question

What is the amount a business earns after deducting what it spends for salaries and other expenses?

answer

profit

question

What is the chance a business owner will lose the time and money invested in a business that provers to be unprofitable?

answer

risk

question

What is a person who assumes the risk of starting a business?

answer

entrepreneur

question

Often in business the great the risk, the

answer

greater the potential award

question

The amount of good and services people can buy with the month they have is call their:

answer

standard of living

question

The most important difference between for-profit business and nonprofit organizations is that:

answer

nonprofit organizations do not seek a profit for its owners or organizers

question

A common characteristic of most entrepreneurs is that they:

answer

accept the risks involved in starting and managing a business

question

In order to make an intelligent investment decision, entrepreneurs should:

answer

compare the risks of potential investments to their expected profits and find the right balance between profit and risk

question

Honda and Toyota have used "insourcing" for years to produce cars in the United States. Insourcing:

answer

helps offset the number of jobs being outsourced

question

For-profit businesses and nonprofit organizations are similar in that they both:

answer

contribute to the welfare of society

question

World-class businesses attempt to meet the needs of:

answer

all of their stakeholders

question

Ross wants to invest some money that he just inherited. He found that his bank offers a savings account paying a guaranteed 3% rate of return. However, he would like to earn a higher return. Ross should keep in mind that to earn a higher return on his money he:

answer

will probably have to accept a higher level of risk

question

Jane's income has remained stable over the past few years while the rices of things she buys have gone up. Nevertheless, Jane feels better off because the environment is cleaner, the crime rate has declined, she has more leisure time, and the quality of medical care has improved. If Jane's experience is typical, we can conclude that the standard of living has:

answer

declined, but the quality of life has increased

question

Which of the following statements about social entrepreneurs (such as Muhammad Yunus who won the Nobel Prize) describes their challenge?

answer

Using the same business skills as other entrepreneurs, social entrepreneurs develop businesses to improve the skill and or quality of life of others.

question

The growth of Hispanic owned businesses:

answer

decreased slightly compared to there minority groups who have started businesses.

question

Which of the following entails the greatest amount of risk?

answer

starting a business

question

The world market is approximately

answer

7 billion potential customers

question

What occurs when a country has a monopoly on producing a product or is able to produce it at a cost well below that of all other countries?

answer

absolute advantage

question

The concept of free trade means:

answer

goods and services can be traded freely across borders without political and or economic barriers

question

Household appliances, Inc. has a manufacturing plant near Chicago. The company specializes in compact washers and dryers for countries where consumers have less living space. Household Appliances participates in the global market through:

answer

exporting

question

The United States currently enjoys a comparative advantage in:

answer

software services

question

Which economic theory refers to the potential gains from trade for individuals, firms, or nations that arise from differences in their factor endowments or technological progress?

answer

comparative advantage

question

What is the practice of selling a product in foreign countries for a lower price than the good sold in the producing country?

answer

dumping

question

An American firm reentry criticized a Chinese steel producer for charging a lower prices for its steel in in the United States than it charges in China. If proven to be true, the Chinese firm has engages in

answer

dumping

question

Monique's Unique Tile Boutique offers decorative tile from around the world. The owner regularly travels overseas to locate the best and most unusual tile that foreign producers have to offer. What does Monique participate in?

answer

importing

question

Reviewing the recent experience of the U.S. in global markets reveals that the U.S. has:

answer

a large trade deficit with China

question

Lis the 5 factors of production:

answer

land, labor, capital, entrepreneurship, and technology

question

What are the inputs to the production process?

answer

factors of production

question

Which two factors of production seem to contribute the most to a nation's ability to create wealth?

answer

entrepreneurship and knowledge

question

In order to create more wealth and provide better services, some nations recognize that a good strategy is to

answer

minimize interference with the free exchange of goods and services.

question

Adam Ripley sells custom bicycles. Adam buys a several bike parts including wheels and tires from the Good Treads Company. Although several government-supported regulation help Adam in his business, regulations that make it easy for Adam's business to enjoy good vendor relationships are:

answer

laws that support enforceable contracts between firms

question

What refers to the output generated with a given amount of input, e.g., the number of pizzas produced in an hour?

answer

productivity

question

What means producing items using the least amount of resources?

answer

efficiency

question

When businesses sell to other business over the Internet, these transactions are known as:

answer

B2B transactions

question

What met the needs of our nations when it was conceived, but needs an overhaul?

answer

the social security system

question

What has greatly improved living standards around the world?

answer

globalization

question

What is the study of how a society employs resources to produce goods and services and distribute them among competing groups and individual?

answer

economics

question

What looks at the behavior of individual people and organizations in specific markets?

answer

microeconomics

question

Economist Thomas Malthus believed that this would limit economic progress:

answer

overpopulation

question

Who is considered to be the father of modern economics?

answer

Adam Smith

question

In which type of class would the topic emphasize how the market conditions determine the price of a specific product?

answer

microeconomics

question

What was economics known as because too many people would result in food shortages and shortages of other resources?

answer

dismal science

question

What is the name of a free-market economic system in which most of the factor of production and distribution- such as land, factories, railroads, and stores- are owned by individuals?

