question

The point at which the supply curve and the demand curve intersect is the market price.

answer

true

question

Inflation results in increased purchasing power for the consumer.

answer

false

question

If productivity increases, prices charged to consumers will tend to increase as well.

answer

false

question

One of the four elements that are necessary for private enterprise to be carried out is reasonable prices

answer

false

question

Product differentiation is common in a market characterized by monopolistic competition

answer

true

question

In typical modern oligopolies, the large capital investment necessary to enter the market discourages new competitors

answer

true

question

Natural monopolies exist partly because duplication of effort and resources would be wasteful in some cases

answer

true

question

What is the process for converting government enterprises into individually owned firms known as? A)profit maximization B)privatization C)production allocation D) entrepreneurship E)demand assessment

answer

B)privatization

question

What is the point at which the supply curve and the demand curve intersect on a graph? a. decision point b. surplus price c. parity point d. perfect price e. equilibrium price

answer

e. equilibrium price

question

Which term refers to the pattern of short-term ups and downs in an economy? A)aggregate output B)balance of payments C)standard of living D)business cycle E)demand and supply schedule

answer

D)business cycle

question

What is the economic condition characterized by widespread increased prices without increased purchasing power? A)inflation B)recession C)deflation D)expansion E)unemployment

answer

A)inflation

question

What marks the key difference between economic systems? A) the way they manage the factors of production B)the way rules and regulations are legislated C)the way basic necessities are determined D)the way they transport goods within their borders E)the way workers are relocated to different regions

answer

A) the way they manage the factors of production

question

In perfect competition, which of the following conditions must prevail? A)It is relatively difficult to enter the industry. B)All firms must adhere to cost and pricing standards. C)All firms in a given industry must be small. D)The number of firms in the industry must be limited. E)A single firm is able to influence the price of its product.

answer

C)All firms in a given industry must be small.

question

How does monopolistic competition differ from perfect competition? A) In a market characterized by monopolistic competition, individual firms have some control over price. B) In a perfectly competitive market, the size of the firms must be large. C) It is easier for sellers to enter a market or industry characterized by monopolistic competition. D) There are more sellers in a market characterized by monopolistic competition. E) In a perfectly competitive market, products are more dissimilar.

answer

A) In a market characterized by monopolistic competition, individual firms have some control over price.

question

Which of the following is characterized by having few sellers, similar prices among sellers, and difficult market entry? A)oligopoly B)state socialism C)monopolistic competition D)pure competition E)monopoly

answer

A)oligopoly

question

In an oligopoly, when one firm reduces its prices, how do other sellers react? A) Other firms reduce their prices also, usually quite quickly. B) There is a combined response from other firms to stabilize prices. C) Other firms are not usually aware that price has changed. D) Other firms may reduce their prices, but usually gradually. E) There is no reaction from other firms to change their prices.

answer

A) Other firms reduce their prices also, usually quite quickly.

question

Some ethical and unethical behaviors fall into gray areas while others are widely agreed upon.

answer

true

question

Accepting and offering bribes is a normal part of doing business in some parts of the world

answer

true

question

A business's social responsibility to investors includes following proper accounting procedures

answer

true

question

A whistle-blower is an outsider who reports publicly on the wrongdoings of companies

answer

false

question

Which of the following should be the first step in assessing ethical behavior in a certain situation? A) Collect facts related to the situation. B) Seek the advice of managers. C)Gather a range of opinions on the effectiveness of the policy. D)Make a judgment based on the outcome of the activity. E)Consider appropriate moral values.

answer

A) Collect facts related to the situation.

question

What term refers to the way in which a business tries to balance its commitments to groups and individuals in its social environment? A)socialization B)social responsibility C)business ethics D) corporatization E)stakeholder consciousness

answer

B)social responsibility

question

What does the Sarbanes-Oxley Act of 2002 require a chief financial officer to do? A) prevent insider trading B) oversee the implementation of ethical standards C)guarantee the accuracy of financial reporting D)hire a forensic accountant E)engage in strategic management

answer

C)guarantee the accuracy of financial reporting

question

Which of the following is the best description of organizational stakeholders? A)government regulators B)the officers and key employees of an organization C)individuals and businesses that own stock in a company D)competitors E)individuals and groups that are directly affected by the practices of a company

