Final exam Latest Updated 2023 Graded A +
Chapter 1 The U.S. Business Environment
25) Which environment is NOT an important dimension of a business organization's external
environment?
A) the political-legal environment
B) the sociocultural environment
C) the technological environment
D) the corporate cultural environment
E) the global business environment
Answer: D
Explanation: D) The external environment consists of everything outside an organization's
boundaries that might affect it. The corporate cultural environment is internal to the organization.
Page Ref: 6-7
Difficulty: Easy
Objective: 1.2
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
26) What term denotes a nation's basis for allocating its resources among its citizens?
A) capital structure
B) economic system
C) ownership processes
D) distribution network
E) national regulations
Answer: B
Explanation: B) An economic system is a nation's system for allocating its resources among its
citizens, both individuals and organizations.
Page Ref: 7
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
27) What is the process for converting government enterprises into individually owned firms
known as?
A) production allocation
B) privatization
C) entrepreneurship
D) demand assessment
E) profit maximization
Answer: B
Explanation: B) Privatization is the process of converting government enterprises into privately
owned companies, which will then have the right to run such a business for profit.
Page Ref: 10
Difficulty: Easy
,Final exam Latest Updated 2023 Graded A +
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
28) What is the point at which the supply curve and the demand curve intersect on a graph?
A) equilibrium price
B) decision point
C) surplus price
D) perfect price
E) parity point
Answer: A
Explanation: A) The equilibrium price is determined by the shape of the supply curve and the
demand curve when plotted by amount available and price. The equilibrium price is set at the
point at which the supply curve and the demand curve intersect.
Page Ref: 12
Difficulty: Easy
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
29) What is the price at which the quantity of goods demanded and the quantity of goods
supplied are equal?
A) the going rate
B) the margin rate
C) the market price
D) the optimum price
E) the cost price
Answer: C
Explanation: C) The market price is set by the demand and supply for a given good. It is defined
as the price at which the quantity of goods demanded and the quantity of goods supplied are
equal.
Page Ref: 12
Difficulty: Easy
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
30) What occurs when the quantity demanded exceeds the quantity supplied?
A) demand deficit
B) surplus
C) equilibrium point
D) shortage
E) supply schedule
Answer: D
Explanation: D) When demand exceeds supply, there will not be enough goods available to meet
the demand for them. This is known as a shortage.
Page Ref: 12
,Final exam Latest Updated 2023 Graded A +
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
31) Which of the following does NOT represent a degree of competition in a private enterprise
system?
A) oligopoly
B) socialism
C) monopoly
D) perfect competition
E) monopolistic competition
Answer: B
Explanation: B) Competition is the economic condition in which there are certain demands that
can be met by more than one business, so businesses in the same industry compete for the same
resources or customers.
Page Ref: 14
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
32) Which of the following exists when an industry or market has only one producer?
A) competition
B) oligopoly
C) monopoly
D) communism
E) socialism
Answer: C
Explanation: C) A monopoly is a market or industry in which there is only one producer that
supplies a certain product. Monopolies in the United States economy are either discouraged or
regulated so that prices are not too high.
Page Ref: 16
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
33) Which term refers to the pattern of short-term ups and downs in an economy?
A) aggregate output
B) business cycle
C) standard of living
D) balance of payments
E) demand and supply schedule
Answer: B
Explanation: B) The business cycle is the short-term pattern of economic expansions and
contractions.
, Final exam Latest Updated 2023 Graded A +
Page Ref: 17
Difficulty: Easy
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
34) Which term refers to the total quantity and quality of goods and services that people living in
an economic system can purchase?
A) business cycle
B) demand and supply schedule
C) standard of living
D) aggregate output
E) consumer price index
Answer: C
Explanation: C) The standard of living is the total quantity and quality of goods and services
that people can purchase with the currency used in their economic system. Standard of living is
determined by economic conditions such as inflation and purchasing power.
Page Ref: 17
Difficulty: Easy
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
35) Which term refers to the total value of all goods and services produced within a given period
by a national economy?
A) standard of living
B) aggregate output
C) gross domestic product
D) gross national produce
E) purchasing power parity
Answer: C
Explanation: C) Gross domestic product is the total value of all goods and services produced
within a given period by a national economy through domestic factors of production.
Page Ref: 17
Difficulty: Easy
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
36) Which of the following measures indicates the prices of typical products purchased by
American consumers living in urban areas?