answer

capitalism

question

Under a capitalistic system, decisions such as what goods and services to produce, what to charge, and how much to import or export are made by?

answer

individuals

question

A free market is one in which decisions about what to produce and in what quantities are made by:

answer

the market

question

A simply supply curve shows that an increase in the price of a good will cause the quantity supplied to:

answer

increase

question

What demand curve shows that people tend to buy more of a good when its price decreases?

answer

typical demand curve

question

What is characterized by unequal distribution of wealth and income?

answer

capitalism

question

Usually in free markets that result in better quality and lower prices are due to the presence of what?

answer

competition

question

Patrick lives in a nation whose government embraces capitalism. He owns his own home and car, as well as his own business and building. Patrick maintains ownership due to:

answer

the right to own private property

question

In which type of systems the major premise to reduce the inequality in the distribution of wealth?

answer

socialist system

question

Recently, Hugo Chavez, the Prime Minister of Venezuela, announced that he is standing behind the concept of state owned utilities, public schools, and the communications industry of his nation. Although not all industry is owned and managed by the government, his ideas would lead one to believe that he has a preference for:

answer

a socialistic state

question

The "Reaching Beyond Our Borders" box in Ch. 2, explains the changing business climate in other nations. What kinds of experiences are U.S. based companies facing abroad?

answer

For some food franchisors such as Yum Brands, the economic and political systems are not preventing them from growing the business abroad.

question

What type of unemployment refers to loss of jobs due to a recession or a similar downturn in the economy?

answer

cyclical

question

The measure used to report price changes at the wholesale level is the:

answer

producer price index or PPI

question

What is one reason the CPI is monitored very closely by government, businesses, and workers is that:

answer

Some wages, interest rates, tax rates, and government benefits are tired to changes in the value of the CPI

question

If consumers see a measurable increase in the price of coffee, they are likely to change their consumption to less expensive tea. The substitutions would show up in the:

answer

chained consumer price index

question

True or false. Measures of productivity in the service sector of the U.S. economy do a poor job of taking quality improvements into account.

answer

True

question

Recently, the U.S.national debt was a little more than:

answer

10 trillion

question

Which economic theory suggests that short-term increases in government spending to stimulate the economy?

answer

Keynesian

question

If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment <2%), the Fed mad decide to:

answer

increase interest rates

question

A fee paid to a firm in a licensing agreement that gives another firm the right to manufacture their product or use its trademark is called a:

answer

royalty

question

What did the federal government create to help small and medium sized businesses get involved in exporting?

answer

Export Assistance Centers

question

Which partnership is in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project?

answer

join venture

question

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service is a:

answer

foreign subsidiary

question

Using contract manufacturing as a strategy to reach global markets offers firms the advantage of:

answer

reduced financial risks

question

Pepsi Cola entered into a long-term contract with a South African beverage company. The contract calls for the South African firm to produce and market Pepsi Cola in South Africa. Pepsi will receive royalties on each case of beverage sold. This is an example of:

answer

licensing

question

Nike _________________ its products in foreign countries, where labor is cheap and production sites are owned by other companies. This strategy allows Nike to experiment in new markets without incurring large start-up costs involved with building their own production facilities.

answer

contract manufactures

question

ExxonMobil Corporation refines and markets its petroleum products in many different nations. In addition, Exxon's stockholders and managers come from many different nations. If some of the nations where it operates decided to take over the assets of the company, this act would constitute:

answer

expropriation

question

An article published in the journal of "Modern Healthcare" reported that in 2007, the governments of the following nations held sizeable investments in U.S. companies, (including U.S. healthcare providers): These investments are called _____________ and some experts fear that the strategy behind these governments sinking large amounts of capital in U.S. companies may have ____________________.

answer

Sovereign Wealth Funds (SWFs); geopolitical objectives

question

What is lovering the value of a nation's currency relative to other currencies called?

answer

devaluation

question

The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials, to secure business contracts is the:

answer

Foreign Corrupt Practices Act

question

A major force that often impeded global trade occurs when government regulations limit the import of goods and services. We call this:

answer

trade protectionism

question

Idle Time Gaming, Inc. needed silicon wafers that it knew could be massed produced efficiently by Silicon City, Inc., a start-up firm in India. The Indian company needed MSG (metallurgical grade silicon) in order to make the wafers which it knew it could get from a Chinese firm. The Chinese firm (mostly owned by the Chinese government) agreed to supply the silicon to the Indian company if it could get a certain quantity of gaming hardware from Idle Time. This beneficial exchange is described as:

answer

countertrading

question

What is the use of government regulations to limit the import of goods and services.

answer

trade protectionism

question

The two basic types of tariffs are:

answer

revenue and protective

question

What represents the first attempt to establish a truly global mediation center to resolve international trade disputes?

answer

World Trade Organization

question

The three countries participating in NAFTA are:

answer

Canada, Mexico, and the United States

question

The keiretsu tradition in Japan serves as a:

answer

nontariff barrier

question

According to the Legal Briefcase box, titled, "NAFTA or SHAFTA?":

answer

NAFTA has increased U.S. food exports, despite a decrease in manufacturing jobs.

question

Promote conditions of fair competition for the three trading partners is an objective for:

answer

NAFTA

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