unit 1 & 2 test

The general classifications of business risks are

Hazard, Operational, Strategic, Financial

Changing a good's form involves which of the following:

adding a new feature to the good

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

which of the following is an example of an economic want? clothing conversation understanding fresh air

clothing

A popular product is said to be

in demand

what do business owners consider when they select a business ownership structure?

personal circumstances, financial needs, and type of business

Most businesses put their greatest competitive efforts into competing

with direct competitors.

For which of the following do workers compete in a private enterprise system:

jobs

what type of corporation may be owned by just a few people and does not offer its shares for sale to the general public?

private

one reason a physicians' practice might form a partnership as an llp is to

protect innocent partners from the malpractice of another partner.

Marketers are in charge of

studying and analyzing customer satisfaction

the two main divisions of the trade industry are

wholesalers and retailers

Requiring a contractor to purchase a surety bond is an example of handling business risk by __________ the risk.

transferring

in order for consumption to occur, goods and services must be

produced

one way in which many businesses demonstrate their social responsibility toward employees is by providing them with

a safe working environment

In a private enterprise economic system, consumers can choose from a variety of products as a result of

competition

the heart of economics is

decision making

what do service businesses sell?

intangible activities

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

Task utility is about making changes to the characteristics of a

service

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

If no profit is generated in the long run, a business must

shut down

retailing takes place whenever goods are

sold to the ultimate consumer

Which of the following pieces of legislation prevents monopolies from forming and hinders price fixing: Sherman Antitrust Act Celler-Kefauver Antimerger Act Robinson-Patman Act Clayton Act

Sherman Antitrust Act

emilia works for a company that constructs houses and business facilities. which type of producer does she work for?

a builder

an example of a noneconomic want would be the desire for concert tickets. a college education. police protection. a friend.

a friend

in business terms, what is profit

a monetary reward

A fixed value in a mathematical formula and the speed of light in science are examples of

constants

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 an effect on

A hurricane that destroys a business is an example of a(n) __________ risk.

hazard

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

businesses in trade industries that offer discount prices usually offer

limited services

what type of corporation sells millions of shares and must furnish complete information about its earnings, assets, and debts?

"c"

a type of state-chartered corporation that was developed to help small businesses by taxing them as individuals in a partnership is a(n) __________ corporation.

"s"

Which of the factors that affect profit are usually able to be controlled?

expenses and prices

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

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

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 buy, own, or use private property

if all of the individuals who own a business share unlimited liability for the business's losses, these individuals are part of a(n)

general partnership

A garden store customer tripped over a plant, fell, and sued the store for damages. This is an example of a(n) __________ risk.

hazard

One of the ways that competition benefits customers is by encouraging businesses to

improve their existing products

an economic good or service that is scare is one that is

in limited supply

Which of the following is an example of a business risk that cannot be covered by insurance:

increase in interest rates

producers respond to consumers positive economic votes by

increasing production

Which activities are likely to increase a firm's profit?

increasing sales and decreasing expenses

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 goods

One of the results of freedom in the marketplace is that

individuals can buy anything they can afford and legally be sold

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

Which of the following is a benefit of the freedom to own private property:

it encourages people to save and invest

which of the following statements is true regarding joint ventures:

joint-venture arrangements are usually short-term relationships.

Business owners are usually interested in net profit because they want to know what they can

keep

lois and lora plan to open a florist shop. lois is unable to devote full time to the daily operations of the shop but wishes to provide financial support. which form of business partnership is most likely to appeal to lois?

limited

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 anytime a consumer...

makes a purchase

a producer is someone who

makes things

Individuals put limits on their own economic freedom by

making personal economic choices

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 prohibited from improving their standard of living

Every society must develop a system for deciding how it will use its resources so that it can

meet peoples needs

What type of market structure is most commonly found in a private enterprise economy?

monopolistic competition

olivia runs a home-based business that distributes high quality, handmade baskets. she sells the products and earns commissions on the baskets sold by four other basket representatives. this is an example of

muti-level marketing

water and air are examples of __________ resources, while people are considered to be __________ resources.

natural; human

One way that competition benefits business is by encouraging the creation of

new companies

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

friendship would be considered a(n) __________ want.

noneconomic

Offering high quality, large assortments, and free shipping are examples of

nonprice competition

the american red cross is an example of a(n) ___________ corporation.

nonprofit

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

What category of business risk includes production problems and incompetent employees?

operation

A union strike that stops production at a manufacturing plant is a(n) __________ risk.

