Exam Prep The Dynamics Of Business And Economics Chapter 1 - Business Foundations Changing World 11e Complete Test Bank by O. C. Ferrell. DOCX document preview.
Chapter 01
The Dynamics of Business and Economics
True / False Questions
1. | Businesses have the right to keep and use their profits as they choose, without limitations. |
2. | Finance refers to all activities concerned with obtaining money and using it effectively. |
3. | Owners have little responsibility to provide funds for the operation of the business. |
4. | All economic systems must address three important issues, one of which is how the goods and services will be produced. |
5. | The equilibrium price is represented by the point where a product's supply and demand curves intersect. |
6. | While ethical behavior can enhance a company's reputation, it often has a negative effect on the company's financial performance. |
Multiple Choice Questions
7. | _____ is the primary goal of business.
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8. | The outcomes of a business's efforts are
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9. | Businesses differ from nonprofit organizations in that a business's focus is on
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10. | Which of the following is an example of an intangible product?
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11. | Sue hired an attorney to help her draft a purchase and sale agreement for her new home. The home is an example of a product that is a(n)
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12. | Which of the following is an example of a tangible product?
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13. | Which of the following statements is true about businesses and profits?
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14. | All of the following are true of nonprofit organizations EXCEPT they
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15. | All the groups that have an interest in an organization's success and outcomes are known as the organization's
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16. | Auto Depot is working to find a way to produce the SUVs and trucks its customers want while meeting environmental requirements. This is an effort to please multiple
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17. | All of the following are people and forces beyond an organization's control that have an impact on the business's daily operations EXCEPT
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18. | Among the major activities of business, which of the following is an element of management?
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19. | Mary is the owner of a small business. She has an HR person, an operations manager, a marketing manager, and a sales manager on staff. Who is responsible for the financial decisions that arise in the course of business?
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20. | Which of the following is true of the responsibilities of the people involved in a business?
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21. | _____ is an element of the management activity in a business.
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22. | Paral has responsibility for the functions of organizing, staffing, planning, and controlling activities in a large company. These functions are most closely associated with
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23. | Karen, the manager of a new pet grooming company, makes sure her grooming salon always has plentiful treats and toys for the animals as well as beverages and snacks for their owners to ensure a quality customer service experience. This is an example of the _______ element of management.
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24. | _____ gather information and conduct research to determine what customers want. They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available.
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25. | Which of the following can be grouped under a single segment among the various elements of business activity?
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26. | Advertising, personal selling, coupons, and sweepstakes are forms of the _____ aspect of marketing activities.
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27. | Games Galore has a new video game that it hopes will increase its sales. It is offering coupons and a sweepstake to get people to buy the game. These are all examples of
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28. | Which of the following is NOT true of the marketing mix?
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29. | When a business fails or does not make a profit, _____ have the most to lose in terms of finances.
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30. | David is an accountant for a small company. As such, he participates primarily in _______ activities.
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31. | _____ is the study of how resources are distributed for the production of goods and services within a social system.
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32. | A firm's _____ resources are also known as labor.
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33. | _____ are the funds used to acquire the natural and human resources needed to provide products.
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34. | Which of the following is a factor of production for a firm?
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35. | Which of the following is a natural resource?
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36. | Which of the following is an intangible resource?
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37. | A(n) _____ describes how a particular society distributes its resources to produce goods and services.
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38. | Joachim lives and works in a communist country. Which of the following statements is true about a communist economy?
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39. | Which of the following is considered a command economy?
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40. | Which of the following is a characteristic of communist economies in reality?
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41. | Which of the following has become the first communist country to make strong economic gains by adopting capitalist approaches to business?
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42. | How are profits handled in communist systems?
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43. | Which of the following is true of product availability in a communist system?
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44. | In which of the following economic systems do most people work for government-owned industries or farms?
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45. | In a socialist economy,
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46. | _____ is an economic system in which the government owns and operates basic industries.
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47. | Which of the following is a true statement about a socialist system of economy?
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48. | In the country of Thelisia, income and social services are distributed equally among its citizens, however, they must pay high taxes and they experience high levels of unemployment. Thelisia is an example of a(n) ______ nation.
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49. | In a free-market system,
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50. | In a capitalist economic system
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51. | ____ is often called the father of capitalism.
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52. | How does modified capitalism differ from pure capitalism?
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53. | During a recent recession, the government of Ingrid provided loans and took ownership positions in its main bank, Savings Co. What economic system does this exemplify?
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54. | Egalitarianism refers to the
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55. | Which of the following countries is an example of an economic system based on capitalism?
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56. | All of the following are examples of mixed economies EXCEPT
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57. | Gary is a real estate entrepreneur in a country that promotes the individual right to own property, earn profits, make decisions about business operations, and choose productivity systems. Which of the following systems best describes Gary's business environment?
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58. | _____ relates to the number of goods and services that consumers are willing to buy at different prices at a specific time.
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59. | _____ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time.
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60. | _____ is the number of products that businesses are willing to sell at different prices at a specific time.
