Question 1
John Blue has started his own Internet business, Blueways.com, offering online ordering of refurbished computer parts. His business has experienced a slower than usual start due to higher than expected costs for capital resources. Those expenses include:
buildings, money, and skilled labor.
computers, cables, Internet service, copiers, and software.
raw materials, money, and employee training.
advertising and financial costs.
Question 2
__________ is an entrepreneurial "must."
Freedom from taxation
Protection from competition
Freedom from regulation
Protection from corruption
Question 3
To be successful, entrepreneurs must be comfortable risking their money and __________ to start and manage a business.
time
standard of living
revenue
freedom
Question 4
Megan's parents want her to become an accountant after she graduates from college. However, Megan wants to start her own cupcake store. To boost her chance of personal success, experts advise Megan to:
become an accountant because it is a safe career choice.
do what her parents suggest since they will be paying for her student loan.
do what she loves.
become an accountant at a restaurant.
Question 5
Business transactions that occur online are examples of:
I-commerce.
meta-economics.
e-commerce.
nano-commerce.
Question 6
All of the following are basic freedoms encouraging entrepreneurship EXCEPT:
freedom of choice.
freedom from excess regulation.
freedom of guaranteed profits.
freedom from too much taxation.
Question 7
Leading edge businesses maintain a competitive advantage by introducing products:
just as the market becomes ready to embrace them.
12-18 months before the market is really ready to embrace them.
long before anyone else has even thought of them, and at least two years before the majority of customers will express interest in them.
right before the demand for the product reaches its highest level.
Question 8
The core goal of business is to generate long-term __________by delivering ___________ to their customers.
value; products
profits; value
profits; security
value; profits
Question 9
Entrepreneurs participate in __________ business environments.
competitive, economic, and social
capital, economic, and competitive
human resources, competitive, and social
economic, competitive, technological, social, and global
Question 10
During the relationship era, businesses concentrated on:
hard selling designed to convince people to buy products.
building long-term customer relationships.
developing brands to differentiate their products from those of competitors.
refining the production process and creating greater efficiencies.
Question 11
Which of the following is the BEST way for firms to enhance customer satisfaction?
By providing lower-priced products
By providing greater value
By providing effective advertising and promotion
By providing the greatest quality
Question 12
Which of the following statements represents how consumers and workers react to socially responsible behavior by business?
A large majority of both consumers and workers tend to respond favorably to socially responsible business behavior.
Workers tend to respond favorably to socially responsible behavior, but consumers tend to ignore the benefits of such behavior.
The purchasing decisions of most consumers are influenced by socially responsible behavior, but most workers are having no interest in whether their employer is socially responsible.
Most workers and consumers base decisions on monetary considerations and largely ignore issues dealing with socially responsible behavior.
Question 13
Lisa is a marketing consultant who is trying to help a regional company design an advertising campaign that will appeal to the local population. Her report should take into account __________ factors such as the age, income, and ethnic composition of the area's population.
psychographic
sociological warfare
natural resource management
demographic
Question 14
Business will incur a __________ when expenses are higher than revenue.
premium
profit
surplus
loss
Question 15
As life spans increase and birthrates decrease, the working population will decrease while the number of retirees will increase. One example of new business growth reflecting this market might be a(n):
increase in the number of assisted living facilities.
increase in the number of school-age after school programs.
rise in the number of state laws requiring employers to offer prescription benefit plans for employees.
new federal healthcare premium program adjusted for age.
Question 16
The debt ceiling is:
the maximum amount Congress lets the government borrow.
the sum of all the money that the federal government has lent over the years.
the total value of all final goods and services produced within a nation's physical boundaries.
the total amount of money within the overall economy.
Question 17
Michael has inherited $500,000 from the sale of a family business. His banker is advising him to find multiple banks to deposit his money. Why?
The open market operations of the Federal Reserve would invest his money in other securities and might lose it without needing to justify the expenditure.
The Federal Reserve does not keep that much money in any one bank due to federal regulations prohibiting the buying and selling of securities.
The Federal Deposit Insurance Corporation will only insure up to $250,000 in each account per customer, per bank.
He needs to diversify his holdings in more than one bank to protect himself against fraudulent lending practices of banks.
Question 18
Why is a low level of inflation desirable in an economy, and why is deflation not desirable?
Low-level inflation reflects a healthy economy; people have money and are willing to spend it.
A low level of inflation keeps a currency from edging too near deflation.
Inflation helps to justify investment and keeps a currency strong.
Deflation means that the currency is increasing in value, and is actually desirable.
Question 19
The main economic goal of the government in a socialist economy is to:
keep taxes as low as possible.
operate key economic enterprises in the best interests of the general public.
achieve the highest possible rate of economic growth.
provide the widest array of economic freedoms to its citizens.
Question 20
__________ unemployment involves layoffs during recessions.
Frictional
Structural
Cyclical
Seasonal
Question 21
A basic characteristic of __________ is that both producers and consumers are free to make their own economic decisions on many basic issues.
socialism
capitalism
communism
mercantilism
Question 22
If low-cost solar power were to become a viable energy source in households across the U.S., what would be the economic impact on energy prices?
Energy costs across the country would increase with adoption of the new energy source.
Housing prices would decrease as new homes are built with this new energy source.
Prices would increase as this is a new energy source.
Prices would decrease as competition increases in energy production.
Question 23
When tax revenue is higher than government expenditures, the government incurs a:
budget deficit.
windfall.
budget surplus.
national debt.
Question 24
A market structure with pure competition has all of the following characteristics EXCEPT:
the firms use product differentiation allowing consumers to easily identify their favorite brands.
customers cannot distinguish one product from another.
firms can easily enter and leave the market.
no individual firm has any control over the price of the product.
Question 25
The economy, as a system, represents the:
non-efficient use of material resources.
flow of resources from production through consumption.
means of production only.
means of capitalistic systems.