A) GDP per capita
B) standard of living
C) consumer price index
D) purchasing power parity
E) Big Mac index
Chapter 1 The U.S. Business Environment
25) Which environment is NOT an important dimension of a business organization's external
environment?
A) the political-legal environment
B) the sociocultural environment
C) the technological environment
D) the corporate cultural environment
E) the global business environment
Answer: D
Explanation: D) The external environment consists of everything outside an organization's
boundaries that might affect it. The corporate cultural environment is internal to the organization.
Page Ref: 6-7
Difficulty: Easy
Objective: 1.2
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
26) What term denotes a nation's basis for allocating its resources among its citizens?
A) capital structure
B) economic system
C) ownership processes
D) distribution network
E) national regulations
Answer: B
Explanation: B) An economic system is a nation's system for allocating its resources among its
citizens, both individuals and organizations.
Page Ref: 7
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
27) What is the process for converting government enterprises into individually owned firms
known as?
A) production allocation
B) privatization
C) entrepreneurship
D) demand assessment
E) profit maximization
Answer: B
Explanation: B) Privatization is the process of converting government enterprises into privately
owned companies, which will then have the right to run such a business for profit.
Page Ref: 10
Difficulty: Easy
,Final exam Latest Updated 2023 Graded A +
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
28) What is the point at which the supply curve and the demand curve intersect on a graph?
A) equilibrium price
B) decision point
C) surplus price
D) perfect price
E) parity point
Answer: A
Explanation: A) The equilibrium price is determined by the shape of the supply curve and the
demand curve when plotted by amount available and price. The equilibrium price is set at the
point at which the supply curve and the demand curve intersect.
Page Ref: 12
Difficulty: Easy
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
29) What is the price at which the quantity of goods demanded and the quantity of goods
supplied are equal?
A) the going rate
B) the margin rate
C) the market price
D) the optimum price
E) the cost price
Answer: C
Explanation: C) The market price is set by the demand and supply for a given good. It is defined
as the price at which the quantity of goods demanded and the quantity of goods supplied are
equal.
Page Ref: 12
Difficulty: Easy
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
30) What occurs when the quantity demanded exceeds the quantity supplied?
A) demand deficit
B) surplus
C) equilibrium point
D) shortage
E) supply schedule
Answer: D
Explanation: D) When demand exceeds supply, there will not be enough goods available to meet
the demand for them. This is known as a shortage.
Page Ref: 12
,Final exam Latest Updated 2023 Graded A +
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
31) Which of the following does NOT represent a degree of competition in a private enterprise
system?
A) oligopoly
B) socialism
C) monopoly
D) perfect competition
E) monopolistic competition
Answer: B
Explanation: B) Competition is the economic condition in which there are certain demands that
can be met by more than one business, so businesses in the same industry compete for the same
resources or customers.
Page Ref: 14
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
32) Which of the following exists when an industry or market has only one producer?
A) competition
B) oligopoly
C) monopoly
D) communism
E) socialism
Answer: C
Explanation: C) A monopoly is a market or industry in which there is only one producer that
supplies a certain product. Monopolies in the United States economy are either discouraged or
regulated so that prices are not too high.
Page Ref: 16
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
33) Which term refers to the pattern of short-term ups and downs in an economy?
A) aggregate output
B) business cycle
C) standard of living
D) balance of payments
E) demand and supply schedule
Answer: B
Explanation: B) The business cycle is the short-term pattern of economic expansions and
contractions.
, Final exam Latest Updated 2023 Graded A +
Page Ref: 17
Difficulty: Easy
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
34) Which term refers to the total quantity and quality of goods and services that people living in
an economic system can purchase?
A) business cycle
B) demand and supply schedule
C) standard of living
D) aggregate output
E) consumer price index
Answer: C
Explanation: C) The standard of living is the total quantity and quality of goods and services
that people can purchase with the currency used in their economic system. Standard of living is
determined by economic conditions such as inflation and purchasing power.
Page Ref: 17
Difficulty: Easy
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
35) Which term refers to the total value of all goods and services produced within a given period
by a national economy?
A) standard of living
B) aggregate output
C) gross domestic product
D) gross national produce
E) purchasing power parity
Answer: C
Explanation: C) Gross domestic product is the total value of all goods and services produced
within a given period by a national economy through domestic factors of production.
Page Ref: 17
Difficulty: Easy
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
36) Which of the following measures indicates the prices of typical products purchased by
American consumers living in urban areas?
A) GDP per capita
B) standard of living
C) consumer price index
D) purchasing power parity
E) Big Mac index
