Question 1

What is a commodity?  A.  Something that producers are unable to sell to consumers  B.  A resource that is available in unlimited quantities  C.  An exchange between a producer and a consumer  D.  Something of value that can be bought, sold, or traded

Accepted Answer

d

Question 2

What is likely to happen if the price of a product goes up?  A.  The supply is likely to increase.  B.  The supply is likely to decrease.  C.  The demand is likely to cause scarcity.  D.  The demand is likely to increase.

Accepted Answer

a

Question 3

Which of the following is an indirect competitor for a company that makes chocolate chip cookies?  A.  Another company that makes chocolate chip cookies  B.  A company that makes potato chips  C.  A company that makes baking pans  D.  A company that makes brownies

Accepted Answer

d

Question 4

What does scarcity force people to do?  A.  Produce commodities  B.  Make choices  C.  Consume products  D.  Increase inflation

Accepted Answer

b

Question 5

In a planned economy, prices of commodities are controlled by _________.  A.  Supply and demand  B.  Producers and consumers  C.  The government  D.  Private enterprises

Accepted Answer

c

Question 6

A producer is someone who _____________.  A.  Makes a commodity available for sale or exchange  B.  Buys or trades in order to receive a commodity  C.  Is in the market for a commodity  D.  Receives a commodity from a business

Accepted Answer

a

Question 7

If your company uses a nonprice competition strategy, what should you focus on?  A.  Lowering prices  B.  Differentiation  C.  Creating direct competitors  D.  The public sector

Accepted Answer

b

Question 8

If the demand for a product decreases, what is likely to happen?  A.  The supply is likely to increase.  B.  The demand is likely to be inelastic.  C.  The price is likely to increase.  D.  The price is likely to decrease.

Accepted Answer

d

Question 9

A market economy is regulated by the interactions between which two things?  A.  Goods and services  B.  Producers and consumers  C.  Product-based and service-based businesses  D.  Public and private sectors

Accepted Answer

b

Question 10

Which of the following is a sign of a strong economy?  A.  An increase in GDP  B.  A shrinking economy  C.  An increase in unemployment  D.  A decrease in spending power

Accepted Answer

a

Question 11

The law of diminishing returns is often used to analyze the ideal amount of which factor of production?  A.  Capital  B.  Land  C.  Entrepreneurship  D.  Labor

Accepted Answer

d

Question 12

How is the value of a product determined?  A.  By the amount a consumer is willing to pay for it  B.  By how much it cost the producer to make  C.  By its variable costs  D.  By the number of workers who were involved in making it

Accepted Answer

a

Question 13

A computer game that can be purchased online and played right away has good ________ utility.  A.  Form  B.  Information  C.  Value  D.  Time

Accepted Answer

d

Question 14

Which of the following is a fixed cost for a company that sells greeting cards online and mails the printed cards to customers?  A.  The paper and glue to make the cards  B.  Hourly workers who assemble and ship the cards  C.  Packaging and shipping costs  D.  A paper cutting machine

Accepted Answer

d

Question 15

If your company has a large production-related task, such as assembling an airplane, what strategy could help you increase productivity?  A.  Generalization  B.  Decreasing your use of technology  C.  Raising prices  D.  Division of labor

Accepted Answer

d

Question 16

A company\'s ________ tells you how much money the company has left over after subtracting all expenses.  A.  Net profit  B.  Gross profit  C.  Revenue  D.  Cost of goods sold

Accepted Answer

a

Question 17

Which of the following is a way to increase possession utility for a refrigerator?  A.  Creating brochures about the product  B.  Providing a delivery service  C.  Expanding the store hours  D.  Making a Web site with information about the product

Accepted Answer

b

Question 18

If productivity increases significantly and demand is not very elastic, what is likely to happen?  A.  The number of consumers will increase.  B.  Fewer workers will be needed.  C.  Division of labor will decrease.  D.  Demand will increase

Accepted Answer

b

Question 19

Economies of scale give an advantage to what type of company?  A.  A company with a small number of employees  B.  A company that makes many sales  C.  A company with many variable costs  D.  A service-based company

Accepted Answer

b

Question 20

Your company buys a car, and its value goes down over time. What is that process called?  A.  Leasing  B.  Depreciation  C.  A unit of sale  D.  Interest

Accepted Answer

b

Question 21

A company that is organized by both product and function is using ________ organization.  A.  Flat  B.  Hierarchical  C.  Market  D.  Matrix

Accepted Answer

d

Question 22

Which of the following describes a saturated market?  A.  The prices of competitors are very high.  B.  Many people want this product and haven\'t purchased it yet.  C.  Most potential buyers have not heard of the product and don\'t know it exists.  D.  Most potential buyers already have a product that satisfies this need or want.

