Exam 1: The Foundations of Business

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

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

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. -Because it's set up to make profits while meeting people's needs, New Age stands to make larger profits when prices fluctuate.

Scalpers sell tickets for such events as the World Series and the Super bowl for prices many times the amount printed on the tickets. This situation is an example of which of the following conditions

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. -In determining the quantity of drugs that it will be willing to sell at different prices, New Age management will actually be developing a demand curve.

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

The term laissez-faire means that:

Discuss the government's role in dealing with inflation.

This week, Billy Bob's Barbeque had sales of $4,000. Employees were paid $1,000; food costs were $1,500; and rent was $500. Profit for the week was (select one)

The free market system was espoused by _____ in his book The Wealth of Nations.

Businesses such as hospitals, insurance companies, financial institutions, and attorneys convert resources into _____ products.

Currently, the U.S. national debt is approximately _____.

Demand is the quantity of product that buyers are willing to purchase at various prices.

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

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

The activities needed to operate a business can be divided into a number of _____.

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

_____ involve(s) planning, organizing, directing, and controlling a company's resources so that it can achieve its goals.

A budget deficit occurs when the government spends more than it takes in.

One of the primary roles of management is investing money back into the business.