Deck 1: Exploring the World of Business and Economics

Question 1

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about both how and what his company would produce.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
Refer to Satellite Communications.Which company has the correct objective?

A) Satellite Communications
B) Universal Communications
C) Both of them
D) None of them
E) Not enough information is provided.

Answer 1

B

Question 2

Describe how supply and demand affect the price of a product.

Answer 2

Answer not provided.

Question 3

In perfect competition, who sets the price of a product?

Answer 3

Answer not provided.

Question 4

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

Question 5

Explain how the basic economic questions are answered in the capitalistic and command economies.

Question 6

How does socialism differ from communism?

Question 7

A nation's economy fluctuates instead of growing at a steady pace every year.These fluctuations are generally referred to as the business cycle.Describe the four different phases of the business cycle.

Question 8

How does monopoly have complete control over the price of its product?

Question 9

What is the difference between monetary policies and fiscal policies? How does each affect the nation's economy?

Question 10

In your own words, describe four reasons why someone should study business.

Question 11

Explain how you can improve your course grade and become more successful in this course.

Question 12

What is profit and why is it important to a business?

Question 13

Explain how an entrepreneur could use the factors of production to start a successful small business.

Question 14

Why do we say that the U.S.economy is a mixed economy?

Question 15

What effect did the Industrial Revolution and the golden age of invention have on the development of American business?

Question 16

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about both how and what his company would produce.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
Refer to Satellite Communications.When hiring people, which of the following does Jonathan think is most important to consider?

A) Unilateral thinking
B) Profit
C) Wage increases
D) Health benefits
E) Cultural diversity

Question 17

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

Question 18

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about both how and what his company would produce.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
Refer to Satellite Communications.Now that Jonathan plans to open his own business, he needs to look at the factors of production.Which of the following is not a factor of production?

A) Labor
B) Capital
C) Machinery
D) Demand
E) Entrepreneurship

Question 19

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about both how and what his company would produce.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
Refer to Satellite Communications.Jonathan is operating in a ____ because he has the opportunity to decide what to produce and how to produce it.

A) command economy
B) mixed economy
C) free-enterprise system
D) split economy
E) cultural diversity

Question 20

What do you consider to be the most important challenges that American business faces today?

Question 21

Shawn Sine decides to start his own business.How likely is Shawn to still be operating a successful business in five years?

A) It depends on whether it is an e-business or not.
B) It is very likely because most small businesses are successful.
C) It is likely because the chance of failure is nearly equal to the chance for success.
D) It is unlikely because well over half of new small businesses fail within the first six years.
E) It is very unlikely because almost all new businesses fail within the first five years.

Question 22

All of the following are material resources for Toyota except _____.

A) paint
B) steel
C) factory
D) tires
E) money

Question 23

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, at 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.According to Hailey, to improve productivity, the company must practice which of the following?

A) Free enterprise
B) Work ethics
C) Specialization
D) Cultural diversity
E) Pure competition

Question 24

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about both how and what his company would produce.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
Refer to Satellite Communications.Jonathan's success will contribute to society.This is referred to as the _____.

A) objective
B) market economy
C) business cycle
D) invisible hand
E) standard of living

Question 25

Raw materials, buildings, and machinery are ____ resources.

A) human
B) financial
C) information
D) major
E) material

Question 26

The monetary contributions that the owners of IBM pay for shares in the company's stock are ____ resources for IBM.

A) material
B) financial
C) informational
D) human
E) manufacturing

Question 27

Organizations that combine raw materials, machinery, and labor to produce goods are called _____.

A) manufacturing businesses
B) service businesses
C) merchandisers
D) market intermediaries
E) processors

Question 28

____ resources include the funds needed to pay wages, purchase raw materials, and operate a business.

A) Human
B) Financial
C) Information
D) Major
E) Material

Question 29

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, at 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 noticed that when sales were up, the economy was in a _____.

A) depression
B) peak period
C) grace period
D) recession
E) stagnant mode

Question 30

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, at 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.Home Inspirations currently operates in a ____ environment.

A) purely competitive
B) demand
C) monopolistic
D) command
E) supply

Question 31

For a profit, the Ford Motor Company produces and sells automobiles that satisfy a society's needs.These efforts are referred to as ____.

A) entrepreneurial
B) agricultural
C) economical
D) business
E) competition

Question 32

Verizon Corporation has the right to manufacture and market a product and redesign its stores because it operates in a(n) ____ system.

A) free-enterprise
B) oppressed economic
C) communistic
D) socialistic
E) totalitarian

Question 33

Alex Crane is a financial planner who gives seminars on the benefits of purchasing stocks and bonds for retirement.Alex's seminars educate the participants on how to

A) become more informed consumers.
B) become more informed investors.
C) start their own businesses.
D) be better employees.
E) manage retirement.

Question 34

Chris chooses to work only thirty hours a week as an engineering assistant while trying to shield himself from additional responsibilities at work.Chris seems to value _____.

