Business Management: Chapter 1 Test
What is another name for capitalism?
private enterprise system
In a(n) _____, a few sellers can exert substantial control over prices. A. oligopoly B. perfect monopoly C. pure monopoly D. monopolistic competition E. competitive monopoly
A.
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
A.
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
B.
Individual ownership of property is a key element in: A. socialism B. capitalism C. communism D. a command economy E. utopianism
B.
The situation in which the average of all prices of products is rising is called: A. deflation B. inflation C. upsizing D. purchase power acceleration E. rejuvenation
B.
Upward and downward changes in aggregate economic activity, as measured by GDP, are called: A. business standards B. business cycles C. cyclical adjustments D. economic yields E. standards of business deviation
B.
Which of the following countries has a high standard of living? A. Malaysia B. the United States C. Guatemala D. Nigeria E. Bolivia
B.
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
B.
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
B.
_____ are workers who create, distribute, and apply knowledge. A. Data managers B. Knowledge workers C. Information analysts D. Data prospectors E. Information conduits
B.
A decline in real GDP that lasts for two consecutive quarters is called a(n): A. economic downsizing B. depression C. recession D. resource divestment E. economic regression
C.
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
E.
Which of the following factors would most likely result in a dramatic change in supply? A. the iceberg effect B. the laddering of resources C. a change in consumer fashion D. expectations about prices of consumer products E. a change in the price of raw materials used in the production process
E.
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
E.
With a communist economy system: A. there is complete freedom of trade B. consumers can expect a mixed economic reaction C. there are strong incentives for workers D. basic industries such as railroads and utilities are owned by government, while other industries are owned by the private sector E. none of the above is true
E.
Communism
the complete opposite of capitalism.
GDP
the total market value of all goods and services produced within a country on an annual basis
T or F: 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.
F
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
A.
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? A. perfect competition B. monopolistic competition C. imperfect competition D. a pure monopoly E. an oligopoly
A.
_____ is the quantity of a good or service that people are willing to buy at various prices. A. Demand B. Supply C. Market potential D. Market share E. Capacity
A.
List the four types of unemployment.
Frictional, Structural, cyclical, and seasonal
Quality of Life
What exactly is a researcher studying who looks at people's general level of human happiness based on such things as life expectancies, educational standards, health, sanitation, and leisure time?
Frictional Unemployment
When you graduate from college and start looking for a job, you will experience
Natural Resources
include everything that is useful as a productive input in its natural state, such as land, forests, mineral and oil deposits, and water.
Strategic Alliance
is a cooperative agreement between business firms.
Pure monopoly
is a market structure in which a single firm accounts for all industry sales and in which there are barriers to entry.
Recession
is defined as a decline in GDP that lasts for six months.
Millenials
is used to describe all Americans who were born between 1981 and 1997.
_____ 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
D.
T or F: It takes four consecutive quarters of decline in the GDP for economists to consider the economy to be in a recession.
F
T or F: No true examples of a pure monopoly exist today.
F
Purchasing Power
George LaDuc is the manager of a nonprofit agency that provides transportation for parents of children with life-threatening diseases. Each year the prices of necessities such as groceries, housing, and electricity continue to rise, but LaDuc's salary stays the same. LaDuc's ___________________ is being eroded by his stagnant salary and increasing prices.
What is the primary difference between goods and services?
Goods are tangible and services are not
is the general upward movement of prices from year to year.
Inflation
What kind of economic system exists in the United States?
Mixed economy
There are only very few national cereal manufacturers. The equipment to manufacture cereal is expensive and available shelf space in supermarkets limits the number of producers. In which market structure do cereal manufacturers operate?
Oligopoly
What kind of interaction is a pet groomer using when it sends birthday cards to the pets she cares for?
Relationship management
T or F: A business is an organization that strives for a profit by providing goods and services desired by its customers.
T
T or F: At the equilibrium point, quantity demanded equals quantity supplied.
T
T or F: 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.
T
T or F: Business owners and managers have a great deal of control over the internal environment of business, which covers the day-to-day business decisions.
T
T or F: Factors of production are common to all productive activities, regardless of the economic system.
T
T or F: Freida Bida lost her job as a result of a recession and would be described as experiencing cyclical unemployment.
T
T or F: Full employment means 94-96 percent of the working force is employed.
T
T or F: Many people consider knowledge to be a fifth factor of production.
