22-23 1A Economics & Marketing 2.2

Why is a knowledge of basic economic principles important for businesses?

• It will help them lose more profit.

• It can help them make better decisions about

  meeting consumer needs.

• It will prevent them from needing the services

  of a financial advisor.

• It can guarantee business success.

Which of the following is the best example of a business's economic decision?

• Hiring part-time employees to save on costs

• Endorsing an independent candidate in state

  elections

• Updating directions to your office on the

  company website

• Following up with a customer after she

  exchanged an item

Which of the following is NOT a factor of production?

• Entrepreneurship

• Human capital

• Land

• Money

In most businesses, what is the most costly factor of production?

• Entrepreneurship

• Land Capital

• Human Capital

• Capital Stock

What is the role of the entrepreneur in the modern economy?

• To preserve natural resources

• To create jobs

• To generate wealth

• To take big risks

If a customer shops at your store because it is on his

way home from work, which utility is involved?

• Place

• Form

• Possession

• Time

Which condition is a result of open competition in a free market system?

• Government regulation

• Higher quality goods

• Higher prices

• Poor customer service

What is the term that describes when the amount of goods produced is

about the same as thenumber of consumers who are willing to buy the product?

• Risk

• Supply

• Demand

• Equilibrium point

What is the principle that producers are entitled to make

more money from a business than they invest?

• Profit motive

• Free enterprise

• Capital stock

• Risk and reward

What is the formula for determining productivity?

• Output/Labor

• Input/Output

• Output/Input

• Capital x Input