Principles of business

If you decide to purchase a digital copy of your favorite movie instead of a pair of jeans, the value of the jeans to you is called the

opportunity cost.

The basic economic problem is

having unlimited wants and needs but limited economic resources.

The means through which goods and services are produced are called

economic resources

What does the point where the demand curve and the supply curve intersect show?

market price

In what economic system does the government own and control resources and its officials decide what and how goods are produced and how they will be distributed and consumed?

command economy

Demand is the

quantity of a good or service that consumers are willing and able to buy

Which of these is NOT an important principle of the U.S. economic system?

traditions and customs

A government plan for answering the three economic questions is a _______ economy when the economic resources are owned and controlled by the government.

command

When a country decides to answer the economic question ______ , it may decide to focus on advanced technology and a skilled labor force.

How to produce?

When you have _____, you give up something to have something else.

a trade off

Workers in a ______ economy are likely to produce goods and services in the way they have always been produced.

traditional

Which of the following would NOT be included in a measure of GDP?

You give your car a tune-up and change the oil yourself

How do high interest rates affect the economy?

They are likely to result in higher prices

An increase in GDP per capita means that

an economy is growing

What type of inflation occurs when a large supply of money is spent on goods and services causing prices to rise faster than wages?

demand-pull inflation

What type of inflation occurs when production costs increase?

cost-push inflation

The most widely used measure of national output is a nation's ___, which calculates the total dollar value of all final goods and services produced each year in a country.

GDP

Monthly, the U.S. Department of Commerce measures _____ or the sales of durable and nondurable goods bought by consumers.

retail sales

A period of _____ is one in which unemployment begins to rise, demand begins to decrease, and businesses lower production.

recession

The _______is the total amount owed by the federal government.

national debt

A corporation's _____ represents equity in the company.

stock

Which of the following can create an informal trade barrier - culture, embargo, quota, tariff

Culture

A tariff

is a tax that a government places on certain imported products

Which of the following is NOT one of the three main factors that affect currency exchange rates among countries? a) The political stability of the country. b) The country's level of technology use. c) The country's balance of payments. d) The economic conditions within the country

B

The formula for Coca-Cola is the same no matter where in the world it is sold - this is an example of

global strategy

An agreement between two or more companies to share a business project is called

joint venture

The _________ settles trade disputes and enforces free-trade agreements between member countries

World Trade Organization

A nation's ________ is positive or favorable when it receives more money from trade in a year than it pays out

balance of payments

When a country's _______ is negative, it exports more than it imports

balance of trade

When a(n) ________ exists, a country specializes in the production of a good or service at which it is relatively more efficient

comparative advantage

When a (n) ________ exists, a country can produce a particular good or service at a lower cost than other countries

absolute advantage

Contracts

must be for a product or service that can be legally sold

Which of the following is NOT a way government assists businesses.

It ensures equal distribution of goods and services.

Government attempts to prevent monopolies with

antitrust laws

Which of the following is an example of a public utility?

electric company

Government is concerned with all of the following EXCEPT

ensuring profits for businesses

A tax levied on goods and services is a(n) _______ tax, which is collected by the seller

sales

Examples of the government's role in ________ are preventing monopolies and unfair business practices as well as promoting fair competition among business.

regulating and promoting competition

A _______ protects creative work of authors, composers, and artists.

copyright

In general, foreign and interstate commerce is regulated by the

federal government

which of the following is not a benefit of socially responsible activities?

money spent for wellness programs may reduce costs of company health insurance

The obligation to complete specific work is called

responsibility

In a matrix organizational structure

work is structured around particular projects, products, or customer groups.

A unique business organized by two or more other businesses to operate for a limited time and for a specific project is a

joint venture

The direction for a business comes from its

mission statement

Which of the following statements about a nonprofit corporation is TRUE?

It pays no corporate income taxes.

Over the next ten years, the number of ___ workers in the United States is expected to nearly double.

contingent

Of the several key roles businesses play in the U.S. economy, ___ is the most important.

making and distributing products and services

An ___ is a business involved in selling goods produced by others

intermediary

A ___ is a business owned and run by just one person, who receives all the profits.

proprietorship

A special type of corporation is a ___ which allows all income to be passed through to owners based on their investment and is taxed on their individual tax returns.

S corporation

The business idea, ownership structure, and the business's long-term goals are discussed in this section of a business plan.

description of the business

Business ideas can come from

all of the above

Most business plans are updated

annually

Small businesses

have an advantage when customers want more individual attention.

New businesses are often discontinued because of

all of the above

A business uses ___ to finance its main resources. This usually requires a large amount of money that will be paid over many years.

long-term financing

Usually ___ financing would be used to purchase the land that a business is built on.

venture capital

According to the Small Business Administration, an independent business with fewer than ___ employees is a small business.

500

Investors may provide entrepreneurs with ___ a new business.

venture capital to finance

___ is a personal characteristic of a successful entrepreneur.

Persistance

Ethical behavior must meet all of the following standards EXCEPT it

makes money

core values

outline the important principles that guide company decisions.

This type of influence arises when employees recognize that the leader has special knowledge or ability in the area.

expert influence

The BEST way leaders can emphasize the importance of ethical behavior is to

always act ethically

No matter how well-liked they are by employees, all managers have

formal influence

___ influence is a type of influence that arises when employees recognize that the leader has special knowledge or ability in the area.

expert

To ___ is NOT a good way to develop leadership skills.

never ask for help from coworkers

When the work is routine with few new challenges, a ___ management style is the BEST style to use.

strategic

The management function of ___ is the MAIN concern of supervisors.

implementing

One role of a manager is ___, or directing and leading people to accomplish the planned work of the organization

implementing

This allows employees some choice in how their work days and work hours are arranged.

flextime

A worker that receives $800 a week plus a week of paid vacation is receiving which type of compensation?

straight salary and benefits

What is an artificial limit placed on minority groups moving into positions of authority and decision making called?

glass celling

The physical conditions and psychological atmosphere in which employees work is the

work environment

Which of the following is NOT a major goal of a human resources department?

set prices on products and services

The term for a worker who has no explicit or implicit contract for long-term employment is ___ worker

contingent

An employee gets a ___ when he or she is assigned to another job in the company with a similar level of responsibility.

transfer

A ___ compensation plan is when an employee receives a specific amount of pay for each unit of work produced.

piece rate

An employee is receiving a type of ___ if he or she is getting a share of the company's profits.

incentive pay

A job is considered ___ if it is more mental than physical and involves the handling and processing of information.

white-collar