Unit 1

In a global market, countries utilize their comparative and absolute advantages to:

• A. Eliminate competition.
• B. Control foreign markets.
• C. Restrict imports.
• D. Enter international trade markets.

Those who buy stock in a company become:

• A. Shareholders of the firm.
• B. Legally responsible for the firm.
• C. Employees of the firm.
• D. Debt holders of the firm.

When a business adjusts its operations to meet consumer demand more effectively, which external factor is it responding to?

• A. The regulatory environment
• B. The competitive landscape
• C. Changes in taxation
• D. Technological advancements

Why do astute economists underscore the concept of opportunity cost?

• a) To ensure that individuals perpetually make the most lucrative choices.
• b) To optimize profits within the marketplace.
• c) To account for the cumulative value of goods and services within the economic sphere.
• d) To empower individuals with the ability to make judicious decisions by factoring in multifaceted trade-offs.

In a free-market economy:

• A. The government intervenes in all business decisions.
• B. Consumers have limited choices due to regulation.
• C. Prices are determined by supply and demand.
• D. There is no competition among businesses.

During periods of economic expansion:

• A. Unemployment rates tend to rise.
• B. Inflation rates decrease.
• C. Consumer spending declines.
• D. The demand for goods and services typically increases.

A business cycle reflects changes in economic activity, typically measured by:

• A. The inflation rate.
• B. Consumer Price Index (CPI).
• C. The stock market performance.
• D. Gross Domestic Product (GDP).

In a competitive market, businesses use their unique selling propositions to:

• A. Eliminate competition

• B. Control foreign markets

• C. Restrict imports

• D. Differentiate themselves from competitors

What is likely to happen during periods of economic recession?

• A. Unemployment rates tend to decrease

• B. Consumer spending increases

• C. Demand for goods and services typically decreases

• D. Inflation rates rise rapidly

Sarah started a marketing consultancy to help small businesses improve their online presence. You have 2 minutes to answer: What is Sarah's primary objective in starting her business?

• A. Changing industry regulations

• B. Achieving personal satisfaction

• C. Maximizing social impact

• D. Generating revenue and profit