Business study guide

What is the ratio of a pound of yellow squash @ $.40 a pound and a pound of butternut squash @ $1.20 a pound?

1 to 3

Which of the following statements is true regarding a nation's unemployment rates?

A nation always has a certain percentage of unemployed citizens at any given time.

When consumers purchase gas, telephone services, and tobacco products, they must often pay

An excise tax

The payment of taxes to the federal government allows it to provide goods and services to

Businesses and households

Which of the following actions would the federal reserve system take to expand monetary policy?

Buy securities on the open market

Which of the following factors affects consumers' decisions to buy goods or services?

Buying power

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?

Concert tickets

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

Consumers and businesses spend less

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

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

Customer satisfaction

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

Decision matrix

What is one reason why the overall unemployment rate understates the actual employment situation?

Discouraged workers are not included.

When customers buy the exact amount of goods that producers are selling at a specific price, the

Equilibrium price exists

Which of the following is a decision about production that a business might make based on the law of diminishing returns?

Establish a desired level of production

When consumer spending and consumption decrease, consumer confidence tends to

Fall

The highest level of labor union organization is the

Federation

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?

Financial and positive

What type of government policy involves raising or lowering taxes and increasing or decreases government spending?

Fiscal

The government uses some of the tax money it collects from individuals and businesses to support public welfare programs. What is the benefit of these welfare programs to businesses in a private enterprise economy?

Funds received by recipients are spent in businesses.

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

Government regulations

What is excess supply?

Having more supply than what is in demand.

Which of the following is a negative economic incentive?

High taxes on cigarettes

Which of the following is a characteristic of a buyer's market?

Low prices

What is likely to occur when the inflation rate increases and workers do not receive pay increases?

Lower standard of living

Which of the following government actions is most likely to stimulate the economy

Lowering tax rates

Which of the following is important information that businesses consider wheen d3ciding whether it would be profitable increase production?

Marginal cost

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?

New pair of jeans

During which phase of the business cycle would there most likely be shortages of workers in certain skill areas?

Peak

In which of the following occupations would employees be organized into craft/trade unions:

Plumber

Arm and Hammer baking soda, which was originally developed as a cooking ingredient, is now being sold as an effective refrigerator deodorizer. This is an example of ____________ innovation.

Positioning.

Which of the following is an economic activity

Purchasing a candy bar

What usually decreases as the rate of inflation increases?

Purchasing power

One of the functions of certain types of taxes is to

Regulate business activity

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

Relative price

Which of the following would policy makers monitor to understand personal consumption expenditures?

Retail sales

Which of the following is a program that some managers implement to acheive quality in all aspects of the business?

Six Sigma

Why are human resources limited?

Some people are unable to work.

What usually results when interest rates continue to increases?

Spending decreases

Which of the following is an example of a business paying property taxes?

ThSubmitting a check to the government based on the value of an office building.

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

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

If interest rates go down, which of the following would most likely occur?

The stock market will go up.

Why are resources considered limited?

There are not enough available so that everyone can have as much of them as desired.

A large number of underemployed workers indicates there is a problem in the economy because underemployment means that...

There are not enough jobs for qualified people.

Which of the following is a true statement about currency exchange rates

They change frequently

Why does the Federal Reserve system raise interest rates?

To fight inflation

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

To minimize errors

What is the most common type of labor specialization?

Trade or profession

How long do most business cycles last?

Varying lengths of time

Which of the following represents a good time for a country's government to use its fiscal policy to increase taxes?

When inflation is too high

What kind of strike occurs when the members of a union local stop work without the consent of their national organization?

Wildcat

Which of the following is an example of paradigm innovation?

Windows computer operating system

To reduce the chance of investigations and orders to cease production, businesses should

adhere to government regulations

The category of GDP called gross private domestic investment includes

all purchases of capital goods

When management and union leaders negotiate but cannot reach an agreement, either one may call for an

arbitrator

To calculate total revenue, a business multiplies the number of units sold by

average price per unit

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

capital goods

As the GDP increases, it is easier for all levels of government to

carry out their functions.

The amount of a product that is produced is most directly affected by

consumer demand

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

contraction

Technological advances may increase the chance of job obsolescence. For workers, this is a _______________ of labor specialization.

disadvantage

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

economic instability

When changes in a product's price cause corresponding changes in cosumer demand, the product has

elastic demand

To continuously improve and achieve quality throughout the business, management must

establish standards

A government's fiscal policies that are intended to encourage economic growth are known as

expansionary policies

When a business cycle is affected by international relations, new discoveries, and social or political changes, it is said to have been

external

Higher prices that result from a tax on luxury goods are likely to result in...

fewer customers and less productivity

When consumer spending is high, the economy is usually in a

growth stage

During the peak phase of a business cycle, a business could be expected to have

higher prices

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 to the movies the opportunity cost of his choice is

ice cream at DQ

To stimulate the economy, the government is likely to

increase spending

When producers are hopeful about the economic business outlook, they often

increase their investment in capital goods

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

increasing taxes

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

interest rates are low

The value of a country's currency declines when it implements policies that restrict trade. The primary factor affecting the change in the value of the currency in this situation is

isolationism

The formula that is generally used to measure productivity is

outputs divided by inputs

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

population

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

productivity

When applying the law of diminishing returns, businesses know that there is a point at which production

reaches its maximum level.

A six-month decline in GDP is known as a

recession

One of the main functions of a country's monetary policy is to

regulate the economy

When a nation's inflation rate is low, prices tend to

remain stable

One way for a business to increase productivity is to increase its

research and development

An important aspect of continuous quality improvement within an entire business organization requires management to

solicit input from employees

Many different workers are needed to carry out the steps in processing milk before it can be distributed to consumers. This is an example of

specialization by stages of production

The use of thorough job orientation helps to increase productivity through

training and education

A country's easy monetary policy is often used to correct the problem of

unemployment

A couple constructs a decision matrix to select which charity will receive a $500 donation. Since "Helping criteria is the most important criteria to the couple, which of the following weights should it be assigned?

.60

Mary is a bagger at Glen's Market. On a weekly average, she works 30 hours and fills 876 bags of groceries. Her productivity is

29.2 bags of groceries per hour

If three employees each work 35 hours a week and produce a total of 9765 items, what is their total hourly productivity level?

93

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

Increase government spending

What is a likely result when workers' wages rise throughout the economy while productivity decreases?

Inflation

What do businesses usually expect will increase when the economy experiences a continued rise in the level of inflation?>

Interest rates

A country is experiencing civil unrest. What is likely to happen to the value of its currency?

It will decrease

Why might businesses decide to hold on to products to sell later when the economy is experiencing high levels of inflation?

Prices will continue to rise.

Which of the following does consumption rely on to provide goods and services?

Producers

The GDP is calculated each year in the U.S. to determine what?

The health of the economy

What often happens when a nation has a high unemployment rate?

The nation experiences an economic slowdown.

Which of the following is true when a potato farmer keeps some of the farm's potatoes for personal use?

The potatoes are not counted in the GDP

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

The standard of living drops

What is one of the main reasons why governments levy taxes?

To raise revenue

Why should productivity be measured?

To see whether the business's objectives are being met

A manager's allowing employees to set the pace of their work is an example of providing

job enrichment

When union members of a 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

lockout

The addition of too many workers on a job may cause the marginal product to turn

negative

The market's way of rationing limited resources, goods, and services to consumers in a market economy is through...

prices

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

production of goods

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

Licensing

Vernon was the milkman in his neighborhood for 30 years. Then, supermarkets started selling milk right in the store, and Vernon's job is an example of a

structural job