Business 101

Which of the following is not a way that Warby Parker differentiates itself from its competition?

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Capitalism

An economic system in which individuals own and operate the majority of businesses that provide goods and services

command economy

An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production

Which of the following best describes the relationship between productivity and economic growth?

An increase in productivity results in economic growth because a larger number of goods and services are produced by a given labor force.

As the demand curve slopes downward from left to right, this shows which of the following statements is true?

As the price decreases, the quantity demanded increases.

When considering the relationship between profits and business risks, which group of people is paid last?

Business owners

______ is an economic system based on free markets, in which all or most of the factors of production and distribution are privately owned and operated for profit.

Capitalism

To be an effective manager, which of the following is one of the four basic management functions that a manager must be able to perform?

Controlling

Cultural (or workplace) diversity

Differences among people in a workforce owing to race, ethnicity, and gender

Which statement below best represents the technological environment of business?

Many businesses are now using social media to provide customers with information about products and services.

Which of the following resources must a business combine in order to be successfully organized?

Materials, human, financial, and informational

Dave says that most brands of eyeglasses are owned by the same company. This illustrates which type of competition?

Monopoly

What are the four phases in the typical business cycle?

Peak, recession, the trough, and recovery

Which statement is true regarding economic performance?

Productivity growth can lead to higher unemployment rates.

Which of the following statements best defines "profit"?

Profit is what remains after all business expenses have been deducted from sales revenue.

Which of the following best represents the three types of business organizations today?

Services, marketing intermediaries, and manufacturing

Modern businesses must compete in a challenging technological environment. Which of the following most closely explains the technological challenges facing businesses?

The current technological environment is undergoing constant change in manufacturing equipment, distribution of products, and communication with customers

E-business

The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs through the facilities available on the Internet

Which measure is an accurate predictor of both changes in the consumer price index (CPI) and prices that consumers will pay for many everyday necessities?

The producer price index (PPI)

Microeconomics

The study of the decisions made by individuals and businesses

Macroeconomics

The study of the national economy and the global economy

Free enterprise

The system of business in which individuals are free to decide what to produce, how to produce it, and at what price to sell it

Gross Domestic Product (GDP)

The total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period—usually a one-year period

national debt

The total of all federal deficits

Economy

The way in which people deal with the creation and distribution of wealth

standard of living

a loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services

Oligopoly

a market (or industry) in which there are few sellers

Monopoly

a market (or industry) with only one seller, and there are barriers to keep other firms from entering the industry

monopolistic competition

a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors

Domestic System

a method of manufacturing in which an entrepreneur distributes raw materials to various homes, where families process them into finished goods to be offered for sale by the merchant entrepreneur

Depression

a severe recession that lasts longer than a typical recession and has a larger decline in business activity when compared to a recession

federal deficit

a shortfall created when the federal government spends more in a fiscal year than it receives

invisible hand

a term created by Adam Smith to describe how an individual's personal gain benefits others and a nation's economy

service economy

an economy in which more effort is devoted to the production of services than to the production of goods

mixed economy

an economy that exhibits elements of both capitalism and socialism

Producer Price Index (PPI)

an index that measures prices that producers receive for their finished goods

supply

an item that facilitates production and operations but does not become part of a finished product

_ is the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs.

business

In order to perform management functions, a manager must possess the ability to think in abstract terms in order to see the "big picture." This skill is known as a(n):

conceptual skill

The ultimate objective of every firm is to satisfy the needs of its __________________.

customers

fiscal policy

government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending

A loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services is known as:

standard of living.

Warby Parker offers customers a virtual try on feature which allows them to see how they might look in a pair of glasses. This feature shows the effect of the _______ environment on business.

technology

Productivity

the average level of output per worker per hour

The total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period (e.g., one-year) is called:

the gross domestic product (GDP).

perfect (or pure) competition

the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product

Profit

what remains after all business expenses have been deducted from sales revenue

According to the authors, many individuals, business leaders, and politicians, _ that the future of the nation's economy _

worry, could lead to a bumpy road and another recession

Studying _____ can help you develop skills and acquire knowledge to prepare for your future career, regardless of whether you plan to work for a multinational Fortune 500 firm, start your own business, work for a government agency, or manage or volunteer at a nonprofit organization.

business

Due to the forces of competition, providing products and services that meet the needs of customers is essential for a business to survive in a(n) _ economy.

capitalistic

False and misleading advertising is an example of where _______ issues can present ethical questions.

communications

In a capitalistic economy, _______ ensures that a firm will survive only if it serves its customers well by providing products and services that meet needs.

competition

consumer products

goods and services purchased by individuals for personal consumption

Ethical misconduct can take on many forms within the business environment, including all of the following, except:

prohibiting employees from taking gratuities from customers.

