Entrepreneurship - Ch.2 Review

1.    The equilibrium price is

• a.  the price set by the government

• a.   the price at which supply equals demand

• a.  the price at which exports equal imports

• a.   the price set by the foreign exchange rate

    Profit is beneficial to entrepreneurs because

• profit builds wealth and financial independence

• profit is the equilibrium quantity on a supply and demand curve

• profit is a barrier to international trade

• profit is the answer to one of the fundamental questions of economics

    A market economy is also called

• socialism

• capitalism

• free enterprise system

• capitalism and free enterprise system

The profit motive is

• the money left over after expenses are subtracted from sales

• the economics of one unit

• a reason entrepreneurs take on business risks

• profit calculated as a percentage of expenses

Which of the following statements about competition is false?

• competition motivates entrepreneurs to introduce new products to consumers

• competition between suppliers drives prices upward

• competition between consumers benefits suppliers

• competition occurs between suppliers and between consumers

Importing and exporting are activities primarily associated with

• nonprofit organizations

• the profit motive

• the economics of one unit

• the global economy

The economics of one unit is a calculation of

• the equilibrium quantity on a supply curve

• how many items an entrepreneur has for sale

• the profit or loss associated with a unit of sale

• foreign demand for an entrepreneur’s product

    The United States economy is best described as

• a pure market economy in which the government plays no role in the economy

• a pure command economy in which the government controls the economy

• a mixed economy in which suppliers and consumers play the primary role

• a socialist economy in which suppliers and consumers play the primary role

Which of the following challenges poses a busi-ness risk to entrepreneurs who want to conduct international trade?

• tariffs that must be paid to import goods

• cultural differences between nations

• trade barriers

• all of these

1.      A nonprofit organization

• a.   is not allowed to make a profit

• a.   must use any profit it earns to further its social mission

• a.   can use profit any way it sees fit

• a.   uses profit for the financial gain of its operators