Final Business Economics Final Exam Review

Currency fluctuations

A U.S. company begins selling its products in France. Despite brisk sales, the company doesn't make enough profit to cover its expenses. When setting prices, the company simply used the same prices in both countries. For example, $5.99 = 5.99 French francs; $2.89 = 2.89 French francs. What risk of international business did the company not consider?

income

A business's profits are subject to __________ taxes.

Positioning

A company decides to start marketing its health food bar as a candy bar. Which type of innovation is taking place?

Observations

A company gets ideas by reading trade publications and attending trade shows. What source of innovation is this company using?

population

A country's standard of living can be calculated by dividing the goods and services its people have by

have to pay union dues.

A disadvantage to workers of having a union represent them is that they

wasted resources.

A factory that mass produces clothing increases productivity because it reduces

identify cause and effect.

A fishbone diagram is a quality-control tool used to

control chart.

A key tool in statistical process control is the

motivation

A manager, whose workers perform specialized job tasks, decides to offer employees cash bonuses for suggesting ways to improve the work environment. Offering bonuses is one way to increase employee

increase sales and profits.

A positive effect that productivity has on a business is helping it

Professional unions

Actors and athletes belong to what type of union?

assistance in recruitment.

An advantage to companies of unionization is

work in process.

An automobile assembly line currently has 75 cars being assembled. These partially-complete cars are considered

She must pay the entire amount of her payroll taxes.

Anita is self-employed. Which of the following is a true statement regarding her tax obligations:

Price

Any factor that causes changes in supply and demand will cause changes in

process

Asia's company comes up with a new method to manufacture its product that saves time, money, and effort. This is known as __________ innovation.

$12.00

Determine a product's equilibrium price by examining the following table: Price Units Produced Units Demanded $11.00 12,000 18,000 $11.50 14,000 16,000 $12.00 15,000 15,000 $12.50 17,000 13,000

productivity.

Dividing the dollar value of total sales by the cost of making those sales is one way that businesses often measure their

quality of work life.

Fair salaries and wages, competitive benefits, and safe and healthful working conditions are all important in creating a good

central banks.

Governments participate in the foreign exchange market through their

the average worker's productivity.

Gross domestic product per capita is a measure of

GDP for the United States.

Honda is a Japanese firm that produces some of its cars in Ohio. In calculating GDP, the Ohio-produced cars would be part of

To ration limited resources

How are prices used in our economy?

Exchange

How do societies that specialize in producing certain goods obtain the other goods that they need?

Consumers and businesses spend less.

How do spending levels impact the economy in an inflationary period?

More goods and services become available, so prices go down.

How does increased business productivity benefit consumers?

increasing taxes.

If a government wants to decrease economic growth, it would use a contractionary fiscal policy that might involve

93

If three employees each work 35 hours a week and produce a total of 9,765 items, what is their total hourly productivity level?

distribution

In some states, it is against the law to sell alcohol on Sundays. This law was created to honor the Christian religious belief that Sunday is a special day of rest. This is an example of culture impacting the __________ of goods.

trust funds.

In the United States, payroll taxes are used as

quote

In the exchange rate quotation GBP / JPY = 171.93, JPY is the __________ currency.

base

In the exchange rate quotation USD / EUR = 0.73, USD is the __________ currency.

spending less on goods and services.

Inflation can occur when the economy is growing too fast. One of the ways the government might respond is by

menu costs.

Inflation has driven up prices at Allen's business, forcing him to reprint all his price lists and send notices out to clients. These expenses are known as

currency exchange rates.

Inflation influences the balance of trade between countries through its effect on

economic instability.

Interest rates rising and falling by a wide range on a regular basis often are an indication of

New pair of jeans

John only had $40 to spend and couldn't decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision?

Concert tickets

Justin is trying to decide whether he wants to spend a $50 birthday check on a new DVD player or tickets to a concert. If he chooses the DVD player, what is the opportunity cost of this decision?

the underground economy.

Keoni agreed to paint Joe's car for him and asked to be paid in cash so that there would be no record of the transaction. The money Keoni earned is part of

cost-push inflation.

Limited commodities can cause

elasticity.

Marc wants to figure out how much changes in price will affect his business's sales, so he pays attention to

demand.

Marcy is ready to buy a new computer, and she has saved up enough money to buy the model she wants. This is an example of

for which they are best suited.

More goods and services are produced when people use their skills and abilities in jobs

Gross private domestic investment

Mr. Barnes has bought several rental properties. The money Mr. Barnes spent to buy these buildings would be included in which category of GDP?

No, these are transfer payments.

Octavia's father receives veterans' benefits, and her grandmother gets Social Security. Are these payments counted in GDP?

technology.

One reason why the supply of certain products has been eliminated is because of

dividing the dollar value of total sales by the costs of making those sales.

One way that the productivity of a business can be measured is by

fixed

Pegged currency is also known as __________ currency.

standard of living.

