Test bank for business 6th canadian edition by ferrell

14 15A central issue of economics is how to fulfill consumers' unlimited demand for goods and services in a world with limited resources.. 19 20Russia, Poland, Hungary, and other Eastern

Name _

TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false.

3)Non-profit organizations, such as the Canadian Red Cross, do not have to engage in

management, marketing, or finance activities

3)

4)Organizations such as the Special Olympics have two fundamental purposes: to earn a

profit and to accomplish social objectives

4)

6)Businesses have the right to keep and use their profits as they choose, without

limitations

6)

7)Earning profits contributes to society by providing employment, which in turn provides

money that is reinvested in the economy

7)

9)Owners have little responsibility to provide funds for the operation of the business 9)

13)Studying business will help you develop skills to employ in a future career, if that careertakes place in the country where you studied business topics

13)

14)One of the best-known Canadian marketing initiatives of all time is Tim Hortons' "Roll

Up the Rim to Win" campaign

14)

15)A central issue of economics is how to fulfill consumers' unlimited demand for goods

and services in a world with limited resources

15)

16)Natural resources include land, minerals, water, and other gifts of nature which are not

made by humans

16)

17)As the baby boomers, who make up roughly one-third of Canada's population, retire,

Canada may face a labour shortage in some sectors

17)

18)Capitalism is an economic system in which the government owns and operates basic

industries while individuals own most other businesses

18)

19)China is an example of a communist economy that exists today which satisfies Karl

Marx's ideal of communism

19)

20)Russia, Poland, Hungary, and other Eastern European nations have turned away from

communism and toward economic systems governed by supply and demand rather than

by central planning

20)

21)The Chinese state is the largest shareholder among China's largest companies and

influences thousands of other businesses

21)

23)Human resources refer only to the mental abilities of people used to produce goods and

services; it is synonymous with knowledge

23)

24)If free enterprise is going to be successful, individuals must have the right to choose

what career to pursue, where to live, what goods and services to purchase, and more

24)

25)Demand is the quantity of goods and services that consumers are willing to buy at

different prices at a specific time

25)

27)The equilibrium price is represented by the point where a product's supply and demand

30)Government-granted monopolies are not subject to government-regulated prices 30)

31)A product's equilibrium price is constantly changing in response to changes in economicconditions, availability of resources, and degree of competition

31)

32)Economic expansion occurs when an economy is growing and people are spending moremoney.

32)

33)The standard of living rises because people have less money to spend 33)

37)Gross domestic product is the sum of all goods and services produced in a country

40)When a nation collects more from taxes than it spends, it has a budget deficit 40)

43)Advertising first made consumers aware of differences in products and prices in the

marketing economy

43)

44)Entrepreneurs risk their wealth, time, and effort to develop for profit an innovative

product or way of doing something

44)

47)Free-market capitalism and laissez-faire capitalism are essentially the same thing. 47)

48)Research has shown that ethical behaviour cannot only enhance a company's reputation

but can also drive profits

48)

49)Society demands ethical and socially responsible business behaviour towards customersand investors only There seems to be less of a concern for other stakeholder groupsincluding government regulators and the environment

49)

MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question.

50)Businesses differ from non-profit organizations in that a business' focus is on:

52)If a business is to be successful in the long run, it must treat its customers, employees,

and community with social:

53)Which of the following is not a product?

A)Profits earned by businesses

B)A veterinarian's treatment of a pet's injuries

C)A checkup by a doctor

D)A lawyer's advice in a divorce case

E)A Mac personal computer

55)The functions of organizing, staffing, planning, and controlling are most closely

56)Which of the following functions involve activities designed to provide goods and

services that fulfill the needs and wants of consumers?

58)One of the best-known Canadian marketing initiatives of all time is:

A)The Air Miles Program

B)HBC's reward program

C)Petro-Points

D)Tim Hortons' "Roll Up the Rim to Win"

E)The President's Choice points

61)The group of people to whom management activities most apply is:

66)Which of the following questions are addressed by all economic systems?

A)Who will produce the goods?

B)What goods and services should be produced?

C)How much of each good and service should be produced?

D)How should the goods and services be distributed?