During the economic periods of _ , the economy is at its highest point and unemployment is low, in addition, total income is high and consumers are willing to buy products and services.

prosperity

A manufacturing technique, separating processes into distinct tasks to improve productivity, is called:

specialization.

business cycle

the recurrence of periods of growth and recession in a nation's economic activity

Specialization

the separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals

Factory System

A system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place

______________ is the application of moral standards to business situations.

Business ethics

______________ is the study of right or wrong and of the morality of the choices individuals make.

Ethics

Which of the following most closely explains the purpose of economics as used by experts?

Experts use economics to explain the choices we make and how these choices change as we cope with the demands of everyday life.

_ is the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period - usually a one-year period.

Gross domestic produce (GDP)

For a business to organize and be successful, which of the following four resources must it effectively combine and use?

Human resources, material resources, informational resources, and financial resources

Which of the following is true about monopolistic competition?

In monopolistic competition there are many buyers along with a relatively large number of sellers.

When a business cycle enters a trough of a recession or depression, the federal government can use _ and _ to offset its effects

Monetary, fiscal policies

Which term describes the purely competitive market structure where many buyers are trying to satisfy a similar need with uniquely branded products from a relatively large number of sellers (e. g., sports-drinks)?

Monopolistic competition

What is the term for all of the different people or groups of people that are affected by the policies, activities, and decisions of a business and whose concerns the business needs to address?

Stakeholders

Which of the following best explains the use of gross domestic product (GDP) in world economic analysis?

The GDP figure facilitates comparisons between the United States and other countries because it is the standard used in international guidelines for economic accounting.

Sustainability

The ability to maintain or improve standards of living without damaging or depleting natural resources for present and future generations

Business

The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs

Economics

The study of how wealth is created and distributed

Which statement is true regarding ethical issues that arise out of a business relationship?

When ethical misconduct occurs in a business, investors also suffer.

The "invisible hand" refers to:

a description of individual personal gains benefiting others.

Deflation

a general decrease in the level of prices

Inflation

a general rise in the level of prices

Consumer Price Index (CPI)

a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area

Entrepreneur

a person who risks time, effort, and money to start and operate a business

Our economic system provides freedom that allows businesses to

adapt

Stakeholders

all the different people or groups of people who are affected by an organization's policies, decisions, and activities

market economy

an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices

monetary policies

Federal Reserve's decisions that determine the size of the supply of money in the nation and the level of interest rates

_ is the study of how wealth is created and distributed.

economics

Dave and the other founders of Warby Parker can be best described as __________, people who risk their time, effort, and money to start and operate a business.

entrepreneurs

The price at which the quantity demanded is exactly equal to the quantity supplied is called the____________________.

equilibrium price

A system of manufacturing where all the materials, machinery, and workers required to manufacture a product are assembled in one place is known as a:

factory system.

When the government attempts to influence the amount of savings and expenditures by altering the tax structure it is using _______ to offset the effects of a recession or depression.

fiscal policy

_ are affected by anything that affects supply and demand.

market prices

While the United States' economic system is rooted in laissez-faire capitalism, its government collects taxes and provides services (such as national defense and education), making the United States a ___________________________.

mixed economy

An issue related to fairness and honesty that involves knowingly taking the words, ideas, or original material of others without acknowledging the sources is known as ____________________.

plagiarism

factors of production

resources used to produce goods and services

competition

rivalry among businesses for sales to potential customers

Which of the following is not a factor of production?

services

social media

the online interaction that allows people and businesses to communicate and share ideas, personal information, and information about products or services

unemployment rate

the percentage of a nation's labor force unemployed at any time

market price

the price at which the quantity demanded is exactly equal to the quantity supplied

product differentiation

the process of developing and promoting differences between one's products and all competitive products

demand

the quantity of a product that buyers are willing to purchase at each of various prices

In general, economists define a recession as _______ or more consecutive three-month periods of decline in a country's GDP.

two

Recession

two or more consecutive three-month periods of decline in a country's GDP