Deck 1: The Dynamics of Business and Economics

Question 1

Owners have little responsibility to provide funds for the operation of the business.

Answer 1

False
Explanation: The primary responsibility of the owners is to provide financial resources of the business.

Question 2

Profit is the reward for business in exchange for the ____ taken in providing products.

A)expenses
B)time
C)energy
D)risks
E)markets

Answer 2

D
Explanation: Businesses assume risks in providing products and are entitled to the reward of profit.

Question 3

The focus of all marketing activities is customer satisfaction.

Answer 3

True
Explanation: Marketing includes all the activities designed to provide goods and services that satisfy customer's needs and wants.

Question 4

Products have tangible attributes only.

Question 5

Which of the following is not a product?

A)A Dell personal computer
B)A veterinarian's treatment of a pet's injuries
C)A lawyer's advice in a divorce case
D)Business profit
E)A checkup by a doctor

Question 6

Managers coordinate resources to achieve the firm's goals.

Question 7

Businesses differ from nonprofit organizations in that a business's focus is on

A)price.
B)goods.
C)profit.
D)organization.
E)plans.

Question 8

If a business is to be successful in the long run,it must produce quality products,operate efficiently,and be

A)fun.
B)socially responsible.
C)hard-working.
D)egalitarian.
E)transparent.

Question 9

Profit is what it costs to make and sell a product.

Question 10

The goal of business is to earn

A)respect.
B)resources.
C)a profit.
D)responsibility.
E)independence.

Question 11

When purchasing,a consumer is actually buying a product's anticipated benefits and

A)satisfaction.
B)price.
C)costs.
D)productivity.
E)form.

Question 12

The primary goal of business activities is profit.

Question 13

Nonprofit organizations such as Habitat for Humanity do not engage in management,marketing,or finance activities.

Question 14

Finance refers to all activities concerned with obtaining money and using it effectively.

Question 15

Businesses have the right to keep and use their profits as they choose,without limitations.

Question 16

____ have both tangible and intangible characteristics.

A)Products
B)Services
C)Businesses
D)Stakeholders
E)Organizations

Question 17

Owners always manage their businesses.

Question 18

Briefly describe the goals of a business,especially the primary goal.

Question 19

____ is the primary goal of business.

A)Growth
B)Profit
C)IPO
D)Marketing
E)Strategy

Question 20

Customers,employees and investors are examples of:

A)constituents.
B)stockholders.
C)stakeholders.
D)entities.
E)organizations.

Question 21

The group of people to whom the management activity most applies is

A)consumers.
B)owners.
C)bankers.
D)government regulators.
E)employees.

Question 22

The functions of organizing,staffing,planning,and controlling are most closely associated with

A)employees.
B)customers.
C)managers.
D)stockholders.
E)accountants.

Question 23

Which of the following functions involves activities designed to provide goods and services that fulfill needs and desires of consumers?

A)Accounting
B)Engineering
C)Finance
D)Production
E)Marketing

Question 24

In a capitalist system,individuals own and operate ____ businesses.

A)no
B)few
C)about half
D)many
E)the majority of

Question 25

____ resources are also known as labor.

A)Economic
B)Human
C)Productive
D)Financial
E)Natural

Question 26

____ have the most to lose if the business fails to make a profit.

A)Employees
B)Owners
C)Banks
D)Customers
E)Accountants

Question 27

Describe the relationship between management,marketing,finance,owners,employees,and customers.

Question 28

All the following are factors of production used to make goods and services except

A)natural resources.
B)human resources.
C)customers.
D)capital.
E)financial resources.

Question 29

When a business fails or does not make a profit,_______ have the most to lose.

A)customers
B)workers
C)managers
D)owners
E)consumers

Question 30

Financial resources are also known as _______________.

A)capital
B)labor
C)barter
D)economics
E)exchange

Question 31

In a free-market system,the government regulates business.

Question 32

What are the people and activities of business? Define each group.

Question 33

The function concerned with obtaining and managing money and using it effectively is called

A)management.
B)marketing.
C)finance.
D)production and operations.
E)personnel.

Question 34

Capitalism is an economic system in which the government owns and operates basic industries while individuals own most other businesses.

Question 35

In a socialist system,citizens are dependent on _________ for many goods and services.

A)the government
B)the people
C)businesses
D)supply and demand
E)suppliers

Question 36

Most socialist nations are democratic.

Question 37

A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with limited resources.

Question 38

Free-market capitalism and laissez-faire capitalism are essentially the same thing.

Question 39

Advertising,personal selling,coupons,and sweepstakes are forms of _____.

A)publicity
B)promotion
C)marketing research
D)management activities
E)the marketing mix

Question 40

Factors of production are

A)resources used to produce goods and services.
B)fixed resources.
C)taxes.
D)seldom in demand.
E)free.

Question 41

An oligopoly exists when there are many small businesses selling one standardized product.

Question 42

Demand is the quantity of goods and services that consumers are willing to buy at different prices at a specific time.

Question 43

Economic expansion occurs when an economy is growing and people are spending more money.

Question 44

Define supply,demand,and equilibrium price,and explain their relationship with each other.

