Deck 1: Exploring the World of Business and Economics

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

Question 7

Command economies include capitalism, socialism, and communism.

Question 8

Karl Marx is known as the father of communism.

Question 9

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 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

Productivity is the total output per worker per year.

Question 15

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 16

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

Question 17

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 18

A copyright of a product exists indefinitely.

Question 19

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

Question 20

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

Question 21

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 22

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

Question 23

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

Question 24

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

Question 25

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 26

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

Question 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

People buy goods and services simply to own them.

Question 35

Specialization is meant to increase the efficiency of industrial workers.

Question 36

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

Question 37

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 38

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

Question 39

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

Question 40

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

Question 41

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

Question 42

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

Question 43

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

Question 44

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

Question 45

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

Question 46

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

Question 47

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

Question 48

Deflation is a general decrease in the level of prices.

Question 49

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

Question 50

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

Question 51

Consumers exchange tax money to purchase goods and services.

Question 52

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

Question 53

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 54

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

Question 55

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

Question 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

For firms like Target and Walmart, competition

A)is not a factor that must be considered in a free-market economy.
B)affects smaller businesses but not large chain operations.
C)affects larger chain operations but not smaller businesses.
D)is a rivalry among businesses for sales to potential customers.
E)is a problem that has been eliminated in the twenty-first century.

Question 62

Raw materials, buildings, and machinery are ____ resources.

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

Question 63

Examples of command economies include

A)socialism and free enterprise.
B)capitalism and socialism.
C)socialism and market economy.
D)communism and capitalism.
E)socialism and communism.

Question 64

The total dollar value of all goods and services produced by all people within the boundaries of a country is called

A)productivity.
B)gross domestic product.
C)gross national product.
D)inflation factor.
E)standard of living.

Question 65

In a communist country such as Cuba, emphasis is placed on producing what type of goods?

A)Goods needed by the government
B)Consumer goods
C)Goods for export
D)Perishable goods such as food
E)Durable goods such as machinery

Question 66

Although all casual clothing ultimately provides the same purpose, companies such as The Gap strive to make their brand seem unique from the many other brands available on the market. The market for casual clothing can best be characterized as

A)pure competition.
B)monopolistic competition.
C)an oligopoly.
D)a monopoly.
E)a natural monopoly.

Question 67

The economic term used to describe the Federal Reserve's actions to determine the size of the supply of money in the nation and the level of interest rates is

A)monetary policy.
B)fiscal policy.
C)debt policy.
D)recovery technique.
E)recovery guideline.

Question 68

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

Question 69

A market or industry with only one seller is referred to as

A)a limited command system.
B)a monopoly.
C)an oligopoly.
D)monopolistic competition.
E)a perfect competitive market.

Question 70

The purpose of specialization is to

A)reduce productivity.
B)increase the efficiency of industrial workers.
C)boost the morale of an employee because he or she is special.
D)relieve boredom.
E)make the nature of the work more general.

Question 71

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

Question 72

Service businesses employ approximately ___ percent of the U.S. work force.

A)40
B)50
C)65
D)75
E)85

Question 73

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

Question 74

​Kami and Derek went to the mall. While there they passed a Vans store, Nike's store, New Balance store, and Adidas store. Derek commented that there was really a large number of sellers and noted that there seemed to be many buyers as well. What kind of market competition is represented by these stores?

A)​Perfect.
B)​Monopolistic.
C)​Oligopoly.
D)​Monopoly.

Question 75

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 76

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 77

In the last decade of the century, ____ became a major force in the economy in regard to business.

A)reduced business profits
B)high interest rates
C)high inflation
D)the Internet
E)shortage of crude oil

Question 78

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

Question 79

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

Question 80

During which phase do high unemployment rates decline and levels of income increase?

A)Repression
B)Peak
C)Recession
D)Trough
E)Recovery