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Wayne State University BUS 105 Chapter 1 1)Since World War II, the average length of recessions has been a

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Wayne State University

BUS 105

Chapter 1

1)Since World War II, the average length of recessions has been

a.            three years

b.            twenty-two months

c.             five years

d.            six months

 

e.            eleven months

2.            In a communist country such as Cuba, emphasis is placed on producing what type of goods?

a.            Perishable goods such as food

b.            Goods for export

c.             Goods needed by the government

d.            Durable goods such as machinery

e.            Consumer goods

3.            All bribes are unethical. a. True

b. False

4.            Kami and Derek went to the mall. While there they passed a Vans store, Nike’s store, New Balance store, and Adidas store. Derek commented that there was really a large number of sellers and noted that there seemed to be many buyers as well. What kind of market competition is represented by these stores?

a.            Perfect.

b.            Monopolistic.

c.             Monopoly.

d.            Oligopoly.

5.            The economic term used to describe the Federal Reserve's actions to determine the size of the supply of money in the nation and the level of interest rates is

a.            debt policy.

b.            recovery guideline. c. monetary policy.

d. fiscal policy.

e. recovery technique

 

6.            Which president stated that consumers have the right to consumer education?

a.            Franklin D. Roosevelt b. Gerald R. Ford

c.             Bill Clinton

d.            John F. Kennedy

e.            Lyndon B. Johnson

7.                           is the exportation of large quantities of a product at a price lower than that of the same product in the home market.

a.            Dropping

b.            Export quota c. Dumping

d. Duty

e. Embargo

8.            Productivity can best be described as

a.            the average level of output per worker per hour.

b.            a country's total output.

c.             economic growth in a country.

d.            the efficiency of a company's operations.

e.            the average level of output per worker per year.

9.            Refer to Landing Service. Landing Service must have contacted which of these organizations to mediate regarding unfair treatment by foreign governments?

a.            WTO

b.            EU

c.             GATT

d.            COPPA

e.            OPEC

10.          The recurrence of periods of growth and recession in a nation's economic activity is a depression.

a.            True b. False

 

11.          Howard believes that there should be no trade restrictions for any reason. What effect would Howard say that trade restrictions have on prices?

a.            He would argue that trade restrictions increase prices because they break up domestic monopolies.

b.            He would argue that restrictions would cause greater competition and therefore lead to higher prices. c. He would say that restrictions reduce competition and therefore cause an increase in prices.

d. He would argue that by encouraging competition with trade restrictions, prices are likely to decrease.

e. He would say that trade restrictions have no impact on prices, but they do restrict consumers' choices.

12.          MasterCard sends a customer a memo that discloses the true cost of borrowing with each billing statement. It does this because it realizes that the customer has the right to

a.            safety.

b.            choose.

c.             be informed.

d.            be heard.

e.            obtain credit

13.          When consumers spend their money to purchase Apple iPhones or computers with an Intel processor, or when they discontinue buying such items as compact discs, they are telling resource owners

a.            what to produce.

b.            for whom to produce.

c.             to avoid faddish products.

d.            how to produce.

e.            when to produce

14.          One way a social responsibility program can be funded is by passing on the cost to the consumer in the form of higher prices.

a.            True

b.            False

 

 

 

 

 

 

 

15.          Alberto complained that it took some time to locate a distributor of an imported light bulb that he had to replace. He was further annoyed that he had to pay an artificially high price. When asked for his opinion, Alberto would probably argue

 

a.            against trade restrictions.

b.            for tourism.

c.             for exports.

d.            against international free trade associations.

e.            for the trade deficit

16.          Which of the following best defines balance of trade?

a.            The ability to produce a certain product more efficiently than any other nation.

b.            Purchasing products in other countries and bringing them into one's own country.

c.             The ability to specialize in the production of a specific product and trade it for other needed products.

d.            The total flow of money into the country minus the total flow of money out of the country over some period of time.

e.            The total value of a nation's exports minus the total value of its imports over some period of time.

