2017 First Semester Practice Exam Mrs.Litton
Who answers the basic economic questions in a private enterprise economic system
businesses and individuals
For each new product it offers, a business seeks
buyers
Maintenance, modifications, and use of alternative sources are responses to limited
capital goods
Which of the following economic resources helps people to be more productive:
capital goods
The government controls the economic system and does not allow private ownership of the means of production and distribution in a __________ economy.
communist command
When a rival's product on the market reduces sales of your company's product, your company is experiencing strategic risk caused by
competition
Which of the following is one of the main principles of the private enterprise system:
competition
The heart of economics is
decision making
The price of complementary products has an effect on
demand
Burger King and McDonald's are examples of
direct competitors
One of the ways that competition benefits customers is by encouraging businesses to
improve their existing products
A popular product is said to be
in demand
An economic good or service that is scarce is one that is
in limited supply
Which of the following is an example of a business risk that cannot be covered by insurance:
increase in interest rates
Which activities are likely to increase a firm's profit?
increasing sales and decreasing expenses
If a consumer chooses to go to the movies rather than to a pizza parlor, then the movie theater and the pizza parlor are
indirect competitors
Economic votes" are cast by consumers each time they
make a purchase
A producer is someone who
makes things
What type of economic system is used in the United States?
market
Every society must develop a system for deciding how it will use its resources so that it can
meet people's needs
The most common medium of exchange in modern economic systems is
money
What type of market structure is most commonly found in a private enterprise economy?
monopolistic competition
The state of technology that exists in a society can limit
natural resources and capital goods
Carefully selecting goods or services to sell is an example of handling business risks by __________ the risk.
preventing or controlling
An electronics store charges less for a new television than other electronics stores. The store is engaging in ________ competition.
price
What is the amount of money for which an item sells in the competitive marketplace?
price
A business that advertises a special sale as well as its delivery service is using a combination of ___________ competition.
price and non price
When a business keeps a risk because management is unaware of it, the business is _________ the risk.
retaining
If expenses are greater than income, there's no
reward
People who go into business know that the business may not succeed. This possibility is referred to as business
risk
Which of the following is a pure business risk:
robbery
Following your teacher's guidelines is an example of which ethical principal?
rule of law
Retailing takes place whenever goods are
sold to the ultimate consumer
If one of your coworkers is treating another coworker unfairly, what is the ethical thing to do?
speak up
Gross profit shows business owners the difference between what they've
spent and receive
What motivates businesses to produce efficiently and sell effectively?
the hope of making a profit
Your business is selling more and more large-screen televisions each month. Applying the law of supply and demand, what do you expect to happen to the price and supply of these televisions over the next few months?
the price will increase, and supply will increase
Behaving ethically means doing
the right thing
Why are entrepreneurs important in a private enterprise system?
they encourage the development of new products
When producers use the best combination of resources, consumers are more likely to get goods and services that
they want
Why do marketers classify goods and services?
to aid in marketing planning
The act of reducing or removing risks by shifting the risk factor to another person or business is referred to as __________ risk.
transferring
What are the three basic economic questions?
what products will be produced, how will products be produced, and how will products be allocated
Which of the following is a measurable goal
"i will write 1,000 words by the end of the day"
Determine a product's equilibrium price by examining the following table:
$12.00
What does SMART mean?
Specific Measurable Accepted Realistic Time-Bound
Which of the following is an example of the substitution effect:
The price of laptops went up recently, so Francis decided to buy a tablet instead
After Paul gets away with cheating on his Spanish homework, his friends start cheating on their homework, too. This is an example of which consequence of unethical behavior?
a bad example
An example of a noneconomic want would be the desire for
a friend
In business terms, what is profit?
a monetary reward
In many places, trash pickup is legally controlled by just one company. This is known as
a regulated monopoly
One way in which many businesses demonstrate their social responsibility toward employees is by providing them with
a safe working environment
Management decides to hold its annual meeting in one U.S. city rather than another because of crime in that city. This is an example of __________ the risk.
avoiding
Which of the following is a general benefit profit provides:
better wages
The ultimate goal of all economic activity is
consumption
Profitable businesses often help improve their local communities by
contributing to charitable causes
The amount of money paid for raw materials and products sold is called
cost of goods
One way that competition helps to build a prosperous society is by
creating new jobs
Which of the factors that affect profit are usually able to be controlled?
expenses and pricing
An example of a short-term goal is
finishing the annual report in 2 weeks
A hurricane that destroys a business is an example of a(n) __________ risk.
hazard
The general classifications of business risks are
hazard, operational, strategic, and financial
Which of the following is characteristic of a seller's market:
high prices
Which of the following are qualities of monopolies:
high prices and low production
Intergrity means acting with
honesty
Offering higher wages, employee-assistance programs, and benefits are responses to limited
human resources
What do consumers, producers, and resource owners need to have in order to make economic decisions?
information about prices
What do service businesses sell?
intangible activities
Which of the following statements about perfect competition is correct:
it is used as a benchmark to compare real market structures against
One way that competition benefits business is by encouraging the creation of
new companies
Offering high quality, large assortments, and free shipping are examples of
non price competition
Which of the following describes inelastic demand:
not affected by price change
When Maura purchased a new car, she was able to get part of the purchase price back from the car's manufacturer. The car's manufacturer engaged in
offering rebates
The automobile industry, the pharmaceutical industry, and the oil industry are all examples of
oligopolies
The money spent to run a business is called
operating expense
A union strike that stops production at a manufacturing plant is a(n) __________ risk
operational
Businesses can show their social responsibility by contributing to
public intrests
Businesses can protect themselves from the risk associated with lost shipments by
purchasing transportation insurance
The two main divisions of the trade industry are
wholesalers and retailers
Which of the following is a direct benefit to consumers of the effects of competition:
wider product selection