Business 101 Exam -1 with Complete
Solutions
business - correct answer-organization that proviedes goods or services to earn a profit
profit - correct answer-difference between a business's revenues and expenses
external environment - correct answer-everything outside an organization's boundaries
that might affect it
economic system - correct answer-a nation's system for allocating its resources among
its citizens
factors of production - correct answer-resources used in the production of goods and
services- labor, capital, entrepreneurs, physical resources, and information resources
labor (human resources) - correct answer-physical and mental capabilities of people as
they contribute to economic production
capital - correct answer-funds needed to create and operate a business enterprise
entrepreneur - correct answer-indicidual who accepts the risks and opportunities
involved in creating and operating a new business venture
intrepreneur - correct answer-part of a company
planned economy - correct answer-economy that relies on a centralized government to
control all or most factors of production and to make all or most production and
allocation decisions
communism - correct answer-political system in which the government owns and
operates all factors of production
market economy - correct answer-economy in which individuals control production and
allocation decisions through supply and demand
market - correct answer-mechanism for exchange between buyers and sellers of a
particular good or service
capitalism - correct answer-system that santions the pricate owndership of the factors of
production and encourages entrepreneurship by offering profits as an incentive.
, privatization - correct answer-process of converting government enterprises into
privately owned companies
socialism - correct answer-planned economic system in which the government owns
and operates only selected major sources of production
demand - correct answer-the willingness and ability of buyers to purchase a good or
service
supply - correct answer-the willingness and ability of producers to offer a good or
service for sale
pricate enterprise - correct answer-economic system that allows individuals to pursue
their own interests without undue governmental restriction
competition - correct answer-vying among businesses for the same resources or
customers
perfect competition - correct answer-market or industry characterized by numerous
small firms producing and identicle product
monopolistic competition - correct answer-market or industry characterized by
numerous buyers and relatively numerous sellers trying to differentiate their products
from those of competitors
monopoly - correct answer-market or industry in which there is only one producer that
can therefore set the prices of its products
natural monopoly - correct answer-industry in which one company can most efficiently
supply all needed goods or services
standard of living - correct answer-the total quantity and quality of goods and services
people can purchase witht the currency used in their economic system
gross domestic product (GDP) - correct answer-total value of all goods and services
produced within a given period by a national economy through domestic factors of
production
gross national product (GNP) - correct answer-total value of all goods and services
produced by a national economy within a given period regardless of where the factors of
production are located
real GDP - correct answer-gross domectic product adjusted to account for changes in
currency values and price changes
Solutions
business - correct answer-organization that proviedes goods or services to earn a profit
profit - correct answer-difference between a business's revenues and expenses
external environment - correct answer-everything outside an organization's boundaries
that might affect it
economic system - correct answer-a nation's system for allocating its resources among
its citizens
factors of production - correct answer-resources used in the production of goods and
services- labor, capital, entrepreneurs, physical resources, and information resources
labor (human resources) - correct answer-physical and mental capabilities of people as
they contribute to economic production
capital - correct answer-funds needed to create and operate a business enterprise
entrepreneur - correct answer-indicidual who accepts the risks and opportunities
involved in creating and operating a new business venture
intrepreneur - correct answer-part of a company
planned economy - correct answer-economy that relies on a centralized government to
control all or most factors of production and to make all or most production and
allocation decisions
communism - correct answer-political system in which the government owns and
operates all factors of production
market economy - correct answer-economy in which individuals control production and
allocation decisions through supply and demand
market - correct answer-mechanism for exchange between buyers and sellers of a
particular good or service
capitalism - correct answer-system that santions the pricate owndership of the factors of
production and encourages entrepreneurship by offering profits as an incentive.
, privatization - correct answer-process of converting government enterprises into
privately owned companies
socialism - correct answer-planned economic system in which the government owns
and operates only selected major sources of production
demand - correct answer-the willingness and ability of buyers to purchase a good or
service
supply - correct answer-the willingness and ability of producers to offer a good or
service for sale
pricate enterprise - correct answer-economic system that allows individuals to pursue
their own interests without undue governmental restriction
competition - correct answer-vying among businesses for the same resources or
customers
perfect competition - correct answer-market or industry characterized by numerous
small firms producing and identicle product
monopolistic competition - correct answer-market or industry characterized by
numerous buyers and relatively numerous sellers trying to differentiate their products
from those of competitors
monopoly - correct answer-market or industry in which there is only one producer that
can therefore set the prices of its products
natural monopoly - correct answer-industry in which one company can most efficiently
supply all needed goods or services
standard of living - correct answer-the total quantity and quality of goods and services
people can purchase witht the currency used in their economic system
gross domestic product (GDP) - correct answer-total value of all goods and services
produced within a given period by a national economy through domestic factors of
production
gross national product (GNP) - correct answer-total value of all goods and services
produced by a national economy within a given period regardless of where the factors of
production are located
real GDP - correct answer-gross domectic product adjusted to account for changes in
currency values and price changes
