BA 1301: Chpt 1-4 quiz

The Chubb Group, an insurance company, regularly supplies funds for programming on the public television network. Its donations are an example of: economic responsibility financial empowerment ethical responsibility D. corporate philanthropy corporate paternalism

D. corporate philanthropy

Eighty-two percent of boomers indicated that they will not retire at or before age 65. (T/F)

True

Human rights include an individual's right to life, to freedom, and to the pursuit of happiness. (T/F)

True

The _____ of any country is measured by the output of goods and services people can buy with the money they have. standard of living consumer productivity input per person quality of life total consumption rate

standard of living

In 2018, Country A exported $84.9 billion and imported products valued at $74.69 billion. The difference between the dollar value of its exports and imports represents a: positive exchange rate positive balance of payment trade surplus trade deficit positive countertrade

trade surplus

A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship. (T/F)

False

According to the principle of absolute advantage, each country should specialize in the products that it can produce most readily and cheaply and trade those products for products that foreign countries can produce most readily and cheaply. (T/F)

False

Armenia had a favorable balance of trade in 2018 when it exported $800 million in goods and services and imported $1.5 billion. (T/F)

False

Labor, as a factor of production, relates only to the production of manufactured goods; services are not included. (T/F)

False

When Congress passes a law to raise individual tax rates, it is creating fiscal policy. (T/F)

True

The sole proprietorship is considered a legal entity; therefore, it is taxed separately from the owner. (T/F)

False

A key element in capitalism is: a low standard of living B. individual ownership of property government ownership of property government control of market continued growth

B. individual ownership of property

An enterprise in which two or more firms or investors (including governments) share ownership of a business and its property rights is called a(n): cooperative international partnership C. joint venture cartel limited partnership

C. joint venture

Why would a company choose to engage in a conglomerate merger instead of a vertical or horizontal merger? A. A conglomerate merger is done to reduce risk. Double taxation does not occur when the merger is with a company outside the normal business environment of the acquiring company. The conglomerate merger results in reduced liability while the other two types of mergers do not. It is easier to dissolve a conglomerate merger than the other types of mergers. Government regulation of conglomerate mergers is minimal.

A. A conglomerate merger is done to reduce risk.

Individual ownership of property is a key element in: socialism B. capitalism communism a command economy utopianism

B. capitalism

Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment. If the company goes bankrupt, the most Medford could lose would be: half of his investment the par value of his stock C. $600 $600 plus foreclosure costs nothing--the company must reimburse him his investment

C. $600

In perfect competition, there is: only one producer a large number of buyers and few sellers no relationship between supply and demand C. a large number of sellers producing nearly identical products a large number of buyers who demand low prices

C. a large number of sellers producing nearly identical products

In Canada, the government owns the communications, transportation, and utilities industries, while most other activity is carried on by private enterprise. Canada is an example of: private enterprise communism private governmentalism C. a mixed economy social capitalism

C. a mixed economy

A corporation: does not have a life separate from its owners cannot sue or be sued C. does not have a size limitation ends when the owner of the corporation charter dies is one of the easy types of businesses to form

C. does not have a size limitation

All of the following are characteristics unique to the capitalistic or private enterprise system EXCEPT: profits free choices C. economies of scale ownership of property competition

C. economies of scale

Which of the following is the BEST example of a not-for-profit business? A. the American Cancer Society McDonald's Kellogg's FedEx delivery service Hightower Construction Company

A. the American Cancer Society

Of all forms of business ownership, corporations account for the largest share of both: number of firms and sales B. sales and profits income and employees number of firms and employees bankruptcies and employees

B. sales and profits

The most fundamental reason for the growth in world trade is probably due to: the creation of free trade areas B. the need for businesses to expand their markets fluctuating exchange rates cultural differences political unrest

B. the need for businesses to expand their markets

A business is an organization that strives for a profit by providing goods and services desired by its customers. (T/F)

True

Which of the following is the best example of a service? A. The pleasure you derive from seeing a good play the license tags you purchased for your car the hamburger you bought for lunch the gallon of milk you purchased at the convenience store the grill on which you cook steak

A. The pleasure you derive from seeing a good play

Which of the following statements about a socialist economic system is true? A. The government owns or controls the major industries. The government owns no major industries. Private individuals own and control the major industries. Private individuals own all companies and industries. Major industries are internationally-owned.

A. The government owns or controls the major industries.

Fred Pittman has invested $10,000 in his son's motorcycle repair shop, but he takes no part in its management. Pittman is a(n): A. limited partner non-working partner general partner entrepreneur unlimited partner

A. limited partner

When the government decides to cut military spending, it is implementing a(n) _____ policy. microeconomic operational monetary C. fiscal expansionary

C. fiscal

The development of new drugs is very expensive. For this reason Genentech, a large biotechnical company, has entered into a _____ with Swiss-owned Roche to develop a vaccine for tuberculosis. When the vaccine is developed or when the two biotechnical companies determine the vaccine cannot be developed using their current methodology, this relationship will dissolve. general partnership limited-time partnership C. joint venture cooperative C corporation

C. joint venture

In 1947, the largest brewer in the U.S., Schlitz, had a 4.57 percent share of the domestic market. (Anheuser-Busch was number four in those days). The top ten brewers, including the number one brewer, had 29.29 percent of the domestic market. Over 70 percent of the domestic market was controlled by "all other" brewers. By the year 2001 the largest brewer was Anheuser-Busch, with a 54.76 share of the domestic market. The top ten brewers held 97.04 percent share of the domestic market in 2001. Thus, the brewing industry in the U.S. became a(n) _____ market structure. perfect competition imperfect competition C. oligopoly monopoly monopolistic competition

C. oligopoly

The fact that a corporation has limited liability means: corporations can earn a limited amount some of the owners are limited in earnings C. owners' liabilities are limited to the amount invested the life of the corporation is limited the corporation's ability to expand is limit

C. owners' liabilities are limited to the amount invested

The most common form of business organization is the: general partnership corporation C. sole proprietorship cooperative limited partnership

C. sole proprietorship

The quality of life is: measured by subtracting the supply of goods and services from the demand for goods and services determined by the money left over after all expenses are paid C. the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time measured by the output of goods and services people can buy with the money they have higher for less developed countries like Angola, Bangladesh, and Ceylon than it is for the U.S.

C. the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time

Ease of formation, flexibility, and diversity of management are advantages of the _____ form of business ownership. A. partnership joint venture cooperative conglomerate corporation

A. partnership

For most agricultural products, farmers produce homogeneous products, sell them to a common market, and generally cannot affect prices greatly. This is an example of which kind of market structure? A. perfect competition monopolistic competition imperfect competition a pure monopoly an oligopoly

A. perfect competition