Business Organization - Chapter 1.2 Quiz

What is a commercial activity that seeks profit by providing goods in exchange for money?

• profit

• market research

• competition

• a business

What is profit?

• commercial activity

• motivation and wealth

• money remaining after costs have been paid

• an opportunity to earn a better living

Which is NOT true of businesses?

• They pay taxes and provide jobs.

• The wealth they create benefits the entire community.

• They are rewarded with profits by satisfying consumers.

• They can survive without profits.

What is competition?

• a contest to win customers

• the freedom to produce new products

• voluntary exchange

• inexpensive goods and services

Which is NOT something a competitive business needs to offer?

• quality products

• discontinued goods

• outstanding service

• good prices

What must a business do when developing new products or services?

• evaluate demand

• lend money

• pay taxes

• focus on customer service

What is one result of effective market research?

• immediate access to global markets

• immediate access to start-up capital

• information that helps a business identify opportunities

• improved production management

What might a business do if its products don't meet consumer's needs?

• consider bankruptcy

• start a new business

• try new selling techniques

• modify its products to satisfy consumers

Competition among businesses hurts the consumer.

• True

• False

Competition forces businesses to

• file for bankruptcy.

• drive their competitors out of business.

• decide how to best use and conserve their resources.

• lower their prices.