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1) Describe three ways that governments can foster entrepreneurship and encourage the creation of wealth. 2) Describe how businesses can use technology to be more responsive to customers. 3) Competition among businesses has never been greater. Identify and describe two ways that businesses can become more competitive. 4) What is demography? Identify two demographic trends in the United States and discuss how they will impactUnited States businesses.
5) Describe what we mean by greening and thinking green. List five ways that people and businesses are participating in the green movement. List business opportunities that may emerge from this movement. 6) Trace the evolution of American business. Identify the key trends, and discuss the implications these trends have for the future. 7) An entity that seeks to earn a profit by providing a good or service is known as a(n) A) industry. B) corporation. C) business. D) service.
B) revenue. C) loss. D) retained earnings. 12) A(n) __________ is a person who assumes the risk of starting a business. A) manager B) entrepreneur C) employee D) stakeholder 13) Starting a business always involves A) profit. B) loss. C) revenue. D) risk. 14) Often in business the greater the risk, the A) greater the potential reward. B) lower the expected revenues. C) lower the value provided to society. D) greater the number of stakeholders.
15) __________ is a measure of the general well-being and satisfaction derived from a variety of factors including political freedom, safety, education, and a clean environment. A) Standard of living B) Quality of life C) Gross national income D) Social satisfaction 16) The amount of goods and services people can buy with the money they have is called their A) nominal income. B) consumer price index. C) profit margin. D) standard of living. 17) The customers, employees, stockholders, suppliers, creditors, and others who stand to gain or lose by the policies and activities of a business represent the firm's A) market makers. B) economic environment. C) stakeholders. D) social environment. 18) The most important difference between for-profit businesses and nonprofit organizations is that A) for-profit businesses do not benefit society.
22) Honda and Hyundai have insourced for years to design and manufacture cars in the United States. What statement is accurate about this practice? A) Insourcing helps offset the number of jobs being outsourced. B) Insourcing increases the number of jobs being outsourced. C) Insourcing damages the United States economy. D) Insourcing causes jobs to be lost to overseas competitors. 23) Public schools, charities, and government agencies generally A) have the same goals as for-profit businesses. B) do not seek to earn a profit. C) provide goods rather than services. D) do not have any stakeholders. 24) For-profit businesses and nonprofit organizations are similar in that they both A) contribute to the welfare of society. B) seek to earn a profit. C) have a limited life. D) must be controlled by a board of directors. 25) The standard of living for a nation's people depends mainly on A) the quality of the natural environment. B) how much political freedom they have.
C) their income and the prices of the goods and services they can buy. D) the amount of labor and capital available employed in the manufacturing sector. 26) Today’s businesses attempt to meet the needs of A) their customers, even if it comes at the expense of employees and other stakeholders. B) their employees, even if it means shortchanging customers by charging higher prices. C) all stakeholders. D) exclusively their owners, since they are ultimately the ones who pay the bills. 27) What is the most accurate statement about the impact of business on society? A) When businesses earn a profit for their owners, they usually do so at the expense of the rest of society, which proves it is never a win-win situation. B) While businesses often improve the standard of living within a society, they can do little to improve the quality of life. C) Businesses often improve the quality of life, but can do little to improve the standard of living for most people. D) Businesses can have a positive impact on both the standard of living and the quality of life within a society. 28) Last year, Jensen Consulting reported revenues of $34 million while its total expenses were $10 million. Based on this information, Jensen reported A) profits of $24 million. B) profits of $34 million. C) losses of $24 million.
D) declined, and so has the quality of life. 32) Hyun and her three college friends enjoy perfumes. As a special gift to each of them last holiday season, Hyun found a way to make scented candles with each friend's favorite perfume scent. The three friends loved her gift idea and encouraged Hyun to create more and sell them online. Recently, she is filling orders from her website, and turning a profit. Hyun is proof that A) personalized products will always be successful. B) when you successfully fill a market need, you can make money. C) the Internet is a way to distribute just about anything. D) the cost of supplies to make candles is relatively cheap. 33) Miranda wants to operate a small catering business out of her home, located in a quiet residential neighborhood. She asks for input from her neighbors, the homeowner's association, her suppliers, and the zoning commission about issues including parking, noise, safety concerns, and operating hours. Before officially opening, Miranda adjusts her business plan based on the feedback she received. Miranda has discovered that A) her new business will definitely be successful. B) stakeholder considerations are important if you want your business to thrive. C) town politics is more important than company profits. D) consulting various stakeholders eliminates any risk. 34) Generally, the greatest amount of risk is involved in A) working for the government. B) working for a large business. C) working for a small business.
