C201- BUSINESS ACUMEN QUESTIONS & ANSWERS
Define Microeconomics - Answers -The behavior of small economic units, such as
individuals, families, business, in making decisions regarding the allocation of limited
resources. *small scale*
Define Macroeconomics - Answers -address such issues as how an economy uses its
resources and how government policies affect people's standard of living. *big picture*
Explain Demand and Supply Curve - Answers -- Demand: Graph of the amount of a
product that buyers will purchase at different prices, typically slopes downward,
meaning that buyers will purchase greater qualities of good or service as prices fall.
- Supply: Shows the relationship between different prices and the quantities that sellers
will supply or offer for sale, regardless of demand.
How do factors of production influence the overall supply of goods and services? -
Answers --can shift the entire supply curve, either increasing or decreasing the amount
available at every price
- play a central role in determining the overall supply of goods and services.
Factors of Production - Answers -1. Natural Resources
2. Capital
3. Human resources
4. Entrepreneurship
Pure competition - Answers -Market structure in which large number of buyers and
sellers exchange homogeneous products, and no single participant has a significant
impact on price.
monopolistic competition - Answers -Market structure in which large numbers of
buyers and sellers exchange differentiated (heterogenous) products, so each participant
has some control over price.
On which economic system is the U.S. economy based? - Answers --Private
Enterprise System
What is privatization? - Answers -- the conversion of government-owned and operated
companies into privately held businesses.
- Governments may privatize state-owned enterprises in an effort to raise funds and
improve their economy.
Describe the four stages of the business cycle. - Answers -- Prosperity: Characterized
by low unemployment and strong consumer confidence.
,- Recession: May include consumers postponing major purchases, layoff, and
decreasing household savings.
- Depression: Occurs when an economic slowdown continues in a downward spiral over
a long period of time.
- Recovery: Consumer spending increases, and business activity accelerates.
What is a managers job? - Answers -- to combine human and technical resources in
the best way possible to achieve the company goals.
How do the jobs of top managers, middle managers, and supervisory managers differ? -
Answers -- TOP: (CEO, CFO, EVP) Developing long range plans, set a direction for
their organization, and inspire all employees to achieve the company's vision.
- MIDDLE: Focus on specific operations, products, or customers. They develop
procedures to implement the company's strategic plans.
- SUPERVISORY: Interact directly with nonmanagerial employees who produce and sell
the companies goods and services. They are responsible for implementing the plans
developed by the middle managers and motivating workers to accomplish daily, weekly,
and monthly goals.
What is the relationship between the manager's planning and controlling functions? -
Answers -- The basic purpose of controlling is to assess the success of the planning
function. Controlling also provides feedback for future rounds of planning. Helps to
achieve future events and objectives.
What is meant by a vision for the company? - Answers -- serves as the target for a
company's actions, helping direct the company toward opportunities and differentiating it
from its competitors.
- Ability to perceive marketplace needs and what an organization must do to satisfy
them.
*must be flexible enough to adapt to changes in the business environment. *
Why is it important for a top executive to set high ethical standards? - Answers -- result
in a stable workforce, job satisfaction, and customer loyalty. It also helps discourage
employees from wrongdoing.
- Motivates and inspires employees to achieve goals they never thought possible.
- Creates more productive, stable workforce, and can create long term competitive
advantage for the organization.
Outline the planning process. - Answers -- Strategic
- Tactical
- Operation
-Contingency
Some plans are very broad and long range, focusing on key organizational objective;
others are more detailed and specify how particular objectives will be achieved. From
the mission statement to objectives to specific plans, each phase must fit into a
comprehensive planning framework.
, Describe the purpose of tactical planning. - Answers -to determine which short-term
activities should be implemented to accomplish the company's overall strategy.
Compare the kinds of plans made by top managers and middle managers. - Answers -
- Strategic = Top management- organizational objectives, fundamental strategies, long-
term plans
- Tactical = Middle management- Quarterly and semi-annual plans, departmental
policies, and procedures. Short -term plan focus
Contingency = Top management/ all levels- ongoing plans for actions and
communications in an emergency
What is the purpose of a mission statement? - Answers -- a written explanation of a
company's purpose, the reason it exists, the customers it will serve, and how it is
different from competitors.
-It guides the actions of company managers and employees.
Which of a company's characteristics does a SWOT analysis compare? - Answers -
determines a company's strengths, weaknesses, opportunities, and threats relative to its
competitors.
What are some measures that economists use to determine the health of an economy?
- Answers -- GDP (gross domestic product)
- Unemployment rate
- General level of prices
- CPI( Consumer price index)
- Core inflation rate
Total productivity Equation - Answers -- Total productivity= output (goods & services
produced)/ Input (human/natural resources, capital)
Expansionary Monetary Policy - Answers -Increases the money supply in an effort to
cut the cost of borrowing, which encourages business decision makers to make new
investments, in turn stimulating the employment and economic growth.
Restrictive Monetary Policy - Answers --government actions to reduce the money
supply to curb rising prices, over expansion, and concerns about overly rapid economic
growth.