A) recognition and rewards
B) the opportunity to help others
C) promotions and transfers
D) more free time
E) get-rich-quick schemes

Question 35

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, at 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's goal of offering products with unique features and special services is called _____.

A) specialization
B) product differentiation
C) barter
D) a factory system
E) a natural monopoly

Question 36

The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs is called _____.

A) consumerism
B) the economy
C) capitalism
D) business
E) the workplace

Question 37

When an individual chooses his or her ideal career, it is most likely a reflection of one's _____.

A) values
B) hobbies
C) skills
D) education
E) desire to be rich

Question 38

Cultural diversity represents:

A) a business theory that is no longer valid.
B) the differences among people in a workforce.
C) a technical skill.
D) a statistical method used to project sales revenues and profits for global companies.
E) a religious issue that doesn't affect business organizations.

Question 39

____ resources are the individuals who provide labor for an organization in exchange for wages.

A) Human
B) Material
C) Labor
D) Financial
E) Informational

Question 40

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, at 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.Which of these statements is true?

A) Hailey feels that e-business is an important avenue to venture into.
B) Home Inspirations is in a depressive economy.
C) Hailey feels that the barter system is working well.
D) The economy has a high standard of living.
E) The company's sales are obviously in equilibrium.

Question 41

A local retailer calls its customers when it receives merchandise that they may be interested in, provides individual service to each customer, provides forms and phone numbers for complaints and comments, and has a 100 percent satisfaction guarantee.Which objective is this business working hard to accomplish?

A) making a profit
B) achieving low employee turnover
C) satisfying the needs of its customers
D) increasing the owner's wealth
E) keeping up with the current technology

Question 42

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

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 43

When a firm's sales revenue is greater than its expenses, the firm has a _____.

A) profit
B) loss
C) positive cash flow
D) financial resource
E) factor of production

Question 44

Target stores, which resell manufactured goods to consumers in its retail stores would most likely be classified as a(n) _____.

A) service business
B) sole proprietorship
C) marketing intermediary
D) manufacturing establishment
E) perfect competition

Question 45

The study of an individual's economic decisions would be an example of ____.

A) macroeconomics
B) microeconomics
C) fiscal policy
D) monetary policy
E) national economic policy

Question 46

Microeconomics is the study of _____.

A) global economies
B) the entire U.S.economy
C) the decisions made by individuals
D) the national unemployment rate
E) productivity in other countries

Question 47

There are several types of businesses.Which of the following, according to its primary business activities, would be classified as a service business?

A) IBM
B) a local bakery
C) Hertz Rent-a-Car
D) Sears
E) Anheuser-Busch, Inc.

Question 48

Mike Amerson decides to start a residential landscaping business.How would this business most likely be classified?

A) manufacturing business
B) marketing intermediary
C) service business
D) corporation
E) nonprofit organization

Question 49

Which of the following companies is an example of a manufacturer?

A) American Airlines
B) General Electric
C) Merrill Lynch
D) JC Penney
E) Sears

Question 50

For a business, a stakeholder is one who represents the _____

A) investors in the business.
B) lenders that have provided loans.
C) suppliers that have extended credit to the firm.
D) employees who work for the firm.
E) different people or groups who are affected in some way by the business.

Question 51

____ is the study of how wealth is created and distributed.

A) Economics
B) Business
C) Marketing
D) Capitalism
E) Finance

Question 52

When economists study the national economy or global economy, they are using a(n) ____ approach.

A) macroeconomic
B) microeconomic
C) fiscal
D) monetary
E) intuitive

Question 53

Just-The-One Jewelry had sales revenues of $1,500,000.This retailer also had expenses that totaled $800,000.What is the firm's profit or loss amount?

A) $2,300,000
B) $1,500,000
C) $800,000
D) $700,000
E) It is impossible to calculate profit or loss with the above information.

Question 54

What resource tells the managers of a business how effectively other resources are being combined and used?

A) technical
B) human
C) financial
D) material
E) informational

Question 55

The ultimate objective of every firm, such as IBM, Hewlett-Packard, JC Penney, and Cengage Learning, must be to

A) sell either to other firms or to consumers.
B) satisfy the needs of its customers.
C) pay out money to cover the various expenses of doing business.
D) know that people generally buy a product and store it.
E) make it impossible to satisfy customers.

Question 56

A natural resource, as recognized by economists, would include which of the following?

A) crude oil
B) buildings
C) tools
D) machinery
E) equipment

Question 57

Andrew Cooper decides to become a part owner of a corporation.As a part owner, he expects to receive a profit as payment because he has assumed the risk of

A) serious inflation eroding the purchasing power of his investment.
B) being paid before the suppliers and employees are paid.
C) losing his home, car, and life savings.
D) losing the money he has invested in the corporation and not receiving profits.
E) the company giving all of the profits to local communities.

Question 58

When a firm's expenses are greater than its sales revenue, the firm has a _____.