answer

E)individuals and groups that are directly affected by the practices of a company

question

What is it called when two or more firms agree to collaborate on wrongful acts? A)business as usual B)collusion C)consumerism D)brokering E)monopolizing

answer

B)collusion

question

Most businesses in the United States are large businesses with more than 500 employees

answer

false

question

Manufacturing is overwhelmingly handled by big business

answer

true

question

A limited liability corporation is a hybrid of a publicly held corporation and a partnership

answer

true

question

Low start-up costs and tax benefits are advantages of sole proprietorships

answer

true

question

Corporations enjoy significant tax benefits when compared to sole proprietorships or partnerships.

answer

false

question

What is the name of the document in which an entrepreneur summarizes his or her business strategy for a proposed new venture? A) director's guideline B)success chart C)financial blueprint D)balance sheet E)business plan

answer

E)business plan

question

What is the most important source of money for new business start-ups? A)personal resources B) venture capital C)the SBA D)banks E)government grants

answer

A)personal resources

question

In which business sector are cooperatives still important? A)agriculture B)health care C)manufacturing D)public utilities E)automotive

answer

A)agriculture

question

The U.S. Department of Commerce considers a business "small" if it has fewer than how many employees? A)100 B)500 C)1,500 D)50 E)10

answer

B)500

question

What is the major drawback of accepting venture capital? A)sharing company control B)having to write a proposal C) facing a short repayment period D)having to pay high interest rates E)limiting expansion

answer

A)sharing company control

question

Which of the following legal forms of business is owned and usually operated by a person who is responsible for its debts? A)sole proprietorship B)cartel C)limited partnership D)corporation E)general partnership

answer

A)sole proprietorship

question

What is a major drawback of sole proprietorships? A)limited funding B)work flexibility C)unlimited liability D)structured hours E)low start-up costs

answer

C)unlimited liability

question

What is the most important advantage of general partnerships? A)the ability to grow with the addition of new talent and money B)the ease of implementing an effective control system C)the increased role of luck D)the need for minority partners E)the unlimited liability of the partnership

answer

A)the ability to grow with the addition of new talent and money

question

What do both sole proprietorships and partnerships lack? A)adaptable processes B)legal standing C)shared vision D)trust E)continuity

answer

E)continuity

question

What type of company has stock that is widely held and available for sale to the general public? A)private corporation B)professional corporation C)limited liability corporation D)public corporation E)general partnership

answer

D)public corporation

question

Free market economies often establish some system of quotas and/or tariffs.

answer

true

question

Globalization refers to the process by which countries around the world are becoming more self-sufficient.

answer

false

question

The single largest trading partner of the United States is China.

answer

false

question

If 1 euro = $1.35 on June 4 and $1.40 on June 5, the value of the dollar has risen.

answer

false

question

What are products that are created domestically and transported for sale abroad? A)imports B)dumped goods C)buy backs D)exports E)domestic goods

answer

D)exports

question

Which of the following is a government payment to help a domestic business compete with foreign firms? A)export rebate B)protectionist tariff C)subsidy D)import buy-back E)revenue tariff

answer

C)subsidy

question

Which of the following best describes a positive trade balance? A)the economic condition in which a country's exports exceed its imports B)the economic condition in which a country's inflow of money exceeds its outflow C)the economic condition in which a country's imports exceed its exports D)the economic condition in which a country's natural resources exceed its human resources E)the economic condition in which a country's outflow of money exceeds its inflow

answer

A)the economic condition in which a country's exports exceed its imports

question

National competitive advantage derives from four conditions, one of which is factor conditions. What do factor conditions include? A)product quality, productivity, and profits B)government quotas and subsidies C)strategies, structures, and rivalries D)labor, capital, entrepreneurs, and physical resources E)customers, suppliers, and labor

answer

D)labor, capital, entrepreneurs, and physical resources

question

The U.S. government forbids the importation of cigars from Cuba. What is this practice called? A)business practice law B)embargo C)subsidy D)local content law E)tariff

answer

B)embargo

question

Which of the following types of firms design, produce, and manufacture products in many nations? A)international firms B)domestic firms C)importing firms D)multinational firms E)exporting firms

answer

D)multinational firms

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