MBA 5113 Business Foundations
exam 1 Question and answers 100%
correct 2025
Business - correct answer ✔any activity that provides goods or services to
consumers for the purpose of making profit.
Profit - correct answer ✔selling a good/service for more than its cost..
Some organizations are established to provide social or educational services,
earning profit is not their objective - nonprofit organizations (ex. Habitat for
Humanity, American Red Cross).
Owner - correct answer ✔- their primary role is to invest money in the
business. They organize the business idea and bring necessary resources
together.
Employees - correct answer ✔hired by owners; work for the business and
help achieve owners' goals.
Customers - correct answer ✔the ultimate goal of owners and employees is
to satisfy customers.
Triple bottom line - correct answer ✔framework for social responsibility.
People - social concerns
Planet - environmental concerns
Profits - economic concerns
,Factors affecting productivity: - correct answer ✔Capital/labor ratio: It is a
measure of whether enough investment is being made to make effective use
of labor hours.
Scarcity of some resources
Work-force changes
Innovations and technology
Regulatory effects
Bargaining power
Managerial factors
Quality of work life
Slope - correct answer ✔rise/run
Causation - correct answer ✔A graph is a summary of empirical
observations.
It says nothing about cause and effect.
Economics - correct answer ✔Study of how society (business) chooses to
allocate scarce resources (land, labor, capital, etc.) to satisfy virtually
unlimited wants (meet various business objectives, profits, etc.).
KEY ECONOMIC IDEAS - correct answer ✔Scarcity Implies CHOICE which
implies OPPORTUNITY COST
OPPORTUNITY COST - correct answer ✔Value of benefits foregone by
choosing
one alternative over another.
, ECO Profits
ACC Profits - correct answer ✔ECO Profit= TR-EC-IC
ACC Profit= TR-EC
Ceteris Paribus - correct answer ✔Everything else being held equal.
To test for market effects on price, must hold other factors, e.g., costs and
demand factors, constant.
Market Mechanism helps resolve three Basic Economic Questions - correct
answer ✔WHAT to produce: We have to sacrifice less desired activities and
goods.
HOW to produce: find an optimal method of producing goods and services
FOR WHOM to produce: focuses on how an economy's output is distributed
across members of society
Production possibilities - correct answer ✔The alternative combinations of
goods and services that could be produced in a given time period with all
available resources and technology
Economic Resources - correct answer ✔Land - including natural resources
Labor - number and skills of workers
Capital - machinery, buildings, networks
Entrepreneurship - skill in creating products, services, and processes
production possibilities curve - correct answer ✔A curve showing the
different combinations of two goods or services that can be produced in a full-
employment, full-production economy where the available supplies of
resources and technology are fixed.
exam 1 Question and answers 100%
correct 2025
Business - correct answer ✔any activity that provides goods or services to
consumers for the purpose of making profit.
Profit - correct answer ✔selling a good/service for more than its cost..
Some organizations are established to provide social or educational services,
earning profit is not their objective - nonprofit organizations (ex. Habitat for
Humanity, American Red Cross).
Owner - correct answer ✔- their primary role is to invest money in the
business. They organize the business idea and bring necessary resources
together.
Employees - correct answer ✔hired by owners; work for the business and
help achieve owners' goals.
Customers - correct answer ✔the ultimate goal of owners and employees is
to satisfy customers.
Triple bottom line - correct answer ✔framework for social responsibility.
People - social concerns
Planet - environmental concerns
Profits - economic concerns
,Factors affecting productivity: - correct answer ✔Capital/labor ratio: It is a
measure of whether enough investment is being made to make effective use
of labor hours.
Scarcity of some resources
Work-force changes
Innovations and technology
Regulatory effects
Bargaining power
Managerial factors
Quality of work life
Slope - correct answer ✔rise/run
Causation - correct answer ✔A graph is a summary of empirical
observations.
It says nothing about cause and effect.
Economics - correct answer ✔Study of how society (business) chooses to
allocate scarce resources (land, labor, capital, etc.) to satisfy virtually
unlimited wants (meet various business objectives, profits, etc.).
KEY ECONOMIC IDEAS - correct answer ✔Scarcity Implies CHOICE which
implies OPPORTUNITY COST
OPPORTUNITY COST - correct answer ✔Value of benefits foregone by
choosing
one alternative over another.
, ECO Profits
ACC Profits - correct answer ✔ECO Profit= TR-EC-IC
ACC Profit= TR-EC
Ceteris Paribus - correct answer ✔Everything else being held equal.
To test for market effects on price, must hold other factors, e.g., costs and
demand factors, constant.
Market Mechanism helps resolve three Basic Economic Questions - correct
answer ✔WHAT to produce: We have to sacrifice less desired activities and
goods.
HOW to produce: find an optimal method of producing goods and services
FOR WHOM to produce: focuses on how an economy's output is distributed
across members of society
Production possibilities - correct answer ✔The alternative combinations of
goods and services that could be produced in a given time period with all
available resources and technology
Economic Resources - correct answer ✔Land - including natural resources
Labor - number and skills of workers
Capital - machinery, buildings, networks
Entrepreneurship - skill in creating products, services, and processes
production possibilities curve - correct answer ✔A curve showing the
different combinations of two goods or services that can be produced in a full-
employment, full-production economy where the available supplies of
resources and technology are fixed.
