Deck 1: Understanding Economic Systems and Business

Question 1

Not-for-profit organizations have the same goals as for-profit organizations.

Answer 1

False

Question 2

The major difference between a good and a service is how the producer uses the factors of production to create each.

Answer 2

False

Question 3

People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs.

Answer 3

True

Question 4

Economics is the study of a society's financial institutions.

Question 5

Full employment means 94-96 percent of the working force is employed.

Question 6

Some global corporations are large enough to create major changes in the external environment.

Question 7

Tyron Lewis has recently quit his job in the administrative offices at the nearby hospital and is currently seeking a retail management position.He would be described as structurally unemployed.

Question 8

Factors of production are common to all productive activities, regardless of the economic system.

Question 9

Baby boomers are Americans that are retiring or near-retirement age.

Question 10

Labor, as a factor of production, relates only to the production of manufactured goods; services are not included.

Question 11

As a factor of production, capital includes money.

Question 12

It takes four consecutive quarters of decline in the GDP for economists to consider the economy to be in a recession.

Question 13

The term Generation X refers to people born between 1965 and 1980.

Question 14

Business owners and managers have a great deal of control over the internal environment of business, which covers the day-to-day business decisions.

Question 15

Many people consider knowledge to be a fifth factor of production.

Question 16

Demography is the study of how people use their free time, how people integrate their hobbies and their vocations, and how people make their purchase decisions.

Question 17

When Raoul Welsh is evaluating the construction industry in terms of interest rates, employment cycles, and the rate of new home building nationwide, he is looking at microeconomics.

Question 18

Social factors influence what, how, where, and when to purchase products or services.

Question 19

Freida Bida lost her job as a result of a recession and would be described as experiencing cyclical unemployment.

Question 20

A business is an organization that strives for a profit by providing goods and services desired by its customers.

Question 21

The situation in which the average of all prices of products is rising is called inflation.

Question 22

Monetary policy deals with tax revenues and expenditures at the national level.

Question 23

Belinda Asher works in a vegetable processing plant and is out of work about six months a year due to the periodic harvest times.She can be described as seasonally unemployed.

Question 24

The higher the price of a good or service, the greater the amount a producer is willing to supply.

Question 25

The Federal Reserve System can print money and raise taxes.

Question 26

A strategic alliance is a cooperative agreement between business firms.

Question 27

Legal challenges arising from laws designed to control anticompetitive behavior occur in monopolistic competition.

Question 28

No true examples of a pure monopoly exist today.

Question 29

At the equilibrium point, quantity demanded equals quantity supplied.

Question 30

Which of the following businesses provides its customers with a service?

A)a pecan grower
B)a wheat farmer
C)a mattress manufacturer
D)a used book store
E)a law office

Question 31

An increase in the price of crude oil could trigger cost-push inflation.

Question 32

Monopolistic competition is a market structure in which entry is easy.

Question 33

When Congress passes a law to raise individual tax rates, it is creating fiscal policy.

Question 34

Which of the following is the best example of a service?

A)the pleasure you derive from seeing a good play
B)the license tags you purchased for your car
C)the hamburger you bought for lunch
D)the gallon of milk you purchased at the convenience store
E)the grill on which you cook steak

Question 35

The higher the price of a good or service, the greater the quantity demanded.

Question 36

A farmer's market where sixty farmers come weekly to sell the produce they grow in their gardens is an example of monopolistic competition.

Question 37

Which of the following businesses provides its customers with a good?

A)hotel
B)hair salon
C)accounting firm
D)movie theater
E)bicycle manufacturer

Question 38

Which of the following is the best example of a good?

A)the physical examination you received from your doctor
B)the birthday candles you purchased to go on your sister's birthday cake
C)the airplane flight you took to attend a funeral
D)the driving lessons you took
E)the life guarding class you took last summer

Question 39

Which of the following is an example of a business?

A)Jack & Jill, a specialty clothing store for young children
B)Wal-Mart
C)Ford Motor Company
D)Lawson & Tyler law offices
E)all of the above

Question 40

The national debt is the accumulation of deficits that have occurred in the past as a result of expenditures exceeding tax revenues.

Question 41

The _____ of any country is measured by the output of goods and services people can buy with the money they have.

