Question 1

Samuel is struggling to run his start-up in his locality because local trade associations have established strict codes of conduct regarding certification, accreditation, and insurance obligation for businesses. In the context of economic freedom in a business environment, which of the following is adversely affecting Samuel's start-up?
A) A lack of freedom of production
B) A lack of freedom of staffing
C) Excessive regulation
D) Excessive taxation

Accepted Answer

Excessive regulation is adversely affecting Samuel's start-up as the strict codes of conduct imposed by local trade associations create barriers to entry and operation, limiting his economic freedom.

Question 2

Melina and Carl want to start an event management company that would provide local artists with a platform to showcase their talent and gain an audience. Melina and Carl are willing to invest their own resources in this project. In the context of factors of production, the given scenario exemplifies the concept of _____.
A) deployment
B) entrepreneurship
C) situational analysis
D) capital creation

Accepted Answer

Entrepreneurship is the process of starting a new business or organization. It involves taking risks and investing resources in order to create something new. In this case, Melina and Carl are investing their own resources to start an event management company. This is an example of entrepreneurship.

Question 3

In the context of the economic environment of business, which of the following will most likely increase the cost of doing business for everyone involved?
A) Ethical lapses
B) Enforceable contracts
C) A low level of corruption
D) A high level of competition

Accepted Answer

Ethical lapses can lead to increased costs due to legal fees, fines, and loss of reputation, which can affect all parties involved in business.

Question 4

In September 2008, during the fiscal crisis in the United States, the stock market lost more than a third of its value, and 11.1 million Americans were out of work. Neither businesses nor individuals could borrow funds to meet their needs. Which of the following dimensions of the business environment does this illustrate?
A) The economic environment
B) The competitive environment
C) The technological environment
D) The social environment

Accepted Answer

The scenario describes an economic downturn affecting employment and financial markets, illustrating the economic environment.

Question 5

Which of the following dimensions of a business environment is specifically highlighted when stock markets lose a major portion of their value and when huge, venerable institutions collapse financially?
A) The social environment
B) The technological environment
C) The cultural environment
D) The economic environment

Accepted Answer

The economic environment is highlighted in such scenarios as it encompasses factors like stock market performance and the financial stability of institutions, which directly impact the economy.

Question 6

Russia and China are both rich in natural resources and human resources, and both countries have a solid level of capital. Yet, neither country is wealthy. The missing ingredient seems to be _____.
A) synthetic resources
B) taxable income
C) workforce
D) entrepreneurship

Accepted Answer

Entrepreneurship is often considered a key factor in transforming resources into wealth by driving innovation, creating businesses, and generating economic growth.

Question 7

Judith plans to start a prosthetic company to help physically challenged people avail prosthetics at affordable prices. She researches and develops a cost-effective way of crafting durable prosthetics. In the context of factors of production, the given scenario exemplifies the concept of _____.
A) capital creation
B) deployment
C) situational analysis
D) entrepreneurship

Accepted Answer

Judith's actions demonstrate entrepreneurship as she is innovating and organizing resources to create a new business that provides affordable prosthetics.

Question 8

Lint Port, an apparel company, offers personalized customer service in all its stores and engages in post-purchase communication to take feedback from its customers. It also gives gift vouchers with customized messages to its customers on their birthdays. The company values the importance of building long-term customer relationships. In this context, which dimension of the business environment is affected the most?
A) The competitive environment
B) The legal environment
C) The technological environment
D) The political environment

Accepted Answer

The competitive environment is affected the most as Lint Port's personalized customer service and engagement strategies are designed to differentiate itself from competitors and build long-term customer relationships.

Question 9

Renault and Renoir, a law firm, is infamous for influencing witnesses with the use of bribes. Because of this corruption, the law firm has won many cases that it would have otherwise lost. In this context, which dimension of the business environment is affected the most?
A) The political environment
B) The global environment
C) The technological environment
D) The economic environment

Accepted Answer

The answer of Renault and Renoir, a law firm, is...

Question 10

When the government takes steps to reduce the risks of starting and running a business, it is most likely to result in:
A) public ownership of the means of production.
B) ethical lapses.
C) low levels of bribery.
D) an increase in free enterprises.

Accepted Answer

Reducing risks for businesses encourages entrepreneurship and the growth of free enterprises by making it easier and safer for individuals to start and operate businesses.

Question 11

President Barack Obama spearheaded passage of a massive economic stimulus package, which was designed not only to create jobs but also to build infrastructure, with a focus on _____.
A) reduced taxation
B) eliminating corruption
C) excessive regulation
D) renewable energy

Accepted Answer

The economic stimulus package under President Obama, known as the American Recovery and Reinvestment Act of 2009, included significant investments in renewable energy to promote sustainable growth and job creation.

Question 12

Which of the following statements is true of the economic environment of a business?
A) It is affected by customer satisfaction.
B) It reduces the hassles associated with acquiring manpower.
C) It is affected by corruption.
D) It prevents customers from turning into loyal advocates.

Accepted Answer

The economic environment of a business is influenced by various factors, including corruption, which can affect business operations, costs, and overall economic stability.

