Chapter 1 Test Yourself PDF

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Questions for Chapter 1 Reviewing and possible test questions...

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Chapter 1 - Exploring the World of Business and Economics Test Yourself Matching Questions 1. _____ Materials, machinery, and workers are assembled in one place. 2. _____ The government spends more than it receives. 3. _____ A market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors. 4. _____The process of distinguishing Colgate from Crest toothpaste. 5. _____The average level of output per worker per hour. 6. _____ A study of how wealth is created and distributed. 7. _____ An organized effort to produce and sell goods and services for a profit. True False Questions

8. _____ A system where individuals own and operate the majority of businesses. 9. _____ A person who takes the risk and invests in a business. 10. _____Value of all goods and services produced within a country during a one-year period. a. capitalism b. economics c. federal deficit d. productivity e. product differentiation f. business g. factory system h. entrepreneur i. gross domestic product j. monopolistic competition

11.T F The majority of small business firms are successful at the end of ten years. 12.T F For a business to be organized, it must combine four types of resources: workers, natural resources, capital, and ownership. 13.T F The equilibrium price means that the supply and demand for a product are in balance. 14.T F Under communism, individual consumers determine what will be produced. 15.T F Hewlett-Packard Corporation and Dell Computer use

product differentiation in the marketplace. F If a firm’s sales revenues exceed its expenses, the firm has earned a profit. F Fiscal policy determines the level of interest rates. F The ultimate objective of business firms should be to satisfy the needs of their customers. F Adam Smith is the father of communism and advocated a classless society. F A business cycle consists of four states: peak, recession, trough, and recovery.

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© Copyright 2019 Cengage Learning, Inc. All rights reserved.

Multiple-Choice Questions 21.

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Demand is a a. relationship between prices and the quantities purchased by buyers. b. relationship between prices and the quantities offered by producers. c. quantity of goods available for purchase. d. is measured by comparing the gross domestic product with supply. e. by-product of communism. The process of separating work into distinct tasks is called a. product differentiation. b. networking. c. specialization. d. a factory system. e. a domestic system. What term implies that there shall be no government interference in the economy? a. Market economy b. Free-market economy c. Command economy d. Laissez-faire e. Socialism When the level of prices in an economy rise, it’s called a. prosperity. b. recession. c. depression. d. recovery. e. inflation. The total of all federal deficits is called a. depression. b. fiscal policy. c. gross domestic product. d. national debt.

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e. business cycle. The ability to work well with many types of people in the workplace is referred to as a. workplace differentiation. b. cultural diversity. c. economic stability. d. career unity. e. employee magnification. Best Buy and Walmart are both examples of a. production intermediaries. b. manufacturing businesses. c. service businesses. d. marketing intermediaries. e. small businesses. The study of the national economy and the global economy is referred to as a. factors of the economy. b. microeconomics. c. macroeconomics. d. laissez-faire capitalism. e. a command economy. How well off an individual or a society is, mainly in terms of want satisfaction through goods and services is referred to as a. microeconomics. b. national satisfaction index. c. economic standard. d. standard of living. e. global comparison measure. A monthly index that measures changes in prices that consumers pay for goods is referred to as the

© Copyright 2019 Cengage Learning, Inc. All rights reserved.

a. prosperity index. b. producer’s price index. c. prosperity price predictor.

© Copyright 2019 Cengage Learning, Inc. All rights reserved.

d. inflation rate index. e. consumer price index....