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Business: A Changing World, 4/e
O.C. Ferrell, Colorado State University
Geoffrey Hirt, DePaul University

The Dynamics of Business and Economics

Multiple Choice Quiz

Please answer all questions.



1

The following function involves activities designed to obtain money and use it effectively in the business:
A)accounting.
B)engineering.
C)finance.
D)production.
E)marketing.
2

When Sony introduced its 5 CD changer, the price of and demand for these systems were high. As a result,
A)other suppliers introduced 5 CD changers to meet the demand.
B)consumers stopped buying all CD players.
C)producers stopped producing 5 CD changers.
D)competition was not allowed to enter the market.
E)the equilibrium price met supply.
3

Under a communist system, which goods and services are provided is determined by
A)competition.
B)supply.
C)consumer demand.
D)market forces.
E)the government.
4

Profit is the goal of
A)every U.S. organization.
B)most hospitals and libraries.
C)all business activities.
D)socially responsible charities.
E)every organization in a capitalist society.
5

Which of the following is not a product?
A)business profit
B)a haircut at a department store
C)a visit to the university infirmary for treatment of a bad cold.
D)a Mazda Miata
E)a Big Mac
6

A severe recession may turn into a(n)
A)economic contraction.
B)more stable economy.
C)mixed economy.
D)economic expansion.
E)depression.
7

Communist societies
A)operate under a free market system.
B)have a high standard of living.
C)seldom have consumer shortages.
D)have only one class of people.
E)appear to be efficient and equitable, at least in theory.
8

The primary difference between business and nonprofit organizations is the importance of:
A)product offerings.
B)customer satisfaction.
C)profit
D)service offerings.
E)new product development.
9

Resources used to produce goods and services are called
A)factors of production.
B)financial resources.
C)human resources.
D)natural resources.
E)capital.
10

All the following are factors of production used to make goods and services except
A)financial resources.
B)natural resources.
C)capital.
D)customers.
E)human resources.
11

The economic system in which the government owns and operates basic industries, but individuals own most businesses is called
A)socialism.
B)capitalism.
C)communism.
D)egalitarianism.
E)laissez-faire.
12

Consumers are generally willing to
A)let businesses dictate demand.
B)demand more at a lower price.
C)demand more at a higher price.
D)determine equilibrium price.
E)pay whatever the market charges.
13

Inflation refers to
A)a continuing rise in prices over a period of time.
B)economic growth and increased spending.
C)an increasing national standard of living.
D)an economic expansion.
E)increases in employment levels over time.
14

A willingness to take risks is an important characteristic associated with
A)consultants.
B)employees.
C)entrepreneurs.
D)accountants.
E)bankers.
15

When Walgreen's has a sale on 12-packs of Diet Coke
A)consumers won't demand more Diet Coke than normal.
B)the store won't supply more Diet Coke than it normally does.
C)consumers will demand more Diet Coke.
D)Coca Cola will halt production.
E)consumers will demand less Diet Coke.
16

The functions of organizing, controlling, planning, and controlling are most closely associated with management of the firm's
A)finances.
B)records.
C)employees.
D)customers.
E)competitors.
17

In the history of the American economy, the early stages of the U.S. economy were based mainly on
A)service.
B)technology.
C)manufacturing.
D)agriculture.
E)information.
18

Aspirin and soft drinks are usually sold under which competitive environment?
A)monopoly
B)monopolistic competition
C)pure competition
D)oligopoly
E)pure competition
19

The economy of the United States is best described as
A)pure capitalism.
B)mixed economy based on socialism.
C)pure socialism.
D)mixed economy based on capitalism.
E)mixed communism.
20

Business is an important area of study because
A)it provides employment for most people.
B)it provides the goods and services consumers need to survive.
C)business activities and skills also occur in nonprofit organizations.
D)it helps you become a better informed consumer.
E)all of the above are reasons business is an important area of study.
21

The sum of all goods and services produced in a country during a year is called
A)real income.
B)gross domestic product.
C)real gross national product.
D)balance of trade.
E)gross international product.




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