Question 13

The Federal Trade Commission:
A) regulates interstate and international communications.
B) regulates financial institutions.
C) actively promotes fair competitive practices.
D) works to eliminate employment discrimination.

Accepted Answer

The Federal Trade Commission (FTC) is primarily responsible for promoting fair competitive practices and protecting consumers by preventing anticompetitive, deceptive, and unfair business practices.

Question 14

Despite the U.S. economic crisis of 2008, research suggests that:
A) the government will most likely increase the federal tax rate, both for individuals and businesses.
B) upcoming regulations will look toward eliminating enforceable contracts.
C) housing prices are still likely to reach a record high.
D) most budding entrepreneurs still plan to launch their firms in the next three years.

Accepted Answer

Research indicates that despite economic downturns, many entrepreneurs remain optimistic and plan to start their businesses, driven by innovation and opportunity.

Question 15

Leading-edge companies have focused on customer satisfaction, with a goal to develop long-term, mutually beneficial relationships with customers. Which of the following dimensions of a business environment does this illustrate?
A) The economic environment
B) The global environment
C) The social environment
D) The competitive environment

Accepted Answer

The competitive environment refers to the factors that affect a company's ability to compete in the marketplace, including customer satisfaction.

Question 16

In the context of the economic environment of business, which of the following is most likely to reduce the risks of running a business?
A) A high federal tax rate
B) Legislation that contradicts enforceable contracts
C) A low level of corruption
D) Absence of government agencies dedicated to monitoring business practices

Accepted Answer

A low level of corruption creates a stable and predictable business environment, reducing risks associated with bribery, fraud, and unfair competition.

Question 17

When Ruben wanted to start a new online news service, he was skeptical about investing in it because of the economic crisis in his country. However, he was put at ease after learning about the government's policy of levying low federal taxes on startup businesses. In this context, which dimension of the business environment is affected the most?
A) The technological environment
B) The social environment
C) The economic environment
D) The competitive environment

Accepted Answer

The economic environment is affected the most because the government's policy of low federal taxes on startup businesses directly impacts the economic conditions and incentives for new businesses.

Question 18

Marina, a garments manufacturing company, signed a contract with Tertch Tex, a textile company, to receive 2 million pounds of yarn at a rate of $2 per pound. However, Tertch Tex hikes up the price to $5 per pound just before the day of delivery. Marina files a lawsuit against Tertch Tex for breaking an enforceable contract and receives $100 million in compensation. In this context, which dimension of the business environment is affected the most?
A) The economic environment
B) The technological environment
C) The social environment
D) The political environment

Accepted Answer

The economic environment is affected the most as it involves the financial aspects of the business, including pricing and contracts. The breach of contract and subsequent lawsuit directly impact the economic dealings between the two companies.

Question 19

Zip Zap Inc., a delivery service agency, employs a strict code of conduct that is aimed at minimizing unethical practices within the company. The policy describes the actions that would be taken against anyone who violates the company rules. This ensures that the business faces minimal risk. In this context, which dimension of the business environment is affected the most?
A) The technological environment
B) The economic environment
C) The political environment
D) The global environment

Accepted Answer

The answer of Zip Zap Inc., a delivery service agency,...

Question 20

Despite having a small population and severely limited natural resources, Hong Kong has consistently ranked among the richest regions in Asia. The prime reason behind this is:
A) the active encouragement of entrepreneurship by the government.
B) the imposition of excessive and strict regulations by the government.
C) the imposition of embargoes on Hong Kong by other nations.
D) the presence of communism.

Accepted Answer

Hong Kong's economic success is largely attributed to its free-market policies, low taxation, and minimal government intervention, which actively encourage entrepreneurship and business growth.

Quiz 1: Business Now: Change Is the Only Constant

In the context of the economic environment of business, which of the following will most likely increase the cost of doing business for everyone involved?

Which of the following dimensions of a business environment is specifically highlighted when stock markets lose a major portion of their value and when huge, venerable institutions collapse financially?

Russia and China are both rich in natural resources and human resources, and both countries have a solid level of capital. Yet, neither country is wealthy. The missing ingredient seems to be _____.

Judith plans to start a prosthetic company to help physically challenged people avail prosthetics at affordable prices. She researches and develops a cost-effective way of crafting durable prosthetics. In the context of factors of production, the given scenario exemplifies the concept of _____.

Renault and Renoir, a law firm, is infamous for influencing witnesses with the use of bribes. Because of this corruption, the law firm has won many cases that it would have otherwise lost. In this context, which dimension of the business environment is affected the most?

When the government takes steps to reduce the risks of starting and running a business, it is most likely to result in:

President Barack Obama spearheaded passage of a massive economic stimulus package, which was designed not only to create jobs but also to build infrastructure, with a focus on _____.

Which of the following statements is true of the economic environment of a business?

The Federal Trade Commission:

Despite the U.S. economic crisis of 2008, research suggests that:

Leading-edge companies have focused on customer satisfaction, with a goal to develop long-term, mutually beneficial relationships with customers. Which of the following dimensions of a business environment does this illustrate?

In the context of the economic environment of business, which of the following is most likely to reduce the risks of running a business?

Despite having a small population and severely limited natural resources, Hong Kong has consistently ranked among the richest regions in Asia. The prime reason behind this is: