BUS 110 - Unit 1 Exam Review

Philomena helps run a museum dedicated to the preservation of local history in her hometown. The museum is able to cover the cost of rent, maintenance, and utilities by asking visitors to pay an entry fee and through sales in their gift shop.

Nonprofits like this help increase the _______ of a society.

• standard of living

• infrastructure

• quality of profit

• entrepreneurship

An economist analyzes the quantity of goods/services that businesses are willing to sell at different prices. This is

• competition

• demand

• supply

• equilibrium

According to supply and demand, why is it that as the price of a product increases, the amount supplied increases?

• Customers equate higher prices to the quality of goods and like paying more

• Businesses are willing to supply more of a product at higher prices

• Customers will buy more of a product at a higher price to stimulate demand

• The government requires a greater production of the demanded product

Uptown Coffee invests in ethically sourced materials and cares about the labor conditions of the farms. Uptown Coffee can expect

• better financial performance because customers are willing to pay more for ethically sourced materials

• to never have to make any changes to their coffee

• that every customer will prefer Uptown's coffee to that of their competitors

• that Uptown's coffee will meet all customer demands

Subway is the most popular fast food chain in the world, but recent health trends in the United States, such as the demand for gluten-free, locally-sourced, and organic ingredients, have decreased its popularity in some countries. This is an example of how Subway is facing pressure from the ________ environment.

• Competitive

• Social

• Technological

• Global

During the most recent economic crisis caused by the COVID-19 pandemic, Emma and many other workers in the restaurant industry lost their jobs. This job loss increased the unemployment rate. As the economy recovered, some of those workers, including Emma, were able to get their jobs back, which decreased the unemployment rate. The rise and fall of unemployment is one element in the study of _______.

• macroeconomics

• recession

• microeconomics

• gross domestic product (GDP)

Although the U.S. government does control certain enterprises, such as Medicare and Social Security, private enterprises largely rely on the principles of _______.

• pure competition

• budget surplus

• socialism

• supply and demand

Joon is a successful entrepreneur who lives in Denmark. He started his business in 2010 when the tax rates were higher. He considered moving his business to a country with more favorable tax rates, but then Denmark lowered its corporate tax rate to encourage domestic investment. Joon is encouraged by this move towards a more _______ economic system.

• socialist

• pure planned

• communist

• mixed market

In 2021, hackers launched a successful cyberattack against the Colonial Pipeline, effectively halting operations for a week. The attack led to a shortage of gasoline for drivers in the United States, which drove the price for a gallon of gas to its highest rate in six years. Since a gallon of gas is included in the basket of goods used to calculate the ______, we can assume that this higher price would contribute to an increase in that measure for 2021.

• unemployment rate

• consumer price index (CPI)

• gross domestic product (GDP)

• producer price index (PPI)

Many U.S.-based automobile manufacturers, like Ford, have opened factories in Mexico in order to cut costs. Mexico is able to manufacture cars more cheaply because it has a(n) _______ relative to the United States when it comes to labor.

• inflow of innovation

• absolute advantage

• comparative advantage

• opportunity cost