- Accomplished by increasing interest rates and increasing the cost of borrowing
What are the three primary sources of government funds? - Answers -- Taxes
- Fees
- Borrowing
Does a balanced budget erase the national debt? - Answers -- No, a balanced budget
does not erase the national debt, it just doesn't increase it
Define Microeconomics - Answers -The behavior of small economic units, such as
individuals, families, business, in making decisions regarding the allocation of limited
resources. *small scale*
Define Macroeconomics - Answers -address such issues as how an economy uses its
resources and how government policies affect people's standard of living. *big picture*
Explain Demand and Supply Curve - Answers -- Demand: Graph of the amount of a
product that buyers will purchase at different prices, typically slopes downward,
meaning that buyers will purchase greater qualities of good or service as prices fall.
- Supply: Shows the relationship between different prices and the quantities that sellers
will supply or offer for sale, regardless of demand.
How do factors of production influence the overall supply of goods and services? -
Answers --can shift the entire supply curve, either increasing or decreasing the amount
available at every price
- play a central role in determining the overall supply of goods and services.
Factors of Production - Answers -1. Natural Resources
2. Capital
3. Human resources
4. Entrepreneurship
Pure competition - Answers -Market structure in which large number of buyers and
sellers exchange homogeneous products, and no single participant has a significant
impact on price.
monopolistic competition - Answers -Market structure in which large numbers of
buyers and sellers exchange differentiated (heterogenous) products, so each participant
has some control over price.
On which economic system is the U.S. economy based? - Answers --Private
Enterprise System
What is privatization? - Answers -- the conversion of government-owned and operated
companies into privately held businesses.
- Governments may privatize state-owned enterprises in an effort to raise funds and
improve their economy.
Describe the four stages of the business cycle. - Answers -- Prosperity: Characterized
by low unemployment and strong consumer confidence.
,- Recession: May include consumers postponing major purchases, layoff, and
decreasing household savings.
- Depression: Occurs when an economic slowdown continues in a downward spiral over
a long period of time.
- Recovery: Consumer spending increases, and business activity accelerates.
What is a managers job? - Answers -- to combine human and technical resources in
the best way possible to achieve the company goals.
How do the jobs of top managers, middle managers, and supervisory managers differ? -
Answers -- TOP: (CEO, CFO, EVP) Developing long range plans, set a direction for
their organization, and inspire all employees to achieve the company's vision.
- MIDDLE: Focus on specific operations, products, or customers. They develop
procedures to implement the company's strategic plans.
- SUPERVISORY: Interact directly with nonmanagerial employees who produce and sell
the companies goods and services. They are responsible for implementing the plans
developed by the middle managers and motivating workers to accomplish daily, weekly,
and monthly goals.
What is the relationship between the manager's planning and controlling functions? -
Answers -- The basic purpose of controlling is to assess the success of the planning
function. Controlling also provides feedback for future rounds of planning. Helps to
achieve future events and objectives.
What is meant by a vision for the company? - Answers -- serves as the target for a
company's actions, helping direct the company toward opportunities and differentiating it
from its competitors.
- Ability to perceive marketplace needs and what an organization must do to satisfy
them.
*must be flexible enough to adapt to changes in the business environment. *
Why is it important for a top executive to set high ethical standards? - Answers -- result
in a stable workforce, job satisfaction, and customer loyalty. It also helps discourage
employees from wrongdoing.
- Motivates and inspires employees to achieve goals they never thought possible.
- Creates more productive, stable workforce, and can create long term competitive
advantage for the organization.
Outline the planning process. - Answers -- Strategic
- Tactical
- Operation
-Contingency
Some plans are very broad and long range, focusing on key organizational objective;
others are more detailed and specify how particular objectives will be achieved. From
the mission statement to objectives to specific plans, each phase must fit into a
comprehensive planning framework.
, Describe the purpose of tactical planning. - Answers -to determine which short-term
activities should be implemented to accomplish the company's overall strategy.
Compare the kinds of plans made by top managers and middle managers. - Answers -
- Strategic = Top management- organizational objectives, fundamental strategies, long-
term plans
- Tactical = Middle management- Quarterly and semi-annual plans, departmental
policies, and procedures. Short -term plan focus
Contingency = Top management/ all levels- ongoing plans for actions and
communications in an emergency
What is the purpose of a mission statement? - Answers -- a written explanation of a
company's purpose, the reason it exists, the customers it will serve, and how it is
different from competitors.
-It guides the actions of company managers and employees.
Which of a company's characteristics does a SWOT analysis compare? - Answers -
determines a company's strengths, weaknesses, opportunities, and threats relative to its
competitors.
What are some measures that economists use to determine the health of an economy?
- Answers -- GDP (gross domestic product)
- Unemployment rate
- General level of prices
- CPI( Consumer price index)
- Core inflation rate
Total productivity Equation - Answers -- Total productivity= output (goods & services
produced)/ Input (human/natural resources, capital)
Expansionary Monetary Policy - Answers -Increases the money supply in an effort to
cut the cost of borrowing, which encourages business decision makers to make new
investments, in turn stimulating the employment and economic growth.
Restrictive Monetary Policy - Answers --government actions to reduce the money
supply to curb rising prices, over expansion, and concerns about overly rapid economic
growth.
- Accomplished by increasing interest rates and increasing the cost of borrowing
What are the three primary sources of government funds? - Answers -- Taxes
- Fees
- Borrowing
Does a balanced budget erase the national debt? - Answers -- No, a balanced budget
does not erase the national debt, it just doesn't increase it