Accepted Answer

d

Question 23

What does a company\'s customer service department do?  A.  Promote the company to new groups of potential customers.  B.  Interact with customers after they have purchased the product.  C.  Receive payments from customers and handle the company\'s money.  D.  Handle employee-related procedures.

Accepted Answer

b

Question 24

Which of the following types of business ownership has the advantages of pass-through taxation and liability protection?  A.  A sole proprietorship  B.  An LLC  C.  A C corporation  D.  A partnership

Accepted Answer

b

Question 25

A company that builds houses and a company that makes cars are part of the __________ industry.  A.  Retailing  B.  Extractive  C.  Wholesaling  D.  Manufacturing

Accepted Answer

d

Question 26

Which of the following business ownership structures is the simplest and easiest to set up?  A.  A partnership  B.  An LLC  C.  A sole proprietorship  D.  A C corporation

Accepted Answer

c

Question 27

A company is usually unable to take advantage of economies of scale during the __________ stage of the product life cycle.  A.  Saturation  B.  Introduction  C.  Growth  D.  Maturity

Accepted Answer

b

Question 28

A corn farm, a coal mine, and a fishing company are all part of the _________ industry.  A.  Manufacturing  B.  Service  C.  Extractive  D.  Retailing

Accepted Answer

c

Question 29

Your company manufactures children\'s toys, and you want to keep the prices as low as possible for individual consumers. Which of the following things could you do to keep prices low?  A.  Add subcontractors to the manufacturing process.  B.  Hire tradespeople.  C.  Keep the distribution chain short.  D.  Add companies to the distribution chain.

Accepted Answer

c

Question 30

Which of the following business ownership structures offers the best liability protection but higher taxes?  A.  A nonprofit corporation  B.  A C corporation  C.  A partnership  D.  A sole proprietorship

Accepted Answer

b

Question 31

What does an exchange rate tell you?  A.  How many products have been exchanged between two different countries  B.  The number of people in one country in comparison to another country  C.  How much one unit of currency is worth when converted to another currency  D.  The speed that people are buying a specific type of product

Accepted Answer

c

Question 32

A good investment should do one or both of which two things?  A.  Grow in value or produce income  B.  Raise prices or increase demand  C.  Avoid opportunity cost or increase volatility  D.  Decrease diversification or decrease interest

Accepted Answer

a

Question 33

What is the best way to deal with volatility and get the best return on your investment?  A.  Invest only in very safe investments.  B.  Put your money in a savings account.  C.  Avoid investments that create capital gains.  D.  Use diversification.

Accepted Answer

d

Question 34

A __________ is when you take money out of the bank.  A.  Deposit  B.  Transfer  C.  Branch  D.  Withdrawal

Accepted Answer

d

Question 35

As a unit of measure, money makes it easier for consumers to do what?  A.  Compare prices of different products.  B.  Make a bigger profit from their income.  C.  Have a better exchange rate with other currencies.  D.  Get more unearned income.

Accepted Answer

a

Question 36

Which of the following is an example of earned income?  A.  A paycheck you receive for work you have done  B.  Interest on money you lent to a friend  C.  A gift of money from a friend or family member  D.  Money you receive from a company you invested in

Accepted Answer

a

Question 37

If you want to compare two different investments, what should you calculate?  A.  The compound interest  B.  The ROI percentages  C.  The ROI dollar amounts  D.  The capital gain

Accepted Answer

b

Question 38

What is a minimum balance?  A.  The process of balancing your checkbook register against your bank statement  B.  The largest number of checks you can write in a month  C.  The smallest withdrawal you can make from a bank account  D.  The smallest amount of money you can keep in a bank account

Accepted Answer

d

Question 39

If you plan to take money out of the bank frequently, what type of account should you get?  A.  A savings account  B.  A checking account  C.  An interest account  D.  An investment account

Accepted Answer

b

Question 40

Why can a bank afford to pay an interest rate on a savings account?  A.  Because the bank is insured by the FDIC  B.  Because the Fed prints more currency when needed  C.  Because the bank puts the money into equity investments  D.  Because the bank lends that money out at a higher interest rate

Accepted Answer

d

Question 41

Which type of tax provides income for retired and disabled people and their families?  A.  Social Security tax  B.  Medicare tax  C.  Property tax  D.  Income tax

Accepted Answer

a

Question 42

A company sells a car to a consumer and helps the consumer set up a loan with regular set payments. What type of credit is this?  A.  Revolving credit  B.  A line of credit  C.  Noninstallment credit  D.  Installment credit

Accepted Answer

d

Question 43

Which of the following is a strategy for using credit wisely while improving your credit score?  A.  Pay off your credit card in full each month.  B.  Use as much of your total available credit as you can.  C.  Pay exactly the minimum payment on your credit cards each month.  D.  Avoid using your credit card.

