Deck 1: Exploring the World of Business and Economics

Question 1

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

Answer 1

Answer not provided.

Question 2

In your own words, describe what you "bring to the table" as a potential employee of a company that you desire to work for.

Answer 2

Answer not provided.

Question 3

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

Answer 3

Answer not provided.

Question 4

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 5

Explain how the notion of scarcity is related to personal as well as business decision making.

Question 6

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

Question 7

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

Question 8

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 what his company would produce and how. 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 and how to do things.

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

Question 9

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

Question 10

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

Question 11

An entrepreneur combines four kinds of resources into a business. What would be the effect on the business if any one were left out?

Question 12

What is real gross domestic product, and how does it differ from gross domestic product?

Question 13

How does socialism differ from communism?

Question 14

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

Question 15

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

Question 16

What three activities must a business perform in order to be successful? Briefly describe each of these and why each is essential to business success.

Question 17

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

Question 18

How can online networking improve your chances of success in the business world?

Question 19

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

Question 20

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

Question 21

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 what his company would produce and how. 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, Jonathan thinks it is important to consider

A) unilateral thinking.
B) profit.
C) wage increases.
D) health benefits.
E) cultural diversity.

Question 22

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 what his company would produce and how. 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) Land
D) Demand
E) Entrepreneurship

Question 23

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 24

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 25

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, 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 feels that for productivity to improve, the company must practice

A) free enterprise.
B) work ethics.
C) specialization.
D) cultural diversity.
E) pure competition.

Question 26

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, 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 27

Of the following, which is not considered a basic management function necessary to be an effective manager?

A) Planning
B) Organizing
C) Leading and motivating
D) Controlling
E) Selling

Question 28

Shawn Sine decides to start his own business. How likely is Shawn to still be operating a successful business in seven 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 over half of all new small businesses fail.
E) It is very unlikely because almost all new businesses fail within the first three years.

Question 29

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 what his company would produce and how. 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 30

____ 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 31

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 32

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 33

Raw materials, buildings, and machinery are ____ resources.

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

Question 34

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, 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 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, 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 36

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 what his company would produce and how. 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.

Question 37

Amazon.com has the following rights: to make a profit for its stockholders; to market a wide variety of products; and, to compete with other online retailers. Amazon.com operates in a(n) ____ system.

A) free-enterprise
B) domestic
C) e-business
D) socialistic
E) totalitarian

Question 38

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, 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 39

All of the following are material resources for Toyota Motor Company except

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

Question 40

The ability for a manager to think in abstract terms while envisioning the "big picture" falls into the category of _____, deemed an important management trait.

A) interpersonal skills
B) conceptual skills
C) leading and motivating functions
D) mechanical skills
E) controlling functions

Question 41

A business' efforts to sustain the planet and the business' participation in ecological movements are part of a firm's

A) free enterprise system.
B) stakeholder responsibilities.
C) factors of production.
D) social responsibility.
E) business cycle.

Question 42

For a business, stakeholders represent

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

Question 43

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 44

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

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

Question 45

During 2012, 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 46

Mondell Weller 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 47

At the end of the year, an individual, small business owner has made $65,000 in profit. Who does that profit belong to?

A) The company's CEO and top managers
B) The banks from which the business borrowed money
C) All employees of the small business
D) The consumers of the business' products
E) The owner of the business

Question 48

____ 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 49

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

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

Question 50

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 51

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

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

Question 52

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 53

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 54

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 55

The ultimate objective of every firm, such as Intel, Chevrolet, and Sony 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

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

A) Best Buy
B) Sony
C) Walmart
D) Zynga
E) Amazon.com

Question 57

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

A) profit.
B) loss.
C) negative cash flow.
D) recession.
E) depression.

Question 58

When a firm's sales revenues are greater than its expenses, the firm has a

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

Question 59

The relationship between sales and profits can be written as

A) sales revenues + expenses = profit.
B) loss + profit = sales revenue.
C) profi―expenses = sales revenue.
D) expenses + loss = sales revenue + profit.
E) sales revenue―expenses = profit.

Question 60

Best Buy stores would most likely be classified as

A) service businesses.
B) sole proprietorships.
C) a marketing intermediary.
D) manufacturing establishments.
E) perfect competition.

Question 61

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

A) macroeconomics
B) microeconomics
C) fiscal
D) monetary
E) intuitive

Question 62

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 63

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 64

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 65

Diane is passionate about soccer and decides to open her own soccer sporting goods 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 66

Olan Okowo recently moved to the United States with many hopes and dreams. However, he realizes that economic freedom includes all of the following except the right to

A) guaranteed economic success.
B) use owned resources to produce a profit.
C) accept or reject any job offered.
D) sell a product at the price chosen.
E) buy any economic good or service producers sell.

Question 67

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 68

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 69

An economic system in which individuals and businesses make the 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 70

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 71

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 and purchases the necessary land, facilities, advertising, and five helicopters 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 72

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 73

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 74

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 75

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 76

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 77

The United States, whose economy exhibits elements of both capitalism and socialism, has what is known as a ____ economy.

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

Question 78

For a Pepperidge Farm production facility, managers and employees would be

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

Question 79

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

A) Providing defense against foreign governments
B) Regulating business activity
C) Ensuring internal order
D) Furnishing public works
E) Providing education

Question 80

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 from the loan and the resources he will purchase with it are known as

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