Question 1

Product differentiation is common in a market characterized by monopolistic competition.

Accepted Answer

A) True 
 B)False

Question 2

A Danish company has built a production facility on the island of New Vermont.Will the value of the goods produced by the Danish company be included in New Vermont's GNP? Explain.

Accepted Answer

The answer of A Danish company has built a production...

Question 3

Differentiate between gross national product (GNP)and gross domestic product (GDP).

Accepted Answer

The answer of Differentiate between gross national product (GNP)and gross...

Question 4

The global business environment encompasses many international forces that influence the outcomes of companies doing business in foreign countries.Which of the following scenarios would BEST count as evidence of globalization?

Accepted Answer

A)  Diamonds mined in Country X are sold on the markets in Country Y. The proceeds are then used to fund a coup against the government in Country X. 
B)  A natural disaster disables factories in Country X that produce computer chips for Company Y. Company Y reduces the number of employee shifts and raises the price of its products. 
C)  Farmers in Country X have lost most of their wheat crops due to a drought. The market price for wheat triples and the government pays the farmers for a percentage of the lost wheat. 
D)  Country X has almost mined all of its available natural energy sources. The government has been investing in alternative energy research for years and now an efficient synthetic energy source has been developed. 
E)  Country X has raised the tax on oil products. As a result more people are taking public transportation and reducing unnecessary car travel.

Question 5

A new watch manufacturer would like to determine the market price of a new line of watches.How could the manufacturer MOST effectively determine the market price?

Accepted Answer

A)  Place several of the new watches on sale at a watch store and see which sells most quickly. 
B)  Arrange to sell the watches in a number of diverse auctions. 
C)  Set the price of one watch higher than another and see which sells the most quickly. 
D)  Survey potential customers and retailers on what they think the price should be. 
E)  Canvass executives from competing companies about what they think the price should be.

Question 6

What marks the key difference between economic systems?

Accepted Answer

A)  the way they manage the factors of production 
B)  the way they transport goods within their borders 
C)  the way rules and regulations are legislated 
D)  the way workers are relocated to different regions 
E)  the way basic necessities are determined

Question 7

What is a chief goal of an economic system?

Accepted Answer

A)  economic stability 
B)  income equality 
C)  money supply growth 
D)  national debt reduction 
E)  product innovation

Question 8

What is measured by the consumer price index (CPI)?

Accepted Answer

The answer of What is measured by the consumer price...

Question 9

Robert has established a start-up business manufacturing a range of outdoor wear for the leisure market.Which possible scenario would BEST show that Robert is positioning his business for the global business market?

Accepted Answer

A)  Robert launched a Web site for his business and hired two new employees to handle national and international shipping. 
B)  Robert launched a Web site and filmed a commercial for television and recorded a radio version for local stations. 
C)  Robert created a page for his business on a networking site and offered store coupons to his first 100 friends. 
D)  Robert had his Web site translated into Korean in order to better serve the local Korean community. 
E)  Robert took a full-page ad out in the state's official tourism brochure.

Question 10

How would you characterize the level of competition for computers in New Vermont? How are prices set in this type of competitive environment?

Accepted Answer

The answer of How would you characterize the level of...

Question 11

Which of the following exists when an industry or market has only one producer?

Accepted Answer

A)  competition 
B)  oligopoly 
C)  monopoly 
D)  communism 
E)  socialism

Question 12

Which of the following does NOT represent a degree of competition in a private enterprise system?

Accepted Answer

A)  oligopoly 
B)  socialism 
C)  monopoly 
D)  perfect competition 
E)  monopolistic competition

Question 13

In perfect competition,which of the following conditions must prevail?

Accepted Answer

A)  All firms must adhere to cost and pricing standards. 
B)  The number of firms in the industry must be limited. 
C)  A single firm is able to influence the price of its product. 
D)  It is relatively difficult to enter the industry. 
E)  All firms in a given industry must be small.

Question 14

Assume that Allied has required Cicada to not handle any of Allied's competitors' products.Which of the following MOST strongly suggests that this arrangement is legal?

Accepted Answer

A)  The pricing demands of Cicada have forced many building suppliers out of business. 
B)  Companies similar to Allied have demonstrated strong financial performance in recent years. 
C)  Cicada often sells groups of homes to institutions that then resell them to individual consumers. 
D)  In the past, Cicada and Allied were part of the same company. 
E)  Monopolistic competition is encouraged by the government in some cases.

Question 15

Aggregate output refers to a company's annual production of goods or services.

Accepted Answer

A) True 
 B)False

Question 16

How does inflation affect purchasing power?

Accepted Answer

The answer of How does inflation affect purchasing power?...

Question 17

Physical resources include the data and other information used by businesses.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following BEST describes economic stability?

Accepted Answer

A)  the measure of economic growth that compares how much a system produces with the resources needed to produce it 
B)  a condition in an economic system in which the amount of money available and the number of goods and services produced are growing at about the same rate 
C)  the economic condition in which a country's exports exceed its imports 
D)  a relative equality between what the government owes its creditors and the revenue it gets from imports 
E)  the economic value of all the products that a country exports minus the economic value of all the products it imports

Question 19

Which of the following BEST gives the meaning of the term gross domestic product?

Accepted Answer

A)  total quantity of goods and services produced by an economic system 
B)  total quantity of goods that a country's citizens can purchase with the currency used in their economic system 
C)  conditions of the economic system in which an organization operates 
D)  total value of all goods and services produced within a given period by a national economy through domestic factors of production 
E)  indicators of available goods and services produced within a specific domestic market

Question 20

Which is the BEST explanation for why standard of living only increases through productivity?

Accepted Answer

A)  The more goods that are available, the lower prices will be. 
B)  More goods are available without having to come by additional resources. 
C)  Productivity increases the money supply in an economy. 
D)  Purchasing power increases when there is more consumer choice. 
E)  Prices are determined by the standard of living.

Exam 1: The U.S.Business Environment

Product differentiation is common in a market characterized by monopolistic competition.

A Danish company has built a production facility on the island of New Vermont.Will the value of the goods produced by the Danish company be included in New Vermont's GNP? Explain.

Differentiate between gross national product (GNP)and gross domestic product (GDP).

The global business environment encompasses many international forces that influence the outcomes of companies doing business in foreign countries.Which of the following scenarios would BEST count as evidence of globalization?

A new watch manufacturer would like to determine the market price of a new line of watches.How could the manufacturer MOST effectively determine the market price?

What marks the key difference between economic systems?

What is a chief goal of an economic system?

What is measured by the consumer price index (CPI)?

Robert has established a start-up business manufacturing a range of outdoor wear for the leisure market.Which possible scenario would BEST show that Robert is positioning his business for the global business market?

How would you characterize the level of competition for computers in New Vermont? How are prices set in this type of competitive environment?

Which of the following exists when an industry or market has only one producer?

Which of the following does NOT represent a degree of competition in a private enterprise system?

In perfect competition,which of the following conditions must prevail?

Assume that Allied has required Cicada to not handle any of Allied's competitors' products.Which of the following MOST strongly suggests that this arrangement is legal?

Aggregate output refers to a company's annual production of goods or services.

How does inflation affect purchasing power?

Physical resources include the data and other information used by businesses.

Which of the following BEST describes economic stability?

Which of the following BEST gives the meaning of the term gross domestic product?

Which is the BEST explanation for why standard of living only increases through productivity?