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INTRO TO BUSINESS EXAM 1
QUESTIONS & ANSWERS
Question: What is the primary focus of a profit
organization?
CORRECT ANSWER : To make a profit.
Question: What are the four functions of management?
CORRECT ANSWER : Planning, organizing,
controlling, and leading
Question: What are the factors of production used to
make goods and services?
CORRECT ANSWER : quality products, efficient
operations, social responsibility, and business ethics.
Question: What is Communism?
CORRECT ANSWER : Owned and operated by
government. No competition, the government owns and operates everything. Excess income goes to the government. Consumers have limited choice of goods and
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services, prices usually high. Little choice in career choice, most work for government-owned farms and industries.
Question: What is Socialism?
CORRECT ANSWER : Gov owns and operates major
industries, individuals own small businesses. Restricted in major industries, encouraged in small business. Profits earned in small business may be reinvested in business, profits from gov owned industries go to gov. Consumers have some choice of goods and services, prices determined by supply and demand. Some choice of careers, many work in gov jobs.
Question: What is Capitalism?
CORRECT ANSWER : Individuals own and operate all
business. Encouraged by market forces and government regulations. People are free to keep profits and use them as they wish. Consumers have wide choice of goods and services, prices determined by supply and demand.Unlimited choice of careers.
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Question: What is pure competition?
CORRECT ANSWER : Many small businesses in same
product market.
Question: What is monopolistic competition?
CORRECT ANSWER : small number of businesses little
difference in products.
Question: What is oligopoly?
CORRECT ANSWER : Very few businesses selling a
product.
Question: What is a monopoly?
CORRECT ANSWER : The market structure that exists
when there is only one business providing a product in a given market.
Question: What is economic expansion?
CORRECT ANSWER : Economy is growing and
consumers are spending money.
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Question: What is a depression?
CORRECT ANSWER : unemployment very high;
consumer spending low; business output sharply reduced
Question: What is a recession?
CORRECT ANSWER: Decline in production,
employment, and income
Question: What is economic contraction?
CORRECT ANSWER : spending declines, layoffs,
economy slows down.
Question: What is inflation?
CORRECT ANSWER : Condition characterized by
continuing rise in prices.
Question: What is importing?
CORRECT ANSWER : the purchase of goods and
services from foreign sources