186. (p. 5) The amount of goods and services people can buy with the money they have is called their:
A. nominal income.
187. (p. 5) 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.
188. (p. 7) The most important difference between businesses and nonprofit organizations is that:
A. businesses do not benefit society.
189. (p. 7) The knowledge and skills students acquire in business courses will be useful to them:
A. only if they work for a major corporation.
190. (p. 4) Last year, MacTeck Enterprises had total revenues of $34 million while its total expenses were $22
million. Based on this information, MacTeck:
D. suffered a loss of $22 million.
191. (p. 4) Shelley recently opened a new restaurant specializing in fast foods prepared with less fat and calories
for health-conscious diners who are in a hurry. Shelley knows that there are some risks associated with opening
and managing a restaurant, but she is confident that she can earn a profit. Shelley is an example of a(n):
D. account manager.
192. (p. 4) A key characteristic of entrepreneurs is that they:
D. have experience in running large, complex organizations.
193. (p. 4) Which of the following is the best example of a business?
A. A community college
194. (p. 4-5) In order to make an intelligent investment decision, entrepreneurs should:
195. (p. 6) Companies that outsource research and development and design jobs:
A. have always made a wise decision.
196. (p. 6) Honda and Toyota have used insourcing for years to produce cars in the United States. Insourcing:
D. causes jobs to be lost to overseas competitors.
197. (p. 7) Public schools, charities and government agencies are not classified as businesses because they:
A. have not been incorporated.
198. (p. 7) Business and nonprofit organizations are similar in that they both:
D. must be controlled by a board of directors.
199. (p. 5) The standard of living for a nation’s people depends mainly on:
A. the quality of the natural environment.
200. (p. 5-6) World-class business organizations attempt to meet the needs of:
A. their customers, even if it comes at the expense of employees and other stakeholders in the business.
201. (p. 5) Which of the following 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.
202. (p. 5) Jane’s income has remained stable over the past few years while the prices of the goods and services
have gone up. Nevertheless, Jane feels better off because the environment is cleaner, the crime rate has
declined, she has more leisure time, and the quality of medical care has improved. If Jane’s experience is
typical, we can conclude that the standard of living has:
A. increased, but the quality of life has decreased.
203. (p. 7; Spotlight on Small Business box) According to the “Spotlight on Small Business” box for Chapter 1, which of
the following statements about social entrepreneurs is most accurate?
A. Social entrepreneurs work with the entertainment industry in the U.S.
204. (p. 8) In the past twenty years, the number of U.S. women business owners:
A. remained relatively constant.
205. (p. 8) The number of businesses owned by Hispanics and Asians has:
A. has decreased after the 9-11 terrorist attack.
206. (p. 8) Which of the following entails the greatest amount of risk?
A. Working for the government.
207. (p. 9) The resources that contribute to the creation of wealth are known as:
208. (p. 9) Which of the following is a factor of production?
A. bonds
209. (p. 9, figure 1.2) As a factor of production, the term capital includes:
A. stocks and bonds issued by corporations.
210. (p. 10) The two factors of production that seem to contribute the most to making countries rich are:
A. land and labor.
211. (p. 10, figure 1.2) Nadine has started up a new printing business. The printers, computers, and copying machines
she has leased are examples of:
212. (p. 9) As you consider the factors of production, which of them will be the most important contributing
factor to increasing our nation’s wealth?
A. land
LG: 2
LL: 2
Nickels – Chapter 01 #212
213. (p. 9, figure 1.2) Which of the following factors of production is the most important contributing factor to
increasing a nation’s wealth?
A. natural resources
214. (p. 4) Stewart wants to invest some money that he just inherited. He found that his bank offers a savings
account paying a guaranteed 3% rate of return. However, he would like to earn a higher return. Stewart should
keep in mind that to earn a significantly higher return on his money he:
A. will have to invest overseas.
215. (p. 10; Reaching Beyond Our Borders box) According to the “Reaching Beyond Our Borders” box in Chapter 1, which
of the following statements about economic and political freedom is the most accurate? Nations with low taxes,
government regulations, and restrictions on trade:
216. (p. 10) Which of the following statements about factors of production is the most accurate?
A. The five factors of production are energy, capital, labor, leadership and money.
217. (p. 10) Johnsonville is a small and poor nation, but its current president has a genuine desire to create more
wealth for Johnsonville’s citizens. The president has received recommendations from several of her advisors.
