BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
When businesses compete, products usually become more expensive. - (ANSWER)False
The physical or tangible products that a business offers are called: - (ANSWER)goods
Which of the following are factors of production? - (ANSWER)labor, natural resources, capital,
entrepreneurs, technology
An increase in unemployment has no affect on a business owner. - (ANSWER)False
Please describe market equilibrium either in your own words or according to the textbook. -
(ANSWER)Market equilibrium is when the need and availability for an item are in balance. This is the
"perfect price" for that item.
Gross domestic product (GDP) is determined by: - (ANSWER)the overall market value of final goods and
services produced in a country in a year.
Socialism differs from communism in that the government has little control of important resources
rather than control of all resources. - (ANSWER)False
An interconnected system of different demographic factors is referred to in the book as: - (ANSWER)a
social environment
___________ competition exists when there is an industry where products are identical and there are
many small sellers such as a roadside vegetable stand. - (ANSWER)Perfect or pure
If you go to a restaurant, what is the best definition of what you are getting? - (ANSWER)a good and a
service
Profitable businesses benefit society in all the following ways EXCEPT: - (ANSWER)providing dental care
for ALL full and part-time employees
,BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
The essential function of economics is to study ___________. - (ANSWER)the exchange of goods and
services between individuals, businesses and nations.
_________ occurs when there are many buyers and many sellers in an industry with little difference
between products (like athletic shoes). Companies use differentiation to stimulate demand. -
(ANSWER)Monopolistic competition
Manufacturers are motivated by profit and thus are willing to produce more of a product at a higher
price. - (ANSWER)True
One example of a complementary good is: - (ANSWER)iPod and iTunes
Profits allow a company to: - (ANSWER)invest in new technology
What is the difference between complementary goods and substitute goods. -
(ANSWER)Complementary goods are products or services that go with each other and are consumed
together, such as the iPhone and the apps associated with it, are considered complementary goods.
Meanwhile, substitute goods are goods that can be used in place of other goods, such as Coke for Pepsi
or McDonald's Quarter Pounder for Burger King's Whopper.
Change in price is an important economic indicator because it influences consumer's purchasing power.
- (ANSWER)True
A(n) ________ seeks to primarily serve the community through social or educational means or "causes".
- (ANSWER)non-profit or not-for-profit organization
National businesses will always serve international markets. - (ANSWER)False
A person that assumes risk and creates a business is called: - (ANSWER)an entrepreneur
,BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
One social change to be aware of is the ______________ due to the large number of Baby Boomers in
the U.S. - (ANSWER)aging of the population
It is important to look at changes in GDP to determine if the economy is "healthy" or growing. -
(ANSWER)True
The U.S. government can influence the economy with fiscal policies such as increasing taxes or
increasing government spending. - (ANSWER)True
A government determines the appropriate level of taxes and spending through its ___________. -
(ANSWER)fiscal policy
_________ occurs when there are few sellers in a given market and each seller has a fairly large market
share. The market has many buyers. - (ANSWER)Oligopoly
The various resources used to create a company's goods and services are referred to as: -
(ANSWER)factors of production
Car insurance is an example of a good. - (ANSWER)False
Name 2 challenges multinational businesses face. - (ANSWER)1) Multinational corporations must be
familiar and comply with the laws of the countries in which they operate. Laws concerning the import
and export of goods vary greatly from one country to another. Things can get particularly complicated if
a product is shipped to one country for assembly, another for packaging, and then yet another country
for distribution.
(2) Safety regulations and quality control, copyright, and patent laws are some of the other laws
multinational corporations must comply with when doing business in foreign countries.
Generally in the United States we consider monopolies to be illegal. - (ANSWER)True
Consumer Price Index (CPI) is an economic indicator that is used to measure the rate of recession. -
(ANSWER)False
, BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
Name 2 benefits of profit either from the book or discussed in class. - (ANSWER)(1) The more profit a
business gets, the more they can reward their employees, increase productivity, or expand their
business into new areas.
(2) Businesses also benefit the customers by providing more goods and services the customers need and
want.
What does the term "invisible hand" mean as it relates to Adam Smith. - (ANSWER)"Invisible hand"
refers to the invisible market force that brings a free market to equilibrium with levels of supply and
demand by actions of self-interested individuals.
When a company's revenue is greater than its expenses it means that: - (ANSWER)the company earns a
profit
Which of the following BEST describes competition? - (ANSWER)2 or more companies contend with one
another to attract customers and gain an advantage
If you own a store and buy items online to sell, which factor of production best illustrates the use of the
computer and Internet? - (ANSWER)technology
When a business is profitable the society benefits. - (ANSWER)True
A rise in the general level of prices over time is called: - (ANSWER)inflation
Microeconomics is the study of the behavior of the overall economies of small countries. -
(ANSWER)False
Competition arises when two or more businesses contend with one another to attract customers and
gain an advantage. - (ANSWER)True
When businesses compete, products usually become more expensive. - (ANSWER)False
The physical or tangible products that a business offers are called: - (ANSWER)goods
Which of the following are factors of production? - (ANSWER)labor, natural resources, capital,
entrepreneurs, technology
An increase in unemployment has no affect on a business owner. - (ANSWER)False
Please describe market equilibrium either in your own words or according to the textbook. -
(ANSWER)Market equilibrium is when the need and availability for an item are in balance. This is the
"perfect price" for that item.
