BE Unit 2 2.05 Test 23/24

A business decides against opening a store in the next town because its research shows the location will be unprofitable. What form of risk management is this?

• A. avoidance

• B. reduction

• C. retention

• D. transfer

What is the name for markets with only a few sellers, such as the markets for automobiles, pharmaceuticals, or oil?

• A. oligopolies

• B. monopolies

• C. perfect competition

• D. monopolistic competition

Competition helps create a healthy society by:

• A. creating new jobs.

• B. increasing the money supply.

• C. making new government regulations.

• D. replacing small businesses with large businesses.

In 1890, Congress passed a law that prevents monopolies from forming and hinders price fixing. What law is this?

• A. Clayton Act

• B. Robinson-Patman Act

• C. Sherman Antitrust Act

• D. Celler-Kefauver Antimerger Act

R & R Real Estate company buys errors and omissions liability insurance. What form of risk management is this?

• A. avoidance

• B. reduction

• C. retention

• D. transfer

In some places, a company can have exclusive control of the supply of a good or service such as the trash service. This is an example of:

• A. price competition.

• B. price discrimination.

• C. nonprice competition.

• D. a regulated monopoly.

Arc Electric Company holds regular safety training meetings for its employees. What form of risk management is this?

• A. capital

• B. reduction

• C. retention

• D. transfer

All Care pays for all of its expenses this fiscal year. The amount left over after all expenses have been paid is called what?

• A. capital

• B. debt

• C. loss

• D. profit

What is the amount of money paid for raw materials and products sold?

• A. net profit

• B. gross profit

• C. cost of goods

• D. operating expense

Negative events which an organization or company has no control over are:

• A. debits.

• B. credits.

• C. speculative risks.

• D. pure business risks.