Chapter 14 Entrepreneurship

Multiple Choice

How does competition between suppliers and consumers influence prices in a market economy?

• Competition between suppliers lowers prices, while competition between consumers raises prices.

• Competition between suppliers raises prices, while competition between consumers lowers prices.

• Both types of competition lower prices.

• Both types of competition raise prices.

Multiple Choice

Knowing your costs, profit goals and competitors’ prices.

• helps you to set the right price for your product.

• depends on your targeted market

• is key in planning your decor

• useful way to segment a market

Multiple Choice

What is the definition of profits in economics?

• Financial gains after deducting expenses

• The total revenue of a company

• Money earned from selling goods

• The amount of money invested in a business

Multiple Choice

Although profit is a strong incentive, what are some other goals that might motivate entrepreneurs?

• Helping their community

• Solving global problems

• Personal satisfaction

• All of the above

Multiple Choice

Which formula is used to calculate the profit (or loss) for each unit of sale made by a business?

• Sales Price + Cost = Profit (or Loss)

• Sales Price - Cost = Profit (or Loss)

• Cost - Sales Price = Profit (or Loss)

• Sales Price x Cost = Profit (or Loss)

Multiple Choice

According to the Economics of One Unit (EOU) calculation the selling price must be greater than expenses in order to make a profit?

• True

• False

Multiple Choice

Staying Competitive' slide, what is NOT a recommended strategy to increase profits.

• Decrease labor cost

• Decrease cost of materials needed

• Increase the selling price

• Increase marketing cost