business essentials objective 2.01 and 2.02

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.

Jeremy has $15,000 to spend on a new car. He found a car that cost $14,500, but he did not think the car was worth more than $12,000. The dealer told Jeremy that he has not been able to sell this model because other customers have expressed the same opinion as Jeremy. Does demand for this car exist?

No, because consumers are not willing to pay the price being asked for this car.

Your business is selling more and more large-screen televisions each month. Applying the law of supply and demand, what do you expect to happen to the price and supply of these televisions over the next few months?

The price will increase, and supply will increase.

Which of the following statements about wholesale trade businesses is true:

They operate from a variety of business premises.

Most businesses strive to supply goods and services in direct proportion to

demand

The price of complementary products has an effect on

demand

Demand for a good is more likely to be elastic when the good is

a luxury

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

a safe, secure working environment.

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.

Which of the following determines whether consumers can purchase goods or services:

buying power

Which of the following is a factor affecting a product's utility to the individual customer:

consumer's age

The heart of economics is

decision making

Orlando changes the price of one of his products, and this price change leads to a major change in the number of people who purchase the product. This means that demand for Orlando's product is

elastic

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

Which of the following describes inelastic demand:

fluctuating

A team of employees is responsible for researching potential demand for a business's brand-new product. The factor that is most likely to affect demand for this product is the

inelastic

One way in which a business can show its social responsibility is by __________ its profits.

maximizing

Distribution examines how income is divided between

producers and resource owners.

Businesses can show their social responsibility by contributing to

public interests

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

satisfaction

6. A company that transforms cotton into wearable clothing is considered a

service business

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.

People often buy goods and services in order to maintain the quality of life and general living conditions to which they are accustomed. This influence on demand is referred to as

standard of living

The quantity of a good or service that producers are able and willing to offer for sale at a specified price in a given period of time is

supply

A socially responsible business will attempt to give customers

the best products at the best prices.

Rembert works for a grocery store that buys food from producers and sells it to customers. The grocery store is considered a

trade industry.