People often buy goods and services in order to maintain the quality of life and general living conditions to which they are accustomed. This influence on demand is referred to as

real estate.

Property taxes most often apply to a business's

natural resources.

Ski instructors in Colorado are examples of workers whose jobs involve specialization by

Financial and positive

The U.S. government is offering a decrease in taxes to citizens who install solar panels on their homes. Using economic terms, how would you describe this incentive?

interest rates are low.

The best time for a business to purchase new equipment is when

recession

The country of Callisto is experiencing an economic contraction. Trade and economic activity have decreased, and GDP has fallen over the past six months. Callisto is most likely to be experiencing a(n)

outputs divided by inputs.

The formula that is generally used to measure productivity is

expansion.

The period of time during the business cycle when production and employment increase is called a(n)

demand

The price of complementary products has an effect on

spend the money it receives in tax revenue.

The role of government in a market economy is to

capital goods.

The use of robots in assembly line work is a form of specialization involving

licensing.

The young children's section of a U.S. amusement park features cartoon characters from a German TV show. Although the amusement park signed an agreement and paid a fee to display images of the cartoon characters, the TV show doesn't own or manage the park in any way. This is an example of

open-mindedness.

Tia always considers her employees' suggestions, even if their ideas are new or unusual. Tia demonstrates

business cycle.

Ups and downs in the level of economic activity over a period of time are called a(n)

Increased interdependency

What is a negative result of an employee's doing just one part of a total job?

Customer satisfaction

What is often the result when businesses are able to achieve and maintain a quality culture?

Buying power

What is one factor that will determine how much a customer is willing to pay for a good or service?

The standard of living drops.

What is the effect on society of a falling growth rate in productivity?

Increasing job scope

What technique is a company using to combat the disadvantages of labor specialization when it expands job tasks to include other like tasks?

contraction

When consumers' purchasing power decreases, the economy will experience a period of

lockout.

When union members of Local 654 arrived at work today, they found a sign on the door stating that the business had closed temporarily, and the employees were not allowed to work. This is a pressure strategy known as a(n)

Buy securities on the open market

Which of the following actions would a country's central bank take to expand monetary policy:

Increase government spending

Which of the following actions would a government take to increase economic growth:

Not affected by price change

Which of the following describes inelastic demand:

A manager selects the products to be sold for a business and selects the employees who will work in each business activity.

Which of the following examples best exhibits a job task with high depth and low scope:

Consumers and producers are borrowing more money.

Which of the following factors characterizes the growth phase of business cycles:

Employees responding to each of their emails with a personalized message

Which of the following is NOT an example of a business process?

Relative price

Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks:

High taxes on cigarettes

Which of the following is a negative economic incentive:

Innovation helps the economy.

Which of the following is a reason why innovation is important:

It does not provide meaningful information about a country's contributions to society.

Which of the following is a shortcoming of GDP as an economic indicator:

It is a decentralized market.

Which of the following is a true statement about the foreign exchange market:

Employers pay a matching amount of employees' Social Security and Medicare taxes.

Which of the following is a true statement regarding an employer's tax obligations:

They are built into the overall price of a product.

Which of the following is a true statement regarding excise taxes:

Hyperinflation makes running a business more difficult and unpredictable.

Which of the following is a true statement regarding hyperinflation's effect on businesses:

Inflation does not affect everyone equally.

Which of the following is a true statement regarding inflation's effects on the economy:

It is a general trend in which some prices may go down.

Which of the following is a true statement regarding inflation:

It measures inflation based on a representative section of consumer products.

Which of the following is a true statement regarding the Consumer Price Index:

ISO 9000

Which of the following is a widely used set of quality-management standards:

The "green movement" leads to an increase in demand for recycled products.

Which of the following is an example of a change in culture affecting the production of a good or service:

High unemployment

Which of the following is characteristic of an economy experiencing a short money supply:

Job security

Which of the following labor issues is most affected by the use of technology:

Government regulations

Which of the following might cause supply of a good to decrease:

New jobs are created.

Which of the following occurs as a result of discoveries and innovations:

Concurrent engineering

Which of the following quality-control methods improves quality by saving time and allowing potential problems to be caught earlier in the product design and development process:

Pareto chart

Which of the following quality-management tools helps managers determine which problems need immediate attention:

To minimize errors

Why do most businesses use some type of quality control method at work?

They both want to keep businesses operating but have different ideas about how to reach that goal.

Why do unions and management experience conflicts?

To see whether the business's objectives are being met

Why should productivity be measured?

Cost of production

Your firm is considering producing a new product. Research shows that there is definitely a demand for the product and that there are currently only two other producers of this product. Which of the following might prevent your firm from producing this product:

Reducing risk

Yvonne wants her innovation to succeed, so she makes sure that there's a market for her innovation and that she has plenty of money and resources on hand. Which step of achieving innovation is Yvonne demonstrating?