Accepted Answer

a

Question 44

How is a line of credit similar to a credit card?  A.  Interest is charged only on the amount you actually borrow.  B.  The interest rates are the same.  C.  They both require co-signers.  D.  Lenders don\'t check your credit score.

Accepted Answer

a

Question 45

If you use credit, what are you creating?  A.  A line of credit  B.  Debt  C.  Collateral  D.  A default

Accepted Answer

b

Question 46

______________ is the amount an employee earns before payroll withholding is performed.  A.  Net pay  B.  Gross pay  C.  Taxable interest  D.  An estate

Accepted Answer

b

Question 47

Which of the following things can help you get a lower interest rate when you receive a loan?  A.  A low credit score  B.  A history of defaulting  C.  Using all of your available credit  D.  Collatera

Accepted Answer

d

Question 48

When you receive a loan, the money the lender gives you is called the ____________.  A.  Interest  B.  Line of credit  C.  Principal  D.  Collateral

Accepted Answer

c

Question 49

If you co-sign for a friend\'s credit card, what is the danger to you if your friend fails to pay?  A.  You might get secured credit.  B.  You might have to pay extra money in taxes.  C.  Your credit score might go down.  D.  Your credit score might go up.

Accepted Answer

c

Question 50

When you pay more than you owe in taxes and the IRS gives you money back, that money is called _________.  A.  A tax refund  B.  Gross pay  C.  Estimated tax  D.  An audit

Accepted Answer

a

Question 51

If you wanted to make sure a company has enough money available to pay its bills, which financial statement would be most helpful?  A.  Balance sheet  B.  Income statement  C.  Statement of owners\' equity  D.  Cash flow statement

Accepted Answer

d

Question 52

Which of the following is a type of liability?  A.  A revenue stream  B.  A liquid asset  C.  Accounts payable  D.  Accounts receivable

Accepted Answer

c

Question 53

If you want to know whether a company had a profit or a loss during a specific period of time, which financial statement would be most helpful?  A.  Statement of owners\' equity  B.  Cash flow statement  C.  Balance sheet  D.  Income statement

Accepted Answer

d

Question 54

The amount that people are willing to pay for each additional unit of a product or service is the _____________?  A.  Opportunity cost  B.  Marginal benefit  C.  Marginal cost  D.  Investment opportunity

Accepted Answer

b

Question 55

What is the opportunity cost of an investment?  A.  The combined values of the other opportunities available  B.  The value of the next most valuable opportunity  C.  The marginal benefit of the investment  D.  The volatility of the investment

Accepted Answer

b

Question 56

Money that your company has in the bank in case of unexpected financial needs or in case sales slow down is called ____________.  A.  An asset fund  B.  A cash reserve  C.  Equity  D.  Insurance

Accepted Answer

b

Question 57

In the accounting equation, assets are equal to which two things?  A.  Debits + equity  B.  Debits + accounts  C.  Liabilities + equity  D.  Liabilities + accounts

Accepted Answer

c

Question 58

Which of the following statements describes GAAP?  A.  GAAP standards are written and regulated by the government.  B.  It is legally required that all companies meet GAAP standards.  C.  Companies that meet GAAP standards usually use cash basis accounting.  D.  GAAP recommends accrual basis accounting.

Accepted Answer

d

Question 59

Which of the following assets is the most liquid?  A.  Inventory  B.  Real estate  C.  Money in the bank  D.  A piece of equipment

Accepted Answer

c

Question 60

The costs of running a business are called ___________.  A.  Startup costs  B.  Cash flow  C.  Operating expenses  D.  Fixed costs

Accepted Answer

c

Question 61

The U.S. encourages domestic companies to export because _____________.  A.  It increases inflation.  B.  It increases the number of U.S. consumers who buy domestic products.  C.  It increases the value of a U.S. dollar.  D.  It improves the interest rate.

Accepted Answer

c

Question 62

Which of the following is a reason a country might put a tariff on imports?  A.  To form an agency relationship  B.  To increase its exports  C.  To protect domestic companies  D.  To create free trade

Accepted Answer

c

Question 63

In a contract, what is consideration?  A.  Exchanging things of value  B.  Breaching the contract  C.  A business tort  D.  The minimum age for the contract

Accepted Answer

a

Question 64

Which type of tort happens when you unfairly damage another company\'s reputation?  A.  Fraud  B.  Conflict  C.  Interference  D.  Defamation

Accepted Answer

d

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