Deck 1: The US Business Environment

Question 1

Who is the person who accepts the risks and opportunities inherent in a new business opportunity?

A) Capital managers
B) Entrepreneurs
C) Human resources
D) Home country economic systems managers
E) Information technology managers

Answer 1

B

Question 2

What is the term for the physical and intellectual contributions of people while engaged in the production of goods and services?

A) Human resources
B) Working capital
C) Physical resources
D) Planned resources
E) Market resources

Answer 2

A

Question 3

What type of economy is the United States reflective of?

A) Planned
B) Mixed
C) Market
D) Private
E) Socialist

Answer 3

B

Question 4

What is the general term for resources used by a business to produce a good or service referred to as?

A) Labor
B) Human Resources
C) Human capital
D) Factors of production
E) Economic systems

Question 5

When making decisions about production and allocation,which type of system depends on individual producers and consumers to create a combination of supply and demand?

A) Planned economy
B) Communism
C) Private economy
D) Market economy
E) Socialism

Question 6

The pursuit of profits is how a business differs from organizations such as public universities,public hospitals,and government agencies.

Question 7

The idea that individuals would contribute according to their abilities and receive benefits according to their needs supports which type of economy?

A) Market economy
B) Socialist based economy
C) Mixed market economy
D) Capitalist market economy
E) Communist based economy

Question 8

Which environment is NOT an important dimension of a business organization's external environment?

A) The political-legal environment
B) The sociocultural environment
C) The technological environment
D) The corporate cultural environment
E) The global business environment

Question 9

An organization's external environment consists of everything outside of the organization that might affect it.

Question 10

What term denotes a nation's basis for allocating its resources among its citizens?

A) Capital structure
B) Economic system
C) Ownership processes
D) Distribution network
E) National regulations

Question 11

What is the environment where a firm conducts its operations and derives its revenues known as?

A) Global business environment
B) Economic environment
C) Domestic business environment
D) Technological environment
E) Political-legal environment

Question 12

What is the process for converting government enterprises into individually owned firms known as?

A) Production allocation
B) Privatization
C) Entrepreneurship
D) Demand assessment
E) Profit maximization

Question 13

Changes in which type of business environment can reduce or replace the need for traditional working methods,physical equipment,and other platforms needed to conduct business?

A) Global business environment
B) Economic environment
C) Domestic business environment
D) Technological environment
E) Political-legal environment

Question 14

What factor of production is used to generate forecasts based on specialized knowledge and economic data?

A) Economic resources
B) Labor
C) Information resources
D) Entrepreneurs
E) Physical resources

Question 15

What is profit?

A) Total money taken in by a corporation
B) Increases in income from year to year
C) Increases in a corporation's stock price
D) Revenue generated by goods and services
E) Difference between revenues and expenses

Question 16

What are the benefits of business for society?

Question 17

Compare a sociocultural environment to an economic environment.

Question 18

Factors such as international trade agreements,economic conditions,and political unrest will have the greatest impact on what type of business environment?

A) Global business environment
B) Economic environment
C) Domestic business environment
D) Technological environment
E) Political-legal environment

Question 19

Which of the following best explains the difference between a market economy and a planned economy?

A) In a planned economy, consumers have little choice in where people work or what they purchase or pay. In a market economy, there is more choice in where people work or what they purchase or pay.
B) In a market economy, consumers must pay what the market demands.
C) Capitalism is the root of a planned economy.
D) Market economies are also known as mixed market economies.
E) Planned economies promote the use of privatization to increase market share.

Question 20

How do consumer choice and demand affect a capitalistic system?

Question 21

What marks the key difference between economic systems?

A) The way the factors of production are managed
B) The way goods are transported within their borders
C) The way rules and regulations are legislated
D) The way workers are relocated to different regions
E) The way basic necessities are determined

Question 22

What is the price at which the quantity of goods demanded and the quantity of goods supplied are equal?

A) The going rate
B) The margin rate
C) The market price
D) The optimum price
E) The cost price

Question 23

What can be used to determine relationships among different levels of demand and supply,based on price?

A) Market economies
B) Degrees of competition
C) Surplus to shortage relationships
D) Demand and supply curves
E) Private enterprise competition

Question 24

What does a planned economy rely on a centralized government to do?

A) Support free enterprise in every way possible
B) Determine how to allocate all or most factors of production
C) Encourage citizens to buy shares of stock in small companies
D) Keep its control activities to a minimum
E) Direct workers to start their own small businesses

Question 25

In a market economy,there is a centralized government that controls factors of production and decision making.

Question 26

Discuss the two forms of planned economies and give examples of each.

Question 27

What is the primary force that determines what a firm buys and sells?

