Deck 1: The Dynamics of Business and Economics

Question 1

Which of the following can be grouped under a single segment among the various elements of business activity?

A)Marketing and finance
B)Management and end-users
C)Organization and customers
D)Marketing and consumers
E)Management and regulatory forces

Answer 1

D

Question 2

Which of the following is an example of a tangible product?

A)An automobile
B)A movie
C)A theatre play
D)A music concert
E)A business conference

Answer 2

A

Question 3

A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with limited resources.

Answer 3

True

Question 4

Which of the following statements is true about businesses and profits?

A)Profit making is a business activity that seldom requires risk taking.
B)Businesses do not have the right to use their profits the way they choose.
C)Profit-making businesses often weaken the economy of a country.
D)Earning profits contributes to society by providing employment.
E)Ignoring the interests of stakeholders is the best way for a business to be profitable.

Question 5

_____ is the primary goal of business.

A)Charity
B)Profit
C)Bureaucracy
D)Quality
E)Strategy

Question 6

The difference between what it costs to make and sell a product and what a customer pays for it is referred to as _____.

A)net value
B)gross price
C)profit
D)retail price
E)stake

Question 7

All the groups that have an interest in an organization's success and outcomes are known as the organization's _____.

A)agencies
B)stakeholders
C)owners
D)investors
E)shareholders

Question 8

Which of the following is an example of an intangible product?

A)A movie DVD
B)A sandwich
C)A sports car
D)A music concert
E)Jewelry

Question 9

_____ is an element of the management activity in a business.

A)Production
B)Advertising
C)Sales promotion
D)Personal selling
E)Publicity

Question 10

The functions of organizing,staffing,planning,and controlling are most closely associated with:

A)managers.
B)assembly line workers.
C)investment advisors.
D)stockbrokers.
E)direct sales executives.

Question 11

Finance refers to all activities concerned with obtaining money and using it effectively.

Question 12

_____ gather information and conduct research to determine what customers want.They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available.

A)Accountants
B)Engineers
C)Marketers
D)Supervisors
E)Stockbrokers

Question 13

Which of the following is true of the responsibilities of the people involved in a business?

A)The finance department is concerned with acquiring,developing,and using human resources effectively and efficiently.
B)The marketing team handles all activities concerned with obtaining money for the firm and using it effectively.
C)The managers of nonprofit organizations conduct all kinds of business operations except collecting funds.
D)The senior management is not involved in the day-to-day functions of production and manufacturing.
E)The primary responsibility of providing financial resources for the operation of the business lies with the business owners.

Question 14

Which of the following is a similarity between businesses and nonprofit organizations?

A)Both do not have to abide by government regulations.
B)Both are unaffected by political or social change.
C)Both of them engage in management and finance activities.
D)Both of them do not need to adapt to technological changes.
E)Both aim to maximize financial returns for their owners.

Question 15

Owners have little responsibility to provide funds for the operation of the business.

Question 16

Among the major activities of business,which of the following is an element of management?

A)Marketing activities
B)Product research
C)Personal selling
D)Promoting sales
E)Acquiring resources

Question 17

Which of the following is a force within an organization's control that has an impact on the business's daily operations?

A)Employees
B)Regulatory environment
C)Competition
D)Political environment
E)Technology

Question 18

The equilibrium price is represented by the point where a product's supply and demand curves intersect.

Question 19

Businesses have the right to keep and use their profits as they choose,without limitations.

Question 20

Businesses differ from nonprofit organizations in that a business's focus is on:

A)profit.
B)goods.
C)price.
D)charity.
E)fund raising.

Question 21

When a business fails or does not make a profit,_____ have the most to lose in terms of finances.

A)consumers
B)media agencies
C)government bodies
D)owners
E)market experts

Question 22

_____ are the funds used to acquire the natural and human resources needed to provide products.

A)Skills
B)Exchanges
C)Capital resources
D)Labor charges
E)Barter charges

Question 23

_____ refers to the physical and mental abilities that people use to produce goods and services.

A)Labor
B)Economics
C)Finance
D)Capital
E)Natural resources

Question 24

Identify the form of business ownership in communist systems.

