24SP-BUMA-010 Quiz CH 1

As a factor of production, capital includes money.

False

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.

False

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

False

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

True

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

True

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

True

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

True

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

True

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

True

Which of the following factors would most likely result in a dramatic change in supply?

a change in the price of raw materials used in the production process

In perfect competition, there is:

a large number of sellers producing nearly identical products

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

Entrepreneurs

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

False

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

False

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

False

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

Knowledge workers

At the equilibrium point, quantity demanded equals quantity supplied.

True

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

True

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.

True

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

True

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

True

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

True

Which of the following is a characteristic of pure competition?

all of the above

Labor, as a factor of production, refers to:

all workers in business

Upward and downward changes in aggregate economic activity, as measured by GDP, are called:

business cycles

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

capitalism

In terms of economic trends, the complete opposite to communism is:

capitalism

The average price of construction materials increased by 8.1 percent in 2005. The head of the Home Builders Association said it was due totally to increases in lumber, metal, and labor costs. The 8.1 percent increase is probably an example of:

inflation

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

social change

One of the reasons for the growing inflation rate in Argentina is due to increases in production costs of goods and services which occurred as a result of a decline in a suitable labor force. This would be an example of a _____ inflation.

cost-push

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

factors of production

A(n)_____ occurs if a country's total expenditures are higher than the revenues received from the taxes it gathers.

federal budget deficit

Which of the following is NOT a form of unemployment?

fiscal unemployment

Jarvis Washington recently quit his job as a veterinarian's assistant and is now trying to find a job with another veterinarian. This is an example of _____ unemployment.

frictional

The quality of life is:

the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time

Which one characteristic most clearly defines a market structure?

the number of suppliers in a market

The GDP of Poland in 2006 was approximately $512 billion. This $512 billion represents:

the total value of all final goods and services produced in Poland during 2006

Imagine that you were reading an international marketing text in which you learned that the GDP for a nation that was a member of the former Soviet Union was $1.56 billion. A few pages later in the same text, the book states that that nation's real GDP was $800,000. From reading this information, you would know that:

this former member of the Soviet Union had a high rate of inflation

The most basic measure of economic growth is the:

gross domestic product

A key element in capitalism is:

individual ownership of property

Last year, a mother in a small African nation could buy a pound of flour for the U.S. equivalent of $1.30. Six months ago, an identical pound of flour costs $3.40. Today she would need $5.60 to buy that pound of flour. This example of the general upward movement of prices is called:

inflation

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

inflation

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

money

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

natural resources

With a communist economy system:

none of the above is true

In a(n) _____, a few sellers can exert substantial control over prices.

oligopoly

The main incentive in capitalism is:

profit

When the price of gasoline rises by 40 percent, but your salary remains the same, it is an example of a decline in your:

purchasing power

The _____ GDP takes inflation into account and uses adjusted market prices.

real

As soon as any nation has experienced two consecutive quarterly declines of its gross domestic product, that nation will be in a(n):

recession

Today companies are focusing on _____, which involves building, maintaining, and enhancing interactions with customers and other parties so as to develop long-term satisfaction through mutually beneficial partnerships.

relationship management

The implementation of a contractionary policy by the Federal Reserve would result in:

lower inflation

The implementation of an expansionary policy by the Federal Reserve would result in:

lower interest rates

A strategic alliance is a cooperative agreement between business firms

False

No true examples of a pure monopoly exist today.

False

The Federal Reserve System can print money and raise taxes.

False

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

False

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

False

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.

False

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.

False

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

Millennials are technologically savvy and prosperous young people.

_____ refers to a government's programs for controlling the amount of money in circulation.

Monetary policy

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

Profit

In Canada, the government owns the communications, transportation, and utilities industries, while most other activity is carried on by private enterprise. Canada is an example of:

a mixed economy

The government does not consider full employment to mean 100 percent of its citizens are employed because:

all of the above conditions can and do exist

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

A good is tangible, and a service is intangible.

Successful owners and managers must continually study which of the following elements of the environment to remain successful?

All of the above

Which of the following statements about demand and supply curves is true?

All of the above statements about supply and demand curves are true.

Which of the following factors would most likely result in a dramatic change in demand?

An expectations about future prices

The government of Cuba owns or controls all of the basic industries in their economy. Cuba operates in which type of economic system?

Communism

Which of the following words best describes the business environment?

dynamic

When demand and supply meet, the price of the product or service is established. This is the point of:

equilibrium

Archer Daniels Midland Co. (ADM) has joined with Baron Spices and Seasonings to market spices, seasonings and herbs to the foodservice industry. ADM will provide the raw materials, and Baron will act as the distributor and use its already existing relationships with participants in the food service industry to make a success of this:

strategic alliance

Forty-five percent of the labor force in Armenia is involved in the agricultural sector, but the economic growth in the nation comes from industry and tourism. What type of unemployment would such a mismatch of ability and job requirements cause?

structural

The quantity of a product or service that businesses will make available at various prices is called:

supply

Fiscal policy is concerned with:

taxation and spending

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?

$80

In 1993, Purdue Pharmaceuticals of Stamford, Conn. applied for the first in a series of patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. As a result of the patent Purdue was the only company that could sell Oxycontin. Thus, Purdue became an example of which of the following market structures?

a pure monopoly

Members of millennial generation:

are not accurately described by any of the above

A "mixed economy" is an economic system that:

combines private and government ownership of the factors of production

In a _____, the factors of production are owned collectively rather than individually, and no incentives to work harder or to produce quality products are provided.

communist economic system

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

competition

The _____ represents the prices of a market basket of goods and services as measured monthly by the Department of Labor.

consumer price index (CPI)

For most agricultural products, farmers produce homogeneous products, sell them to a common market, and generally cannot affect prices greatly. This is an example of which kind of market structure?

perfect competition

There are a large number of small firms that provide entertainment for children's birthday parties. There is little difference between one company's inflatable slide and another company's. Clowns and magicians do similar tricks. Both the sellers and the parents buying the entertainment are well informed as to price and sources although sometimes it is difficult to hire the same entertainer two years in a row because the business is so easy to open and close. What type of market structure do local party entertainers depict?

perfect competition

Which of the following factors would most likely result in a shift in the demand curve?

prices of substitute products

In 1993, Purdue Pharmaceuticals of Stamford, Conn. applied for the first in a series of patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin. Purdue's patents acted as a(n) _____ and prevented Endo from entering the market.

barrier to entry

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

bicycle manufacturer

The national debt is the:

cumulative total of past national deficits

In 1998 the tourism industry in Egypt had 43 percent unemployment due to an economic downturn that gripped the country as a result of an increase of terrorists' activities. The workers in the tourism industry were experiencing _____ unemployment.

cyclical

When the economy is in a recession, many companies must lay off workers, which causes _____ unemployment.

cyclical

The slope of the demand curve is:

downward and to the right

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

knowledge

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

labor

The standard of living in any country is:

measured by the output of goods and services people can buy with the money they have

Office Depot has instituted the Office Depot Advantage, a program in which a customer who spends a minimum of $200 up to $299 in a three-month period can receive a $20 reward good for the purchase of additional Office Depot merchandise. Customers who spend between $300 and $499 receive a $30 reward and those who spend more than $500 quarterly receive a $50 reward. The goal of this _____ program is to encourage customers to consolidate their office product purchases at Office Depot.

relationship management

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

the United States

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

the advice of a wedding planner

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

the birthday candles you purchased to go on your sister's birthday cake

Structural unemployment is unemployment that results from:

the changing structure of an industry