E)All of these questions must be addressed by all economic systems

66)

67)All of the following are true in a communist economy, except:

A)that consumers have a wide choice of goods and services

B)that supply is determined by central government planning

C)the means of production are owned by the government

D)the government decides how the goods will be produced

E)the government chooses what will be produced

67)

68)Communist societies:

A)do not spend much on defense

B)have only one class of people

C)seldom have consumer shortages

D)have a high standard of living

E)appear to be efficient and equitable, at least in theory

68)

69)Socialism:

A)allows only private ownership of business

B)allows only government ownership of the factors of production

C)is becoming more popular

D)has government ownership of basic industries

E)all of the answers accurately describe socialism

72)The difference between pure capitalism and modified capitalism is that:

A)under modified capitalism, there is less government regulation

B)for either form of capitalism, government regulation is equal

C)under pure capitalism, there is less government regulation

D)under pure capitalism, there is more government regulation

E)none of the answers accurately describe the difference between pure capitalism andmodified capitalism

72)

73)Most economic systems:

A)are ineffective

B)give individuals freedom

C)exist in a pure form

D)create revolutions

E)exist in a mixed form

73)

74)Private property, profits, independent business decisions, and freedom of choice are

rights associated with:

76)In which economic system(s) are basic services provided by the central government?

A)Communism and capitalism

B)Communism and socialism

C)Socialism only

D)Capitalism and socialism

E)Capitalism only

76)

77)Which of the following countries best depict a communist economic system?

77)

78)If an economist is analyzing the quantity of goods or services that businesses are willing

to sell at different prices at specific times, then the focus is on:

79)Suppliers are generally willing to:

A)supply more at a lower price

B)determine equilibrium prices

C)supply more at a higher price

D)lower prices below costs

E)demand more at a higher price

79)

80)When Walmart has a sale on digital cameras:

A)consumers will demand more digital cameras

B)the store won't supply more digital cameras than it normally does

C)the manufacturer will halt production of digital cameras

D)consumers won't demand more digital cameras than normal

E)consumers will demand fewer digital cameras

80)

81)When Apple introduced the iPod portable digital music player, the price of and demandfor digital music players was high As a result:

A)consumers stopped buying digital music players

B)other suppliers introduced digital music players to meet the demand

C)competition was not allowed to enter the market

D)manufacturers stopped producing digital music players

E)the equilibrium price met the supply

81)

82)Supply and demand may be an efficient way to distribute resources:

A)and it is always fair

B)but it doesn't allow the poor to get rich

C)but it helps inefficient producers to succeed

D)although equilibrium price is determined by the government

E)but it may not distribute resources equally among those who need them

82)

83)Competition fosters efficiency because:

A)the government regulates prices

B)producers have to offer the best products at reasonable prices

C)businesses can set whatever prices they want

D)supply depresses prices

E)all buyers have perfect knowledge

85)Monopolies that function in a capitalistic economy are likely to have prices determined

by:

A)the interaction of supply and demand

B)the law of supply

C)the law of demand

D)equilibrium interaction

E)government regulation

85)

86)Using the supply and demand curves shown in the graph that follows, what is the

equilibrium price for soft drinks?

[INSERT GRAPHIC]

86)

87)When businesses can promote different features of their products and consumers are

willing to pay more for products containing the features they desire, the competitiveenvironment is probably:

91)Economic expansion occurs when:

A)prices begin to rise and incomes begin to fall

B)fewer goods and services are produced than consumers demand

C)a nation's standard of living drops quickly

D)an economy is growing and people are spending more money

E)employment levels decline over time

91)

92)Economic contraction occurs when:

A)employment levels increase over time

B)prices begin to rise and incomes rise accordingly

C)a nation's standard of living remains stable over time

D)spending declines and businesses cut back on production

E)more goods and services are demanded by consumers

95)Countries measure the state of their economies in order to:

A)avoid taking corrective action

B)control government spending

C)let other nations know the state of their economic health

D)regulate wages and employment

E)determine whether they are expanding or contracting

95)

96)Increased unemployment can reduce consumer demand for goods and services leading to

A)higher employment levels

97)A budget surplus, when a nation spends less than it takes in from taxes, is the opposite ofa(n):

99)Inflation in Canada is typically measured by:

A)The consumer price index

B)The trade balance

C)The gross domestic product

D)Income per head

E)Gross national product

103)All of the following are associated with the Industrial Revolution, except:

104)In the history of the Canadian economy, the period or stage following the Industrial

Revolution was known for its emphasis on:

D)reducing the time they spend at work

E)paying others to do their own home tasks

106)

107)As women entered the workforce in increasing numbers, Canadians began to pay others

to do jobs for them which made their lives easier This began the transformation of theCanadian economy into a:

108)Technological trends have gradually changed Canada to a(n) economy

focused on making life easier for busy consumers

110)What do Enron, Maple Leaf, and SNC-Lavalin have in common?

