Chapter 1: Business Basics Review

When a company's revenue is greater than its expenses, it means that ________.

• the company earns a profit

• the company spends more than it earns

• the company's income is decreasing

• the company needs to increase its spending

The physical products that a business offers are called ________.

• goods

• services

• assets

• devices

Chris orders a salad at a restaurant. What is the BEST definition of what he is buying?

• Chris is buying a good.

• Chris is buying a service.

• Chris is buying neither a good nor a service.

• Chris is buying both a good and a service.

Which of the following statements is TRUE of a not-for-profit organization?

• It pursues profits for its owners.

• It does not pay expenses.

• It can earn excess revenue.

• It cannot operate like a business.

The various resources used to create a company's goods and services are collectively referred to as ________.

• raw materials

• factors of production

• supplies

• inventory

Which of the following is an example of real capital?

• a business loan

• computer software

• a manufacturing plant

• personal savings

Melinda is a store owner who buys items online to sell in her shop. Which of the following factors of production is BEST illustrated in Melinda's use of the Internet?

• capital

• labor

• technology

• entrepreneurs

The economy of the United States is BEST described as ________.

• market-based

• government-owned

• socialistic

• not-for-profit

Which of the following refers to an interconnected system of different demographic factors?

• cultural environment

• economic environment

• political environment

• social environment

Which of the following social issues would LEAST affect the environment in which U.S. businesses operate?

• an aging American population

• the popularity of reality television

• increasing ethnic diversity in the workforce

• emergence of the green movement