Exam 1: The Foundations of Business

What are the external forces that influence business activities

Explain monopolistic competition.

SCENARIO-BASED Soup, Salad, & Sandwich is a regional chain of restaurants in the northeast that provides dine-in, carry-out, and catering services. Owners Jesse and Mataya Peña currently operate six locations and are in the process of opening a new restaurant in another state. Their operation is quite successful and appeals to health-conscious consumers, busy moms, and executives in a hurry. Staying open longer hours, enlarging the menu, and expanding the scope of the business are among the many goals set by the Peñas. They want to follow a traditional business model in reaching their goals. -Mataya is good at summarizing and communicating financial and other information to Jesse and the other restaurant managers. Which functional area is her specialty

If the Fed believes that inflation is a problem, it will (select one):

_____ refers to the quantity of a product that sellers are willing to sell at various prices

In calculating gross domestic product (GDP), the U.S. government does not include the following: (select one)

Because Jenny Craig's bank provides payment services, loan and insurance products, investments, credit cards, and online banking, it is a _____ company.

The U.S. government uses _____ policy regulate the money supply and interest rates.

Generally speaking, workers in socialist economies (such as those of France and Sweden) work _____ hours and have _____ vacations.

Generally speaking, we find products more attractive at higher prices because we believe that other people find value in them.

Under monopolistic competition, large companies exercise control over prices.

The study of the economic choices made by individual consumers or businesses is called _____.

_____ not only provide factors of production (or resources) but also consume goods and services.

To counter a recession, the Fed will take _____ measures to increase the money supply and reduce interest rates.

According to economists, we're entering a period of prosperity when GDP goes down for two consecutive quarters.

Which of the following question(s) does an economist attempt to answer

The _____ is an index based on results of a monthly survey of 5,000 households published by the Conference Board.

Among free market theorists, the principle of laissez-faire calls for government intervention to equalize the distribution of resources.

Explain how demand functions in a free market system.

SCENARIO-BASED New Age Pharmaceuticals Inc. produces two limited lines of drugs—one for common maladies and one for rarer conditions and diseases. The majority of its business comes from the tried-and-true drugs that most Americans have been using for many years, but the new growth area in the pharmaceutical industry is in high-priced new drugs. New Age management believes that the company’s research-and-development operations are sufficiently effective and efficient enough to develop six new prescription drugs that will start showing a profit within 12 months of their roll-outs. Currently more than 4 million people use New Age products. -New Age will be more willing to develop new products when prices are on the rise and less willing when they're coming down.