SOLUTION MANUAL FOR
FOUNDATIONS OF BUSINESS 7TH
EDITION BY WILLIAM M.
PRIDE,LATEST UPDATE 2025/2026
A+
1|P age
,TABLE OF CONTENTS
Chapter 1. Exploring the World of Business and Economics
Chapter 2. Ethics and Social Responsibility in Business
Chapter 3. Global Business
Chapter 4. Choosing a Form of Business Ownership
Chapter 5. Small Business, Entrepreneurship, and Franchises
Chapter 6. Understanding the Management Process
Chapter 7. Creating a Flexible Organization
Chapter 8. Producing Quality Goods and Services
Chapter 9. Attracting and Retaining the Best Employees
Chapter 10. Motivating and Satisfying Employees and Teams
Chapter 11. Building Customer Relationships Through Effective
Marketing
Chapter 12. Creating and Pricing Products That Satisfy
Customers
Chapter 13. Distributing and Promoting Products
Chapter 14. Exploring Social Media and e-Business
Chapter 15. Using Management and Accounting Information
Chapter 16. Mastering Financial Management
2|P age
, Chapter 1
End Of Chapter Questions
Quiz Yourself
1. Scarcity Implies That The Allocation Decision Chosen By Society Can
a) Not Make More Of Any One Good.
b) Always Make More Of Any Good.
c) Typically Make More Of One Good But At The Expense Of Making
Less Of Another.
d) Always Make More Of All Goods Simultaneously.
EXPLANATION: Scarcity Implies That Choices Involve
Trade- Offs.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Bloom S: Understand
Difficulty: 02 Medium
Gradeable: Automatic
Learning Objective: 01-01
Topic: Economics And Opportunity Cost
2. A Production Possibilities Frontier Is A Simple Model Of
a) Allocating Scarce Inputs To The Production Of Alternative Outputs.
a) Price And Production/Consumption In A Market.
b) The Cost Of Producing Goods.
c) The Number Of Inputs Required To Produce Varying Levels Of Output.
EXPLANATION: The Production Possibilities Frontier Shows The Quantity Of Two
Goods T Hat Can Be Produced. It Implies That Scarcity Requires That Choices Be
Made As T O How To Use Resources.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Bloom S: Understand
Difficulty: 02 Medium
Gradeable: Automatic
Learning Objective: 01-01
Topic: Modeling Opportunity Cost Using The Production Possibilities Frontier
3|P age
, 3. The Underlying Reason That There Are Unattainable Points On A
Production Possibilities Frontier Is That There
a. Is Government.
b. Are Always Choices That Must Be Made.
c. Are Scarce Resources Within A Fixed Level Of Technology.
d. Is Unemployment Of Resources.
EXPLANATION: The Points Outside The Production Possibilities Frontier Are Unattainable
. This Means That Currently Available Resources And Technology Are Insufficient To
Produce Amounts Greater Than Those Illustrated On The Frontier. On A Graph,
Everything Beyond The Frontier Is Unattainable.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Bloom S: Remember
Difficulty: 01 Easy Gradeable:
Automatic
Learning Objective: 01-01
Topic: Modeling Opportunity Cost Using The Production Possibilities Frontier
4. The Underlying Reason Production Possibilities Frontiers Are Likely To Be
Bowed Out (Rather Than Linear) Is Because
a. Choices Have Consequences.
b. There Are Always Opportunity Costs.
c. Some Resources And People Can Be Better Used Producing One Good
Rather Than Another.
d. There Is Always Some Level Of Unemployment.
EXPLANATION: If The Production Possibilities Frontier Is Not A Line But Is Bowed Out
Away From The Origin, Then Opportunity Cost Is Increasing. The Reason For This
Is That As We Add More Resources To The Production Of, For Example, Pizza, We
Are Using Fewer Resources To Produce Soda. Compounding That Problem, At Each
Stage As We Take The Resources Away From Soda And Put Them Into Pizza, We
Are Moving Workers Who Are Worse At Pizza Production And Better At Soda
Production Than Those Moved In The Previous Stage. This Means That The Increase
In Pizza Product Ion Is Diminishing And The Loss In Soda Production Is Increasing. An
Economist Would Call This An Example Of Increasing Opportunity Cost. If The
Production Possibilities Frontier Is A Straight Line That Is Not Bowed Out Away
From The Origin, Then Opportunity Cost Is Constant.
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy Gradeable:
Automatic
Learning Objective: 01-02
Topic: Attributes Of The Production Possibilities Frontier
4|P age
FOUNDATIONS OF BUSINESS 7TH
EDITION BY WILLIAM M.
