Business Economics Finals Prep

If a company develops a new product, method, strategy, or process, it is known as a(n)

• innovation
• reinvention.
• connection.
• creative output.

Anri is known at work for being able to generate unique ideas, approaches, and solutions to her business’s problems. Anri possesses

• creativity
• curiosity
• resilience
• flexibility

A company decides to start marketing its health food bar as a candy bar. Which type of innovation is taking place?

• Practical
• Positioning
• Paradigm
• Product

Which type of innovation relies on a significant change in thinking?

• Product
• Process
• Psychological
• Paradigm

A 12-screen movie theater recently opened in your neighborhood. Just a couple of months after it opened for business, the old single-screen drive-in movie theater nearby went out of business. This is an example of

• competitive advantage.
• creative advantage.
• competitive destruction.
• creative destruction

When a large group of young people moves into a neighborhood, neighborhood businesses may try to develop new products to suit their needs. Which source of innovation does this illustrate?

• Demographics
• Looking toward the past
• Experience
• Accidents

When an economy uses all of its labor resources in the most efficient way possible, it has achieved

• minimal unemployment.
• structural unemployment.
• classical employment.
• full employment

The unemployment rate is a(n) __________ indicator.

• irrelevant
• leading
• coincident
• lagging

Answer explanation

Lagging. The unemployment rate is a lagging economic indicator. This means that it confirms what we already know about the economy but does not predict future trends. Leading indicators predict future economic trends. Coincident indicators show what is currently happening in the economy. Irrelevant economic indicator is not a commonly used term.

Which type of unemployment is voluntary?

• Seasonal unemployment
• Frictional unemployment
• Structural unemployment
• Cyclical unemployment

Answer explanation

Frictional unemployment. Frictional unemployment is voluntary and arises from normal life circumstances, such as moving or changing careers. It will always be present in the economy. Cyclical unemployment rises and falls with ups and downs in the economy. Seasonal unemployment occurs because some jobs are more plentiful at certain times of the year than at others. Structural unemployment occurs because of a mismatch between available jobs and available workers.

There are jobs available in Javier’s town; however, none of the jobs are a good match for his skills and experience. This is an example of __________ unemployment.

• frictional
• structural
• technological
• seasonal

Answer explanation

Structural. Javier’s situation is an example of structural unemployment, or a mismatch between available jobs and available workers. Seasonal unemployment refers to certain jobs being more abundant at certain times of the year. Frictional unemployment is voluntary unemployment that results from normal life circumstances. Technological unemployment happens when advances in technology eliminate certain job positions.