Final Exam Review Part 2

A popular product is said to be in high..

Demand

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 Risks

Carefully selecting goods or services to sell is an example of handling business risks by __________ the risk.

Controlling

One way that competition helps to build a prosperous society is by

Creates new jobs

Changes in the market that cause prices to go up or down, products to change, and businesses to succeed or fail are examples of __________ risks.

Economic Risks

Which of the following are qualities of monopolies:

High Prices and low competition

Which activities are likely to increase a firm's profit?

Increasing sales and decreasing expenses

One way that competition benefits business is by encouraging the creation of

New Business

Offering high quality, large assortments, and free shipping are examples of

Non price competition

Which of the following is a disadvantage of private enterprise:

Periods of Unemployment (if a company isnt making money they cannot afford workers)

Alex owns a guitar, several books, a car, and a telescope. Alex's possessions are examples of

Private Property

If expenses are greater than income, there's no

Reward

Businesses can protect themselves from the risk associated with lost shipments by

Purchasing Transportation Insurance

Gross profit shows business owners the difference between what they've

Spent and received

Why are entrepreneurs important in a private enterprise system?

They encourage the development of new products

Each purchase strengthens the economy by encouraging

Trade

Contractual agreements such as guarantees, surety bonds, and leases are examples of handling business risks through

Transferring the risk

Private enterprise is based on the idea that everyone is better served when

When individuals set their own goals

One of the freedoms provided to individuals by the private enterprise system is the freedom to choose

Where they work, you can work wherever you want

Most businesses put their greatest competitive efforts into competing

With Direct Competition

Private Enterprise

business ownership by ordinary people, not the government