A)Individuals own and operate all businesses.
B)The government owns and operates major industries; individuals own small businesses.
C)Religious groups own businesses and dictate norms of business.
D)Government owns most businesses and operates them single-handedly.
E)Market forces and private enterprise stakeholders own businesses.

Question 25

Which of the following is true of marketers?

A)Marketers are involved primarily in production and management of infrastructure.
B)Marketers gather information and conduct research to determine what customers want.
C)Marketers in nonprofit organizations do not use promotion.
D)Marketers are concerned with acquiring,developing,and using resources.
E)Marketers plan,organize,staff,and control the tasks required to carry out the work of a company.

Question 26

Which of the following is considered a command economy?

A)Capitalism
B)Libertinism
C)Private enterprise
D)Communism
E)Laissez-faire market

Question 27

A(n)_____ describes how a particular society distributes its resources to produce goods and services.

A)labor system
B)economic system
C)political ideology
D)legal framework
E)judicial scheme

Question 28

_____ is the study of how resources are distributed for the production of goods and services within a social system.

A)Public relations
B)Sociology
C)Demographics
D)Psychographics
E)Economics

Question 29

_____ refers to all activities concerned with obtaining and managing money and using it effectively.

A)Public relations
B)Marketing
C)Production
D)Advertising
E)Finance

Question 30

Which of the following is a characteristic of communist economies in reality?

A)Critical shortages of consumer goods
B)High standards of living
C)Low prices
D)Excessive freedom
E)Absence of corruption

Question 31

Which of the following has become the first communist country to make strong economic gains by adopting capitalist approaches to business?

A)Singapore
B)India
C)Thailand
D)China
E)Japan

Question 32

Which of the following statements is true about communism?

A)It is characterized by the government owning and operating most businesses.
B)It relies on supply and demand to make decisions about pricing and production of goods.
C)It encourages private ownership of the means of production.
D)It encourages free market and competition.
E)It provides scope for the production of a large variety of goods and services.

Question 33

Which of the following is a factor of production for a firm?

A)Advertising media
B)Legal consultants
C)Customers
D)Natural resources
E)Company reputation

Question 34

Which of the following is a human resource?

A)Physical and mental abilities of people
B)Forests and minerals
C)Economic capital
D)Financial assets
E)Company reputation

Question 35

A firm's _____ resources are also known as labor.

A)economic
B)human
C)intangible
D)financial
E)natural

Question 36

Which of the following is a natural resource?

A)Minerals
B)People
C)Capital
D)Money
E)Labor

Question 37

People who work as accountants,stockbrokers,investment advisors,or bankers are all part of the _____ world.

A)management
B)financial
C)operations
D)marketing
E)advertising

Question 38

Financial resources are also known as _____.

A)capital
B)labor
C)barter
D)natural resources
E)exchange

Question 39

Coupons,games,sweepstakes,movie tie-ins are all forms of _____.

A)sales promotion
B)publicity
C)advertising
D)personal selling
E)direct retail

Question 40

Advertising,personal selling,coupons,and sweepstakes are forms of the _____ aspect of marketing activities.

A)finance
B)promotion
C)production
D)fundraising
E)social responsibility

Question 41

In which of the following systems are all economic decisions made without government intervention?

A)Socialism
B)Communism
C)Capitalism
D)Marxism
E)Collectivism

Question 42

In which of the following economic systems do most people work for government-owned industries or farms?

A)Capitalist
B)Communist
C)Socialist
D)Libertarian
E)Neo-realist

Question 43

____ is often called the father of capitalism.

A)Karl Marx
B)George Washington
C)Benjamin Franklin
D)Alan Greenspan
E)Adam Smith

Question 44

_____ is an economic system in which the government owns and operates basic industries.

A)Collectivism
B)Capitalism
C)Socialism
D)Egalitarianism
E)Utilitarianism

Question 45

Which of the following is true of a free market system?

A)It is different from laissez fair capitalism.
B)In a free market,a government regulates business.
C)It is also called modified capitalism.
D)In a free market system,all economic decisions are made without government intervention.
E)In a free market system,central government planning determines what goods and services satisfy citizens' needs.

