Deck 1: The U.S.Business Environment

Question 1

A business provides goods or services in order to earn profits.

Answer 1

True

Question 2

Economic systems allocate the factors of production differently.

Answer 2

True

Question 3

Political-legal environment includes the customs,mores,values and demographic characteristics of the society in which an organization functions.

Answer 3

False

Question 4

Global business environment refers to the international forces that affect a business.

Question 5

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

Question 6

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

Question 7

An entrepreneur is a business that accepts the risks and opportunities to create and operate.a new business venture.

Question 8

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

Question 9

The law of demand states that buyers will purchase more of a product as its price drops and less of a product as its price increases.

Question 10

A planned economy relies on a centralized government to control all or most of the factors of production and to make all or most production and allocation decisions.

Question 11

Non-profit businesses operate in many of the same ways as businesses that seek profits.

Question 12

In a socialist economy,the government owns and operates selected major industries.

Question 13

The external environment consists of everything inside an organization's boundaries that might affect it.

Question 14

Businesses seek to be close to customers,establish strong relationships with suppliers,and distinguish themselves from competitors.

Question 15

There are many sellers in an oligopoly.

Question 16

A differentiating strategy used in monopolistic competition is to use brand names such as Tide and Cheer.

Question 17

An example of the influence of the economic environment is when most people have jobs and therefore a growing company may find it necessary to pay higher wages and offer more benefits in order to attract workers from other companies.

Question 18

A factor of production is a nation's system for allocating resources among its citizens.

Question 19

Standard of living refers to the quantity and quality of goods and services that people can purchase with the currency used in their economic system.

Question 20

Capitalism allows for the private ownership of the factors of production.

Question 21

Electric companies are good examples of natural monopolies.

Question 22

Aggregate output refers to the pattern of short-term ups and downs in the economy.

Question 23

Purchasing power parity is a principle that states that exchange rates are set so that the prices of similar products in different countries are about the same.

Question 24

Communism and capitalism are the two basic forms of planned economies.

Question 25

Gross domestic product (GDP)refers to the total value of goods and services produced by a national economy within a given period regardless of where the factors of production are located.

Question 26

Inflation refers to widespread price increases in an economic system.

Question 27

The United States government manages the collection and spending of its revenues through monetary policy.

Question 28

The primary measure of growth in the business cycle is inflation.

Question 29

As a rule,in perfect competition there will be very few sellers.

Question 30

Similar products are differentiated in monopolistic competition.

Question 31

The Gross National Product (GNP)is the total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located.

Question 32

The market for clothing is best characterized as monopolistic competition.

Question 33

The consumer price index measures the prices of typical products purchased by consumers living in urban areas.

Question 34

Labor,capital,entrepreneurs,physical resources,and information resources are the five factors of production.

Question 35

A positive balance of trade results when a country imports more than it exports.

Question 36

An economic indicator helps to assess the performance of an economy.

Question 37

In an oligopoly,the entry of new competitors is hard because large capital investment is needed.

Question 38

The pursuit of profits distinguishes a business from organizations such as most universities,hospitals,and government agencies.

Question 39

One of the four elements that must be present in private enterprise is reasonable prices.

Question 40

Standard of living tends to decrease with growth in the economy.

Question 41

Tax increases and decreases are a form of fiscal policy.

Question 42

An increase in aggregate output will typically result in a recession.

Question 43

Price decreases by one company in an oligopoly are likely to be matched by other companies.

Question 44

Monopolistically competitive businesses may be large or small and may enter or exit the market easily.

Question 45

Inflation results in increased purchasing power for the consumer.

Question 46

When the Fed seeks to increase the money supply,it is implementing a tight monetary policy.

Question 47

The consumer price index (CPI)is used to measure inflation.

Question 48

The real growth rate of the U.S.economic system,as well as the standard of living,has decreased in recent years.

Question 49

Electric companies are good examples of natural monopolies because their price is government-regulated and they can supply all the power needed in a local area.

