Business study guide
What is the ratio of a pound of yellow squash @ $.40 a pound and a pound of butternut squash @ $1.20 a pound?
1 to 3
Which of the following statements is true regarding a nation's unemployment rates?
A nation always has a certain percentage of unemployed citizens at any given time.
When consumers purchase gas, telephone services, and tobacco products, they must often pay
An excise tax
The payment of taxes to the federal government allows it to provide goods and services to
Businesses and households
Which of the following actions would the federal reserve system take to expand monetary policy?
Buy securities on the open market
Which of the following factors affects consumers' decisions to buy goods or services?
Buying power
Justin is trying to decide whether he wants to spend a $50 birthday check on a new DVD player or tickets to a concert. If he chooses the DVD player, what is the opportunity cost of this decision?
Concert tickets
How do spending levels impact the economy in an inflationary period?
Consumers and businesses spend less
A U.S. company begins selling its products in France. Despite brisk sales, the company doesn't make enough profit to cover its expenses. When setting prices, the company simply used the same prices in both countries. For example, %5.99=5.99 French Francs; $2.89 = 2.89 French Francs. What risk of international business did the company not consider?
Currency fluctuations
What is often the result when businesses are able to achieve and maintain a quality culture?
Customer satisfaction
A group of entrepreneurs is trying to decide which of five new product ideas to select. Which tool can be used to help make this decision?
Decision matrix
What is one reason why the overall unemployment rate understates the actual employment situation?
Discouraged workers are not included.
When customers buy the exact amount of goods that producers are selling at a specific price, the
Equilibrium price exists
Which of the following is a decision about production that a business might make based on the law of diminishing returns?
Establish a desired level of production
When consumer spending and consumption decrease, consumer confidence tends to
Fall
The highest level of labor union organization is the
Federation
The U.S. government is offering a decrease in taxes to citizens who install solar panels on their homes. Using economic terms, how would you describe this incentive?
Financial and positive
What type of government policy involves raising or lowering taxes and increasing or decreases government spending?
Fiscal
The government uses some of the tax money it collects from individuals and businesses to support public welfare programs. What is the benefit of these welfare programs to businesses in a private enterprise economy?
Funds received by recipients are spent in businesses.
Which of the following might cause supply of a good to decrease
Government regulations
What is excess supply?
Having more supply than what is in demand.
Which of the following is a negative economic incentive?
High taxes on cigarettes
Which of the following is a characteristic of a buyer's market?
Low prices
What is likely to occur when the inflation rate increases and workers do not receive pay increases?
Lower standard of living
Which of the following government actions is most likely to stimulate the economy
Lowering tax rates
Which of the following is important information that businesses consider wheen d3ciding whether it would be profitable increase production?
Marginal cost
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
During which phase of the business cycle would there most likely be shortages of workers in certain skill areas?
Peak
In which of the following occupations would employees be organized into craft/trade unions:
Plumber
Arm and Hammer baking soda, which was originally developed as a cooking ingredient, is now being sold as an effective refrigerator deodorizer. This is an example of ____________ innovation.
Positioning.
Which of the following is an economic activity
Purchasing a candy bar
What usually decreases as the rate of inflation increases?
Purchasing power
One of the functions of certain types of taxes is to
Regulate business activity
Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks?
Relative price
Which of the following would policy makers monitor to understand personal consumption expenditures?
Retail sales
Which of the following is a program that some managers implement to acheive quality in all aspects of the business?
Six Sigma
Why are human resources limited?
Some people are unable to work.
What usually results when interest rates continue to increases?
Spending decreases
Which of the following is an example of a business paying property taxes?
ThSubmitting a check to the government based on the value of an office building.
Which of the following is an example of a change in culture affecting the production of a good or service?
The "green movement" leads to an increase in demand for recycled products
If interest rates go down, which of the following would most likely occur?
The stock market will go up.
Why are resources considered limited?
There are not enough available so that everyone can have as much of them as desired.
A large number of underemployed workers indicates there is a problem in the economy because underemployment means that...
There are not enough jobs for qualified people.
Which of the following is a true statement about currency exchange rates
They change frequently
Why does the Federal Reserve system raise interest rates?
To fight inflation
Why do msot businesses use some type of quality control method at work?
To minimize errors
What is the most common type of labor specialization?
Trade or profession
How long do most business cycles last?
Varying lengths of time
Which of the following represents a good time for a country's government to use its fiscal policy to increase taxes?
When inflation is too high
What kind of strike occurs when the members of a union local stop work without the consent of their national organization?
Wildcat
Which of the following is an example of paradigm innovation?
Windows computer operating system
To reduce the chance of investigations and orders to cease production, businesses should
adhere to government regulations
The category of GDP called gross private domestic investment includes
all purchases of capital goods
When management and union leaders negotiate but cannot reach an agreement, either one may call for an
arbitrator
To calculate total revenue, a business multiplies the number of units sold by
average price per unit
The use of robots in assembly-line work is a form of specialization involving
capital goods
As the GDP increases, it is easier for all levels of government to
carry out their functions.