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61. | Generally, when a retailer announces a discount sale on all its products
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62. | If you are a member of a wholesale club, like BJs or Sam's Club, you tend to buy items like toilet paper and groceries in bulk to save money. This is an element of
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63. | Which of the following statements describes the force that drives the distribution of resources (goods and services, labor, and money) in a free-enterprise economy?
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64. | Which of the following markets is most likely to be a monopoly?
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65. | Using the supply and demand curves shown in the graph that follows, what is the equilibrium price for soft drinks? 
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66. | According to Adam Smith, competition
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67. | Steve is an entrepreneur who decided to start an online bakery. Since all his business will be done online and he can bake in his home kitchen, he is saving building and other brick-and-mortar costs, which allows him to pass that savings on to his customers. Reducing prices to customers is an element of
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68. | When different businesses promote similar products that differ in some characteristics but satisfy the same consumer need, the competitive environment is most likely to be
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69. | ______ is an example of a product of monopolistic competition.
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70. | Kevin owns a local farm stand. Although he sells fruit and vegetables, like the grocery store chains in the area, he has some power over the price he charges because he can offer consumers features they want. For instance, his fruit and vegetables are organic and locally grown. This is an example of
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71. | Which of the following exists when there are many small businesses selling one standardized product, such as agricultural commodities like wheat, corn, and cotton?
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72. | The market for corn in Brazil has a large number of sellers and buyers, and there is no difference in the products sold by each seller. As a result, prices are determined by the
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73. | When there is only one business providing a product in a given market, there exists
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74. | In which of the following market structures do individual businesses have control over their products' price because each business supplies a large portion of the products sold in the marketplace?
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75. | Which of the following is true regarding an oligopoly?
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76. | Following a bad harvest, the prices of agricultural commodities in Urbania have increased dramatically, as have the prices of products manufactured from agricultural commodities. Government intervention has failed to arrest the rising prices. Based on this information, Urbania is undergoing
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77. | Economic expansion occurs when
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78. | Rachel is living on a fixed income since her retirement. She is worried that the economy is expanding too rapidly, which could result in
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79. | Which of the following is true of economic expansion?
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80. | Which of the following is a characteristic of economic depression?
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81. | Which of the following is associated with a decline in spending?
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82. | Contractions of the economy lead to
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83. | Increased unemployment can reduce consumer demand for goods and services, leading to
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84. | The country of Manyland experienced a rapid expansion of its economy, which resulted in prices doubling every 12 hours. This is an example of
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85. | Which of the following statements is true about GDP as a measure of a country's economic health?
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86. | The United States has a budget deficit of over $18 trillion dollars. A budget deficit occurs when a nation
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87. | If a country balances the money it spends for social, defense, and other programs with the amount of money it takes in from taxes, this country is eliminating a
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88. | _____ measures changes in the prices of goods and services purchased for consumption by typical urban households.
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89. | _____ indicates the income level of "average" Americans. It is useful in determining how much "average" consumers spend and how much money Americans are earning.
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90. | All of the following statements are true of the U.S. national debt EXCEPT
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91. | In Norway, most citizens are able to afford basic necessities and some degree of comfort. This means Norway has a(n)
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92. | Which of the following is true of an open economy, like that of the United States?
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93. | Joe is a consumer who earns less than $50,000 per year. Joe exemplifies the
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94. | To reduce its tax rates, Mootown Burgers moved its headquarters to a country with a lower tax rate. This is an example of tax
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95. | Before the Industrial Revolution, the economy of North America under the colonists was characterized by
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96. | Which of the following is a change that occurred in the United States during the Industrial Revolution?
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97. | Who set up the first American textile factory after he memorized the plans for an English factory and emigrated to the United States?
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98. | In the history of the American economy, the period following the Industrial Revolution was known for an increasing emphasis on
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99. | When the assembly line was applied to more industries, America entered the
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100. | Which of the following is a characteristic of the marketing economy phase of the American economy?
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101. | Which of the following is a characteristic of a service economy?
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102. | An entrepreneur has been primarily associated with the willingness to
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103. | The American economic system is best described as _____ because the government regulates business to preserve competition and protect consumers and employees.
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104. | All of the following are true of entrepreneurs EXCEPT
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105. | Which of the following emerged in the United States as a result of industrialization?
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106. | Which of the following is true of ethics and social responsibility in business?
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107. | Several employees in a well-known corporation, CarCorp, were arrested for intentionally selling defective car parts to their customers. Scandals like this
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108. | All of the following are true of workplace diversity EXCEPT it
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109. | Which of the following is done by the American government to counteract economic contraction?
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110. | Which of the following is useful in fighting inflation?
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Essay Questions
111. | What are nonprofit organizations? Differentiate between nonprofit organizations and businesses.
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112. | Name at least 3 benefits of studying business.
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113. | Differentiate between communist, socialist, and capitalist economic systems.
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114. | How is gross domestic product (GDP) used as a measure of a nation's economic health?
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115. | Describe the pre-industrial economic phase of the United States.
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116. | Describe the role of ethics and social responsibility in business.
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Business Foundations Changing World 11e Complete Test Bank
By O. C. Ferrell