PRIDE,LATEST UPDATE 2025/2026
A+
1|P age
,TABLE OF CONTENTS
Chapter 1. Exploring the World of Business and Economics
Chapter 2. Ethics and Social Responsibility in Business
Chapter 3. Global Business
Chapter 4. Choosing a Form of Business Ownership
Chapter 5. Small Business, Entrepreneurship, and Franchises
Chapter 6. Understanding the Management Process
Chapter 7. Creating a Flexible Organization
Chapter 8. Producing Quality Goods and Services
Chapter 9. Attracting and Retaining the Best Employees
Chapter 10. Motivating and Satisfying Employees and Teams
Chapter 11. Building Customer Relationships Through Effective
Marketing
Chapter 12. Creating and Pricing Products That Satisfy
Customers
Chapter 13. Distributing and Promoting Products
Chapter 14. Exploring Social Media and e-Business
Chapter 15. Using Management and Accounting Information
Chapter 16. Mastering Financial Management
2|P age
, Chapter 1
End Of Chapter Questions
Quiz Yourself
1. Scarcity Implies That The Allocation Decision Chosen By Society Can
a) Not Make More Of Any One Good.
b) Always Make More Of Any Good.
c) Typically Make More Of One Good But At The Expense Of Making
Less Of Another.
d) Always Make More Of All Goods Simultaneously.
EXPLANATION: Scarcity Implies That Choices Involve
Trade- Offs.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Bloom S: Understand
Difficulty: 02 Medium
Gradeable: Automatic
Learning Objective: 01-01
Topic: Economics And Opportunity Cost
2. A Production Possibilities Frontier Is A Simple Model Of
a) Allocating Scarce Inputs To The Production Of Alternative Outputs.
a) Price And Production/Consumption In A Market.
b) The Cost Of Producing Goods.
c) The Number Of Inputs Required To Produce Varying Levels Of Output.
EXPLANATION: The Production Possibilities Frontier Shows The Quantity Of Two
Goods T Hat Can Be Produced. It Implies That Scarcity Requires That Choices Be
Made As T O How To Use Resources.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Bloom S: Understand
Difficulty: 02 Medium
Gradeable: Automatic
Learning Objective: 01-01
Topic: Modeling Opportunity Cost Using The Production Possibilities Frontier
3|P age
, 3. The Underlying Reason That There Are Unattainable Points On A
Production Possibilities Frontier Is That There
a. Is Government.
b. Are Always Choices That Must Be Made.
c. Are Scarce Resources Within A Fixed Level Of Technology.
d. Is Unemployment Of Resources.
EXPLANATION: The Points Outside The Production Possibilities Frontier Are Unattainable
. This Means That Currently Available Resources And Technology Are Insufficient To
Produce Amounts Greater Than Those Illustrated On The Frontier. On A Graph,
Everything Beyond The Frontier Is Unattainable.
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Bloom S: Remember
Difficulty: 01 Easy Gradeable:
Automatic
Learning Objective: 01-01
Topic: Modeling Opportunity Cost Using The Production Possibilities Frontier
4. The Underlying Reason Production Possibilities Frontiers Are Likely To Be
Bowed Out (Rather Than Linear) Is Because
a. Choices Have Consequences.
b. There Are Always Opportunity Costs.
c. Some Resources And People Can Be Better Used Producing One Good
Rather Than Another.
d. There Is Always Some Level Of Unemployment.
EXPLANATION: If The Production Possibilities Frontier Is Not A Line But Is Bowed Out
Away From The Origin, Then Opportunity Cost Is Increasing. The Reason For This
Is That As We Add More Resources To The Production Of, For Example, Pizza, We
Are Using Fewer Resources To Produce Soda. Compounding That Problem, At Each
Stage As We Take The Resources Away From Soda And Put Them Into Pizza, We
Are Moving Workers Who Are Worse At Pizza Production And Better At Soda
Production Than Those Moved In The Previous Stage. This Means That The Increase
In Pizza Product Ion Is Diminishing And The Loss In Soda Production Is Increasing. An
Economist Would Call This An Example Of Increasing Opportunity Cost. If The
Production Possibilities Frontier Is A Straight Line That Is Not Bowed Out Away
From The Origin, Then Opportunity Cost Is Constant.
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy Gradeable:
Automatic
Learning Objective: 01-02
Topic: Attributes Of The Production Possibilities Frontier
4|P age