17.          Olan Okowo recently moved to the United States with many hopes and dreams. However, he realizes that economic freedom includes all of the following except the right to

a.            buy any economic good or service producers sell.

b.            accept or reject any job offered. c. guaranteed economic success.

d. use owned resources to produce a profit.

e. sell a product at the price chosen.

18.          Suppose a set of English bone china costing £1,000 costs $3,000 in the United States. After devaluation, the set of china costs $1,000. This change

a. makes the china less attractive to foreigner purchasers. b. makes the china more attractive to foreign purchasers.

c.             is irrelevant to foreign purchasers.

d.            proves that foreign purchasers would prefer devaluation of the English pound so that it would be worth $2. That way, they could get even more for their dollars.

e.            shows that to foreigner purchasers, the price of the china is the same before and after the devaluation.

19.          Gail Nelson begins her first job after graduating from college and starts putting money away in a savings account. She believes she has removed this money from the circular flow between buyers and sellers that she studied in Introduction to Business. Is Gail correct?

a.            Yes, only direct investments into companies, such as purchasing ownership shares of that company, will put her savings back into the circular flow.

 

b.            No, because she earned this money from a company and because she paid taxes on it, it is always considered part of the flow.

c.             Yes, by putting this money into a savings account, only she has access to the funds and they are no longer available to the circular flow.

d.            No, even though she has saved this money, the bank will in turn invest the money back into the circular flow.

e.            Yes, the circular flow focuses on businesses and government, and therefore Gail's savings have no impact on the circular flow.

20.          The Federal Reserve uses            when it lowers the interest rate charged to banks on short-term loans.

a.            inflation

b.            national   debt c. monetary policy

d. fiscal policy

e. competition

21.          The motion picture industry uses a rating system to describe the content of its movies. Movies are accompanied by ratings such as PG (parental guidance suggested) or R (not suitable for those under 17).

This rating system satisfies consumers' right to

a.            censorship.

b.            be heard.

c.             safety.

d.            be informed.

e.            watch what they want to watch

 

 

 

 

 

 

 

 

22.          Joe would like to start his own lawn maintenance business but is not quite sure where to begin or what to do to start a business. He has come to you for advice. What would you recommend for him to do?

a.            Structure your time and do all of the mundane unimportant things first so they don’t hang over your head all day.

b.            First, determine what you want, why you want to do it, and write it down.

 

c.             Focus on one task at a time then bounce between these tasks to accomplish them all.

d.            Don’t leave your desk until the job is done. If you take breaks, you may forget what you were doing and have to start over.

23.          Refer to Excellent Air Incorporated. EAI's creation of its code of conduct demonstrated its application of moral standards to business situations, which is also known as

a.            moral consciousness.

b.            social responsibility.

c.             social consciousness. d. business ethics.

e. moral responsibility

24.          A program to implement social responsibility in business begins with

a.            appointment of a director.

b.            total commitment of top management.

c.             a board of directors meeting.

d.            conducting a social audit.

e.            careful planning.

25.          A restriction on the amount of a particular foreign currency that can be purchased or sold is a

a.            monetary export control.

b.            nontariff barrier.

c.             currency devaluation.

d.            foreign-exchange control.

e.            currency control

 

 

 

 

 

 

 

26.          Vicky drives a four-door sedan to work and other places everyday. How does her car affect the environment now compared to a similar car thirty years ago?

a. Technology now produces cars that are completely harmless to the environment. b. Today's car has a pollution-control device that reduces harmful emissions.

c.             There are so many cars today that air pollution laws are nearly worthless.

 

d.            Her car is more economical today than it would have been thirty years ago.

e.            A car is a car, so the environmental impact is likely the same.