T
T or F: People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs.
T
T or F: The higher the price of a good or service, the greater the amount a producer is willing to supply.
T
T or F: The situation in which the average of all prices of products is rising is called inflation.
T
What is the major source of revenue for the United States?
Taxes
Services
are intangible offerings of business like haircuts, medical examinations, tutoring, and legal advice.
Entrepreneurs
are people who combines the inputs of natural resources, labor, and capital to produce goods and services with the intention of making a profit
Factors of Production
are the inputs (resources) that are common to productive activity in all economic systems.
The craftsperson was paid $135 for the ornate birdhouse she made. Her costs for producing the birdhouse were $100. What is her profit?
$100
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. A. customer maximization B. profit maximization C. relationship management D. a developing strategic alliance E. product satisfaction
C.
Which market structure is an ideal and does not really exist?
Perfect or pure competition
How is the standard of living for a country like Panama measured?
Real GDP per capita and Gross National Income per capita
What is another name for a strategic alliance?
Strategic partnership
T or F: An increase in the price of crude oil could trigger cost-push inflation.
T
In a monopolistic competition...
market structure, many firms are in the market, the firms in the market sell similar but not identical products, and the market is relatively easy to enter.
List the four types of market structures.
pure monopoly, perfect/pure competition, monopolistic competition, and oligopoly
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: A. inflation B. deflation C. discretionary pricing D. supply-side pricing E. profit maximization pricing
A.
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
A.
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
C.
When the economy is in a recession, many companies must lay off workers, which causes _____ unemployment. A. structural B. cultural C. cyclical D. frictional E. operational
C.
Which of the following factors would most likely result in a shift in the demand curve? A. an increase in the number of suppliers to manufacturers B. the principle of reciprocity C. prices of substitute products D. automation of manufacturing processes E. the multiplier effect
C.
Mixed Economy
Canada's government owns the communications, transportation, and utilities industries; most other activities are carried on by private enterprises. Canada is considered a
What kind of an economic system is characterized by government ownership of virtually all resources and economic decision making by central-government planning?
Communism
What is the term used to describe what is happening when the government spends more on public transportation, and as a result, individuals spend less on private transportation?
Crowding out
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? A. frictional B. predictable C. mechanical D. structural E. operational
D.
In a mixed economy, the government is involved in the economic system through: A. the management of nonprofit organizations B. ownership of media C. its determination of standard of living scales D. taxing, spending, and welfare activities E. none of the above
D.
In terms of economic trends, the complete opposite to communism is: A. a command economy B. socialism C. revolutionary enterprise D. capitalism E. public enterprise
D.
The GDP of Poland in 2006 was approximately $512 billion. This $512 billion represents: A. how much money Polish households spent in 2006 B. the estimated growth of discretionary profit in Poland for 2006 C. the actual growth of discretionary profit in Poland in 2006 D. the total value of all final goods and services produced in Poland during 2006 E. the taxable portion of the materials produced by the production sector of the nation in 2006
D.
The two types of inflation are: A. demand-pull and supply-push B. recessionary and recovery C. cost-pull and supply-push D. demand-pull and cost-push E. demand push and supply-pull
D.
List the two types of inflation
Demand-pull and cost-push
The point at which quantity demanded equals quantity supplied is called the point of
Equilibrium
T or F: A farmer's market where sixty farmers come weekly to sell the produce they grow in their gardens is an example of monopolistic competition.
F
T or F: 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.
F
Which federal government department is responsible for publishing the consumer price index (CPI)?
The department of labor
What is the term used to describe the point at which customers' demands for a product equals the amount made available by the producer?
The equilibrium point
Which government agency controls how much money is in circulation at any given time?
The federal reserve system
The Federal Reserve
is the central banking system in the United States that controls our monetary policy.
Capitalism
is the economic system in which all factors of production are privately owned and the market operates on supply and demand.
Risk
is the potential to lose time and money or otherwise not be able to accomplish an organization's goals.
Demography
is the study of people's vital statistics, such as their age, race and ethnicity, and their location.
GDP
is the total monetary value of all goods and services produced within a nation annually.
List the four traditional factors of production.
natural resources labor (human resources) capital entrepreneurship.
Monetary Policy
refers to a government's program for controlling the amount of money in circulation.
Fiscal Policy
refers to a government's program of taxation and spending.
The demand curve
slopes downward and to the right.