Chapter 1: Exploring the World of Business and Economics

A person must own stock in a corporation to be considered a stakeholder.

• True

• False

• Only if the person owns a majority of the stock

• Only employees can be considered stakeholders

Which four resources must a business use to operate successfully?

• Material resources, human resources, financial resources, operational resources

• Human resources, technological resources, financial resources, customer resources

• Material resources, financial resources, informational resources, customer resources

• Human resources, financial resources, informational resources, operational resources

Today, managers and employees are no longer concerned about cultural diversity.

• True

• False

• Only in certain industries

• Only in multinational companies

The ultimate goal of every business firm should be to satisfy the needs of its customers.

• True

• False

• It depends on the business model

• Only if the business is customer-oriented

If a firm's sales revenue exceeds its expenses, the firm has earned a profit.

• True

• False

According to Adam Smith, under laissez-faire capitalism, everyone should be allowed to work toward their own economic gain without government interference.

• True

• False

Reducing costs and enabling employees to work more efficiently are at the core of all attempts to improve productivity.

• True

• False

Inflation is a general rise in the level of prices experienced by people in a nation.

• True

• False

• Only applies to certain goods

• Refers to the stock market prices

Economists define a recession as two or more consecutive three-month periods of decline in a country's gross domestic product (GDP).

• True

• False

• Only if it is accompanied by high inflation

• Only if it affects the global market

The equilibrium or market price exists when the supply of a product exceeds the amount that consumers are willing to purchase.

• True

• False