Chapter One

Consumers in a certain county are only provided one option for electric service; they have no choice but to use the one company in the area. This is an example of?

A Monopoly

Which of the following is the BEST definition of monopolistic competition?

A market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those competitors

Which of the following is the BEST definition of a natural monopoly?

A market or industry where one company can most efficiently supply all needed goods or services

Which of the following defines the term market?

A method for the exchange of goods or services that takes place between two parties

Which of the following BEST describes an economic system?

A nation's system for allocating its resources among its citizens

The economy in which the government owns and controls factors of production, such as labor, is best known as?

A planned economy

The _________ is the total quantity of goods and services produced by an economic system within a specific period of time.

Aggregate Output

Which of the following is described as the total quantity of goods and services produced by an economic system during a given period

Aggregate output

Which of the following is established when a nation allocates resources among its citizens?

An economic system

Mia, a native of the U.S., has launched a successful clothing line, selling to many customers in international markets by developing a strong online presence. Recently, a dealer in China has contacted Mia, encouraging her to open a physical store in Beijing, China. What kind of market conditions should Mia expect if she decided to pursue this opportunity?

An economy that is based on private ownership and entrepreneurship, but with government oversight.

What is a market or industry characterized by a handful of sellers with the power to influence the prices of their products.

An oligopoly

Law of Demand

Buyers will demand more of a product as its price decreases and less of a product if its price increases

To finance a new business and sustain that business throughout its life, companies need?

Capital

The economic system in which the government owns and operates all factors of production and makes all business decisions is known as?

Communism

What is a political system in which the government owns and operates all factors of production

Communism

Which of the following is a measure of the prices of typical products purchased by consumers living in urban areas?

Consumer Price Index

The _________ measures the prices of products typically purchased by consumers and is used to measure inflation

Consumer Price Index (CPI)

Which of the following is NOT an element of the external environment that would affect a business

Corporate culture

The term __________ refers to the willingness of buyers to purchase a good or service

Demand

What business environment includes other business within the country in which the business operates

Domestic Business Environment

Which of the following comprises the external environment in which a company operates in proximity to its customers, and gets its revenues?

Domestic Business environment

During the recession of 2008 through 2010, Ford saw sales of its vehicles drop and was forced to reduce production. This decision reflected changes in the company's _________ environment

Economic Environment

If GDP (gross domestic product) is rising, the country is likely experiencing?

Economic Growth

What is a nation's method for allocating its resources among citizens and organizations?

Economic system

The __________ is where the amount of goods demanded and the quantity of goods supplied are the same.

Equilibrium Price

Which of the following BEST describes purchasing power parity?

Exchange rates that are set so the prices of similar products in different countries are about the same

To determine the _____________ for a given country for a given year, you need to know the total value of all goods and services a national economy produces during one year using its domestic factors of production plus its population

GDP per capita

Competition from companies such as BMW, Hyundai, and Honda is a part of Ford Motor Company's __________ business environment

Global Business Environment

What represents the total value of all domestic goods and services produced within a given period by a nation?

Gross Domestic Product (GDP)

What is the total value of all goods and services produced within a given period by a national economy through domestic factors of production

Gross domestic product

Which of the following is an example of an economic indicator

Gross domestic product

Which of the following is shown on a supply curve graph?

How much of a product will be for sale at different prices

Which type of resource would a stock market quote be considered

Information resource

Which of the following statements about a market economy is TRUE?

It aims to create shared value between businesses and customers

The factor of production that includes the physical and intellectual contributions people make while engaged in economic production is known as?

Labor

Which factor of production includes physical and intellectual contributions made during production?

Labor

According to the __________, producers offer more product for sale as prices rise and less as prices fall.

Law of Supply

Because the price of grapes has decreased steadily in recent years, Marco has decided to sell off some of his vineyard because he no longer needs to produce as much. Which of the following supports that Marco has made the right decision?

Law of demand

For which of the following is a fiscal policy used

Managing a government's revenues

For sellers to sell goods or services and for buyers to purchase goods and services, a method for the exchange that takes place between the two parties, called a __________, is used

Market

When selling a product to the general public, what would a demand and supply curve be used to determine?

Market Price

John owns a restaurant and business is so good that he is thinking about enlarging his building so he can accommodate more customers. John is operating in a?