Question 46

When different businesses promote similar products that differ in some characteristics but satisfy the same consumer need,the competitive environment is most likely to be:

A)monopolistic competition.
B)pure competition.
C)an oligopoly.
D)a monopoly.
E)socialist.

Question 47

_____ relates to the number of goods and services that consumers are willing to buy at different prices at a specific time.

A)Demand
B)Supply
C)Elasticity
D)Balance of payments
E)Deficit

Question 48

Which of the following is true of product availability in a communist system?

A)Consumers have a wide choice of goods but not services.
B)Consumers have a wide choice of services but not goods.
C)Consumers have a limited choice of goods and services.
D)Consumers have a limited choice of services but not goods.
E)Consumers have a wide choice of services and goods.

Question 49

Using the supply and demand curves shown in the graph that follows,what is the equilibrium price for soft drinks?

A)35 cents
B)45 cents
C)50 cents
D)55 cents
E)75 cents

Question 50

_____ is the number of products that businesses are willing to sell at different prices at a specific time.

A)Equilibrium
B)Distribution
C)Cost pricing
D)Demand
E)Supply

Question 51

_____ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time.

A)Bundled price
B)Equilibrium price
C)Discount price
D)Competitive price
E)Maximum retail price

Question 52

In a capitalist economic system,_____.

A)the government owns and operates all businesses
B)there is little scope for competition
C)consumers have a limited choice of goods and services
D)majority of people possesses government jobs
E)prices of goods and services are determined by demand and supply

Question 53

Which of the following countries is an example of an economic system based on capitalism?

A)Russia
B)Sweden
C)Japan
D)India
E)Israel

Question 54

Which of the following markets is most likely to be a monopoly?

A)Agricultural commodities
B)Lifestyle gadgets
C)Airlines
D)Electricity supply
E)Sports utility vehicles

Question 55

Which of the following statements describes the force that drives the distribution of resources (goods and services,labor,and money)in a free-enterprise economy?

A)Prices for goods and services vary according to the changes in supply and demand.
B)Supply and demand curves intersect at the point where supply and demand are not equal.
C)Changing the price of a product does not alter the supply curve.
D)The price at which the number of products that businesses are willing to supply is inversely proportional to the amount of products that consumers are willing to buy at a specific point in time.
E)Businesses are willing to supply more of a good or service at higher prices because the potential for profits is higher.

Question 56

In a socialist economic system,_____.

A)individuals own and operate all businesses
B)very few people work for government organizations
C)competition is restricted in major industries
D)there is no concept of small businesses owned by individuals
E)demand and supply have no role to play in the pricing of products and services

Question 57

Identify a true statement about a socialist system of economy.

A)Individuals own and operate the majority of businesses that provide goods and services.
B)Central planning determines what basic goods and services are produced.
C)Competition,supply,and demand determine which goods and services are produced and how they are produced.
D)All economic decisions are made without government intervention.
E)Consumers have a wide choice of goods and services.

Question 58

Generally,when a retailer announces a discount sale on all its products:

A)consumers will not demand more than usual.
B)the store will not supply more products than it normally does.
C)consumers will demand more products.
D)the manufacturer will halt production.
E)consumers will demand fewer products than usual.

Question 59

Egalitarianism refers to the:

A)exemption of taxes for successful businesses.
B)restrictions on taking up non-government jobs.
C)equal distribution of income and social services.
D)concept of the rich getting richer and the poor getting poorer.
E)restriction of competition in small businesses by government regulations.

Question 60

According to Adam Smith,competition:

A)mitigates growth.
B)fosters efficiency.
C)prevents low prices.
D)increases demand.
E)increases prices.

Question 61

_____ exists when there are many small businesses selling one standardized product.

A)Monopolistic competition
B)Oligopoly
C)Pure competition
D)Monopoly
E)Monopsony

Question 62

Which of the following is a characteristic of economic depression?

A)Unemployment levels are almost low or absent.
B)Consumer spending is high.
C)Individuals' incomes increase at the same pace as rising prices.
D)Buying power of consumers is quadrupled.
E)Business output is sharply reduced.