The amount of a product that is produced is most directly affected by
consumer demand
When consumers' purchasing power decreases, the economy will experience a period of
contraction
Technological advances may increase the chance of job obsolescence. For workers, this is a _______________ of labor specialization.
disadvantage
Interest rates rising and falling by a wide range on a regular basis often are an indication of
economic instability
When changes in a product's price cause corresponding changes in cosumer demand, the product has
elastic demand
To continuously improve and achieve quality throughout the business, management must
establish standards
A government's fiscal policies that are intended to encourage economic growth are known as
expansionary policies
When a business cycle is affected by international relations, new discoveries, and social or political changes, it is said to have been
external
Higher prices that result from a tax on luxury goods are likely to result in...
fewer customers and less productivity
When consumer spending is high, the economy is usually in a
growth stage
During the peak phase of a business cycle, a business could be expected to have
higher prices
Sam has been invited to go to the movies with one friend and to Dairy Queen for ice cream with another friend. Because he has only $5.00, Sam can't do both. If he decides to go to the movies the opportunity cost of his choice is
ice cream at DQ
To stimulate the economy, the government is likely to
increase spending
When producers are hopeful about the economic business outlook, they often
increase their investment in capital goods
If a government wants to decrease economic growth, it would use a contractionary fiscal policy that might involve
increasing taxes
The best time for a business to purchase new equipment is when
interest rates are low
The value of a country's currency declines when it implements policies that restrict trade. The primary factor affecting the change in the value of the currency in this situation is
isolationism
The formula that is generally used to measure productivity is
outputs divided by inputs
A country's standard of living can be calculated by dividing the goods and services it produces by its
population
Dividing the dollar value of total sales by the cost of making those sales is one way that businesses often measure their
productivity
When applying the law of diminishing returns, businesses know that there is a point at which production
reaches its maximum level.
A six-month decline in GDP is known as a
recession
One of the main functions of a country's monetary policy is to
regulate the economy
When a nation's inflation rate is low, prices tend to
remain stable
One way for a business to increase productivity is to increase its
research and development
An important aspect of continuous quality improvement within an entire business organization requires management to
solicit input from employees
Many different workers are needed to carry out the steps in processing milk before it can be distributed to consumers. This is an example of
specialization by stages of production
The use of thorough job orientation helps to increase productivity through
training and education
A country's easy monetary policy is often used to correct the problem of
unemployment
A couple constructs a decision matrix to select which charity will receive a $500 donation. Since "Helping criteria is the most important criteria to the couple, which of the following weights should it be assigned?
.60
Mary is a bagger at Glen's Market. On a weekly average, she works 30 hours and fills 876 bags of groceries. Her productivity is
29.2 bags of groceries per hour
If three employees each work 35 hours a week and produce a total of 9765 items, what is their total hourly productivity level?
93
Which of the following actions would the government take to increase economic growth
Increase government spending
What is a likely result when workers' wages rise throughout the economy while productivity decreases?
Inflation
What do businesses usually expect will increase when the economy experiences a continued rise in the level of inflation?>
Interest rates
A country is experiencing civil unrest. What is likely to happen to the value of its currency?
It will decrease
Why might businesses decide to hold on to products to sell later when the economy is experiencing high levels of inflation?
Prices will continue to rise.
Which of the following does consumption rely on to provide goods and services?
Producers
The GDP is calculated each year in the U.S. to determine what?
The health of the economy
What often happens when a nation has a high unemployment rate?
The nation experiences an economic slowdown.
Which of the following is true when a potato farmer keeps some of the farm's potatoes for personal use?
The potatoes are not counted in the GDP
What is the effect on society of a falling growth rate in productivity?
The standard of living drops
What is one of the main reasons why governments levy taxes?
To raise revenue
Why should productivity be measured?
To see whether the business's objectives are being met
A manager's allowing employees to set the pace of their work is an example of providing
job enrichment
When union members of a local 654 arrived at work today, they found a sign on the door stating that the business had closed temporarily and the employees were not allowed to work. This is a pressure strategy known as a
lockout
The addition of too many workers on a job may cause the marginal product to turn
negative
The market's way of rationing limited resources, goods, and services to consumers in a market economy is through...
prices
In some states, it is against the law to sell alcohol on Sundays. This law was created to honor the Christian religious belief that Sunday is a special day of rest. This is an example of culture impacting the
production of goods
The young children's section of a U.S. amusement park features cartoon characters from a German TV show. Although the amusement park signed an agreement and paid a fee to display images of the cartoon characters, the TV show doesn't own or manage the park in any way. This is an example of
Licensing
Vernon was the milkman in his neighborhood for 30 years. Then, supermarkets started selling milk right in the store, and Vernon's job is an example of a
structural job