Market economy

Overtime, prices will tend to be set at the __________ price, the price at which the demand and supply curves intersect.

Market or Equilibrium

The U.S. economy is BEST classified as a?

Mixed market economy

Which of the following is a characteristic of the economic environment

Monopolistic competition

Which of the following is a market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors?

Monopolistic competition

Which of the following terms refers to a market or industry in which there is only one producer that can singularly control the prices of its products

Monopoly

Which of the following is BEST defined as a market or industry where one company can most efficiently supply all needed goods or services

Natural monopoly

Drew worked at the local pizza store while in college, and has decided to pursue the ownership of his own store. He knows that most pizza places are similar in product offering, but feels he can be the market leader in pizza sales around the campus by distinguishing his pizza from the competition. What will help Drew compete successfully in an environment based on monopolistic competition?

Offering unique ingredient combinations not found at competing pizzerias

Which of the following statements BEST describes a planned economy?

One in which the government owns and controls factors of production, such as labor

What occurs when many companies offer similar products and prices are set exclusively by supply and demand.

Perfect competition

Socialism and communism are examples of a?

Planned economy

The National Highway Traffic Safety Commission and the Occupational Safety and Health Administration are part of Ford's __________ environment

Political-Legal Environment

The relationship between the amount of resources needed to produce a good and the number of goods produced is known as

Productivity

What plays a huge role in encouraging people to risk their money and time to open and expand businesses?

Profit

What is the principle that exchange rates are set so that the prices of similar products in different countries are about the same

Purchasing power parity

Law of Supply

Sellers will offer more of a product for sale as the price increases and less of a product if its price decreases

When the price of a product is set below the market price, a ________ will occur.

Shortage

What is a planned economic system in which the government owns and operates only selected major sources of production

Socialism

What environment includes the customs, mores, values, and demographic characteristics of the society in which an organization functions.

Sociocultural Environment

What is the BEST example of a perfectly competitive market?

Soybeans. (Perfect competition depends on a large number of small firms all producing identical products)

Which of the following is NOT an element of the external environment that would affect a business

Staffing

Which of the following is an example of information resources

Stock market quote

The _________ curve is a graph showing how many units of a product will be offered for sale at different prices

Supply

When the price of a product is set above the market price, a ________ will occur.

Surplus

The pattern of expansions and contractions in a nation's economic system is referred to as?

The Business Cycle

Inflation is measured by?

The Consumer Price Index (CPI)

Recently, the automotive industry has seen an increase in new car sales, and domestic production has increased to keep up with demand. The housing market has continued to grow, and unemployment is low. If the United States experienced continued increases in aggregate output, what could be happening to the U.S. economy?

The nation may be experiencing economic growth

Which of the following BEST defines the business cycle?

The pattern of expansions and contractions within an economy over the short term

Which of the following choices BEST describes productivity?

The relationship between the amount of resources needed to produce a good and the number of goods produced

A business is usually defined as an organization that produces and sells goods and services in order to make a profit for the owners. Profit represents?

The reward for risking money and time

What would you need to determine the GDP per capita for a given country for a given year?

The total value of all goods and services a national economy produces during one year using its domestic factors of production plus its population

Gross domestic product would be BEST defined as which of the following?

The total value of all goods and services produced within a given period by a national economy through domestic factors of production

How does inflation occur?

When the money supply of a country expands but production does not

Which of the following situations describes the market price?

When the quantity of goods demanded matches the quantity of goods supplied

One of the benefits of a healthy business environment is?

an increased standard of living

In ___________, there are generally only a few large suppliers or sellers of a product or service

an oligopoly

During the recent recession, many people were looking for jobs and companies were able to hire employees for a lower wage. This is an example of how the __________ environment can affect business

economic

Profit equal revenues minus

expenses

Human resources are examples of

factors of production

Labor and capital are examples of

factors of production

Government regulations are part of the?

political-legal environment

The difference between a business's revenues and its expenses is known as?

profit or loss

The _____________ environment of a company includes the various ways it creates value, including human knowledge, work methods, physical equipment, electronics and telecommunications, and processing systems.

technological

The domestic business environment is?

the external environment in which a company operates in proximity to its customers and gets its revenues

Consumers will experience a shortage of products when?

the quantity of goods demanded exceeds the quantity supplied