Question 63

Increased unemployment can reduce consumer demand for goods and services,leading to:

A)economic expansion.
B)inflation.
C)deflation.
D)budget surplus.
E)recovery.

Question 64

In which of the following market structures do individual businesses have control over their products' price because each business supplies a large portion of the products sold in the marketplace?

A)Monopsony
B)Monopoly
C)Oligopoly
D)Government-granted monopoly
E)Coercive gambling

Question 65

Which of the following is associated with a decline in spending?

A)Inflation
B)Economic contraction
C)Economic expansion
D)Employment boom
E)Job expansion

Question 66

Monopolistic competition exists when:

A)there are very few businesses selling a product
B)many small businesses selling one standardized product are present in the market.
C)there is only one producer of a product in a given market.
D)individual businesses have control over their products' price.
E)there is slowdown of the economy characterized by a decline in spending.

Question 67

_____ indicates the income level of "average" Americans.It is useful in determining how much "average" consumers spend and how much money Americans are earning.

A)Per capita income
B)GDP
C)Budget deficit
D)Consumer price index
E)Worker productivity

Question 68

Following a bad harvest,the prices of agricultural commodities in Urbania have increased dramatically,as have the prices of products manufactured from agricultural commodities.Government intervention has failed to arrest the rising prices.Based on this information,Urbania is undergoing _____.

A)deflation
B)stagflation
C)contraction
D)depression
E)inflation

Question 69

Which of the following is true of economic expansion?

A)There is a decline in production,employment,and income.
B)The standard of living rises because more people are employed and have money to spend.
C)There is a decline in spending.
D)Consumer spending is low and business output is sharply reduced.
E)The prices stagnate during this period.

Question 70

Economic contraction is said to have occurred when:

A)GDP increases.
B)spending declines.
C)jobs increase.
D)inflation decreases.
E)unemployment falls.

Question 71

When there is only one business providing a product in a given market,there exists:

A)an oligopoly.
B)modified competition.
C)pure competition.
D)monopolistic competition.
E)a monopoly.

Question 72

Economic expansion occurs when:

A)fewer goods and services are produced than consumer demand.
B)an economy is growing and people are spending more money.
C)a nation's standard of living drops dramatically.
D)employment levels decline over time.
E)prices begin to rise and incomes begin to fall.

Question 73

_____ measures changes in the prices of goods and services purchased for consumption by typical urban households.

A)GDP
B)Per capita income
C)Worker productivity
D)Trade balance
E)Consumer price index

Question 74

Which of the following exists when there are many small businesses selling one standardized product,such as agricultural commodities like wheat,corn,and cotton?

A)Pure competition
B)Monopolistic rivalry
C)Imperfect competition
D)Oligopoly
E)Monopsony

Question 75

A condition characterized by continuing rise in prices over a period of time refers to:

A)inflation.
B)depression.
C)a recession.
D)economic contraction.
E)deflation.

Question 76

The market for corn in Brazil has a large number of sellers and there is no difference in the products sold by each seller.As there are also a large number of buyers for corn,the actions of a single seller or buyer cannot affect the price.The market for corn in Brazil can be described as ____.

A)a monopoly
B)monopolistic competition
C)pure competition
D)an oligopoly
E)modified competition

Question 77

An oligopoly exists when:

A)there are very few businesses selling a product
B)there are many small businesses selling one standardized product.
C)only one producer of a product is present in a given market.
D)individual businesses have control over their products' price.
E)there is a slowdown of the economy characterized by a decline in spending.

Question 78

Which of the following statements is true about GDP as a measure of a country's economic health?

A)It does not include the services produced in a country.
B)It measures only those goods and services made within a country.
C)It includes profits from companies' overseas operations.
D)It does not include profits earned by foreign companies within the country being measured.
E)It essentially takes into account the concept of GDP in relation to population.

Question 79

When a nation takes in more from taxes than it spends,it has a _____.

A)fiscal deposit
B)small cap
C)Kondratieff wave
D)budget deficit
E)balance of trade

Question 80

A budget deficit occurs when a nation:

A)reduces its expenditures.
B)receives excess taxes.
C)has no national debts.
D)spends more than it takes in from taxes.
E)balances taxes and expenditures.