Business Essentials, 9e (Ebert/Griffin)
Chapter 1 The U.S. Business Environment
1) The customs, values, and demographic characteristics of the society in which an
organization functions are the principal elements of the political-legal environment.
Answer: FALSE
Explanation: These are the main considerations of the sociocultural environment. The
political-legal environment reflects the relationship between business and government,
usually in the form of government regulation of business.
Page Ref: 5
Difficulty: Easy
Objective: 1.2
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
2) Physical resources include the data and other information used by businesses.
Answer: FALSE
Explanation: Physical resources are the tangible resources that organizations use to
conduct their business such as natural resources, raw materials, offices, storage and
production facilities, parts and supplies, computers and peripherals, and a variety of other
equipment.
Page Ref: 8
Difficulty: Easy
Objective: 1.3
Learning Outcome: Identify the different types of technologies used in business and
describe their uses
Skill: Concept
,3) Economic systems differ in how factors of production are used.
Answer: TRUE
Explanation: Different types of economic systems manage the factors of production
differently. In capitalism, for instance, they are managed by private individuals with
capital resources, while in a command economy the government manages the factors of
production.
Page Ref: 9
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
,4) The point at which the supply curve and the demand curve intersect is the market price.
Answer: TRUE
Explanation: When demand and supply curves are plotted on the same graph, the point at
which they intersect is the point at which demand matches supply, which determines the
market price.
Page Ref: 12
Difficulty: Easy
AACSB: Analytic skills
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
5) Aggregate output refers to a company's annual production of goods or services.
Answer: FALSE
Explanation: Aggregate output is the total quantity of goods and services produced by an
economic system during a given period.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
6) The United States government manages the collection and spending of its revenues
through monetary policy.
Answer: FALSE
Explanation: The United States government manages the collection and spending of its
revenues through fiscal policy.
Page Ref: 23
, Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
7) The pursuit of profits is how a business differs from organizations such as most
universities, hospitals, and government agencies.
Answer: TRUE
Explanation: The pursuit of profits distinguishes a business from those organizations—
such as most universities, hospitals, and government agencies—that run in much the
same way but that generally don't seek profits.
Page Ref: 4
Difficulty: Easy
Objective: 1.1
Learning Outcome: Explain the entrepreneurship process
Skill: Concept
Chapter 1 The U.S. Business Environment
1) The customs, values, and demographic characteristics of the society in which an
organization functions are the principal elements of the political-legal environment.
Answer: FALSE
Explanation: These are the main considerations of the sociocultural environment. The
political-legal environment reflects the relationship between business and government,
usually in the form of government regulation of business.
Page Ref: 5
Difficulty: Easy
Objective: 1.2
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
2) Physical resources include the data and other information used by businesses.
Answer: FALSE
Explanation: Physical resources are the tangible resources that organizations use to
conduct their business such as natural resources, raw materials, offices, storage and
production facilities, parts and supplies, computers and peripherals, and a variety of other
equipment.
Page Ref: 8
Difficulty: Easy
Objective: 1.3
Learning Outcome: Identify the different types of technologies used in business and
describe their uses
Skill: Concept
,3) Economic systems differ in how factors of production are used.
Answer: TRUE
Explanation: Different types of economic systems manage the factors of production
differently. In capitalism, for instance, they are managed by private individuals with
capital resources, while in a command economy the government manages the factors of
production.
Page Ref: 9
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
,4) The point at which the supply curve and the demand curve intersect is the market price.
Answer: TRUE
Explanation: When demand and supply curves are plotted on the same graph, the point at
which they intersect is the point at which demand matches supply, which determines the
market price.
Page Ref: 12
Difficulty: Easy
AACSB: Analytic skills
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
5) Aggregate output refers to a company's annual production of goods or services.
Answer: FALSE
Explanation: Aggregate output is the total quantity of goods and services produced by an
economic system during a given period.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
6) The United States government manages the collection and spending of its revenues
through monetary policy.
Answer: FALSE
Explanation: The United States government manages the collection and spending of its
revenues through fiscal policy.
Page Ref: 23
, Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
7) The pursuit of profits is how a business differs from organizations such as most
universities, hospitals, and government agencies.
Answer: TRUE
Explanation: The pursuit of profits distinguishes a business from those organizations—
such as most universities, hospitals, and government agencies—that run in much the
same way but that generally don't seek profits.
Page Ref: 4
Difficulty: Easy
Objective: 1.1
Learning Outcome: Explain the entrepreneurship process
Skill: Concept
