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CH BUSN 1, 2, 8 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ 1. According to a survey described in your textbook, approximately what percentage of American adults have taken steps towards entrepreneurship? a. 33% b. 47% c. 70% d. 92% 2. Urban Outfitters has mastered the art of managing change. With the placement of Xbox 360s and other video games in the menswear section of each store, sales have grown because men are kept busy while women shop. This is an example of a company ____ a. not caring about women. b. reinventing itself to meet customer needs. c. not listening to its customers. d. with customer anxiety. 3. Urban Outfitters delivers small batches of new merchandise to each store every day. This ____ a. decreases store traffic, as the store looks too busy. b. increases store traffic, as customers want to see whats new on a regular basis. c. has no affect on store traffic at all. d. causes customers to shop somewhere else because the store changes too much. 4. During the marketing era consumers found: ____ a. fewer choices for goods and services. b. fewer businesses offering goods and services. c. more limits on spending. d. more choices for goods and services. 5. ______________ boomed as mass production took hold during the Industrial Revolution. ____ ____ a. Factory production b. Marketing concept c. Industrialization d. Entrepreneurship 6. Businesses depend on detailed information about their own customers to promote new products and services. What types of resources are commonly used to meet customers wants and needs? a. The Internet b. Digital resources c. Technological improvements d. All of the above 7. Leading edge businesses maintain a competitive advantage by introducing products: a. just as the market becomes ready to embrace them. b. 12-18 months before the market is really ready to embrace them. ____ c. long before anyone else has even thought of them, and at least 2 years before the majority of customers will express interest in them. d. right before the the demand for the product reaches its highest level. 8. The production era is recognized for ____ a. increasingly specialized jobs, resulting in higher productivity and lower costs and prices. b. power shifting away from business toward consumers. c. the rise of monopoly power giving big business the ability to raise prices almost at will. d. creating satisfied customers who acted as advocates for business. 9. Nonprofit organizations play a critical role in a. the community. b. the economy. c. the government. d. all of the above. ____ 10. Nonprofit organizations are commonly recognized for a. employing people. b. building revenue. c. producing goods and services. d. all of the above. ____ 11. Sabiha will be opening her catering business soon but still needs to hire a few more employees to fill the schedule. As an entrepreneur she enjoys certain economic freedoms and a. can hire whom she chooses. b. can only hire who the federal government says she can hire. c. will be given her labor force once she pays her business taxes. d. will hire only those employing natural resources. ____ 12. Which of the following is the best example of a natural resource? a. sunlight b. the effort supplied by an assembly line worker c. entrepreneurship d. corn grown on a farm ____ 13. The factor of production that contributes most to creating wealth is a. entrepreneurship b. natural resources c. capital d. human resources ____ 14. Childrens Campground is a summer program for school-age children. It advertises that there is one counselor for every four children and that several other highly trained professionals are on staff. Its advertisements indicate that Childrens Campground relies heavily on _____________ to provide its services. a. natural resources b. human resources c. entrepreneurship d. capital ____ 15. Your college has contracted with a construction company to build a new bookstore. The heavy machinery and equipment the contractor will use in the construction process are classified as: a. current resources. b. human resources. c. natural resources. d. capital. ____ 16. All of the following are basic freedoms encouraging entrepreneurship EXCEPT______. a. freedom of choice b. freedom from excess regulation c. freedom of guaranteed profits d. freedom from too much taxation ____ 17. ExxonMobil uses natural resources such as reserves of petroleum to produce its goods and ser vices. The value of these resources is likely to: a. remain constant, because natural resources are created by natural forces and dont respond to market forces. b. rise with either an increase in demand or with a decrease in supply. c. fall with increased demand and rise with increased supply. d. rise with decreased demand but remain steady when supply falls. ____ 18. Timber, water, coal deposits and solar energy all would be classified as: a. noneconomic factors. b. natural resources. c. pure capital. d. base inputs. ____ 19. When a business hires bilingual workers to staff its sales and technical help positions, it is using: a. entrepreneurial resources. b. human resources. c. natural resources. d. technological resources. ____ 20. Too much taxation, an overuse of regulation, and limited choices in the broader business environment is likely to result in: a. a decrease in entrepreneurial activities. b. an increase in entrepreneurship. c. an increase in global trade. d. a social crisis. ____ 21. As aging baby boomers retire, companies will: a. face few problems finding labor, because the next generation of workers is larger than the generation that is retiring. b. need to compete for top talent, driving up the costs of recruitment and payroll. c. rely mainly on unskilled labor in the future. d. take advantage of the retirements by replacing them with workers earning lower wages and