A)standard of living
B)consumer productivity
C)input per person
D)quality of life
E)total consumption rate

Question 42

Curtiss Anaya is planning to sell kites on the beach this summer to pay for next year's school expenses._____ refers to the potential that Curtiss will lose money and waste his time and end up at the end of the summer with not enough money to cover his expenses.

A)Profit
B)Risk
C)Revenue
D)Opportunity
E)Cost

Question 43

As one of the factors of production, natural resources includes all of the following EXCEPT:

A)farmland
B)coal
C)water
D)oil deposits
E)machinery

Question 44

As one of the factors of production, capital includes all of the following EXCEPT:

A)tools
B)machinery
C)equipment
D)money
E)delivery trucks

Question 45

Which of the following is the BEST example of a not-for-profit business?

A)the American Cancer Society
B)McDonald's
C)Kellogg's
D)FedEx delivery service
E)Hightower Construction Company

Question 46

Which of the following is NOT an example of a factor of production?

A)entrepreneurship
B)capital
C)competition
D)natural resources
E)labor

Question 47

What is the primary difference between a good and a service?

A)A good costs more to produce than a service.
B)A service is tangible, and a good is intangible.
C)A good is tangible, and a service is intangible.
D)A good costs more to market than a service
E)The development costs for a service is higher than for a product.

Question 48

Labor, as a factor of production, refers to:

A)all workers in business
B)rent and wages
C)full employment
D)tools and wages
E)only hourly wage earners

Question 49

_____ is the amount of money remaining from a firm's sales revenue after it deducts production costs, interest costs, and taxes.

A)Profit
B)A dividend
C)Working capital
D)Net sales
E)Retained earnings

Question 50

The quality of life is:

A)measured by subtracting the supply of goods and services from the demand for goods and services
B)determined by the money left over after all expenses are paid
C)the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time
D)measured by the output of goods and services people can buy with the money they have
E)higher for less developed countries like Angola, Bangladesh, and Ceylon than it is for the U.S.

Question 51

The standard of living is low in Honduras.This means:

A)it has a positive balance of trade
B)it has higher wages than the U.S.
C)its citizens cannot afford to buy much
D)it has a negative balance of trade
E)it attracts risk-aversive entrepreneurs

Question 52

Iris Souza started the summer with $30.She took $10 and made signs for her dog walking service.She posted the signs all over her neighborhood.She used the other $20 to buy a stout leash and a pooper-scooper.At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left.What was Souza's profit for her summer job?

A)$30
B)$80
C)$125
D)$175
E)$205

Question 53

Inputs, such as natural resources, labor, capital, and entrepreneurship, are known as:

A)elemental factors
B)factors of production
C)creative factors
D)building blocks
E)elements of construction

Question 54

Iris Souza started the summer with $30.She took $10 and made signs for her dog walking service.She posted the signs all over her neighborhood.She used the other $20 to buy a stout leash and a pooper-scooper.At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left.Calculate Souza's costs for her summer job?

A)$30
B)$50
C)$80
D)$125
E)$175

Question 55

_____ is the money a company earns from providing services or selling goods to customers.

A)Profit
B)Opportunity
C)Gross margin
D)Revenue
E)Amortization

Question 56

Which of the following countries has a high standard of living?

A)Malaysia
B)the United States
C)Guatemala
D)Nigeria
E)Bolivia

Question 57

Rudy and Ritchie Ling ran a camp this summer for children in their neighborhood.Rudy spent $135 on supplies and earned $250 before expenses.Ritchie spent $140 on supplies and made $210 before expenses.What is the combined revenue for the two brothers?

A)$75
B)$170
C)$290
D)$415
E)$460

Question 58

Which of the following is NOT an example of a good that would be sold in a department store?

A)wedding dress
B)white linen table clothes
C)the advice of a wedding planner
D)silk flower bouquets
E)book on wedding etiquette

Question 59

The standard of living in any country is:

A)measured by subtracting the supply of goods and services from the demand for goods and services
B)determined by the money left over after all expenses are paid
C)the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time
D)measured by the output of goods and services people can buy with the money they have
E)higher for less developed countries like Angola, Bangladesh, and Ceylon than it is for the U.S.

Question 60

Hudson Kling mows yards during the summer.Which of the following is an example of revenue for Kling?