A) Laws of supply and demand
B) The demand and supply schedule
C) Economic resources
D) Equilibrium price
E) The private enterprise system

Question 28

In a market system,individuals are limited as to what they can buy and in how they can spend their money.

Question 29

Physical resources include the data and other information used by businesses.

Question 30

Which economic system emphasizes the private ownership of most factors of production?

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

Question 31

In which type of economy do the individual producer and consumer control production through supply and demand?

A) Planned
B) Communist
C) Market
D) Socialist
E) Mixed

Question 32

What is the point at which the supply curve and the demand curve intersect on a graph?

A) Equilibrium price
B) Decision point
C) Surplus price
D) Perfect price
E) Parity point

Question 33

The customs,values,and demographic characteristics of the society in which an organization functions are the principal elements of the political-legal environment.

Question 34

The technological environment includes only electronics and telecommunications used to perform business activities.

Question 35

China functions as a communistic economy and political system.

Question 36

What is the willingness and ability of producers to offer a good for sale referred to as?

A) Private enterprise
B) Supply
C) Free market economy
D) Law of supply
E) Degrees of competition

Question 37

Describe the role of information resources in business.

Question 38

Which of the following is proven when buyers purchase more of a product when the price drops and less when the price increases?

A) Demand
B) Laws of supply
C) Laws of demand
D) Degree of competition
E) Free market economy

Question 39

Identify the five factors of production and their role in economic systems.

Question 40

What occurs when the quantity demanded exceeds the quantity supplied?

A) Demand deficit
B) Surplus
C) Equilibrium point
D) Shortage
E) Price drop

Question 41

How does monopolistic competition differ from perfect competition?

A) There are more sellers in a market characterized by monopolistic competition.
B) It is easier for sellers to enter a market or industry characterized by monopolistic competition.
C) In a perfectly competitive market, products are more dissimilar.
D) In a market characterized by monopolistic competition, individual firms have some control over price.
E) In a perfectly competitive market, the size of the firms must be large.

Question 42

When a new product has high demand in the market,how should a company react?

A) Increase the supply of the product
B) Decrease the supply of the product
C) Reduce the price of the product
D) Maintain the current supply until demand falls
E) Create an artificial shortage of the product

Question 43

Product differentiation is common in a market characterized by monopolistic competition.

Question 44

One of the four elements that are necessary for private enterprise to be carried out is reasonable prices.

Question 45

What is the basis for a market economy?

A) The ability to pursue an interest with minimal government restriction
B) The ability to limit profits on competitors based on government restriction
C) The ability to offer a good or service at a variety of price points
D) A limitation on the number of competitors the government will allow within a specific geographic region
E) The ability of a large number of smaller firms in an industry will limit influence

Question 46

In an oligopoly,when one firm reduces its prices,how do other sellers react?

A) There is no reaction from other firms to change their prices.
B) Other firms reduce their prices also, usually quite quickly.
C) Other firms may reduce their prices, but usually gradually.
D) Other firms are not usually aware that price has changed.
E) There is a combined response from other firms to stabilize prices.

Question 47

The point at which the supply curve and the demand curve intersect is the market price.

Question 48

In perfect competition,which of the following conditions must prevail?

A) All firms must adhere to cost and pricing standards.
B) The number of firms in the industry must be limited.
C) A single firm is able to influence the price of its product.
D) It is relatively difficult to enter the industry.
E) All firms in a given industry must be small.

Question 49

Which of the following is one of the elements required in private enterprise?

A) Adequate representation in the government
B) Freedom from foreign competition
C) The opportunity for market leadership
D) The right to ownership of property
E) Numerous regulatory agencies

Question 50

What is created when one company is able to supply all the goods or services needed by the marketplace?

A) Communism
B) Natural monopolies
C) Marketplace shifts
D) Monopolistic competition
E) Oligopolies

Question 51

When there are many small firms in a specific industry,what is likely to occur?

A) Competitive advantage
B) An oligopoly
C) Private enterprise
D) Perfect competition
E) Market force reliability

Question 52

Which of the following would lead some to become an entrepreneur and influence the choice of goods or services to produce?

A) Competition
B) Profit
C) Degrees of competition
D) Government regulation
E) Monopolistic competition

Question 53

Which of the following does NOT fall into the degrees of competition continuum?

A) Perfect competition
B) Monopolistic competition
C) Competitive advantage
D) Oligopoly
E) Monopoly

Question 54

Graphically,what has been achieved when price of goods demanded is equal to the quantity of goods supplied?

A) Supply curve optimization
B) Potential for surplus
C) Price reductions
D) Freedom of choice opportunities
E) Equilibrium price

Question 55

Economic systems differ in how factors of production are used.

Question 56

What is needed to gain a competitive advantage over competitors?

