Chapter 1: Fundamentals of Business and Economics
Multiple Choice

1.  

Which of the following is NOT a key social or economic role of business?
to provide goods and services that a society needs
to provide jobs
to reinvest profits in the economy
to eliminate competition by forming monopolies

2.  

Which of the following is NOT a major economic role of the U.S. government?
to regulate prices and labor wages
to protect consumers and foster competition
to adjust tax and interest rates by regulating the money supply
to provide public services

3.  

The dollar value of all the final goods and services produced by businesses located within a nation's borders, excluding receipts from overseas operations of domestic companies is
the gross national product.
the gross domestic product.
the consumer price index.
fiscal policy.

4.  

Which of the following is an example of a lagging economic indicator?
Average length of unemployment
New orders for consumer goods
Recession
None of the above

5.  

Which of the following is NOT among the challenges businesses face particular to the global economy?
Starting and managing a small business in today's competitive environment
Committing to culturally diverse workforce
Behaving in an ethically and socially responsible manner
Memorizing historical information about the industrial and technological revolutions

6.  

Which of the following illustrates how "the new economy" differs from the old?
The new economy is concerned only with physical goods.
Competitors are joining forces to build monopolies.
Companies in the new economy have difficulty entering and exiting the marketplace.
The pursuit of monopoly power is the driving thrust of the new economy.

7.  

Which of the following are "old economy" rules, which remain valid in the new economy?
Profit earning is important to a company's success.
Have a trusted brand name.
Offer a product or service people want or need.
All of the above.

8.  

Why do people study business?
To gain perspective from the position of an employer or manager
Because they have already determined they want a career in business
To learn what is necessary to run a successful business
Both "a" and "c"

9.  

Demand curve is defined as:
a graph of the relationship between various prices and the quantity supplied at each price.
a graph of he relationship between various prices and the quantity demanded at each price.
the point at which quantity supplied equals quantity demanded.
none of the above.

10.  

Pure competition is:
a market dominated by a few producers
rivalry among businesses for the same customer.
a condition that cannot exist in a free-market or mixed economy.
when so many buyers and sellers exist that no single buyer or seller can individually influence market prices.

11.  

Which of the following is NOT considered a barrier to entry into the marketplace?
Significant capital requirements
High learning curves
Tightly controlled markets
The electronic marketplace

12.  

Which of the following is NOT found on www.Hoovers.com?
Pencils
Wage comparisons
Targeted business leads
Stock screener

13.  

Business success Yahoo.com got its start as a:
bet.
hobby.
college business course assignment.
get rich quick scheme

14.  

The monthly statistic that measures changes in the prices of about 400 goods and services that consumers buy is the:
leading economic indicators.
inflation rates.
GNP.
CPI.

15.  

Which of the following is an example of privatization?
The sale of Heathrow Airport
The sale of Rover automobile manufacturing
The U.S. government's acquisition of the postal system
Both "a" and "b."


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