27.          Within a firm, social responsibility begins with management's attitude. a. True

b. False

28.          The equilibrium or market price exists when the supply of a product exceeds the amount that consumers are willing to purchase.

a.            True

b.            False

29.          Ed works in a position where there is very little supervision. In fact, although he considers himself ethical, he figures he could go away for a week without anyone noticing. Which general set of factors is most likely to influence Ed's ethical behavior?

a.            Individual

b.            Social

c.             Opportunity

d.            Circumstantial

e.            Moral

30.          Public utilities are often referred to as

a.            socialistic.

b.            oligopolies.

c.             sole proprietorships. d. monopolies.

e. monopolistic competitors

 

 

 

 

 

 

 

31.          Who are the top two export partners of the United States?

a. Canada and the United Kingdom b. Mexico and Canada

c.             Mexico and China

 

d.            The United Kingdom and Japan

e.            Japan and China

32.          Ethical issues often arise out of business's relationships with investors, customers, employees, creditors, or competitors.

a.            True

b.            False

33.          When a country imports more than it exports, it has a(n)

a.            favorable balance of trade.

b.            favorable balance of payments. c. unfavorable balance of trade.

d. trade surplus.

e. favorable exchange role

34.          When translated, caveat emptor means "let the buyer beware." a. True

b. False

35.          Cultural diversity represents

a.            a statistical method used to project sales revenues and profits for global companies.

b.            a technical skill.

c.             the differences among people in a workforce.

d.            a religious issue that doesn't affect business organizations.

e.            a business theory that is no longer valid.

 

 

 

 

 

 

 

 

36.          At the end of the year, an individual, small business owner has made $65,000 in profit. Who does that profit belong to?

a. The consumers of the business’ products b. The owner of the business

c.             The company's CEO and top managers

 

d.            The banks from which the business borrowed money

e.            All employees of the small business

37.          Refer to Landing Service. Because the company is known for its ability to produce lawn furniture more efficiently than any other company in the world, the company must have a(n)   advantage.

a.            comparative

b.            total

c.             proportional d. absolute

e. relative

38.          The fundamental issues concerning land pollution are how to restore already contaminated land and how to prevent further contamination.

a.            True

b.            False

39.          Malin lives in a country where individuals may own their own property and the factors of production, however, the government lays very heavy taxes on individuals and businesses and uses the taxes to provide life-long pensions to each citizen in accordance with their economic need. The government also provides almost free medical and dental services and education through college. This kind of economic system could best be described as

a.            mixed.

b.            communist.

c.             socialist.

d.            capitalist.

40.          A firm's social responsibility program will be ineffective if it has less than the total commitment of the company's top business officials.

a.            True

b.            False

 

 

 

 

41.          Refer to Home Inspirations. Hailey noticed that when sales were up, the economy was in a

a.            stagnant mode.

b.            grace period.

c.             depression.

d.            recession.

 

e.            peak period

42.          The economic model of social responsibility holds that society will benefit most when business is left alone to produce and market profitable products that society needs. This economic model is based on the notion that

a.            social responsibility brings great benefits to the business that undertakes to act on it.

b.            social responsibility is a privilege and duty of every business. c. social responsibility is someone else’s job.

d. social responsibility is a burden but should nonetheless be undertaken

43.          Because Saudi Arabia and Australia have               , Saudi Arabia can specialize in the production of crude oil and petroleum products, and Australia can specialize in the production of wool.

a.            a company advantage

b.            a comparative advantage

c.             an effective manufacturing system d. an absolute advantage

e. very low labor costs

44.          The planning stage of a social responsibility program can involve outside consultants to help develop it.

a.            True

b.            False

45.          When the United States levies a tax on textiles from India, this tax is a type of

a.            barter.

b.            import.

c.             export duty.

d.            responsibility. e. tariff

 

 

 

46.          Which of the following is not a characteristic of an oligopoly?

a. The seller has considerable control over price. b. Any duplication of facilities is wasteful.

c.             Sizable investments are required to enter the market.

d.            There are few sellers.

 

e.            The market actions of each seller can strongly affect other sellers.

47.          Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of

a.            being paid before the suppliers and employees are paid.

b.            losing the money he has invested in the corporation and not receiving profits.

c.             losing his home, car, and life savings.

d.            serious inflation eroding the purchasing power of his investment.

e.            the company giving all of the profits to local communities.

48.          A depression is a severe recession that lasts longer than a recession. a. True

b. False