Business. Test One.
The American Red Cross is an example of a(n) ___________ corporation.
hybrid
Which of the following is an example of an economic want:
. Clothing
Changing a good's form involves which of the following
Adding a new feature to the good
How would a business's computers be classified?
As equipment
Which of the following statements about economic resources is true:
As natural and human resources become limited, capital goods become limited.
Who answers the basic economic questions in a private enterprise economic system?
Business and individuals
The Scott Company decided to sell stock to raise capital. Under what form of business organization does the company operate?
Corporation
Determine whether the following statement is true or false: Trade industries all have the same form of ownership.
False; they may be independent or belong to a chain.
Malinda owns a home, and instead of living in it, she decides to rent it out to make more money. Which economic freedom does this illustrate?
Freedom to own, use, buy, and sell private property
Which of the following occurs when the supply of individuals who are able and willing to work diminishes:
Human resources become limited.
Which of the following is an example of a business risk that cannot be covered by insurance:
Increase in interest rate
Which activities are likely to increase a firm's profit?
Increasing sales and decreasing expenses
Which of the following statements best describes the way that the U.S. economic system functions:
Individuals and businesses are the primary decision makers, while the government is the regulator
Which of the following is a benefit of the freedom to own private property:
It encourages people to save and to invest.
Which of the following statements about perfect competition is correct:
It is used as a benchmark to compare real market structures against.
Which of the following statements regarding economic resources is true:
Natural resources, human resources, and capital goods are often referred to as factors of production
A car manufacturer receives a shipment of bolts that are going to be used in the production of automobiles. What type of industrial product would the bolts be?
Parts
What do business owners consider when they select a business ownership structure?
Personal circumstances, financial needs, and type of business
When Jacqueline doesn't feel like going to the store to buy her textbooks, she orders them online. Which type of utility does this illustrate? *
Place
Which of the following situations involves finding an alternative resource to use in place of a nonrenewable natural resource:
Powering a motor vehicle with biodiesel instead of gasoline
Which of the following situations involves finding another source of a limited natural re-source:
Searching for oil on the ocean floor
Which of the following pieces of legislation prevents monopolies from forming and hinders price fixing:
Sherman Antitrust Act
George has decided to purchase a dishwasher. He is checking the newspaper ads for the best place to get quality goods and services at a reasonable price. What type of product is the dishwasher?
Shopping
To form my business, I used all of my savings and borrowed from the bank, and I'm personally liable for all of the debts." This is an example of which of the following forms of business ownership:
Sole proprietorship
Why are entrepreneurs important in a private enterprise system?
They encourage the development of new products.
Which of the following statements about wholesale trade businesses is true:
They operate from a variety of business premises
Which of the following is an industrial good:
Tires for a tow truck
Why do marketers classify goods and services?
To aid in marketing planning
Which of the following is a characteristic of economic services:
Useful
What determines whether an economic product is an industrial product or a consumer product?
Who buys and uses the product
Emilia works for a company that constructs houses and business facilities. Which type of producer does she work for?
a builder
3. An example of a noneconomic want would be the desire for *
a friend
Because of competition, people in our society enjoy
a higher standard of living than that of people in many other countries.
In many places, trash pickup is legally controlled by just one company. This is known as
a regulated monopoly
One way in which many businesses demonstrate their social responsibility toward employees is by providing them with
a safe working environment
What role does utility play in the implementation of the marketing concept?
a satisfaction gauge
With place utility, when do businesses move the product to the right place?
at every point in the process
Social responsibility should be part of the objectives of __________ businesses.
all
Management decides to hold its annual meeting in one U.S. city rather than another be-cause of crime in that city. This is an example of __________ the risk.
avoiding
Automation involves replacing human resources with
capital goods
Which of the following is a situation in which people are out of work and can't afford "extra" purchases:
bad economy
Which of the following is a general benefit profit provides:
better wages
For each new product it offers, a business seeks
buyers
In possession utility, a consumer finds a product helpful after doing what?
buying the product
When a stove is used in a restaurant kitchen, it is a
capital good
Maintenance, modifications, and use of alternative sources are responses to limited
capital goods
Which of the following economic resources helps people to be more productive:
capital goods
In a private enterprise economic system, consumers can choose from a variety of products as a result of
competition
When a rival's product on the market reduces sales of your company's product, your company is experiencing strategic risk caused b
competition
Which of the following is one of the main principles of the private enterprise system:
competition
A fixed value in a mathematical formula and the speed of light in science are examples of
constants
A student purchased a laptop to use for homework assignments. In economic terms, this computer would be classified as a(n) __________ good.
consumer
Profitable businesses often help improve their local communities by
contributing to charitable causes
Bread for a family would best be classified as a(n) __________ product.
convenience
The amount of money paid for raw materials and products sold is called
cost of goods
One way that competition helps to build a prosperous society is by
creating new jobs.