A)a tire repair kit and extra air filters for the lawn mower
B)a trip to the lawn mower repair shop to get his machines blade sharpened
C)the new pair of shoes he had to buy because he accidentally ran over a pair with his mower
D)the $10 tip Mrs.Pierre gave him for doing such a fine job of mowing her yard
E)the gas can he had to buy so his mower wouldn't run out of gas while he mowed Mr.Johnson's five-yard pasture

Question 61

Which of the following is an example of a factor of production?

A)economy of scale
B)competition
C)free market
D)labor
E)mass production

Question 62

_____ are workers who create, distribute, and apply knowledge.

A)Data managers
B)Knowledge workers
C)Information analysts
D)Data prospectors
E)Information conduits

Question 63

A key element in capitalism is:

A)a low standard of living
B)individual ownership of property
C)government ownership of property
D)government control of market
E)continued growth

Question 64

Corrine Attlee has always enjoyed cooking more than doing anything else.Atlee has decided to quit her job as a college professor and invest her life savings in starting a restaurant.Attlee is an example of a(n):

A)production worker
B)sales manager
C)entrepreneur
D)monetary manager
E)fiscal manager

Question 65

An economic system based on competition in the marketplace and private ownership of the factors of production is known as:

A)capitalism
B)utopianism
C)socialism
D)democratic economy
E)privatization

Question 66

Individual ownership of property is a key element in:

A)socialism
B)capitalism
C)communism
D)a command economy
E)utopianism

Question 67

Which of the following is an example of a demographic factor?

A)a person's attitude toward premarital sex
B)a person's love of reading
C)a person's value system
D)a person's age
E)all of the above

Question 68

Demography is the study of:

A)people's vital statistics
B)people's attitudes, interests, and values
C)emerging technology
D)social trends
E)global competition

Question 69

How has diversity impacted the marketing and customization of products?

A)The buying power of Asian Americans is declining.
B)There are no significant differences in the various segments of the Hispanic population.
C)The United States will never be a multicultural society.
D)Along with their numbers, the buying power of minorities is growing.
E)The size of the Hispanic market is declining.

Question 70

The fifth factor of production identified by many managers and academicians is:

A)nanotechnology
B)productivity
C)quality
D)social responsibility
E)knowledge

Question 71

Members of Generation X:

A)were born between 1965 and 1980
B)represent the last generation of demography
C)have fueled the growing demand for home delivery
D)are driving the educational software industry
E)are over the age of 65

Question 72

_____ combine the inputs in the production of goods and services for what are intended to be profitable ventures.

A)Privateers
B)Marketers
C)Economists
D)Cooperators
E)Entrepreneurs

Question 73

Thom Nielssen owns 500 acres of woodland.His forest is an example of which factor of production?

A)capital
B)natural resources
C)entrepreneurship
D)labor
E)expense

Question 74

Members of millennial generation:

A)represent the first generation of latchkey children
B)are more likely to be unemployed or underemployed than any other previous generation
C)cherish savings and cling to their money
D)were born between 1946 and 1964
E)are not accurately described by any of the above

Question 75

Which of the following is probably the MOST difficult environmental factor for owners and managers to forecast, influence, or integrate into business plans?

A)demographic change
B)social change
C)global competition
D)emerging technology
E)evolving economic systems

Question 76

The main incentive in capitalism is:

A)high wages
B)profit
C)low taxation
D)reasonable interest rates
E)a shorter work week

Question 77

An economic system based on complete freedom of trade and little, if any, government control is known as:

A)capitalism
B)utopianism
C)socialism
D)democratic economy
E)privatization

Question 78

Which of the following statements about those people designated by demographics as millennials is true?

A)Millennials controls 50 percent of all consumer spending.
B)Millennials are technologically savvy and prosperous young people.
C)Millennials members spend less than any other demographic group.
D)The typical millennial member is at the stage in life where he or she has made a career choice and has started his or her family.
E)None of the above statements about millennials is true.

Question 79

The new employee that Dunn Photographic Services hired is an example of which factor of production?

A)natural resources
B)capital
C)wages
D)interest
E)labor

Question 80

Those people designated by demographics as _____ are defined as Americans born between about 1981 and 1997.

A)baby boomers
B)Generation X
C)latchkey kids
D)Millennials
E)tweens