Question 45

____ is often called the father of capitalism.

A)Karl Marx
B)George Washington
C)Benjamin Franklin
D)Alan Greenspan
E)Adam Smith

Question 46

The _______ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time.

A)supply price
B)equilibrium price
C)demand price
D)demand curve
E)exact price

Question 47

Equal distribution of income and social services is also referred to as:

A)communism.
B)egalitarianism.
C)capitalism.
D)equality.
E)democracy.

Question 48

Define competition,and describe the different forms it can take on.

Question 49

The equilibrium price is represented by the point where a product's supply and demand curves intersect.

Question 50

Monopolistic competition exists when there is only one producer of a product in a given market.

Question 51

The American economic system is best described as _______ because the government regulates business to preserve competition and protect consumers and employees.

A)socialism
B)laissez-faire capitalism
C)modified capitalism
D)communism
E)business ownership

Question 52

When Apple introduced the iPad the price of and demand for netbooks and notebooks were high.As a result,

A)other suppliers introduced competing products to take advantage of the demand.
B)consumers stopped buying netpads.
C)manufacturers stopped producing netpads.
D)competition was not allowed to enter the market.
E)the equilibrium price met supply.

Question 53

___________ exists when there are many small businesses selling one standardized product.

A)Monopolistic competition
B)Oligopoly
C)Pure competition
D)Monopoly
E)Market structure

Question 54

A product's equilibrium price is constantly changing in response to changes in economic conditions,availability of resources,and degree of competition.

Question 55

Agricultural commodities are usually sold under which competitive environment?

A)Monopoly
B)Monopolistic competition
C)Pure competition
D)Oligopoly
E)Modified competition

Question 56

Using the supply and demand curves shown in the graph that follows,what is the equilibrium price for soft drinks? 11ea729f_6adb_60e1_9814_432f9e51d55f__00

A)35 cents
B)45 cents
C)50 cents
D)55 cents
E)75 cents

Question 57

In a socialist economic system,many people work in ___ jobs.

A)self-employed
B)government
C)high-paying
D)poverty-wage
E)part-time

Question 58

When businesses can promote different features of their products and consumers are willing to pay more for products containing the features they desire,the competitive environment is probably

A)pure competition.
B)monopolistic competition.
C)oligopoly.
D)monopoly.
E)pure capitalism.

Question 59

____ relates to the number of goods and services that consumers are willing to buy at different prices at a specific time.

A)Supply
B)Demand
C)Elasticity
D)Equilibrium
E)Economics

Question 60

When Target has a sale on bed linens,

A)consumers will not demand more than normal.
B)the store will not supply more linens than it normally does.
C)consumers will demand more linens.
D)the manufacturer will halt production.
E)consumers will demand less linens than normal.

Question 61

Economic contraction occurs when

A)spending increases.
B)spending declines.
C)jobs increase.
D)inflation decreases.

Question 62

Advertising first made consumers aware of differences in products and prices in the marketing economy.

Question 63

A budget surplus,when a nation spends less than it takes in from taxes,is the opposite of a(n)

A)stagnant income.
B)budget deficit.
C)economic expansion.
D)balance of trade.
E)economic contraction.

Question 64

When a nation takes more from taxes than it spends,it has a budget deficit.

Question 65

Thomas Edison was an American entrepreneur.

Question 66

The standard of living rises because people have less money to spend.

Question 67

The early economy of the United States was marked by colonists who operated a society based primarily on

A)manufacturing.
B)technology.
C)sweat shops.
D)information.
E)agriculture.

Question 68

________________ can be harmful if individuals' incomes do not increase at the same pace as rising prices because it reduces their buying power.

A)Deflation
B)Stagflation
C)Inflation
D)Economic expansion
E)Economic contraction

Question 69

Countries measure the state of their economies to

A)determine whether they are expanding or contracting.
B)regulate wages and employment.
C)let other nations know the state of their economic health.
D)avoid taking corrective action.
E)control government spending.

Question 70

What is an economic contraction,and what can it lead to?

Question 71

Entrepreneurs risk their wealth,time,and effort to develop for profit an innovative product or way of doing something.

Question 72

_________________ is the study of how resources are distributed for the production of goods and services within a social system.

A)Financial resources
B)Human resources
C)Economic system
D)Communism
E)Economics

Question 73

Discuss the issues involved in measuring a country's economy.

Question 74

Increased unemployment can reduce consumer demand for goods and services,leading to

A)economic contraction.
B)inflation.
C)deflation.
D)a budget deficit.

Question 75

The Industrial Revolution brought increasing prosperity and propelled the United States into a manufacturing economy.

Question 76

Gross domestic product is the sum of all goods and services produced in a country during a year.

Question 77

After World War II,the United States became an agricultural economy.

Question 78

A continuing rise in prices over a period of time refers to

A)inflation.
B)economic expansion.
C)a recession.
D)economic contraction.
E)stagflation.

Question 79

Economic expansion occurs when

A)fewer goods and services are produced than consumers demand.
B)an economy is growing and people are spending more money.
C)a nation's standard of living drops quickly.
D)employment levels decline over time.
E)prices begin to rise and incomes begin to fall.

Question 80

A severe recession may turn into a depression.