Business Chapter 1

The equilibrium price is determined where the ___ curve intersects the ___ curve.

1. Demand 2. Supply

What business resources are referred to as factors of production?

1. Labor 2. Capital 3. Land

What are the three issues that all economic systems must address?

1. The type and quantity of goods and services needed to satisfy consumers needs. 2. How goods and services will be produced, by whom, and with what resources. 3. How goods and services will be distributed to consumers.

What describes a nonprofit organization?

1. They utilize skills in management, marketing and finance. 2. They engage in fundraising. 3. They may provide goods and services.

Brad thinks the worst part about sledding is having to continually walk back up the slope each time you slide downhill. He has invested his own time and money to create a new motorized sled that allows people to ride up the hill instead of having to walk back up. In this example, Brad would be considered a(n) ___. A) entrepreneur B) manager C) marketer D) consumer

A) entrepreneur

To be successful in business which of the following will you need? A) Knowledge B) Good judgment C) Experience D) Lots of funding E) Skills F) Very little training

A) knowledge B) Good judgment C) experience D) Skills

The father of capitalism

Adam Smith who wrote the wealth of Nations

Businesses have some power over the price they charge in monopolistic competition because they can make consumers aware of product differences through ___.

Advertising

What type of economy did early colonists have in America?

Agricultural economy

Free market

An economic system in which the market largely determine what products get produced, who gets them, and how the economy grows.

Marcel invented a better mouse trap, so he started a company to make and sell it. He risked his wealth, time, and effort to develop his product for profit. What is Marcel?

An entrepreneur

The automobile industry in a developing country has very few available brands. If one automobile company raises the price of its trucks by a certain amount, other automobile companies follow by raising prices by a similar amount. This situation is example of...

An oligopoly

Open economy

And economy in which economic activities occur between the country and the international community.

A ___ tries to earn a profit by providing goods and services that satisfy people's needs and wants.

Business

Which of the following products are most likely to have a market characterized by pure competition? A) Medicines B) Vacuum cleaners C)Agricultural commodities D) Soft drinks

C) Agricultural commodities

Which of the following is true of communist economies? A) Have a high standard of living B) Seldom face shortages in consumer goods C) Appear to be efficient and equitable on paper D) Produce a huge gap between rich and poor

C) Appear to be efficient and equitable on paper

Which of the following statements is true of socialism? A) There is only private ownership of business. B) There's only government ownership of all factors of production. C) The government owns and operates basic industries. D) The government disregards basic individual freedoms.

C) The government owns and operates basic industries.

Which of the following statements is true of nonprofit organizations? A) They are firms that do not provide goods or services. B) They are start up companies that have not yet generated any profits. C) They engage in management activities to help reach their goals. D) They do not engage in fundraising as their aim is not to generate profits.

C) They engage in management activities to help reach their goals.

A severe recession usually accompanied by very high unemployment, low consumer spending, and sharply reduced business output is called__? A) a business cycle B) stagflation C) a depression D) an economic expansion

C) a depression

In recent decades, America's economy has...

Changed into a service economy

As identified by Karl Marx, what is the economic and political system in which the people contribute according to their ability and receive benefits according to their need?

Communism

The rivalry among businesses for consumers dollars is referred to as ___.

Competition

What unit of measurement measures changes in prices of goods and services purchased for consumption by typical urban household.

Consumer price index

The ___ curve for a product depicts the relationship between the price and the number of products consumers are willing to buy.

Demand

Mark, the marketing manager of a large US corporation, realizes that Afghanistan has virtually no supply of tomatoes. He conducts a study to see what quality of tomatoes asking customers would be willing and able to buy at different prices. Mark is analyzing Afghanistan's ___.

Demand for tomatoes

Critics of supply and demand see the system...

Does not distribute resources equally

What occurs when an economy is growing and people are spending more money; their purchases stimulate the production of goods and services, which in turn stimulates employment.

Economic expansion

True or false: within a free enterprise system, there are only two types of competitive environments: pure competition and monopolistic competition.

False

What do marketers do?

Gather information and conduct research to determine what customers want then use this information to promote products and services.

Monopolies like utility companies that supply electricity or water are likely to have price is determined by...

Government regulation

In socialism, basic industries like the Postal Service are owned and operated by ___ and most other businesses are owned and operated by ___.

Government; individuals

Natural resources

Land, forests, minerals, water and other things that are not made by people.

What are the four functions of management?

Leading, planning, controlling, organizing

Countries with low standards of living are usually characterized by ___.

Lower education rates, high unemployment, poverty.

In a free enterprise system, a business succeeds or fails based on ___.

Market demand

Consumer price index

Measures changes in prices of goods and services purchased for consumption by typical urban households.

Who's nations operate as ___ economies, which have elements from more than one economic system.

