Entrepreneurship :: Chapter 2
Economic resources are not factors of production
False
The traditional economy is used in developed countries
False
The value of the next best economic alternative is the trade-off cost
False
When the quantity of a good or service produced increases, variable costs remain the same
False
Earning a college degree is and example of satisfying which of the following areas of needs? a. Esteem b. Social c. Self - actualization d. Security
c
Needs include the following except... a. food b. basic clothing c. smartphones d. a place to live
c
If and entrepreneur's variable cost for each unit produced is $1.35, how much would the fixed costs increase if 30 additional units were demanded each day? a. $40.50 per day b. $40.50 per week c. $202.50 per week d. None of these
d
In the US economy, competition forces a business to... a. Improve products b. Keep costs low c. Provide good customer service d. All of these
d
In the US economy, entrepreneurs... a. Fulfill consumers' wants and needs b. Help change the way people live and conduct business c. Provide employment d. All of these
d
The US economic system is based on all of the following principles except... a. Competition b. Freedom of choice c. Private property d. Government control
d
Today, China operates under a _____ economy. a. Command b. Traditional c. Market d. Mixed
d
All business that exist in the United States today began as an entrepreneurial idea
False
Both types of wants - economic and noneconomic - from the basis of an economy
False
In a market with perfect competition, a small number of businesses gain the majority of total sales revenue
False
Inelastic demand occurs when a change in price creates more demand.
False
The US economic system is best described as a traditional economy
False
The demand curve for a market economy shows that as the price of a product or service rises, individuals are willing to consume more of the good or service.
False
The functions of business operate independently of each other
False
The most basic of needs is security
False
A mixed economy often results when a country shifts away from a command economy towards a market economy
True
All economic resources have a limited supply
True
Capital resources include buildings and equipment
True
Demand elasticity occurs when demand for a product is affected by its price.
True
Entrepreneurship thrives in a market economy
True
Fixed costs must be paid even if a company has no sales.
True
It is difficult for new businesses to enter a market with an oligopoly market structure
True
Needs and wants are unlimited
True
The fixed costs of a businesses... a. Include monthly rent b. Are based on the price of supplies c. Do not include the cost of insurance d. Include advertising costs
a
The three types of economic resources that an entrepreneur may use to create useful goods and services are called... a. Factors of production b. Production hierarchies c. Factors of consumption d. Economies of scale
a
A supply curve shows that the quantity produced... a. Increases as price decreases b. Increases as price increases c. Decreases as price increases d. Is not affected by price
b
A demand curve shows that the quantity consumed... a. Increases as price increases b. Is not affected by price c. Decreases as price decreases d. Increases as price decreases
d
According to the theory of hierarchy of needs, a. Everyone's needs will eventually be satisfied b. People must satisfy lower-level needs before than can focus on higher level needs c. Everyone has the same needs d. Needs and wants are usually the same
b
All of the following are a function of business except... a. Finance b. Opportunity cost c. Management d. Production
b
All of the following are components of the marketing mix except... a. Distribution b. Competition c. Price d. Product
b
The psychologist who developed a theory on the hierarchy of needs was... a. Sigmund Freud b. Abraham Maslow c. Karl Jung d. Terrence McKenna
b
When a business owner decides to grow the business he or she needs to consider the... a. Marginal cost b. Economies of scale c. Variable costs d. Equilibrium quantity
b
In a market economy, individual choice... a. Does not influence how items are produced b. Creates scarcity c. Creates the market for a good or service d. Has no effect on production
c
Market structures are distinguished by all of the following except... a. The types of goods and services being traded b. The number and size of sellers and buyers in the market c. The amount of profit that can be earned by sellers d. The barriers to entry into the market for sellers
c
Products you can see and touch are called... a. All of these b. intangibles c. goods d. services
c
Raw materials supplied by nature are... a. Monetary resources b. Capital resources c. Natural resources d. Human resources
c
Scarcity exists because... a. There are different types of economies b. There are too many people in the world c. Resources are limited d. Some products are expensive to produce
c
Things that you think you must have in order to be satisfied are called... a. needs b. preferences c. wants d. goals
c
Which of the following is not one of the four major market structures? a. Monopoly b. Oligopoly c. Pure competition d. Perfect competition
c
Which of the following market structures are retail stores and restaurants found in? a. Oligopoly b. Perfect competition c. Monopolistic competition d. None of these
c
Which of the following would not be considered a capital resource? a. Equipment b. Money need to pay employees c. Employees d. Buildings
c
In a command economy,... a. There is very little choice for consumers in what is available b. Individuals may not always be able to obtain exactly what they want c. The government determines what, how, and for whom goods are produced d. All of these
d
Marginal benefit measures the advantages of producing one additional unit of a good or service
True
The rivalry among businesses to sell their goods and services is called competition
True
The role of businesses is to produce and distribute goods and services that people need and want
True
The supply curve for a market economy shows that as the price of a product or service rises, suppliers are willing to produce more of the good or service.
True
Which of the following is not one of the three basic questions that all economies must answer? a. When will the goods and services be produced? b. How will the goods and services be produced? c. For whom will the goods and services be produced? d. What goods and services will be produced?
a
The primary a business exists in a market economy is to earn a profit
True
Two factors that commonly enter into economic decision-making is scarcity and opportunity cost
True
Needs are things that you must have in order to survive
True
Services must be provided to you at the time you need them - they cannot be stored
True