The marketing concept is all about the
customer
It's important for businesses to provide products when
customers need them
Burger King and McDonald's are examples of
direct competitors
If a customer can't afford a product, a business should
do whatever it takes to help the customer afford it
When employees are working faster or better, they are increasing their
efficiency
Which of the factors that affect profit are usually able to be controlled?
expenses and pricing
Rather than being required to start his workday at 8:00 a.m. and end at 4:00 p.m., Tyler is allowed to start and end his workday at his convenience as long as he works 40 hours per week. This is an example of
flextime
Wendy's sells the right to operate its restaurants to individuals who meet the company's criteria. The arrangement between Wendy's and these individuals is an example of
franchising
The connection between the social responsibility of a business and the community in which the business operates is that the business's social responsibility __________ the community.
has a effect on
A garden store customer tripped over a plant, fell, and sued the store for damages. This is an example of a(n) __________ risk.
hazard
A hurricane that destroys a business is an example of a(n) __________ risk
hazard
The general classifications of business risks are
hazard, operational, strategic, and financial
Which of the following are qualities of monopolies:
high prices and low production
A salesclerk working part-time at a clothing store is an example of a(n)
human resource.
Offering higher wages, employee-assistance programs, and benefits are responses to limited
human resources
Which of the following economic resources is responsible for combining the other resources to produce goods and services:
human resources
One of the ways that competition benefits customers is by encouraging businesses to
improve their existing products
A popular product is said to be
in demand
An economic good or service that is scarce is one that is
in limited supply
Producers respond to consumers' positive economic votes by
increasing production
If a consumer chooses to go to the movies rather than to a pizza parlor, then the movie theater and the pizza parlor are
indirect competitors
Private enterprise is based on the idea that everyone is better served when
individuals are free to set their own goals.
Each day, a restaurant sends its used linens to a laundry to be cleaned and pressed. In economic terms, the laundry service would be classified as a(n) __________ service.
industrial
Resources that enable businesses to operate are also known as
inputs
What do service businesses sell?
intangible activities
For which of the following do workers compete in a private enterprise system:
jobs
Business owners are usually interested in net profit because they want to know what they can
keep
Marcus wants to buy a laptop, but he can't afford one right away. So, an electronics store holds it for him until he's able to pay the outstanding balance. This payment process is known as
layaway
ABC Specialty Wear is the only company that has written permission to use a national football team's logo on its sportswear. This is an example of a
licensing agreement
When there is not enough of a resource available for everyone to have as much of it as desired, the resource is
limited
Businesses in trade industries that offer discount prices usually offer
limited services
Businesses must be careful about increasing the prices of their goods to increase profits because the result may be that they
lose sales to competitors
"Economic votes" are cast by consumers each time they
make a purchase
A producer is someone who
makes things
Individuals put limits on their own economic freedom by
making personal economic choices
A company that transforms cotton into wearable clothing is considered a
manufacturer
Sugar and flour that are purchased to make baked goods are classified as
materials
One way in which a business can show its social responsibility is by __________ its profits.
maximizing
One of the differences between private enterprise and other types of economic systems is that in other systems, workers
may be unable to improve their standard of living.
Every society must develop a system for deciding how it will use its resources so that it can
meet people's needs
In business terms, what is profit?
monetary reward
10. What type of market structure is most commonly found in a private enterprise economy?
monopolistic competition
Weather conditions can most directly affect the supply of
natural resources
The state of technology that exists in a society can limit
natural resources and capital goods
Using a stream to supply water for crops is an example of using
natural resources.
One way that competition benefits business is by encouraging the creation of
new companies
Offering high quality, large assortments, and free shipping are examples of
nonprice competition
When Maura purchased a new car, she was able to get part of the purchase price back from the car's manufacturer. The car's manufacturer engaged in
offering rebates
The automobile industry, the pharmaceutical industry, and the oil industry are all examples of
oligopolies
The money spent to run a business is called
operating expense
A union strike that stops production at a manufacturing plant is a(n) __________ risk
operational
What category of business risk includes production problems and incompetent employees?
operational
John, Robert, and Charles were college friends who wanted to start a business. John has creative ability, Robert's expertise is selling, and Charles' expertise is management. However, each has limited capital. The ideal business ownership for these young men is a
partnership
One of the results of freedom in the marketplace is that
people can buy anything they can afford that can legally be sold.