Mixed

According to Adam Smith, competition fosters efficiency because ___.

Producers have to offer the best products at the most reasonable price

A good or service with tangible and intangible characteristics that provide satisfaction and benefits is called a ____.

Product

What are the four P's that marketing focus is on (also known as the marketing mix)?

Product, price, place, promotion

A business major role is to...

Satisfy customer needs

Demand

The number of goods and services that consumers are willing to buy at different prices at a specific time.

Supply

The number of products that businesses are willing to sell at different prices at a specific time.

Human resources

The physical and mental abilities that people used to produce goods and services.

Recession

A decline in production, employment, and income.

What type of economy did America become after industrialization?

A manufacturing economy and then a marketing economy.

What occurs when there is a slow down of the economy resulting in business is cutting back on production and laying off workers?

A recession

Economic contraction

A slow down of the economy characterized by a decline in spending and during which businesses cut back on production and lay off workers.

The doctrine of egalitarianism, which is professed by socialist economies, refers to ___.

Equal distribution of income and social services

On a graph showing both supply and demand curves, the intersection point between the two curves shows the ___ price.

Equilibrium

Zen Nxt, an innovative tablet and smart phone manufacturer, launch is a new line of smart phones with advanced processors, high definition displays, and other added features. The company is willing to sell the smart phones at $150 each, and the consumers are also willing to buy the smart phones at that price. In this scenario, $150 is the ___ price of the new smart phones made by Zen Nxt.

Equilibrium

Communism

Excess income goes to the government, the government support social and economic institutions.

The total value of the final goods and services produced in a country during a year is___ ___ ___.

Gross domestic product

An economic system

How a particular society distributes its resources to produce goods and services.

The Place has been consistently ranked as the most popular fast food restaurant in the city thanks to the excellent culinary skills of it while trying to staff and it's remarkable customer service. The competitive advantage of The Place is due to its ___ resources.

Human

Unemployment rate

Indicates how many working age Americans are not working who otherwise want to work.

Per capita income

Indicates the income level of average Americans.

Capitalism

Individuals and businesses are free to keep profit after paying taxes.

A condition characterized by continuing rise in prices is the definition of ___.

Inflation

What are the two types of capitalism?

Modified capitalism and pure capitalism

Inflation

Monitors price increases in consumer goods and services over a specified period of time

What is the competitive environment characterized by a number of sellers producing products that satisfy consumer needs but the differences among the goods they sell is very small?

Monopolistic competition

What is the competitive environment characterized by number of sellers producing products that satisfy consumer needs but the differences among the goods they sell is very small?

Monopolistic competition

What exists when there is only one business providing a product in a given market?

Monopoly

Central activity of a business is to earn a ___. By doing so, a business can buy more raw materials, hire more employees, and make more products.

Profit

The primary goal of all businesses is to earn a ___, the difference between what it costs to make and sell a product and what a customer pays for it.

Profit

Socialism

Profits earned by small businesses may be reinvested in the business, profits from government owned industries go to the government.

What are the two types of capitalism?

Pure capitalism and modified capitalism

When there are many small businesses selling one standardized product in a market this is called ___.

Pure competition

What are the four types of competitive environments?

Pure competition, monopolistic competition, oligopoly, and monopoly.

Economic ___ occurs when spending declines. Business is cut back on production and lay off workers, and the economy as a whole slows down.

Recession

Customers, employees, investors, government regulators, in the community are called ____ because they all have a stake in the success and outcomes of a business.

Stakeholders

An economist analyzes the quantity of goods or services that businesses are willing to sell at different prices at specific times. The economist is focusing on

Supply

Worker productivity

The amount of goods and services produced for each hour worked.

Trade balance

The difference between a countries exports and its imports.

Financial resources

The funds used to acquire the necessary resources needed to provide products.

Monopolistic competition

The market structure that exists when there are fewer businesses than in a pure competition environment and the differences among the goods they sell are small.

Pure competition

The market structure that exists when there are many small businesses selling one standardized product.

Oligopoly

The market structure that exists when there are very few businesses selling a product.

Monopoly

The market structure that exists when there is only one business providing a product in a given market.

Equilibrium price

The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.

Finance

The primary business activity that encompasses all the activities concerned with obtaining money and using it effectively.

For free enterprise to work, there are a number of basic individual and business rights that must exist including what?

The right to make decisions that determine the way the business operates, the right to earn profits, the right to choose what career to pursue and what goods and services to purchase, the right to own property.

Gross domestic product

The son of all goods and services produced in a country during a year.

Economics

The study of how resources are distributed for the production of goods and services within a social system.

Economics

The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.

Gross domestic product is defined as...

The sum of all goods and services produced in a country during a year

The ___ rate refers to the percentage of the population that wants to work but is unable to find jobs.

unemployment