INTRO TO BUSINESS FINAL EXAM STUDY
GUIDE 2026 | PRACTICE QUESTIONS,
ANSWERS & RATIONALES
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales Included
,Five factors of production land
Labor
Capital
Knowledge
Entrepreneurship
Goods Tangible products such as computers, food, cars, and clothing
Services intangible products which cannot be held in your hand, such as education,
healthcare, insurance, and recreation
Value chain The set of all activities needed to bring a good or service into the hands of the
consumer
Social or socio- culture Many factors and forces in the business environment affect the choices and
activities of firms. Demographic trends (ex: the increase in the number of older
citizens) is part of the social/ socio-culture environment of business
Three ways government actions can promote business Incubator- government gives businesses what they need to succeed
formation and growth
Lower taxes- the government gives businesses lower taxes
There are certain areas were the government will lower prices to purchase
property for your business
Economics The study of how society employs resources to produce goods and services for
consumption among various groups of individuals
Communism A government system where major factors of production are owned and
controlled by the government, which makes almost all economic decisions, and
citizens have very limited personal freedoms
Capitalism The foundation of the economic system of the US, Canada, England, and Australia
Market price (equilibrium point) In a free market economy, as the demand for a product or service increases it will
cause scarcity, and thus the price that consumers are willing to pay for that
product or service will increase. As consumers' willingness to pay increases, more
profit seeking suppliers will enter the market to provide the good or service, and
the increased supply and competition will cause the price to go back down. the
interaction of these forces of supply and demand will cause the price for a good
or service to eventually settle at the market price (equilibrium point)
Socialist Businesses are mostly run by the government
Usually higher taxes because of free healthcare and other government benefits
Fiscal policy Efforts by the government to adjust taxes and federal spending to stabilize the
economy
Capitalist The right to own private property and the right to own a business and keep all of
its profits
, Gross domestic product (GDP) When studying the competitiveness of different nations and comparing their
outputs and standards of living, a measure that is often used is the total value of
all goods and services that are produced in each country in a given year
GDP per capita When the GDP's total value of output is divided by a country's population, to give
a per-person value of economic output
Adam Smith's theory about how society will be improved Adam Smith, the father of economics, came up with the invisible hand theory. The
with such freedoms theory included that people will join the market seeking profits and desiring
innovation, and people will want to buy the product. the invisible hand is working
to stimulate the economy, but really it's people desire for innovations and profits.
He also supported Laissez fair, to let alone
Global value chain All the steps it takes (from coming up with the product) to getting the product to
the hands of the consumer. the reason it's a global value chain is because the
value chain "steps" are completed in different countries
Free trade The movement of goods and services among nations without political or
economic barriers
Competitive advantage David Ricardo believed that countries should produce products that they
produce best and most efficiently, and import everything else from other
countries that make those products best and most efficiently
Importing Buying products from another country
Exporting Selling products to another country
Benefits of global expansion More profit- if you have more stores you will make more money
Grow your brand- it will help make your business's name bigger and more well
known
Outsource- it may be less expensive to send your products to other countries
because of lower taxes between countries
An example of international joint venture General motors and Toyota formed a partnership called NUMMI to build cars
together in an abandoned GM plant in California
Balance of trade The total value of a nation's exports compared to its imports measured over a
particular period of time
Outsourcing When a firm "fine slices" the set of activities required to produce its goods or
services (ex: accounting or manufacturing) and contracts with other companies to
perform some of all of these functions
Trade protectionism The use of government regulations to limit the import of goods and services
NAFTA The north american free trade agreement. it brings countries in North America the
opportunity to trade freely with one another. It includes the US, Mexico, and
Canada
GUIDE 2026 | PRACTICE QUESTIONS,
ANSWERS & RATIONALES
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales Included
,Five factors of production land
Labor
Capital
Knowledge
Entrepreneurship
Goods Tangible products such as computers, food, cars, and clothing
Services intangible products which cannot be held in your hand, such as education,
healthcare, insurance, and recreation
Value chain The set of all activities needed to bring a good or service into the hands of the
consumer
Social or socio- culture Many factors and forces in the business environment affect the choices and
activities of firms. Demographic trends (ex: the increase in the number of older
citizens) is part of the social/ socio-culture environment of business
Three ways government actions can promote business Incubator- government gives businesses what they need to succeed
formation and growth
Lower taxes- the government gives businesses lower taxes
There are certain areas were the government will lower prices to purchase
property for your business
Economics The study of how society employs resources to produce goods and services for
consumption among various groups of individuals
Communism A government system where major factors of production are owned and
controlled by the government, which makes almost all economic decisions, and
citizens have very limited personal freedoms
Capitalism The foundation of the economic system of the US, Canada, England, and Australia
Market price (equilibrium point) In a free market economy, as the demand for a product or service increases it will
cause scarcity, and thus the price that consumers are willing to pay for that
product or service will increase. As consumers' willingness to pay increases, more
profit seeking suppliers will enter the market to provide the good or service, and
the increased supply and competition will cause the price to go back down. the
interaction of these forces of supply and demand will cause the price for a good
or service to eventually settle at the market price (equilibrium point)
Socialist Businesses are mostly run by the government
Usually higher taxes because of free healthcare and other government benefits
Fiscal policy Efforts by the government to adjust taxes and federal spending to stabilize the
economy
Capitalist The right to own private property and the right to own a business and keep all of
its profits
, Gross domestic product (GDP) When studying the competitiveness of different nations and comparing their
outputs and standards of living, a measure that is often used is the total value of
all goods and services that are produced in each country in a given year
GDP per capita When the GDP's total value of output is divided by a country's population, to give
a per-person value of economic output
Adam Smith's theory about how society will be improved Adam Smith, the father of economics, came up with the invisible hand theory. The
with such freedoms theory included that people will join the market seeking profits and desiring
innovation, and people will want to buy the product. the invisible hand is working
to stimulate the economy, but really it's people desire for innovations and profits.
He also supported Laissez fair, to let alone
Global value chain All the steps it takes (from coming up with the product) to getting the product to
the hands of the consumer. the reason it's a global value chain is because the
value chain "steps" are completed in different countries
Free trade The movement of goods and services among nations without political or
economic barriers
Competitive advantage David Ricardo believed that countries should produce products that they
produce best and most efficiently, and import everything else from other
countries that make those products best and most efficiently
Importing Buying products from another country
Exporting Selling products to another country
Benefits of global expansion More profit- if you have more stores you will make more money
Grow your brand- it will help make your business's name bigger and more well
known
Outsource- it may be less expensive to send your products to other countries
because of lower taxes between countries
An example of international joint venture General motors and Toyota formed a partnership called NUMMI to build cars
together in an abandoned GM plant in California
Balance of trade The total value of a nation's exports compared to its imports measured over a
particular period of time
Outsourcing When a firm "fine slices" the set of activities required to produce its goods or
services (ex: accounting or manufacturing) and contracts with other companies to
perform some of all of these functions
Trade protectionism The use of government regulations to limit the import of goods and services
NAFTA The north american free trade agreement. it brings countries in North America the
opportunity to trade freely with one another. It includes the US, Mexico, and
Canada