Which of the following recommendations is likely to create the most wealth for Johnsonville?
A. Acquire more land by invading a neighboring country that is even poorer and weaker than Johnsonville.
218. (p. 12) All around the world, countries are trying to create more wealth by:
A. raising taxes.
219. (p. 12) In countries where businesses are government owned:
D. the quality of goods is high but profits are low.
220. (p. 11) High tax rates tend to:
A. promote economic development.
D. technological
222. (p. 12) Government can do a lot to lessen the risk of starting businesses including:
A. increasing business regulations.
223. (p. 12) Which of the following policies would tend to foster entrepreneurship?
D. allowing public ownership of businesses.
D. laborers can make more money.
225. (p. 12) Business scandals, such as Enron:
D. typically result from too much government regulation.
226. (p. 12) Which of the following government policies would be least likely to encourage entrepreneurship?
A. Passage of laws that enable businesspeople to write enforceable contracts.
227. (p. 12) Indeesh is an owner of a small jewelry store in India. In order to open his shop he first had to:
A. have many employees willing to work at all times of the day.
228. (p. 12) The Internet and the emergence of an information based economy are important parts of the
___________ environment in which businesses operate.
A. economic and legal
229. (p. 13) Technology affects people in:
D. primarily high income countries.
230. (p. 13) Employers provide tools and technology for their employees in order to:
231. (p. 13) Efficiency means:
A. producing the desired result.
232. (p. 13) ___________ refers to the amount of output generated with a given amount of input, e.g., number of
pizzas produced per worker per hour.
A. Efficiency
233. (p. 13) ___________ means producing the desired result.
D. Productivity
234. (p. 13) ___________ means producing items with the least amount of resources.
D. Productivity
235. (p. 14) The two main types of e-commerce are:
A. online and offline.
236. (p. 14) When businesses sell to other businesses over the Internet, these transactions are known as:
A. B2C transactions.
237. (p. 14) Companies that sell goods to consumers over the Internet are engaging in:
D. Y2K transactions.
238. (p. 14; Dealing with Change box) According to the “Dealing with Change” box in Chapter 1, which of the following
statements about Amazon.com is the most accurate?
A. Since its beginning, Amazon.com has been considered a sure thing.
239. (p. 15) The series of lines on a product packaging that the cashier scans when you check out at a grocery
store or discount store is called a:
D. laser code.
240. (p. 15) An electronic storage file where firms keep customer information is known as a(n):
A. MP3 file.
241. (p. 15) __________ is the obtaining of private information about a person, such as a credit card number, and
using that information to buy things with it.
A. Petty theft.
242. (p. 14) Which of the following statements about e-commerce is most accurate?
D. A major advantage e-commerce firms have over traditional retailers is in the area of customer service.
243. (p. 13) Which of the following is an advantage of utilizing technology?
A. Technology increases the cost of production.
244. (p. 14) Which of the following best describes the main difference between B2B and B2C transactions? B2B
transactions
D. involve sales in foreign markets while B2C e-commerce is restricted to domestic markets.
245. (p. 14) Ntercon is an Internet-based company that provides online support services for businesses that need
help in setting up and maintaining their websites. Ntercon is an example of a company that is engaged in:
A. B2C e-commerce.
246. (p. 15) Summit Gifts, Inc., is a mail order firm that specializes in expensive and unusual gifts for all
occasions. Summit keeps a large file of information on all of its regular customers, including names, addresses,
types of gifts they have ordered in the past, and the size and frequency of their orders. The electronic file in
which this information is stored in an example of a(n):
A. spreadsheet.
247. (p. 14) Which of the following predictions about the impact of e-commerce on traditional businesses is likely
to be most accurate?
A. E-commerce will have little impact on most traditional businesses, because only a few types of products can
be sold effectively over the Internet.
248. (p. 15) Tyrell recently noticed that he was receiving many more catalogs and direct mail advertising than he
had in the past even though he had not requested any of them. Which of the following best explains why that is
true?
A. Tyrell was a victim of online theft.
249. (p. 15) To be successful in today’s markets, businesses must:
A. provide the greatest variety of products to consumers.
250. (p. 16) Successful businesses are keenly focused on their:
D. bureaucrats.
251. (p. 16) To be effective, empowerment will require lower-level workers to :
D. have written policies regulating each aspect of their work.
252. (p. 16) Empowerment requires that managers focus more on __________ lower-level employees.
A. directly supervising