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Foundations of Business: Midterm
Exam Key Concepts and Vocabulary
2026 Questions and Answers (100%
Correct Answers) Already Graded A+
What is a free enterprise system? Ans: An economic system
where individuals own and operate most businesses.
© 2026 Assignment
What does microeconomics focus on? Ans: The study of
individual consumers and businesses.
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What does GDP refer to? Ans: The total value of all goods and
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services produced domestically in a year.
What is inflation? Ans: A general rise in prices of goods and
services.
What are the four types of resources needed in business? Ans:
Land, labor, capital, and entrepreneurship.
How is a business defined? Ans: Any activity that provides
goods or services, whether or not for profit.
What is a risk of owning a business? Ans: Loss of investment,
competition, liability
What is capitalism? Ans: An economic system where
individuals own and operate the majority of businesses.
What is a mixed economy? Ans: An economic system that
combines elements of capitalism and socialism.
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What are consumer products? Ans: Products purchased by
individuals for personal use.
What does productivity measure? Ans: Average output per
worker per hour.
What are the four stages of the business cycle? Ans: Peak,
recession, trough, and recovery.
What characterizes perfect competition? Ans: Many sellers
© 2026 Assignment
offering identical products.
How does monopolistic competition differ from perfect
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competition? Ans: Products are slightly differentiated.
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What determines market price? Ans: Supply and demand.
What is the standard of living? Ans: Quality of life based on
goods and services available.
How does social media affect business? Ans: It enhances
communication and marketing opportunities.
What does sustainability in business refer to? Ans: Operating
without negative long-term effects on society and the
environment.
What is a domestic system? Ans: Producing goods at home,
often by hand.
What is business ethics? Ans: The application of moral
standards to business situations.
What occurs during whistle-blowing? Ans: Employees report
unethical practices.
Foundations of Business: Midterm
Exam Key Concepts and Vocabulary
2026 Questions and Answers (100%
Correct Answers) Already Graded A+
What is a free enterprise system? Ans: An economic system
where individuals own and operate most businesses.
© 2026 Assignment
What does microeconomics focus on? Ans: The study of
individual consumers and businesses.
Guru01 - Stuvia
What does GDP refer to? Ans: The total value of all goods and
Expert
services produced domestically in a year.
What is inflation? Ans: A general rise in prices of goods and
services.
What are the four types of resources needed in business? Ans:
Land, labor, capital, and entrepreneurship.
How is a business defined? Ans: Any activity that provides
goods or services, whether or not for profit.
What is a risk of owning a business? Ans: Loss of investment,
competition, liability
What is capitalism? Ans: An economic system where
individuals own and operate the majority of businesses.
What is a mixed economy? Ans: An economic system that
combines elements of capitalism and socialism.
, 2
What are consumer products? Ans: Products purchased by
individuals for personal use.
What does productivity measure? Ans: Average output per
worker per hour.
What are the four stages of the business cycle? Ans: Peak,
recession, trough, and recovery.
What characterizes perfect competition? Ans: Many sellers
© 2026 Assignment
offering identical products.
How does monopolistic competition differ from perfect
Guru01 - Stuvia
competition? Ans: Products are slightly differentiated.
Expert
What determines market price? Ans: Supply and demand.
What is the standard of living? Ans: Quality of life based on
goods and services available.
How does social media affect business? Ans: It enhances
communication and marketing opportunities.
What does sustainability in business refer to? Ans: Operating
without negative long-term effects on society and the
environment.
What is a domestic system? Ans: Producing goods at home,
often by hand.
What is business ethics? Ans: The application of moral
standards to business situations.
What occurs during whistle-blowing? Ans: Employees report
unethical practices.
