Test Bank for Better Business 4th Edition by Michael R. Solomon, Mary Anne Poatsy & Kendall Martin | Complete Chapters

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Better, Business,, 4e, (Solomon),
Chapter, 2, Economics, and, Banking

1) The, main, function, of, economics, is, to, study, .
A) the, exchange, of, goods, and, services, between, individuals,, businesses,, and, nations
B) the, exchange, of, cultural, information, in, a, diverse, society
C) the, stock, exchange
D) the, exchange, of, diplomatic, relations, between, nations
E) the, exchange, of, ideas, about, motivation, and, behavior, in, the, workplace,
Answer:, A
Explanation:, A), Economics, is, the, study, of, how, individuals, and, businesses, make, decisions, to,
best, satisfy, wants,, needs,, and, desires, with, limited, resources., It, is, about, businesses, making, goods,
or, supplying, services, that, we, want, or, need, to, buy.
Diff:, 1
AACSB:, Reflective, thinking
LO:, 2.1:, What, is, economics,, and, what, are, the, different, types, of, economic, systems?,
Classification:, Concept

2) Celeste, is, interested, in, studying, the, effects, that, natural, disasters, have, on, the, value, of, goods,
and, services, in, the, affected, areas., Her, area, of, study, should, be, .
A) marketing
B) microeconomics
C) macroeconomics
D) sociology
E) sustainability,
Answer:, B
Explanation:, B), Microeconomics, is, the, study, of, how, individuals,, businesses,, households,, and,
consumers, allocate, their, resources, in, exchange, for, goods, and, services., Marketing, is, the, process,
or, technique, of, selling, goods, to, consumers., Macroeconomics, is, the, study, of, the, behavior, of, the,
economy, as, a, whole., Sociology, is, the, study, of, social, relations, and, change., Sustainability, is, the,
use, of, resources, without, permanently, depleting, or, damaging, the, resource.
Diff:, 2
AACSB:, Reflective, thinking
LO:, 2.1:, What, is, economics,, and, what, are, the, different, types, of, economic, systems?,
Classification:, Application

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3) Joseph, took, a, class, in, macroeconomics,, which, means, that, he, was, studying, the, behavior, of
.
A) individual, businesses
B) people, with, limited, resources
C) the, overall, economy
D) corporate, executives
E) Fortune,500,companies,
Answer:, C
Explanation:, C), Macroeconomics, is, the, study, of, the, behavior, of, the, economy, as, a, whole., The,
study, of, behavior, of, individual, businesses,, people, with, limited, resources,, and, corporate,
executives, would, fall, under, the, area, of, microeconomics.
Diff:, 1
AACSB:, Reflective, thinking
LO:, 2.1:, What, is, economics,, and, what, are, the, different, types, of, economic, systems?,
Classification:, Concept

4) A, free, market, economy, is, one, in, which, .
A) the, government, or, other, centralized, group, determines, what, to, produce
B) individuals, determine, what, to, produce, with, some, level, of, government, involvement
C) the, government, controls, healthcare, while, privately, owned, businesses, operate, in, other, market,
sectors
D) individuals, and, private, firms, make, decisions, based, on, consumer, needs, and, wants
E) privately, owned,, profit-seeking, enterprises, are, converted, to, government-owned, production,
and, services
Answer:, D
Explanation:, D), A, market, economy, is, run, entirely, by, individuals, and, businesses, with, no,
government, involvement., The, other, responses, refer, to, planned, and, mixed, economies.
Diff:, 1
AACSB:, Reflective, thinking
LO:, 2.1:, What, is, economics,, and, what, are, the, different, types, of, economic, systems?,
Classification:, Concept
Learning, Outcome:, Compare, and, contrast, different, economic, systems

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5) A, mixed, economy, is, one, in, which, .
A) both, resources, and, means, of, production, are, extremely, limited, and, generally, confined, to,
agricultural, produce
B) the, government, or, other, centralized, group, determines, and, controls, all, resources, and, means, of,
production
C) both, individuals, and, government, control, resources, and, determine, production, methods
D) either, individuals, or, private, firms,, but, not, both,, control, resources, and, determine, production,
methods
E) there, is, no, government, intervention, whatsoever, in, industry,
Answer:, C
Explanation:, C), A, mixed, economy, is, one, in, which, individuals,, businesses,, and, government,
share, responsibility, for, determining, allocation, of, resources, and, methods, of, production., The, other,
responses, refer, to, planned, economies, or, market, economies.
Diff:, 1
AACSB:, Reflective, thinking
LO:, 2.1:, What, is, economics,, and, what, are, the, different, types, of, economic, systems?,
Classification:, Concept
Learning, Outcome:, Compare, and, contrast, different, economic, systems

6) A, planned, economy, is, one, in, which, .
A) the, government, or, other, centralized, group, determines, wages,, sets, prices,, and, distributes,
resources, and, products, to, the, common, group
B) individuals, and, businesses, determine, the, production, methods,, with, a, focus, on, efficiency, and,
productivity
C) individual, income, ultimately, controls, purchasing, decisions
D) government, distributes, some, goods, and, services, through, selected, social, programs,, and,
individual, income, determines, purchasing, decisions, for, other, goods, and, services
E) the, production, and, pricing, of, goods, and, services, is, determined, through, the, operation, of, a,
market
Answer:, A
Explanation:, A), A, planned, economy, is, one, in, which, the, government, controls, the, distribution, of,
goods, and, resources., The, other, responses, refer, to, market, economies, and, mixed, economies.
Diff:, 1
AACSB:, Reflective, thinking
LO:, 2.1:, What, is, economics,, and, what, are, the, different, types, of, economic, systems?,
Classification:, Concept
Learning, Outcome:, Compare, and, contrast, different, economic, systems