A)They were scrutinized by the media because of their use of sweatshops in lessdeveloped nations

B)They are all corporations that experienced a sudden, unexplained increase in theirstock price

C)They all experienced a number of ethical issues widely publicized in the media

D)They are the top three Canadian manufacturing organizations

E)They are all service producing multi-national corporations

110)

ESSAY Write your answer in the space provided or on a separate sheet of paper.

111)Briefly describe the goals of a business, especially the primary goal

112)Provide an example of a product which is also a service and how that provides value to customers

113)Provide an example of an organization that does not have the fundamental purpose of earningprofits

114)Describe one business' efforts to reduce the impact that business' waste has on the environment

115)Describe the relationship between management, marketing, finance, owners, employees, andcustomers

116)Describe some of the activities of marketing professionals

117)What are the three questions that all economic systems must answer? Who answers them under acommunist system? A socialist system? A capitalist system?

118)List the three major categories of economic resources and give one example of each

119)Contrast communism and socialism, in terms of business ownership, competition, profits, productavailability and price, and employment options.

120)Define supply, demand, and equilibrium price, and explain their relationship with each other

121)Summarize the four types of competitive environments: pure competition, monopolistic

competition, oligopoly, and monopoly

122)Discuss the issues involved in measuring a country's economy

123)Contrast an economic contraction with an economic expansion, in terms of spending, productionlevels, employment levels, and price levels

124)Why are entrepreneurs important to the economy?

125)Trace the evolution of the Canadian economy

111)Answers will vary

The primary goal of businesses is to earn a profit, the difference between what it costs to make and sell aproduct and what a customer pays for it Other business goals may include acting ethically and sociallyresponsible

112)Answers will vary

Dry cleaning, a check-up by a doctor, a performance by a hockey player–these are examples of services

113)Answers will vary

Non-profits such as the Canadian Red Cross, Special Olympics, and other charities and social causes

114)Answers will vary

Best Buy offers recycling of electronics at all of its stores The stores take cellphones, wide-screen TVs, anmost other electronic products in their green program, regardless of where they were purchased

115)Answers will vary

Management involves coordinating the efforts of employees to achieve organizational objectives Marketininvolves activities designed to provide goods and services that satisfy customers Finance involves

activities concerned with obtaining money–from owners and investors and other sources–and using iteffectively

116)Answers will vary

Marketers gather information and conduct research to determine what customers want Using informationgathered from marketing research, marketers plan and develop products and make decisions about howmuch to charge for their products and when and where to make them available

Answer Key

Testname: UNTITLED1

117)Answers will vary

The three economic questions are (1) What goods and services, and how much of each, will satisfy theneeds of the consumer? (2) How will goods and services be produced, who will produce them, and withwhat resources will they be produced? (3) How are the goods and services to be distributed to the

consumer? Under a true communist system, these questions are answered by a central government

planning committee Under a true socialist system, central planning answers the questions for basic goodsand industries, while the forces of supply and demand answer them for most of the other products Within

a capitalist system, competition, supply, and demand determine the answers

118)Answers will vary

Natural resources include vast supplies of fresh water, large areas of forest, nickel, copper, uranium, andlarge deposits of oil and natural gas

Human resources include labour, referring to the physical and mental abilities that people use to producegoods and services

Financial resources include the funds used to acquire the natural and human resources needed to provideproducts

119)Answers will vary

See Table 1.1 - Comparisons of Communism, Socialism, and Capitalism

120)Answers will vary

Supply is the quantity of goods or services that businesses are willing to sell at different prices at a specifictime Demand is the quantity of goods or services that consumers are willing to buy at different prices at aspecific time Both can be shown graphically with supply and demand curves Where the supply anddemand curves intersect is the equilibrium price, the price at which the quantity of products businesses arewilling to supply equals the quantity of products consumers are willing to buy at a specific point in time

If economic conditions, resource availability, degree of competition, or some other factor changes eithersupply or demand, a new equilibrium price will be established