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Table of Contents
Introduction to Business published by OpenStax
PART 1 THE BUSINESS ENVIRONMENT
1 Understanding Economic Systems and Business
2 Making Ethical Decisions and Managing a Socially Responsible Business
3 Competing in the Global Marketplace
PART 2 BUSINESS OWNERSHIP
4 Forms of Business Ownership
5 Entrepreneurship: Starting and Managing Your Own Business
PART 3 MANAGING ORGANIZATIONS
6 Management and Leadership in Today’s Organizations
7 Designing Organizational Structures
8 Managing Human Resources and Labor Relations
9 Motivating Employees
10 Achieving World-class Operations Management
PART 4 MARKETING MANAGEMENT
11 Creating Products and Pricing Strategies to Meet Customers’ Needs
12 Distributing and Promoting Products and Services
PART 5 TECHNOLOGY AND INFORMATION
13 Using Technology to Manage Information
14 Using Financial Information and Accounting
PART 6 FINANCE
15 Understanding Money and Financial Institutions
16 Understanding Financial Management and Securities Markets
17 Your Career in Business
Appendix: Understanding the Legal and Tax Environment
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Chapter 1 UNDERSTANDING ECONOMIC SYSTEMS AND BUSINESS
TRUE-FALSE QUESTIONS
Title: ANSWER: T REFERENCE: The Nature of Business LEARNING OUTCOME: 1
1. A business is an organization that strives for a profit by providing goods and services desired by its customers.
*a. True
b. False
Title: ANSWER: F REFERENCE: The Nature of Business LEARNING OUTCOME: 1 RATIONALE: The major difference is
tangibility
2. The major difference between a good and a service is how the producer uses the factors of production to create
each.
a. True
*b. False
Title: ANSWER: F REFERENCE: The Nature of Business LEARNING OUTCOME: 1 RATIONALE: Not-for-profit
organizations exist to achieve some goal other than profit.
3. Not-for-profit organizations have the same goals as for-profit organizations.
a. True
*b. False
Title: ANSWER: T REFERENCE: The Nature of Business LEARNING OUTCOME: 1
4. Factors of production are common to all productive activities, regardless of the economic system.
*a. True
b. False
Title: ANSWER: F REFERENCE: The Nature of Business LEARNING OUTCOME: 1 RATIONALE: Labor is the economic
contribution of the people.
5. Labor, as a factor of production, relates only to the production of manufactured goods; services are not included.
a. True
*b. False
Title: ANSWER: F REFERENCE: The Nature of Business LEARNING OUTCOME: 1 RATIONALE: Capital is all the inputs
used to produce goods and services and get them to the customer.
6. As a factor of production, capital includes money.
a. True
*b. False
Title: ANSWER: T REFERENCE: The Nature of Business LEARNING OUTCOME: 1
7. People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs.
*a. True
b. False
Title: ANSWER: T REFERENCE: The Nature of Business LEARNING OUTCOME: 1
8. Many people consider knowledge to be a fifth factor of production.
*a. True
b. False
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Title: ANSWER: T REFERENCE: Understanding the Business Environment LEARNING OUTCOME: 2
9. Business owners and managers have a great deal of control over the internal environment of business, which
covers the day-to-day business decisions.
*a. True
b. False
Title: ANSWER: F REFERENCE: Understanding the Business Environment LEARNING OUTCOME: 2
RATIONALE: No one business is large enough or powerful enough to create major changes in the external
environment.
10. Some global corporations are large enough to create major changes in the external environment.
a. True
*b. False
Title: ANSWER: F REFERENCE: Demographic Factors LEARNING OUTCOME: 2 RATIONALE: Demography is the study of
people's vital statistics.
11. Demography is the study of how people use their free time, how people integrate their hobbies and their
vocations, and how people make their purchase decisions.
a. True
*b. False
Title: ANSWER: T REFERENCE: Demographic Factors LEARNING OUTCOME: 2
12. The term Generation X refers to people born between 1965 and 1980.
*a. True
b. False
Title: ANSWER: T REFERENCE: Demographic Factors LEARNING OUTCOME: 2 RATIONALE: Baby boomers are
Americans that are retiring or near-retirement age. Most are vital contributors to the U.S.'s economy.
13. Baby boomers are Americans that are retiring or near-retirement age.
*a. True
b. False
Title: ANSWER: T REFERENCE: Social Factors LEARNING OUTCOME: 2
14. Social factors influence what, how, where, and when to purchase products or services.
*a. True
b. False
Title: ANSWER: F REFERENCE: How Business and Economies Work LEARNING OUTCOME: 3 RATIONALE: Economics is
the study of how a society uses scarce resources to produce and distribute goods and services.
15. Economics is the study of a society’s financial institutions.
a. True
*b. False
Title: ANSWER: F REFERENCE: Microeconomics and Macroeconomics LEARNING OUTCOME: 3
RATIONALE: Microeconomics focuses on individual parts of the economy.
16. When Raoul Welsh is evaluating the construction industry in terms of interest rates, employment cycles, and the
rate of new home building nationwide, he is looking at microeconomics.
a. True
*b. False
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