Question 1

Which of the following is not a feature of laissez-faire capitalism?

Accepted Answer

A)  Competition 
B)  Guaranteed income 
C)  Private ownership of wealth 
D)  Economic freedom 
E)  Limited role of government 
A)  Competition 
B)  Guaranteed income 
C)  Private ownership of wealth 
D)  Economic freedom 
E)  Limited role of government

Question 2

Deflation is a general decrease in the level of prices.

Accepted Answer

A) True 
 B)False

Question 3

Home Inspirations
Hailey works for her father in a family-owned business called Home Inspirations, a bedding company that has been in operation since the 1800s. When her father retires, Hailey plans on taking over the business. Hailey is aware of many things about the company that she likes, and a few things that she does not. She has particularly noted that when the economy has low unemployment and high total income, sales are great. However, any other time, sales are not so good.
Currently, all of the bedding items are created in one place and everyone works on various tasks every day. Hailey is thinking about streamlining the production process so that individuals would be responsible for only one task. She believes that if production would increase, she could sell her products at a lower price and increase revenue. She knows that most bedding products available in the market are very similar in nature and satisfy the same need. However, if she were able to lower prices, this might give her company the competitive advantage that it needs. She would then be able to invest money in differentiating her products by providing unique features, building the brand name, and offering services such as free delivery. She is also considering selling her products on the Internet. Hailey knows that her father does not like change very much, but she feels these changes are important for the future of the company.
-Refer to Home Inspirations. Hailey feels that for productivity to improve, the company must practice

Accepted Answer

A)  free enterprise. 
B)  work ethics. 
C)  specialization. 
D)  cultural diversity. 
E)  pure competition. 
A)  free enterprise. 
B)  work ethics. 
C)  specialization. 
D)  cultural diversity. 
E)  pure competition.

Question 4

Some economists believe that sound fiscal and monetary policy can reduce the amount of time the economy is in the ____ stage of the business cycle.

Accepted Answer

A)  recession 
B)  recovery 
C)  repression 
D)  prosperity 
E)  trough 
A)  recession 
B)  recovery 
C)  repression 
D)  prosperity 
E)  trough

Question 5

If the demand for a product declines, what happens to the price of the product?

Accepted Answer

A)  The price stays the same. 
B)  The price decreases. 
C)  The price increases. 
D)  The equilibrium price will be maintained. 
E)  The market price will be maintained. 
A)  The price stays the same. 
B)  The price decreases. 
C)  The price increases. 
D)  The equilibrium price will be maintained. 
E)  The market price will be maintained.

Question 6

Households provide all of the following resources to businesses except

Accepted Answer

A)  labor. 
B)  land. 
C)  dividends. 
D)  buildings. 
E)  capital. 
A)  labor. 
B)  land. 
C)  dividends. 
D)  buildings. 
E)  capital.

Question 7

The products available in a monopolistically competitive market are similar in nature and are intended to satisfy the same need.

Accepted Answer

A) True 
 B)False

Question 8

Gross domestic product is a loose, subjective measure of how well a society can satisfy its people through goods and services.

Accepted Answer

A) True 
 B)False

Question 9

Why is productivity important? How can a nation's productivity rate be improved?

Accepted Answer

Productivity is important for several re

Question 10

Microsoft, which produces very popular Windows software, owns the copyright for its products. Microsoft has a(n) ____ for these products.

Accepted Answer

A)  monopoly 
B)  oligopoly 
C)  natural monopoly 
D)  limited monopoly 
E)  illegal monopoly 
A)  monopoly 
B)  oligopoly 
C)  natural monopoly 
D)  limited monopoly 
E)  illegal monopoly

Question 11

As computers gained popularity, the ____ typewriters decreased along with the price.

Accepted Answer

A)  demand for 
B)  supply of 
C)  equilibrium of 
D)  productivity of 
E)  monopoly associated with 
A)  demand for 
B)  supply of 
C)  equilibrium of 
D)  productivity of 
E)  monopoly associated with

Question 12

In a monopolistic competition setting, how can a manufacturer differentiate a product?

