph,the supply curve and the demand curve will normally ________.

Short Case Scenario 1-1 Expert Electronics is a manufacturer of computers on the large, but isolated, island nation of New Vermont. Although imports are extremely limited because of difficult navigation to and from New Vermont, there are a handful of computer manufacturers in addition to Expert Electronics. While the government provides some services, such as public education and a well-maintained road system, almost all businesses are privately owned. Home ownership is unusually high, with 80 percent of all families owning their own home. Expert Electronics is selling a state-of-the-art desktop computer system for 1,299 veros (the local currency). At this price, Expert Electronics is able to fill all orders, but they have no waiting list. -New Vermont underwent a recession two years ago.How might New Vermont's aggregate output have been affected?

Short Case Scenario 1-1 Expert Electronics is a manufacturer of computers on the large, but isolated, island nation of New Vermont. Although imports are extremely limited because of difficult navigation to and from New Vermont, there are a handful of computer manufacturers in addition to Expert Electronics. While the government provides some services, such as public education and a well-maintained road system, almost all businesses are privately owned. Home ownership is unusually high, with 80 percent of all families owning their own home. Expert Electronics is selling a state-of-the-art desktop computer system for 1,299 veros (the local currency). At this price, Expert Electronics is able to fill all orders, but they have no waiting list. -If Expert Electronics cuts the prices for its computer system,how will competitors respond?