A) profit
B) loss
C) negative cash flow
D) planned economy
E) market economy

Question 59

The relationship between sales and profits can be written as

A) Sales revenues + expenses = profit.
B) Loss + profit = sales revenue.
C) Profit - expenses = sales revenue.
D) Expenses + loss = sales revenue + profit.
E) Sales revenue - expenses = profit.

Question 60

At the end of the year, the Walt Disney Company has a profit of $920 million.This profit belongs to which of the following groups?

A) the company's CEO and top managers
B) the banks from which Disney borrowed money
C) all employees including management
D) the consumers of Disney's goods and services
E) the owners of Disney

Question 61

Matt Newell, a former Air Force pilot, decides to operate a helicopter tour company to provide customers with breathtaking views of the Rocky Mountains.He obtains a loan to ensure that the necessary land, facilities, advertising, and five helicopters are available for his business.What important factor of production has he overlooked in creating his business?

A) equipment
B) capital
C) labor
D) entrepreneurship
E) natural resources

Question 62

Approximately what portion of our nation's total production is made up of consumer goods?

A) 70 percent
B) 50 percent
C) 40 percent
D) 20 percent
E) 10 percent

Question 63

Steve Wilson, a chef at a major restaurant in San Francisco, wants to start his own restaurant.He surveys the market, finds a suitable location, and calculates how much money he will need to lease the building and purchase the necessary equipment and supplies.Steve visits his banker and requests a loan.The money Steve will receive as a loan and the resources he will purchase with it are known as _____.

A) capital
B) profit
C) revenue
D) collateral
E) stock

Question 64

Which of the following represents the biggest customer of American business?

A) government
B) other businesses
C) foreign governments
D) consumers
E) the military

Question 65

An economic system in which individuals and businesses make decisions about what to produce and what to buy, and the market determines how much is sold and at what prices, is called a ____ economy.

A) product
B) producer's
C) market
D) planned
E) command

Question 66

All of the following would typically be considered consumer products except a _____.

A) 2-liter of Coke
B) DVD player
C) prom dress
D) high-powered drill press
E) bag of dog food

Question 67

The work performed to produce goods and services is referred to as _____.

A) land
B) financial resources
C) material resources
D) capital goods
E) labor

Question 68

According to economists, natural resources, labor, capital, and entrepreneurship are called _____.

A) free resources
B) competitive resources
C) factory resources
D) factors of manufacturing
E) factors of production

Question 69

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

A) competition
B) guaranteed income
C) private ownership of wealth
D) economic freedom
E) limited role of government

Question 70

Capital or capital goods as recognized by economists would include all of the following except _____.

A) crude oil
B) facilities
C) money
D) machinery
E) computer equipment

Question 71

Households provide all of the following resources to businesses except _____.

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

Question 72

Which of the following purchases goods and services for personal or household use?

A) entrepreneur
B) manager
C) labor
D) consumer
E) market middleman

Question 73

The United States, whose economy exhibits elements of both capitalism and socialism, is known as a(n) ____ economy.

A) planned
B) utilitarian
C) nationalized
D) mixed
E) centralized

Question 74

Diane enjoys scrapbooking and decides to open her own scrapbooking store.She invests her money, time, and effort into making the store a success.Diane can be best described as a(n) _____.

A) capitalist
B) laborer
C) corporate owner
D) entrepreneur
E) competitor

Question 75

A person who risks his or her time, effort, and money to start and operate a business is called a(n) _____.

A) free-market specialist
B) entrepreneur
C) intrapreneur
D) competitor
E) profit taker

Question 76

Ways in which consumers affect American business include all the following except

A) purchasing goods and services.
B) providing necessary business capital.
C) providing the labor necessary for production.
D) providing the resources necessary for production.
E) taxing goods and services.

Question 77

In Adam Smith's view, which of the following is not the role of government in business?

A) providing defense against foreign enemies
B) regulating business activity
C) ensuring internal order
D) furnishing public works
E) providing education

Question 78

Which of the following scenarios would best exemplify Adam Smith's view of best serving the interests of society?

A) Individuals are selected to fill certain positions within the economy of their nation according to the needs of the nation as a whole.
B) Markets are carefully regulated to ensure that all individuals within a nation are treated fairly and charged standardized prices.
C) A country only has a limited amount of space for college students and uses a type of lottery system to determine who gets these spaces.
D) Government scarcely exists in this country, and transactions are based on a system of barter, or trading goods, for other goods.
E) Individuals in the country may pursue their own economic gain and self-interest by doing whatever is best for them.

Question 79

For Starbucks Coffee, managers and employees would be _____.

A) natural resources
B) capital
C) information resources
D) labor
E) the entrepreneurial resource

Question 80

When consumers spend their money to purchase Dell computers or Sony portable CD players, or when they discontinue buying such items as compact discs, they are telling resource owners

A) how to produce.
B) for whom to produce.
C) what to produce.
D) when to produce.
E) to avoid faddish products.