A) The ability to produce goods and services and sell those at a fixed profit
B) The ability to produce goods and services and sell those at a small profit
C) The ability to produce goods or services efficiently and at a reasonable profit
D) The ability to leverage the internet to sell in a global marketplace
E) The ability to have a good or service that can be easily duplicated by competitors

Question 57

What is the term used to describe a market condition where buyers are able to satisfy the demand of the consumer,yet have some product remain unsold?

A) Surplus
B) Stoppage
C) Shortage
D) Demand deficit
E) Equilibrium price

Question 58

In a natural monopoly,prices tend to be government regulated.

Question 59

Which of the following is the MOST likely pricing approach for a monopoly?

A) Charge customers whatever you please
B) Give customers a real bargain on price
C) Charge a price that will not cause consumer demand to drop
D) Undercut the prices of the competition
E) Give customers a fair price that cannot be matched by competitors

Question 60

Which of the following represents the ownership of resources used in a private enterprise system?

A) Freedom of choice
B) Private property rights
C) Increased profits
D) Limited competition
E) Perfect competition

Question 61

Which term refers to the total value of all goods and services produced within a given period by a national economy through domestic factors of production?

A) Standard of living
B) Aggregate output
C) Gross domestic product
D) Gross national product
E) Purchasing power parity

Question 62

What type of policy is made up of fiscal and monetary policy?

A) Trade
B) Employment
C) Stabilization
D) Tax
E) Foreign

Question 63

Which term refers to the total quantity and quality of goods and services that people living in an economic system can purchase?

A) Business cycle supply
B) Demand and supply schedule
C) Standard of living
D) Aggregate output
E) Consumer price index

Question 64

What does productivity measure?

A) The total value of all goods and services produced by a national economy
B) How much a system produces with the resources needed to produce it
C) How much output is necessary to produce a certain level of demand
D) The standard of living relative to purchasing power parity
E) How much gross national product results from inputs of labor

Question 65

Which of the following BEST gives the meaning of the term gross domestic product?

A) Total quantity of goods and services produced by an economic system
B) Total quantity of goods that a country's citizens can purchase with the currency used in their economic system
C) Conditions of the economic system in which an organization operates
D) Total value of all goods and services produced within a given period by a national economy through domestic factors of production
E) Indicators of available goods and services produced within a specific domestic market

Question 66

Which term refers to the pattern of short-term ups and downs in an economy?

A) Aggregate output
B) Business cycle
C) Standard of living
D) Balance of payments
E) Demand and supply schedule

Question 67

Which of the following is a likely cause of increased prices for products,decreased purchasing power,and decreased profit margins?

A) Low unemployment
B) Stagnant wages
C) Declining living standards
D) Cyclical inflation
E) Limited credit

Question 68

Which of the following BEST describes what the consumer price index is used to indicate?

A) The average wage rate for a given region
B) The economic performance of key consumer product companies
C) The changes in the cost of consumer products over time
D) The percentage of consumers in the total population looking for work
E) The number of price increases within a given period of time

Question 69

What is the condition in an economic system in which the amount of money available and the number of goods and services produced are growing at about the same rate?

A) Unemployment
B) Stability
C) Deflation
D) Inflation
E) Oversupply

Question 70

National economies,regardless of industry,are measured through what?

A) Standard of living
B) Aggregate output
C) Gross national product
D) Output per capita
E) Inflation rates

Question 71

Which of the following offers experts statistical information on the strength and performance of an economy?

A) Market price reports
B) Supply curves
C) Economic indicators
D) Demand Curves
E) Degrees of competition reports

Question 72

What is required for perfect competition to exist,and what principles must be in place to achieve those conditions?

Question 73

What term do economists use for the pattern of short-term expansions and contractions in the economy?

A) Business cycle
B) Aggregate output
C) Standard of living
D) Consumer price index
E) Purchasing power parity

Question 74

Discuss each of the four principles of private enterprise systems.

Question 75

Which indicator refers to the total quantity of goods and services produced by an economic system during a given period?

A) The business cycle
B) Aggregate output
C) Gross domestic product
D) The consumer price index
E) Gross national product

Question 76

Which of the following measures indicates the prices of typical products purchased by American consumers living in urban areas?

A) GDP per capita
B) Standard of living
C) Consumer price index
D) Purchasing power parity
E) Economic indicators

Question 77

How can price be best determined?

Question 78

How would supply affect the aggregate output of an economy?

A) Supply would decrease aggregate output
B) Increases in both would cause inflation
C) Aggregate output would grow as supply grows
D) Supply would have no direct effect on aggregate output
E) Aggregate output would increase the money supply

Question 79

Explain the concept of mixed market economies and how they support pure planned and pure market economies.

Question 80

What is the economic condition characterized by widespread increased prices without increased purchasing power?

A) Unemployment
B) Inflation
C) Expansion
D) Deflation
E) Recession