Question 50

Profits from an American-owned automobile factory in Brazil are included in the GDP of Brazil.

Question 51

The main measure of growth in the business cycle is aggregate output.

Question 52

If productivity increases,prices charged to consumers will tend to increase as well.

Question 53

All of the following are important elements of an organization's external environment EXCEPT:

A) political-legal environment
B) sociocultural environment
C) technological environment
D) entrepreneurial environment

Question 54

Inflation increases the purchasing power of your money.

Question 55

After considering the textbook's definition of business,how are universities and hospitals different from the organizations described?

A) They typically are not profit-seeking.
B) They are not affected by the global environment.
C) Their organizational boundaries are narrower than normal.
D) They do not produce goods or services.

Question 56

Product differentiation exists in a market characterized by monopolistic competition.

Question 57

GDP per capita is computed by dividing a nation's GDP by its total population.

Question 58

If wage rates increase,businesses will respond by hiring more employees.

Question 59

The purpose of monetary and fiscal policy is to smooth out fluctuations in output and unemployment and to stabilize prices.

Question 60

Taken together,fiscal policy and monetary policy make up growth policy during inflationary times.

Question 61

________ occurs when two or more businesses vie for the same resources or customers.

A) Socialism
B) Competition
C) Differentiation
D) Conflict

Question 62

The political-legal environment reflects the relationship between the business and ________.

A) industry
B) foreign trade
C) labor unions
D) government

Question 63

The ________ is the growth rate of the GDP adjusted for inflation and changes in the value of the country's currency.

A) GDP per capita
B) adjusted growth rate
C) real growth rate
D) real GDP

Question 64

The price at which the quantity of goods demanded and the quantity of goods supplied are equal is referred to as ________.

A) the equilibrium price
B) consumer equality price
C) the deal-maker price
D) the fixed point price

Question 65

The ________ 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 produce

Question 66

A(n)________ is a nation's basis for allocating its resources among its citizens.

A) capital structure
B) economic system
C) ownership system
D) distribution network

Question 67

Tangible goods that organizations use in conducting their businesses are referred to as ________.

A) physical resources
B) the money supply
C) information resources
D) capital

Question 68

The funds needed to create and operate a business enterprise are ________.

A) physical resources
B) the money supply
C) capital
D) liabilities

Question 69

The point at which the supply curve and the demand curve intersect on a graph is referred to as the ________.

A) equilibrium price
B) decision point
C) surplus price
D) perfect price

Question 70

Which of the following exists when an industry or market has only one producer?

A) perfect competition
B) oligopoly
C) monopoly
D) communism

Question 71

The process of converting government enterprises into privately owned firms is called ________.

A) demand
B) privatization
C) socialism
D) entrepreneurship

Question 72

A ________ economy has characteristics of both planned and market economies.

A) mixed market
B) privatized
C) capitalist
D) hybrid

Question 73

When the quantity demanded exceeds the quantity supplied,a(n)________ will result.

A) demand deficit
B) surplus
C) equilibrium point
D) shortage

Question 74

A(n)________ occurs when the quantity supplied exceeds the quantity demanded.

A) demand deficit
B) shortage
C) surplus
D) overage

Question 75

A(n)________ is an individual who accepts the risks and opportunities entailed by creating and operating a new business.

A) proprietor
B) entrepreneur
C) partner
D) officer

Question 76

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

A) business cycle
B) aggregate output
C) standard of living
D) consumer price index

Question 77

The price at which the quantity of goods demanded and the quantity of goods supplied are equal is referred to as ________.

A) the going rate
B) the point-of-no-return price
C) the market price
D) the better price

Question 78

________ exists when an industry has only a handful of sellers,most of which are large.

A) A monopoly
B) An oligopoly
C) Perfect competition
D) Monopolistic competition

Question 79

The ________ is 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

Question 80

A ________ shows how many of a given product will be bought at different prices.

A) demand curve
B) supply curve
C) price control
D) price list