Which of the following is a disadvantage of private enterprise:
periods of unemployment
Individual customers view products through
personal lenses
Jane is the owner of a pizza shop associated with a national chain of pizza restaurants. She established her business in a regional supermarket. The pizza shop is referred to as a
piggyback franchise.
Where a product is available for purchase is referred to as
place utility
For a consumer to be satisfied, the four types of utility must be
present
Having well-planned buildings and providing effective employee training are ways that a business can __________ business risks.
prevent or control
Carefully selecting goods or services to sell is an example of handling business risks by __________ the risk
preventing or controlling
Careful screening of credit customers is an example of handling business risks through
prevention
An electronics store charges less for a new television than other electronics stores. The store is engaging in ________ competition.
price
A business that advertises a special sale as well as its delivery service is using a combination of ___________ competition.
price and nonprice
The private enterprise economic system is often described as a(n)
price-directed system
Alex owns a guitar, several books, and a telescope. Alex's possessions are examples of
private property
The basic role of the United States government is to
protect U.S. citizens
To provide utility, a product must
provide satisfaction
The Internet creates/enhances form utility by
providing mp3s as an alternative to CDs.
Businesses can show their social responsibility by contributing to
public interest
Businesses can protect themselves from the risk associated with lost shipments by
purchasing transportation insurance
Farms, mines, and lumber companies are examples of
raw-goods producers
In business terms, income is the money
received
Financial loss from investing time and money to comply with accounting standards is an ex-ample of which strategic risk:
regulatory and political issues
A product that provides utility for one business may provide none for another business be-cause utility is completely
relative
If a risk is small in terms of money, a business may decide to __________ the risk.
retain
When a business keeps a risk because management is unaware of it, the business is _________ the risk
retaining
If expenses are greater than income, there's no
reward
People who go into business know that the business may not succeed. This possibility is referred to as business
risk
Which of the following is a pure business risk:
robbery
Besides motivation, what does profit provide business owners in particular?
satisfaction
To discover a product's level of utility, businesses measure the consumer's
satisfaction
Task utility is about making changes to the characteristics of a
service
If no profit is generated in the long run, a business must
shut down
A large retailer feels that it has a duty to contribute to the well-being of society, so it donates a portion of its proceeds to a charity that helps the environment. The retailer is demonstrating
social responsibility
Retailing takes place whenever goods are
sold to the ultimate consumer
Susan is willing to pay a high price for the brand of china that she wants for her home. This china would be classified as a(n) __________ product.
specialty
Gross profit shows business owners the difference between what they've
spent and received
Marketers are in charge of
studying and analyzing customer satisfaction
Cash-register tapes and shipping forms used by a business would be classified as industrial
supplies
One of the factors that directly limits the economic freedom of individuals in a private enterprise system is government
taxation
A socially responsible business will attempt to give customers
the best products at the best prices.
What motivates businesses to produce efficiently and sell effectively?
the hope of making a profit
One of the benefits of economic freedom is that it provides individuals with
the opportunity for success.
The economic basis for the private enterprise economic system is
the profit motive
Which of the following describes the services offered by trade industries:
they may be limited or full line
When producers use the best combination of resources, consumers are more likely to get goods and services that
they want.
Kara orders a dress for her school dance on Saturday. If the dress doesn't arrive until the next Monday, it has no ________ utility.
time
Each purchase strengthens the economy by encouraging
trade
Rembert works for a grocery store that buys food from producers and sells it to customers. The grocery store is considered a
trade industry
Requiring a contractor to purchase a surety bond is an example of handling business risk by __________ the risk.
tranferring
The act of reducing or removing risks by shifting the risk factor to another person or business is referred to as __________ risk. *
tranferring
Contractual agreements such as guarantees, surety bonds, and leases are examples of business risks being handled through
transfer
A characteristic of human wants is that they are
unlimited.
A business that produces a product should be socially responsible to the __________ of the product.
users
To use resources wisely, business owners must reduce
waste
One of the freedoms provided to individuals by the private enterprise system is the freedom to choose
where they will work
The two main divisions of the trade industry are
wholesalers and retailers
Which of the following is a direct benefit to consumers of the effects of competition:
wider product selection
If a good or service is scarce, consumers will usually be
willing to pay money to get it
Most businesses put their greatest competitive efforts into competing
with direct competitors
Over the next few years, members of Generation X and Generation Y are expected to fill many job positions vacated by retiring Baby Boomers. This is an example of a change in
workforce demographics