Gross domestic product (GDP) is determined by: - (ANSWER)the overall market value of final goods and
services produced in a country in a year.
Socialism differs from communism in that the government has little control of important resources
rather than control of all resources. - (ANSWER)False
An interconnected system of different demographic factors is referred to in the book as: - (ANSWER)a
social environment
___________ competition exists when there is an industry where products are identical and there are
many small sellers such as a roadside vegetable stand. - (ANSWER)Perfect or pure
If you go to a restaurant, what is the best definition of what you are getting? - (ANSWER)a good and a
service
Profitable businesses benefit society in all the following ways EXCEPT: - (ANSWER)providing dental care
for ALL full and part-time employees
,BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
The essential function of economics is to study ___________. - (ANSWER)the exchange of goods and
services between individuals, businesses and nations.
_________ occurs when there are many buyers and many sellers in an industry with little difference
between products (like athletic shoes). Companies use differentiation to stimulate demand. -
(ANSWER)Monopolistic competition
Manufacturers are motivated by profit and thus are willing to produce more of a product at a higher
price. - (ANSWER)True
One example of a complementary good is: - (ANSWER)iPod and iTunes
Profits allow a company to: - (ANSWER)invest in new technology
What is the difference between complementary goods and substitute goods. -
(ANSWER)Complementary goods are products or services that go with each other and are consumed
together, such as the iPhone and the apps associated with it, are considered complementary goods.
Meanwhile, substitute goods are goods that can be used in place of other goods, such as Coke for Pepsi
or McDonald's Quarter Pounder for Burger King's Whopper.
Change in price is an important economic indicator because it influences consumer's purchasing power.
- (ANSWER)True
A(n) ________ seeks to primarily serve the community through social or educational means or "causes".
- (ANSWER)non-profit or not-for-profit organization
National businesses will always serve international markets. - (ANSWER)False
A person that assumes risk and creates a business is called: - (ANSWER)an entrepreneur
,BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
One social change to be aware of is the ______________ due to the large number of Baby Boomers in
the U.S. - (ANSWER)aging of the population
It is important to look at changes in GDP to determine if the economy is "healthy" or growing. -
(ANSWER)True
The U.S. government can influence the economy with fiscal policies such as increasing taxes or
increasing government spending. - (ANSWER)True
A government determines the appropriate level of taxes and spending through its ___________. -
(ANSWER)fiscal policy
_________ occurs when there are few sellers in a given market and each seller has a fairly large market
share. The market has many buyers. - (ANSWER)Oligopoly
The various resources used to create a company's goods and services are referred to as: -
(ANSWER)factors of production
Car insurance is an example of a good. - (ANSWER)False
Name 2 challenges multinational businesses face. - (ANSWER)1) Multinational corporations must be
familiar and comply with the laws of the countries in which they operate. Laws concerning the import
and export of goods vary greatly from one country to another. Things can get particularly complicated if
a product is shipped to one country for assembly, another for packaging, and then yet another country
for distribution.
(2) Safety regulations and quality control, copyright, and patent laws are some of the other laws
multinational corporations must comply with when doing business in foreign countries.
Generally in the United States we consider monopolies to be illegal. - (ANSWER)True
Consumer Price Index (CPI) is an economic indicator that is used to measure the rate of recession. -
(ANSWER)False
, BUS 110 Final Exam (Chapters 1-8) Questions and answers with accurate rationales(PASSED).
Name 2 benefits of profit either from the book or discussed in class. - (ANSWER)(1) The more profit a
business gets, the more they can reward their employees, increase productivity, or expand their
business into new areas.
(2) Businesses also benefit the customers by providing more goods and services the customers need and
want.
What does the term "invisible hand" mean as it relates to Adam Smith. - (ANSWER)"Invisible hand"
refers to the invisible market force that brings a free market to equilibrium with levels of supply and
demand by actions of self-interested individuals.
When a company's revenue is greater than its expenses it means that: - (ANSWER)the company earns a
profit
Which of the following BEST describes competition? - (ANSWER)2 or more companies contend with one
another to attract customers and gain an advantage
If you own a store and buy items online to sell, which factor of production best illustrates the use of the
computer and Internet? - (ANSWER)technology
When a business is profitable the society benefits. - (ANSWER)True
A rise in the general level of prices over time is called: - (ANSWER)inflation
Microeconomics is the study of the behavior of the overall economies of small countries. -
(ANSWER)False
Competition arises when two or more businesses contend with one another to attract customers and
gain an advantage. - (ANSWER)True
