Exam 1: The Foundations of Business

During a recession, the economy expands, unemployment is low, incomes rise, and consumers buy more products.

What do we mean by the equilibrium price

SCENARIO-BASED General Motors operates several divisions in supplying cars, trucks, vans, and SUVs to its customers. Each division engages the usual business participants, overlaps management functions with other divisions, and works in basically the same functional areas as all of the others. Chevrolet, Pontiac, Oldsmobile, Cadillac, Saturn, and GMC trucks are among the company’s product lines. Its few major competitors include Ford, DaimlerChrysler, Nissan, Honda, and Toyota. Each automaker sells a large portion of all the products sold in the marketplace, and each differentiates its product lines. -If the automobile industry included many rather than few manufacturers of differentiated their products, we might conclude that it was characterized by _____ conditions.

SCENARIO-BASED General Motors operates several divisions in supplying cars, trucks, vans, and SUVs to its customers. Each division engages the usual business participants, overlaps management functions with other divisions, and works in basically the same functional areas as all of the others. Chevrolet, Pontiac, Oldsmobile, Cadillac, Saturn, and GMC trucks are among the company’s product lines. Its few major competitors include Ford, DaimlerChrysler, Nissan, Honda, and Toyota. Each automaker sells a large portion of all the products sold in the marketplace, and each differentiates its product lines. -The industry conditions under which GM competes could not be characterized as _____.

Ultimately, the goal of any business is to satisfy the needs of its owner.

Discuss the government's role in dealing with inflation.

All the activities needed to operate a business can be divided into the three functional areas of accounting, operations, and marketing.

Fast-food chains that have eliminated Styrofoam containers reflect the desire of owners to be good corporate citizens.

Reported monthly by the Bureau of Labor Statistics, the _____ is the most widely publicized measure of inflation.

The most widely publicized measure of inflation is the consumer price index, which is reported every five years by the Bureau of Labor Statistics.

Good _____ management is particularly important when a company is first formed because new businesses usually need to borrow start-up money.

Product differentiation can be achieved by _____.

To assess whether inflation is going up or going down, economists look at changes in (select one):

Ultimately, the goal of any business is to satisfy the needs of its _____.

External forces play a role in determining whether more people or fewer people eat at fast-food restaurants.

When they assess the success of plans and decisions and take corrective action when it's needed, managers are _______.

The percentage change in a price index is also known as the _____ rate.

In an oligopoly, each seller supplies a large portion of all the products sold in the marketplace.

Businesses are more willing to sell a product when the price _____ and less willing to sell it when prices _____.

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. -As part of their business plan, the Peñas identify their customers' needs, design products and services to meet those needs, and manage customer relationships. In this respect, they're engaged in _____.