Business Management: Chpt. 8
Approximately what percentage of total receipts does a business use to pay its costs? a. 95% b. 65% c. 35% d. 5%
A
Commonly called modest inflation, the phase of the business cycle characterized by decline in growth and employment is a. contraction b. expansion c. peak d. trough
A
Nearly any individual may start a business in a a. capitalist country b. communist country c. socialist country
A
The freedom to own land and other property is a trait of a. capitalism b. communism c. socialism
A
An economic system in which a central planning authority owns most of the factors of production and determines what, how, and for whom goods and services will be produced is called a a. central economy b. command economy c. market economy d. mixed economy
B
Consumer goods are often in short supply in a a. capitalist country b. communist country c. socialist country
B
If a business earns an average profit and has yearly receipts of approximately $500,000, how much would the owner likely earn in a year? a. $15,000 b. $25,000 c. $35,000 d. $45,000
B
In which type of economy does a central planning authority determine what, how, and for whom goods and services are produced? a. capital b. command c. market d. mixed
B
Steel that is used to produce tools and machinery is classified as a a. consumer good b. capital good c. market good d. production good
B
Which phase of the business cycle is characterized by low inflation, with a modest rise in the GDP, profits, and employment? a. contraction b. expansion c. peak d. trough
B
a pattern of irregular but repeated expansion and contraction of the GDP
Business Cycles
Growth, profit, and employment reach their highest level during which phase of the business cycle? a. contraction b. expansion c. peak d. trough
C
How many items does the government use when it tracks pries to calculate the Consumer Price Index? a. less than 20 b. 50 c. more than 100 d. it varies month to month
C
Satisfying wants involves four types of utility: time, place, possession, and a. economy b. capital c. form d. labor
C
What normally happens during a recession? a. both unemployment and production increase b. total demand exceeds supply c. total supply exceeds demand d. the economic growth rate increases rapidly
C
When the production of consumer goods increases, the production of a. capital goods increases b. capital goods and services increases c. capital goods decreases d. capital goods increases and services decreases
C
Which of the following is NOT likely to occur during a recession? a. decline in GDP b. decreased production c. increased demand for goods and services d. increased unemployment
C
rivalry among sellers for consumers' dollars
Competition
An organized way for a country to decide how to use its productive resources is called a(n) a. political assessment b. economic indicator c. political-economy system d. economic system
D
The lowest point in a business cycle is known as a a. contraction b. dip c. peak d. trough
D
What happens when a good or service is privatized? a. cost increase and efficiency increases b. costs increase and efficiency decreases c. costs decrease and efficiency decreases d. costs decrease and efficiency increases
D
What term is used to describe the number of like products that will be offered for sale at a particular time and at a particular price? a. inventory b. need c. stock d. supply
D
the number of products that will be bought at a given time at a given price
Demand
a long and severe drop in GDP
Depression
Capital goods directly satisfy human wants.
False
Demand is represented by wanting an expensive leather jacket without having the money to buy it.
False
Economic utility is one of the four types of utility that satisfy wants.
False
Form utility usually applies only to services and not to goods.
False
One advantage of communism for managers in a communist country is their freedom to decide what to produce.
False
The United States has adequate resources to satisfy all the wants of all its people.
False
The availability of natural resources, labor and capital goods are all that is need to produce goods.
False
When productive resources are used for capital formation, fewer consumer goods are produced.
False
Inflation increases the purchasing power of money.
False.
a rapid rise in prices caused by an inadequate supply of goods and services
Inflation
the human effort, either physical or mental, that goes into the production of goods and services
Labor
anyone that creates utility
Producer
a decline in the GDP that continues for six months or more
Recession
the number of like products that will be offered for sale at a particular time and at a particular price
Supply
Communist countries place heavy emphasis on capital formation.
True
Countries with a command economy are often dictatorships.
True
Decreased production and increased unemployment occur during recessions.
True
Economists include government as a factor of production.
True
Entrepreneurship is a factor of production.
True
If a country did not produce any capital goods, it could not produce many consumer goods.
True
Privatization occurs when a government transfers to a business its authority to provide a good or a service.
True
Selling snow tires to a customer during the first snowstorm of the season is an example of providing time utility.
True
The average profit earned by a business today is about 5% of total receipts.
True
The demand is low and supply is high for unskilled workers in most age groups.
True
The primary incentive for a business to produce goods or services in the United States is profit.
True
the ability of a good or service to satisfy a want
Utility