D) starting a business. 35) The resources that contribute to the creation of wealth are known as A) production coefficients. B) factors of production. C) production technologies. D) production aggregates. 36) Which is considered a factor of production? A) bonds B) competition C) knowledge D) service 37) As a factor of production, the term capital includes A) stocks and bonds issued by corporations. B) natural resources such as land and water. C) tools, machinery, and buildings. D) services provided by the government. 38) Two factors of production that seem to contribute the most to a nation's ability to create wealth are
42) As you consider the factors of production, what did management theorist Peter Drucker believe to be one of the most important contributing factors to increasing our nation's wealth? A) land B) labor C) knowledge D) capital 43) When we compare the factors of production in wealthy versus poor nations, we find A) poor nations have plenty of land and knowledge, but very little labor. B) poor and wealthy nations (both) have an abundance of knowledge; it is the land that varies, with rich nations always having more. C) wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas. D) wealthy nations have land and labor, while poor nations have capital and entrepreneurship. 44) A nation progresses socially when it has good schools, clean air and water, and more. Which statement accurately addresses conditions for social progress? A) Social progress will evolve when capital is apportioned to everyone in equal amounts. B) A city, state, or nation's social progress needs the right business environment. C) The foundation for social progress is a handful of wealthy entrepreneurs willing to spread the wealth. D) Social progress can only improve when there is a strong labor pool to draw from.
45) Which statement about factors of production is the most accurate? A) The five factors of production are energy, capital, labor, leadership, and money. B) Wealth creation in poor nations is slowed by chronic shortages of labor. C) Each of the factors of production is equally important in creating wealth. D) Entrepreneurship and knowledge are the most important in creating wealth. 46) Randall owns a nursery. The trucks, handcarts, and forklift he purchased for the business are called A) natural resources. B) intangible resources. C) knowledge assets. D) capital investments. 47) In a small and poor nation, the current prime minister has a desire to improve conditions for her citizens. The prime minister has received recommendations from several of her advisors. Which recommendation is likely to create the most wealth for the country? A) Acquire more land by invading a neighboring country that is even poorer and weaker. B) Use foreign aid from other nations to purchase more tools and machinery. C) Establish a business environment that promotes and rewards entrepreneurship. D) Establish barriers to trade to protect local businesses from foreign competition.
A) minimal government spending because it keeps taxes to a minimum B) more government services because it minimizes tax consequences C) maximum government spending because it raises business profits D) increased regulation because it benefits stakeholders 52) In order to create more wealth and provide better services, some nations recognize that A) raising taxes benefits all businesses. B) a good strategy is to minimize interference with the free exchange of goods and services. C) restricting trade with other countries always helps domestic businesses. D) taking control of privately owned businesses and making them government-run will improve the lives of everyone. 53) In countries where businesses are government owned, A) there is less incentive to work hard. B) the right amount of each good is produced. C) profits tend to be higher. D) productivity tends to be highest. 54) High tax rates tend to A) promote economic development. B) make a nation's currency tradable. C) discourage entrepreneurship. D) encourage small business ownership.
55) Contemporary governments promote business development by A) increasing business regulations. B) encouraging government ownership of businesses. C) permitting businesspeople to conduct business without the use of contracts. D) establishing a currency that is tradable in world markets. 56) What policies would tend to foster entrepreneurship? A) Minimize taxes and regulations. B) Promote more regulations to protect the environment. C) Develop policies to reduce corruption between individuals. D) Encourage government ownership of businesses. 57) When corruption is present in the business environment, what often occurs? A) Company leaders threaten competitors and minimize competition. B) Factories are easier to build without a government permit. C) Fair competition thrives. D) Laborers can make more money. 58) Which government policies would be least likely to encourage entrepreneurship? A) passage of laws that enable businesspeople to write enforceable contracts B) establishment of a currency that is tradable in world markets C) establishment of strict regulations specifying exactly how products should be made
61) Daniel owns a lawn irrigation system business. When he started the business 10 years ago, he promised to always operate within the legal limits of the law, but lately, the competition is eating him alive. Large competitors hire undocumented workers to perform the manual labor, and they do not pay taxes on these employees—they just pay them in cash at the end of the week. Daniel does not want to hire illegal workers, but employment taxes are decreasing his profits. There is a risk if you permit an illegal worker to drive a truck, or, if they have an accident on the job. You have just studied business ethics in your class. You inform Daniel that A) taxes only need to be paid for the owners. B) he is not only taking a chance that a bigger problem may occur, he is indirectly setting the ethics code for his business. C) small businesses do not need to worry about ethics codes. This concern is better suited for big business. D) it is not unethical to try to provide jobs. 62) The emergence of an information-based economy are important parts of the __________ environment in which businesses operate. A) economic and legal B) technological C) competitive D) social 63) Technology affects people in A) all industries. B) most industries. C) a few information technology industries. D) primarily high-income countries.
64) Employers provide tools and technology for their employees in order to A) increase the cost of production and profitability. B) improve their efficiency and productivity. C) reduce corruption in business and eliminate scandals. D) encourage the private ownership of businesses. 65) Efficiency means A) producing the desired result. B) producing goods and services using the least amount of resources. C) the amount of output you generate given the amount of input. D) the buying and selling of goods using the most amount of resources. 66) __________ refers to the amount of output generated with a given amount of input, e.g., the number of pizzas produced per worker per hour. A) Efficiency B) Technology C) Competence D) Productivity 67) __________ means producing the desired result. A) Effectiveness B) Technology C) Efficiency
