Deck 1: Exploring the World of Business and Economics

Question 1

How the price of homes affects the number of homes built and sold would be an economic issue studied in a Macroeconomics course.

Answer 1

False

Question 2

The consumer price index (CPI)and the producer price index (PPI)actually measure the same economic factors.

Answer 2

False

Question 3

Today,managers and employees are no longer concerned about cultural diversity.

Answer 3

False

Question 4

During the 1930s,government became deeply involved in business for the first time.

Question 5

As the price of a product increases,the amount of the product that a producer is willing to supply increases.

Question 6

In order for a business to be successful,it must be organized,it must satisfy needs,and it must make a profit.

Question 7

A factory system of manufacturing involves the separation of a manufacturing process into separate tasks and the assignment of different tasks to different employees.

Question 8

The four resources that a business must use to operate successfully include material resources,human resources,financial resources,and operational resources.

Question 9

As the founder of an American business firm,Peter Jenkins can,within certain limits,produce and/or sell any product he chooses and sell it at any price it sets.

Question 10

Specialization is meant to increase the efficiency of industrial workers.

Question 11

Real gross domestic product is an economic measure that has been adjusted for price increases of goods and services during a given period of time.

Question 12

Sony is most correctly classified as a marketing intermediary type of business.

Question 13

A copyright of a product exists indefinitely.

Question 14

After getting her bachelor's degree in business,Brit Jackson realized she was much more productive at her job than she had been before.Brit's degree helped her to become a better employee.

Question 15

According to global experts,India is the fastest-growing economy in the world.

Question 16

As the price of a product increases,the amount of the product that consumers purchase increases.

Question 17

Because e-businesses use the Internet,there is no need to meet the needs of their customers.

Question 18

A working knowledge of our business system combined with technical skills can give an applicant an advantage in looking for a job.

Question 19

When a business distributes profits to business owners,these profits become household income and are removed from the circular flow of the economy.

Question 20

In our free-enterprise system,federal and state governments decide what products and services to provide.

Question 21

Consumers exchange tax money to purchase goods and services.

Question 22

People buy goods and services simply to own them.

Question 23

Profit is the payment business owners receive for assuming the risks of ownership.

Question 24

According to Adam Smith,under laissez-faire capitalism,each person should be allowed to work toward his or her own economic gain without government interference.

Question 25

The four basic questions in a capitalist economy are what to produce,how to produce,who should produce,and when to produce.

Question 26

The ultimate goal of every business firm should be to satisfy the needs of its customers.

Question 27

Adam Smith developed the concept of the invisible hand to explain how all economic activity should be based on a nation's needs and not the individual's needs.

Question 28

Generally there are three types of businesses: manufacturing businesses,service businesses,and marketing intermediaries.

Question 29

If a firm's sales revenue exceeds its expenses,the firm has earned a profit.

Question 30

The services that government provides would not be produced by private business firms or would be produced only for those who could afford them.

Question 31

Macroeconomists often study the effect of taxes,government spending,interest rates,and similar factors on a nation's economy.

Question 32

The factors of production include natural resources,labor,government assistance,and entrepreneurship.

Question 33

The government uses taxes to purchase resources and products required to provide services.

Question 34

A market economy is sometimes referred to as a command economy.

Question 35

The U.S.business system is commonly referred to as a mixed economy.

Question 36

A business provides goods and services in exchange for sales revenues.

Question 37

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

Question 38

Adam Smith argued that the creation of wealth is a proper concern of government.

Question 39

Adam Smith is the person who actually organized American business as we know it today.

Question 40

The term stakeholders refers only to the people who have invested money in a business.

Question 41

An oligopoly is a market situation in which there is one producer and a few large buyers.

Question 42

Basically,there are four recognized degrees of competition: perfect competition,monopolistic competition,oligopoly,and monopoly.

Question 43

The equilibrium or market price exists when the supply of a product exceeds the amount that consumers are willing to purchase.

Question 44

Karl Marx is known as the father of communism.

Question 45

Productivity is the total output per worker per year.

Question 46

Perfect competition is the market situation in which a product has many buyers and sellers,and no single buyer or seller is powerful enough to affect a product's price.

Question 47

Gross domestic product is a loose,subjective measure of how well a society can satisfy its people through goods and services.

Question 48

Reducing costs and enabling employees to work more efficiently are at the core of all attempts to improve productivity.

Question 49

The products available in a monopolistically competitive market are similar in nature and are intended to satisfy the same need.

Question 50

The national debt in the United States is about $1.1 trillion.

Question 51

In a socialist economy,the key industries are owned and controlled by the government.

Question 52

Economists define a recession as two or more consecutive three-month periods of decline in a country's gross domestic product.

Question 53

Fewer workers producing more goods and services can lead to higher overall employment rates.

Question 54

Deflation is a general decrease in the level of prices.

Question 55

The terms real gross domestic product and gross domestic product can be used interchangeably.

Question 56

Inflation is a general rise in the level of prices experienced by people in a nation.

Question 57

Command economies include capitalism,socialism,and communism.

Question 58

The recurrence of periods of growth and recession in a nation's economic activity is a depression.

Question 59

A depression is a severe recession that lasts longer than a recession.

Question 60

Monetary policies exert the government's influence on the amount of savings and expenditures by altering the tax structure and changing the levels of government spending.

Question 61

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

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

Question 62

Because of technology and the Internet,the use of information by business managers has increased.

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

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 65

Mandy Bush 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 66

During the peak or prosperity stage of a nation's business cycle,businesses are reluctant to offer new products and services.

Question 67

When consumers spend their money to purchase Samsung android phones or computers with an Intel processor,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.

Question 68

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 69

A legal monopoly is often referred to as a natural monopoly.

Question 70

For the U.S.government to provide services,it collects revenue from

A) only individuals in the form of taxes.
B) only corporations in the form of taxes.
C) selling bonds to foreign governments.
D) both households and businesses in various forms of taxes.
E) selling manufactured goods overseas.

Question 71

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 72

In a monopoly situation,there is no close substitute for the product or service.

Question 73

Kroger grocery stores would most likely be classified as

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

Question 74

The ultimate objective of every firm,such as Apple and Starbucks,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 75

Typical service businesses in the U.S.include real estate,repair companies,and restaurants.

Question 76

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 77

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 78

The government uses tax dollars to

A) invest in foreign bonds.
B) invest in foreign corporations.
C) purchase resources and products needed to provide services.
D) purchase other nations.
E) increase consumer income.

Question 79

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

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

Question 80

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.