salaries, thus reducing labor costs. ____ 22. According to the Pew Internet and American Life Survey, ______ percent of U.S. adult Internet users have created cyber content by building or contributing to Web sites. a. 28% b. 37% c. 44% d. 52% ____ 23. One of the best ways for firms to enhance customer satisfaction is by providing: a. lower priced products. b. greater value. c. effective advertising and promotion. d. eliminating the profit motive. ____ 24. Which of the following strategies is most clearly related to how leading-edge companies respond to the challenges of their competitive environment? a. Keeping prices as low as possible. b. Developing long term mutually beneficial relationships with customers. c. Lobbying for higher tariffs on foreign goods. d. Focusing primarily on the use of natural resources in the production process. ____ 25. _______________ provides information to businesses about where people live and their traits, such as race, gender, age, income and education. a. Psychology b. Demography c. Ethnography d. Sociology ____ 26. Lisa is a marketing consultant who is trying to help a regional company design an advertising campaign that will appeal to the local population. Her report should take into account _____________ factors such as the the age, income and ethnic composition of the areas population. a. psychographics b. sociological warfare c. natural resource management d. demographics ____ 27. The nation of High Land has seen a steady increase in the output of goods and services produced within its borders in the last year. This would indicate a. a rise in High Lands GDP. b. a rise in High Lands CPI. c. a rise in High Lands unemployment rate. d. a decline of the national tax rate. ____ 28. A decrease in _____________indicates that it now takes more resources (inputs) to produce a given amount of goods and services (outputs) than in the past. a. b. c. d. inflation productivity structural unemployment the business cycle ____ 29. An economy is experiencing hyperinflation when average prices of goods and services: a. rise faster than productivity. b. increase by more than 100% in a year. c. increase more than 50% per month. d. decrease more than 50% per day. ____ 30. Denise is a hard worker, but within the last year she and her boss have not seen eye to eye. Angela, her boss, has become more demanding and harder to reach to get clarification on projects. After one too many long working days with little or no job satisfaction, Denise walks into Angelas office and submits her resignation. Denise knows that her resume is strong and feels confident she will find work. Denise is now facing a. seasonal unemployment. b. structural unemployment. c. frictional unemployment. d. cyclical unemployment. ____ 31. If the Fed wants to increase the money supply it should: a. raise the reserve requirement. b. raise the discount rate. c. cut taxes. d. buy government securities. ____ 32. Members of the U.S. Congress have voted themselves an annual pay raise while the country is operating under a budget deficit. The pay raise for all members of Congress will generate a. an increase in the federal debt. b. a decrease in social programs. c. an increase in the reserve requirement. d. a decrease in the interest rate. ____ 33. In an effort to instill public confidence in the banking system after the 1929 stock market crash, Congress established the ______________ to protect deposits in banks and thrift institutions for up to $100,000 per customer, per bank. a. Federal Deposit Insurance Corporation (FDIC) b. Federal Reserve System c. Federal Open Market Committee d. Federal Reserve Requirement ____ 34. Macroeconomics focuses on: a. the major issues facing the national economy, and has little or no relevance to individuals. b. the small individual units operating within the economy. c. the major issues facing the national economy, but these issues often impact an individuals well-being. d. the role of government, while microeconomics focuses on the private sector. ____ 35. Microeconomic analysis would be best suited for: a. helping a firm determine the best pricing strategy for its products. b. determining the best government tax policies to deal with a high rate of inflation. c. explaining the reasons for an increase the in nations unemployment rate. d. measuring the total output produced by a nations economy. ____ 36. Which of the following would be studied in the greatest detail in a macroeconomics course? a. How a large automobile manufacturer decides how many SUVs to produce in a given model year. b. How consumers would respond if a restaurant raised its prices. c. How a firm in an oligopolistic market would respond to a change in the pricing strategy of other firms in its market. d. Factors that influence the nations unemployment rate. ____ 37. Changes in key industries hold the potential to transform a nations economy. Which changes would most likely create that effect in the U.S.? a. Cure for cancer b. New database for accounting c. Greater number of college graduates with computer science degrees d. Decreased number of individuals on welfare ____ 38. Firms in oligopolistic markets tend to a. keep prices as low as possible. b. avoid price competition whenever possible. c. be very concerned about the possibility of new firms entering their market. d. have very small market shares. ____ 39. Which of the following is not a fundamental right of capitalism? a. Right to own property b. Right to compete c. Right to keep profits and not pay taxes d. Right to run a business ____ 40. Which of the following is not a degree of competition? a. Oligopolistic competition b. Monopolistic competition c. Natural competition d. Pure competition ____ 41. Companies that attempt to monopolize a particular market are likely to violate the: a. Fair Competition Standards Act of 1911 