Business Economics -- Final Exam Review Practice Test

A group of entrepreneurs is trying to decide which of five new product ideas to select. Which tool can be used to help make the decision?

Decision matrix

Seeing a movie at a theatre would be considered a(n) __________ want. noneconomic limited unlimited economic

Economic

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? non-financial and positive financial and positive non-financial and negative financial and perverse

Financial and positive

Which of the following is an example of a change in the relative price ratio when the original price of red apples is 60¢ per pound and the original price of green apples is 80¢ per pound: Red apples @ 30¢ per pound; green apples @ 40¢ per pound Red apples @ $1.20 per pound; green apples @ $1.60 per pound Red apples @ 90¢ per pound; green apples @ 80¢ per pound Red apples @ 45¢ per pound; green apples @ 60¢ per pound

Red apples @ 90¢ per pound; green apples @ 80¢ per pound

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

The standard of living drops.

Why does the Federal Reserve System raise interest rates?

To fight inflation

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

To minimize errors

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

for which they are best suited.

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

increasing taxes.

Unions that do not belong to a federation are known as __________ unions.

independent

Even though Brad isn't a manager, his boss encourages him to give his input on issues affecting the company. Brad's boss is using

participative decision-making.

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

productivity.

The government can restrict the flow of money by

raising taxes

There are jobs available in Javier's town; however, none of the jobs are a good match for his skills and experience. This is an example of __________ unemployment.

structural

When the price of Bluetooth speakers increases, the quantity of Bluetooth speakers offered for sale will increase. This is an example of the law of... standardization supply cost of production demand

supply

A country's easy monetary policy is often used to correct the problem of... globalization important quotas unemployment high taxes

unemployment

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

Employees responding to each of their emails with a personalized message

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

Observations

Which of the following would policy makers monitor to understand personal consumption expenditures (PCEs):

Retail sales

One of the benefits of economic growth is that government

can carry out its activities more easily.

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. production packaging pricing distribution

distribution

Sam has been invited to go to the movies with one friend and to Dairy Queen for ice cream with another friend. Because he has only $5.00, Sam can't do both. If he decides to go the movies, the opportunity cost of his choice is... the movie staying at home both the ice cream and he movie ice cream at Dairy Queen

ice cream at Dairy Queen.

Currency speculation is risky because

it can lead to high inflation.

When inflation is out of control, consumers do not

save and invest as much as they should.

A factory produces 20 parts with two employees. With three employees, it produces 45 parts. What is its marginal product?

25 parts

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?

Currency fluctuations

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

Pareto chart

Teresa received a raise this year, so she will pay taxes at a higher rate than she did last year. This is an example of... deductions from taxable income. a progressive tax structure. excise tax. self-employment taxes.

a progressive tax structure.