1. In your own words, describe what you have to offer to a potential employee of a company that you desire to work
for.
2. How can online networking improve your chances of success in the business world?
3. An entrepreneur combines four kinds of resources into a business. What would be the effect on the business if any
one were left out?
4. What is profit and why is it important to a business?
5. What three activities must a business perform in order to be successful? Briefly describe each of these and why
each is essential to business success.
6. Explain how the notion of scarcity is related to personal as well as business decision making.
7. Explain how the basic economic questions are answered in capitalistic and command economies.
8. Why do we say that the U.S. economy is a mixed economy?
9. How does socialism differ from communism?
10. Why is productivity important? How can a nation’s productivity rate be improved?
11. A nation’s economy fluctuates instead of growing at a steady pace every year. These fluctuations are generally
referred to as the business cycle. Describe the four different phases of the business cycle.
12. What is the difference between monetary policies and fiscal policies? How does each affect the nation’s economy?
13. In perfect competition, who sets the price of a product?
14. Describe how supply and demand affect the price of a product.
15. In a monopolistic competition setting, how can a manufacturer differentiate a product?
16. How does a monopoly have complete control over the price of its product?
17. What effect did the Industrial Revolution and the golden age of invention have on the development of American
business?
18. What do you consider the most important challenges that American business faces today?
Satellite Communications
Jonathan worked for Satellite Communications for twenty years. In the time that he worked there, he learned a lot
about the company and how it operated. The company met its sales and revenue goals every year. However, most
of the employees had similar educational and cultural backgrounds. He believed that the company could do much
better if it cultivated an environment that promoted many different ideas. Additionally, Satellite Communications
was mostly focused on how much revenue it earned in a given year. Jonathan felt that the most important goal
should be to satisfy customers. He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire
employees that reflected a more diverse customer base. He was happy to have this opportunity because it was a
dream that he had always had. He had always wanted to make his own decisions about what his company would
produce and how. The only aspect of the business he was unsure of was pricing, yet he knew this would be
important for his ultimate success.
19. Refer to Satellite Communications. Jonathan is operating in a
and how to do things.
a. command economy
b. mixed environment
c. market economy
d. split economy
e. micro-economy
because he has the opportunity to decide what
20. Refer to Satellite Communications. When hiring people, Jonathan thinks it is important to consider
a. unilateral thinking.
b. profit.
c. wage increases.
d. health benefits.
e. cultural diversity.
21. Refer to Satellite Communications. Now that Jonathan plans to open his own business, he needs to look at the
factors of production. Which of the following is not a factor of production?
a. Labor
b. Capital
c. Machinery
d. Demand
e. Entrepreneurship
22. Refer to Satellite Communications. Jonathan‘s success will contribute to society. This is referred to as the
a. objective.
b. market economy.
c. business cycle.
d. invisible hand.
e. standard of living.
Home Inspirations
Hailey works for her father in a family-owned business called Home Inspirations, a bedding company that has been
in operation since the 1800s. When her father retires, Hailey plans on taking over the business. Hailey is aware of
many things about the company that she likes, and a few things that she does not. She has particularly noted that
when the economy has low unemployment and high total income, sales are great. However, any other time, sales
are not so good.
Currently, all of the bedding items are created in one place and everyone works on various tasks every day. Hailey
is thinking about streamlining the production process so that individuals would be responsible for only one task. She
believes that if production would increase, she could sell her products at a lower price and increase revenue. She
knows that most bedding products available in the market are very similar in nature and satisfy the same need.
However, if she were able to lower prices, this might give her company the competitive advantage that it needs.
She would then be able to invest money in differentiating her products by providing unique features, building the
brand name, and offering services such as free delivery. She is also considering selling her products on the Internet.
Hailey knows that her father does not like change very much, but she feels these changes are important for the
future of the company.
23. Refer to Home Inspirations. Hailey noticed that when sales were up, the economy was in a
a. depression.
b. peak period.
c. grace period.
d. recession.
e. stagnant mode.
24. Refer to Home Inspirations. Home Inspirations currently operates in a environment.
a. purely competitive
b. demand
c. monopolistically competitive
d. command
e. supply
25. Refer to Home Inspirations. Hailey feels that for productivity to improve, the company must practice
a. free enterprise.
b. work ethics.
c. specialization.
d. cultural diversity.
e. pure competition.
26. Refer to Home Inspirations. Hailey’s goal of offering products with unique features and special services is called
a. specialization.
b. product differentiation.
c. barter.
d. a factory system.
e. a natural monopoly.
27. When an individual chooses his or her ideal career, it is most likely a reflection of one’s
a. values.
b. hobbies.
c. skills.
d. education.
e. desire to be rich.
28. Chris chooses to work only thirty hours a week as an engineering assistant while trying to shield himself from
additional responsibilities at work. Chris seems to value
a. recognition and rewards.
b. the opportunity to help others.
c. promotions and transfers.
d. more free time.
e. get-rich-quick schemes.
29. Of the following, which is not considered a basic management function necessary to be an effective manager?
a. Planning
b. Organizing
c. Leading and motivating
d. Controlling
e. Selling
30. Cultural diversity represents
a. a business theory that is no longer valid.
b. the differences among people in a workforce.
c. a technical skill.
d. a statistical method used to project sales revenues and profits for global companies.
e. a religious issue that doesn’t affect business organizations.
31. Shawn Sine decides to start his own business. How likely is Shawn to still be operating a successful business in
seven years?
a. It depends on whether it is an e-business or not.
b. It is very likely because most small businesses are successful.
c. It is likely because the chance of failure is nearly equal to the chance for success.
d. It is unlikely because over half of all new small businesses fail.
e. It is very unlikely because almost all new businesses fail within the first three years.
32. The ability for a manager to think in abstract terms while envisioning the “big picture” falls into the category of
, deemed an important management trait.
a. interpersonal skills
b. conceptual skills
c. leading and motivating functions
d. mechanical skills
e. controlling functions
33. The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s
needs is called
a. consumerism.
b. the economy.
c. capitalism.
d. business.
e. the workplace.
34. Raw materials, buildings, and machinery are resources.
a. human
b. financial
c. informational
d. labor
e. material
35. All of the following are material resources for Toyota Motor Company except
a. paint.
b. steel.
c. factory.
d. tires.
e. money.
36. resources include the funds needed to pay wages, purchase raw materials, and operate a business.
a. Human
b. Financial
c. Informational
d. Labor
e. Material
37. resources are the individuals who provide labor for an organization in exchange for wages.
a. Human
b. Material
c. Labor
d. Financial
e. Informational
38. The monetary contributions that the owners of IBM pay for shares of the company’s stock are
IBM.
a. material
b. financial
c. informational
d. human
e. manufacturing
resources for
39. What resource tells the managers of a business how effectively the other three resources are being combined and
used?
a. Technical
b. Human
c. Financial
d. Material
e. Informational
40. Organizations that combine raw materials, machinery, and labor to produce goods are called
a. manufacturing businesses.
b. service businesses.
c. merchandisers.
d. market intermediaries.
e. processors.
41. Which of the following companies is an example of a manufacturer?
a. Best Buy
b. Intel
c. Walmart
d. Trism
e. H&R Block
42. Mondie Weller decides to start a residential landscaping business. How would this business most likely be
classified?
a. Manufacturing business
b. Marketing intermediary
c. Service business
d. Corporation
e. Nonprofit organization
43. A business’ efforts to sustain the planet and their participation in ecological movements are part of a firm’s
a. free enterprise system.
b. stakeholder responsibilities.
c. factors of production.
d. social responsibility.
e. business cycle.