Accepted Answer

In a monopolistic competition setting, a

Question 13

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

Accepted Answer

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

Question 14

Which economist has been called the father of communism?

Accepted Answer

A)  Adam Smith 
B)  Fidel Castro 
C)  Mark Cuban 
D)  Karl Marx 
E)  Alan Greenspan 
A)  Adam Smith 
B)  Fidel Castro 
C)  Mark Cuban 
D)  Karl Marx 
E)  Alan Greenspan

Question 15

A factory system of manufacturing involves the separation of a manufacturing process into separate tasks and the assignment of different tasks to different employees.

Accepted Answer

A) True 
 B)False

Question 16

All of the following were part of the U.S. federal government's stimulus plan except

Accepted Answer

A)  shoring up the country's banks. 
B)  creating a more extensive physical infrastructure. 
C)  shoring up Wall Street firms. 
D)  reducing the number of home foreclosures. 
E)  freeing up credit for individuals and businesses. 
A)  shoring up the country's banks. 
B)  creating a more extensive physical infrastructure. 
C)  shoring up Wall Street firms. 
D)  reducing the number of home foreclosures. 
E)  freeing up credit for individuals and businesses.

Question 17

In the mid-1970s, American auto manufacturers produced big gas-guzzling cars and tried to sell them to consumers who needed fuel-efficient transportation. This happened because manufacturers

Accepted Answer

A)  lost sight of consumers' needs. 
B)  attempted to satisfy consumers' needs. 
C)  followed consumers' wants too closely. 
D)  knew the economy would rise again. 
E)  did not expect a profit. 
A)  lost sight of consumers' needs. 
B)  attempted to satisfy consumers' needs. 
C)  followed consumers' wants too closely. 
D)  knew the economy would rise again. 
E)  did not expect a profit.

Question 18

Online interaction that allows individuals as well as businesses to share ideas, personal information, and information about products and services is defined as

Accepted Answer

A)  social media. 
B)  e-business. 
C)  sustainability. 
D)  social sustainability. 
E)  a domestic system. 
A)  social media. 
B)  e-business. 
C)  sustainability. 
D)  social sustainability. 
E)  a domestic system.

Question 19

Since World War II, the average length of recessions has been

Accepted Answer

A)  six months 
B)  eleven months 
C)  twenty-two months 
D)  three years 
E)  five years 
A)  six months 
B)  eleven months 
C)  twenty-two months 
D)  three years 
E)  five years

Question 20

The relationship between sales and profits can be written as

Accepted Answer

A)  sales revenues + expenses = profit. 
B)  loss + profit = sales revenue. 
C)  profi―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)  profi―expenses = sales revenue. 
D)  expenses + loss = sales revenue + profit. 
E)  sales revenue―expenses = profit.

Exam 1: Exploring the World of Business and Economics

Which of the following is not a feature of laissez-faire capitalism?

Deflation is a general decrease in the level of prices.

Some economists believe that sound fiscal and monetary policy can reduce the amount of time the economy is in the ____ stage of the business cycle.

If the demand for a product declines, what happens to the price of the product?

Households provide all of the following resources to businesses except

The products available in a monopolistically competitive market are similar in nature and are intended to satisfy the same need.

Gross domestic product is a loose, subjective measure of how well a society can satisfy its people through goods and services.

Why is productivity important? How can a nation's productivity rate be improved?

Microsoft, which produces very popular Windows software, owns the copyright for its products. Microsoft has a(n) ____ for these products.

As computers gained popularity, the ____ typewriters decreased along with the price.

In a monopolistic competition setting, how can a manufacturer differentiate a product?

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

Which economist has been called the father of communism?

A factory system of manufacturing involves the separation of a manufacturing process into separate tasks and the assignment of different tasks to different employees.

All of the following were part of the U.S. federal government's stimulus plan except

In the mid-1970s, American auto manufacturers produced big gas-guzzling cars and tried to sell them to consumers who needed fuel-efficient transportation. This happened because manufacturers

Online interaction that allows individuals as well as businesses to share ideas, personal information, and information about products and services is defined as

Since World War II, the average length of recessions has been

The relationship between sales and profits can be written as

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: 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

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

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