Grand Canyon University BUS 100 Exam 1 (pdf) | 2026/2027 | Exam 1
Q&A | Business
1. Which of the following best defines a business in the context of
introduction to business?
A) Any organization that seeks to provide goods and services to others while
operating at a profit
B) Any activity that is conducted by the government to provide public
services
C) A non-profit entity that focuses solely on charitable work
D) A group of individuals who share a common hobby
Correct Answer: Any organization that seeks to provide goods and services to
others while operating at a profit
Rationale: A business is defined as any activity that seeks to provide goods
and services to others while operating at a profit. This definition emphasizes
the for-profit nature of business activities, distinguishing them from non-
profit or government entities.
2. The total amount of money a business takes in during a given period by
selling goods and services is known as:
A) Profit
B) Revenue
C) Loss
D) Capital
Correct Answer: Revenue
,Rationale: Revenue is the total amount of money a business takes in during a
given period by selling goods and services. Profit is what remains after
subtracting expenses from revenue.
3. The difference between a business's revenues and its expenses is called:
A) Revenue
B) Capital
C) Profit
D) Gross domestic product
Correct Answer: Profit
Rationale: Profit is the difference between a business's revenues and its
expenses. A positive profit indicates the business is operating successfully,
while a negative profit (loss) means expenses exceed revenues.
4. Tangible products such as computers, food, clothing, cars, and appliances
are classified as:
A) Services
B) Goods
C) Utilities
D) Intangibles
Correct Answer: Goods
Rationale: Goods are tangible products that can be touched and seen, such
as computers, food, clothing, cars, and appliances. Services, in contrast, are
intangible products like healthcare or insurance.
,5. Which of the following is an example of a service?
A) A laptop computer
B) A pair of shoes
C) A haircut
D) A new car
Correct Answer: A haircut
Rationale: A service is an intangible product, meaning it cannot be touched
or held. A haircut is a service provided by a stylist, whereas a laptop, shoes,
and a car are all tangible goods.
6. Which of the following is NOT one of the four factors of production?
A) Land
B) Labor
C) Capital
D) Profit
Correct Answer: Profit
Rationale: The four factors of production are land, labor, capital, and
entrepreneurship. Profit is the financial reward for risk-taking and is not a
factor of production; rather, it is the result of combining the factors
effectively.
7. The factor of production that encompasses the natural resources used to
create goods and services is:
A) Land
B) Labor
, C) Capital
D) Entrepreneurship
Correct Answer: Land
Rationale: Land refers to the natural resources used to create goods and
services. This includes everything from agricultural land to oil and minerals.
Labor is the human effort, capital is the machinery and tools, and
entrepreneurship is the risk-taking and innovation.
8. The risk-taking individual who combines the factors of production to create
a business is known as a(n):
A) Manager
B) Investor
C) Entrepreneur
D) Employee
Correct Answer: Entrepreneur
Rationale: An entrepreneur is someone who risks time and money to start
and manage a business. They are the driving force behind new business
creation, combining land, labor, and capital to produce goods or services.
9. Which economic system is characterized by private ownership of the
means of production and the pursuit of profit?
A) Socialism
B) Communism
C) Capitalism
D) Feudalism
Q&A | Business
1. Which of the following best defines a business in the context of
introduction to business?
A) Any organization that seeks to provide goods and services to others while
operating at a profit
B) Any activity that is conducted by the government to provide public
services
C) A non-profit entity that focuses solely on charitable work
D) A group of individuals who share a common hobby
Correct Answer: Any organization that seeks to provide goods and services to
others while operating at a profit
Rationale: A business is defined as any activity that seeks to provide goods
and services to others while operating at a profit. This definition emphasizes
the for-profit nature of business activities, distinguishing them from non-
profit or government entities.
2. The total amount of money a business takes in during a given period by
selling goods and services is known as:
A) Profit
B) Revenue
C) Loss
D) Capital
Correct Answer: Revenue
,Rationale: Revenue is the total amount of money a business takes in during a
given period by selling goods and services. Profit is what remains after
subtracting expenses from revenue.
3. The difference between a business's revenues and its expenses is called:
A) Revenue
B) Capital
C) Profit
D) Gross domestic product
Correct Answer: Profit
Rationale: Profit is the difference between a business's revenues and its
expenses. A positive profit indicates the business is operating successfully,
while a negative profit (loss) means expenses exceed revenues.
4. Tangible products such as computers, food, clothing, cars, and appliances
are classified as:
A) Services
B) Goods
C) Utilities
D) Intangibles
Correct Answer: Goods
Rationale: Goods are tangible products that can be touched and seen, such
as computers, food, clothing, cars, and appliances. Services, in contrast, are
intangible products like healthcare or insurance.
,5. Which of the following is an example of a service?
A) A laptop computer
B) A pair of shoes
C) A haircut
D) A new car
Correct Answer: A haircut
Rationale: A service is an intangible product, meaning it cannot be touched
or held. A haircut is a service provided by a stylist, whereas a laptop, shoes,
and a car are all tangible goods.
6. Which of the following is NOT one of the four factors of production?
A) Land
B) Labor
C) Capital
D) Profit
Correct Answer: Profit
Rationale: The four factors of production are land, labor, capital, and
entrepreneurship. Profit is the financial reward for risk-taking and is not a
factor of production; rather, it is the result of combining the factors
effectively.
7. The factor of production that encompasses the natural resources used to
create goods and services is:
A) Land
B) Labor
, C) Capital
D) Entrepreneurship
Correct Answer: Land
Rationale: Land refers to the natural resources used to create goods and
services. This includes everything from agricultural land to oil and minerals.
Labor is the human effort, capital is the machinery and tools, and
entrepreneurship is the risk-taking and innovation.
8. The risk-taking individual who combines the factors of production to create
a business is known as a(n):
A) Manager
B) Investor
C) Entrepreneur
D) Employee
Correct Answer: Entrepreneur
Rationale: An entrepreneur is someone who risks time and money to start
and manage a business. They are the driving force behind new business
creation, combining land, labor, and capital to produce goods or services.
9. Which economic system is characterized by private ownership of the
means of production and the pursuit of profit?
A) Socialism
B) Communism
C) Capitalism
D) Feudalism