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

parntership

if a good or service is scarce, customers are more likely to

pay more money to get it

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

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

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

distribution examines how income is divided between

producers and resource owners

The basic role of the United States government is to

protect us citizens

To provide utility, a product must

provide satisfaction

The Internet creates/enhances form utility by

providing television streaming as an alternative to cable.

businesses can show their social responsibility by contributing to

public interests

Businesses can protect themselves from the risk associated with lost shipments by

purchasing transportation insurance

illegally run organizations that emphasize the collection of high fees from potential product distributors are often referred to as

pyramid schemes

farms, mines, and lumber companies are examples of

raw good producers

In business terms, income is the money

received

Financial loss from investing time and money to comply with accounting standards is an example of which strategic risk?

regulatory and political issues

A product that provides utility for one business may provide none for another business because 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

consumers are typically most willing to pay more for goods and services that bring them greater

satisfaction

a gap between unlimited wants and limited resources creates

scarcity

"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

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 recieved

cash-register tapes and shipping forms used by a business would be classified as industrial

supplies

a socially responsible business will attempt to give customers

the best products at the best prices

which of the following is a characteristic of a product trade-name franchise:

the franchisee can chose the name of the business

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

one of the characteristics of the form of business ownership known as an llc is that

the owners' personal property cannot be taken to pay the business's debts.

The economic basis for the private enterprise economic system is

the profit motive

why are resources considered limited

there are not enough available for everyone to have as much of them as desired.

Why are entrepreneurs important in a private enterprise system?

they encourage the development of new products

which of the following describes the services offered by trade industries: they are always limited. they may be limited or full line. they are always full line. they vary from day to day.

they may be limited or full line.

which of the following statements about wholesale trade businesses is true: they operate only from mail-order warehouses. they operate from a variety of business premises. they operate only from distribution centers. they operate in areas convenient to ultimate consumers.

they operate from a variety of business premises

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

which of the following is an industrial good tires for a tow truck holiday flowers matt's cell phone emily's home computer

tires for a tow truck

why do marketers classify goods and services?

to aid in market planning

a manager is willing to accept the production of fewer products as long as her workers produce higher quality products. the manager is making a(n)

trade-off

Contractual agreements such as guarantees, surety bonds, and leases are examples of business risks being handled through

transfer

The act of reducing or removing risks by shifting the risk factor to another person or business is referred to as __________ risk.

transferring

a characteristics of human wants is that they are

unlimited

which one of the following groups of words best describes wants: unlimited, unchanging, and compensating limited, unchanging, and competing unlimited, changing, and competing limited, changing, and compensating

unlimited, changing, and competing

which of the following is a characteristic of economic services tangible freely available to everyone useful non-transferable

useful

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

what are the three basic economic questions

what products will be produced how will products be produced how will products be allocated

One of the freedoms provided to individuals by the private enterprise system is the freedom to choose

where they will work

what determines whether an economic product is an industrial product or a consumer product?

who buys and uses the product

social responsibility should be part of the objectives of __________ businesses.

all

two factors involved in determining the value of a resource, good, or service are

availability and demand

When employees are working faster or better, they are increasing their

efficiency

a company that transforms cotton into wearable clothing is considered a

manufacturer

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

One of the factors that directly limits the economic freedom of individuals in a private enterprise system is government

taxation

which of the following is the best reason for studying economics

to prepare for effective decision making and responsible citizenship

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

Which of the following are qualities of monopolies: High prices and low production Low production and much competition High prices and much competition Low prices and little competition

High prices and low production

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 statements about perfect competition is correct: Products vary from seller to seller. Businesses have a good deal of control over the market. It is used as a benchmark to compare real market structures against. There is a limited supply of goods and services.

It is used as a benchmark to compare real market structures against.

Which of the following is a direct benefit to consumers of the effects of competition: Wider product selection Wise use of resources Fewer new businesses in the market Higher product prices

Wider product selection

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

What role does utility play in the implementation of the marketing concept?

a satisfaction gauge

jake wanted to run his own business but was unsure that he had adequate business skills to be successful. which type of business would give jake the help he needs?

business-format franchise

Who answers the basic economic questions in a private enterprise economic system?

businesses and individuals

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

seeing a movie at a theatre would be considered a(n) __________ want.

economic

into what two categories can wants be divided?

economic and noneconomic

michelle is trying to decide which goods and services to purchase so that she can get maximum satisfaction. michelle is

economizing

what do consumers, producers, and the owners of resources do with money payments to create a flow of resources, goods, services, and money payments?

exchange

how would a business's computers be classified?

as equipment

With place utility, when do businesses move the product to the right place?

at every point of the process

Management decides to hold its annual meeting in one U.S. city rather than another because of crime in that city. This is an example of __________ the risk.

avoid

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 supplies Better wages Higher prices More products

better wages

in economics, capital goods include

building and equipment

When a rival's product on the market reduces sales of your company's product, your company is experiencing strategic risk caused by

competition

Which of the following is one of the main principles of the private enterprise system: Exclusive agreements Competition Monopolies Price fixing

competition

a student purchased a laptop to use for homework assignments. In economic terms, this computer would be classified as a(n) __________ good.

consumer

the ultimate goal of all economic activity is

consumption

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 scott company decided to sell stock to raise capital. under what form of business organization does the company operate?

corporation

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