b. Taft-Sharpley Free Enterprise Act of 1957 c. Sherman Anti-Trust Act of 1890 d. Market Competition Enhancement Act of 1978 ____ 42. Competition among businesses a. is consistent with the goals of socialism. b. is a primary feature of a communist economic system. c. ensures that eveyone is a winner. d. drives higher quality and lower prices in capitalism. ____ 43. According to your textbook, the Happy Cows campaign, created by the California Milk Board, has directly increased sales of California cheese by more 1 billion pounds. This benefits a. Wisconsin dairy farmers and the consumers of Wisconsin cheeses. b. California dairy farmers and the consumers of California cheeses. c. U. S. cheese producers. d. European cheese producers. ____ 44. Prior to 1999, most consumers believed that there was virtually no difference between cheese produced by the thousands of dairy farms in different states. But the Happy Cows campaign created by the California Milk Board created a perception that California cheese is better. This successful product differentiation means that the cheese market is no longer: a. purely competitive b. monopolistic c. consistent with capitalism. d. oligopolistic ____ 45. In 1999, Coca-Cola considered a plan to install thermometers in vending machines that would charge more for cold beverages on particularly hot days. If the demand curve for Coke is like most demand curves, on hot days such a strategy would have: a. resulted in a shortage of Coca Cola. b. resulted in a lower quantity of Coke demanded than at the lower price. c. increased the available supply of competing soft drinks. d. had no effect on the amount of Coke consumers would buy. ____ 46. If the cost of an ice-cold Coke is more expensive during the summer months, consumers will a. not buy at all. b. buy no more or less due to the increase in price. c. buy more due to the increase in price. d. buy less due to the increase in price. ____ 47. The ideas of political philosopher Karl Marx are most closely linked to the economic system known as: a. communism. b. capitalism. c. socialism. d. mercantilism. ____ 48. Communist economies have faced a number of issues that have interfered with their effectiveness. The issues include all of the following EXCEPT a. crippling shortages and surpluses. b. abundant natural resources. c. corruption d. suspension of individual rights and choices. ____ 49. Government laws against monopolies are a. b. c. d. a key way the government promotes competition in a capitalist system. inconsistent with the role of government in a capitalist system. the main reason the U.S. economy is best classified as a socialist system. the main way the government ensures an equal distribution of income in the U.S. economy. ____ 50. Manufacturing jobs have migrated overseas due to increased productivity and low wages of workers in other countries. This contributes to ______________ unemployment for American workers in the manufacturing sector. a. structural b. frictional c. seasonal d. cyclical ____ 51. Banks help increase the money supply by a. printing more money. b. extending loans to credit-worthy consumers. c. holding more money in their accounts with the Federal Reserve. d. sending more money to the Treasury Department. ____ 52. The primary way the Fed controls the supply of money is by: a. establishing the amount of currency the U.S. Treasury is allowed to print each month. b. changing the reserve requirement. c. buying and selling government securites on the open market. d. allowing banks to borrow more money from the U.S. Treasury. ____ 53. Which of the following would be listed in the owners equity section of a balance sheet? a. Cash. b. Accounts receivable. c. Net income. d. Retained earnings. ____ 54. All of the following are assets EXCEPT a. cash. b. inventory. c. salaries payable. d. buildings. ____ 55. As the owner of 100 shares of Megabux Corporations stock, Elbert Treble wants to know whether his company earned a profit or loss during the past year. He can find the answer to this by looking at Megabuxs a. master budget. b. income statement. c. statement of cash flows. d. revenue report. ____ 56. All of the following are liabilities EXCEPT a. bank loans. b. wages payable. c. accounts payable. d. cost of goods sold. ____ 57. The two broad sources of financing for a firm are a. owners and non-owners. b. retained earnings and assets. c. income and profit. d. cash and credit. ____ 58. __________________ normally is the first asset listed on a balance sheet. a. Accounts receivable b. Cash c. Inventory d. Equipment ____ 59. Which of the following would be listed in the liabilities section of the balance sheet? a. Retained earnings. b. Debits. c. Short-term notes payable. d. Expenses. ____ 60. Which item would be listed first on the income statement? a. Revenue. b. Cost of goods sold. c. Net operating income. d. Retained earnings. ____ 61. Which of the following items would be listed on an income statement? a. Cost of goods sold. b. Current liabilities. c. Cash flows from operations. d. Accounts receivable. ____ 62. Profit is the difference between a. retained earnings and cost of goods sold. b. notes payable and accounts payable. c. revenue and expenses. d. assets and liabilities. ____ 63. If a firms assets = $6,000 and its liabilities = $3,500, then owners equity = a. $6,000. b. $2,000. c. $2,500. d. $4,500. BUSN CH 1, 2, 8 Answer Section MULTIPLE CHOICE 1. ANS: OBJ: 2. ANS: OBJ: 3. ANS: OBJ: 4. ANS: OBJ: 5. ANS: OBJ: 6. ANS: OBJ: 7. ANS: OBJ: 8. ANS: OBJ: 9. ANS: OBJ: 10. ANS: OBJ: 11. ANS: OBJ: 12. ANS: OBJ: 13. ANS: OBJ: 14. ANS: OBJ: 15. ANS: OBJ: 16. ANS: OBJ: 17. ANS: OBJ: 18. ANS: OBJ: 19. ANS: OBJ: 20. ANS: OBJ: 21. ANS: OBJ: 22. ANS: ? 1 ? 1 ? 1 ? 2 ? 2 ? 2 ? 5 ? 2 ? 3 ? 3 ? 4 ? 4 ? 4 ? 4 ? 4 ? 4 ? 4 ? 4 ? 4 ? 4 ? 5 ? 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