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WorksheetsBusiness Economics Finals Prep
Total questions: 86
Worksheet time: 43mins
Name
Class
Date
1.
If a company develops a new product, method, strategy, or process, it is known as a(n)
a)
innovation
b)
reinvention.
c)
connection.
d)
creative output.
2.
Anri is known at work for being able to generate unique ideas, approaches, and solutions to her business’s problems. Anri possesses
a)
creativity
b)
curiosity
c)
resilience
d)
flexibility
3.
A company decides to start marketing its health food bar as a candy bar. Which type of innovation is taking place?
a)
Practical
b)
Positioning
c)
Paradigm
d)
Product
4.
Which type of innovation relies on a significant change in thinking?
a)
Product
b)
Process
c)
Psychological
d)
Paradigm
5.
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
a)
competitive advantage.
b)
creative advantage.
c)
competitive destruction.
d)
creative destruction
6.
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?
a)
Demographics
b)
Looking toward the past
c)
Experience
d)
Accidents
7.
When an economy uses all of its labor resources in the most efficient way possible, it has achieved
a)
minimal unemployment.
b)
structural unemployment.
c)
classical employment.
d)
full employment
8.
The unemployment rate is a(n) __________ indicator.
a)
irrelevant
b)
leading
c)
coincident
d)
lagging
9.
Which type of unemployment is voluntary?
a)
Seasonal unemployment
b)
Frictional unemployment
c)
Structural unemployment
d)
Cyclical unemployment
10.
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.
a)
frictional
b)
structural
c)
technological
d)
seasonal
11.
Which of the following is a potential reason for structural unemployment:
a)
An overabundance of available jobs
b)
A change in consumer preferences
c)
Increased competitiveness of main industries in the economy
d)
People transitioning between jobs
12.
The poor economy is causing consumer demand and spending to go down. As a result, companies aren’t hiring. This is called __________ unemployment.
a)
classical
b)
frictional
c)
cyclical
d)
structural
13.
The classical theory of unemployment states that unemployment begins when
a)
demand goes down.
b)
spending goes up.
c)
prices decrease.
d)
wages rise too high.
14.
Unemployment benefits can have a positive effect on the economy by
a)
creating new jobs.
b)
raising prices.
c)
stimulating demand.
d)
increasing tax revenue.
15.
Unemployment can have a positive effect on individuals by
a)
encouraging them to create their own businesses.
b)
lowering prices of goods and services.
c)
stimulating demand in the economy.
d)
reducing levels of poverty.
16.
The main result of inflation is
a)
increasing consumer demand.
b)
reducing the purchasing power of the dollar.
c)
pushing most prices down.
d)
making everyday products unaffordable.
17.
Which of the following is a true statement regarding inflation:
a)
It is a general trend in which some prices may go down.
b)
It is always caused by consumer demand.
c)
It does not affect everyone in the economy.
d)
It impacts only low-income consumers.
18.
“Too much cash chasing too few goods” is a description of
a)
demand-pull inflation.
b)
hyperinflation.
c)
cost-push inflation.
d)
deflation.
19.
Limited commodities can cause
a)
price stability.
b)
cost-push inflation.
c)
inflation targeting.
d)
demand-pull inflation.
20.
Which of the following is a benefit of low, controlled inflation:
a)
The strength of labor unions
b)
The government’s ability to adjust interest rates
c)
The scarcity of certain commodities
d)
The reduced purchasing power of the dollar
21.
Which type of inflation is harmful to the economy?
a)
Negative inflation
b)
Cost-push inflation
c)
Hyperinflation
d)
Demand-pull inflation
22.
Why is deflation bad for the economy?
a)
It encourages too much spending.
b)
It reduces output and can lead to layoffs.
c)
It raises prices for both consumers and businesses.
d)
It causes shortages of goods.
23.
An exchange rate indicates one currency’s value in relation to
a)
an average of all world currencies.
b)
its value from a year ago.
c)
another currency.
d)
the U.S. dollar.
24.
In the exchange rate quotation USD / EUR = 0.73, USD is the __________ currency.
a)
counter
b)
pegged
c)
base
d)
quote
25.
In the exchange rate quotation GBP / JPY = 171.93, JPY is the __________ currency.
a)
strong
b)
quote
c)
free-floating
d)
base
26.
Which of the following is a true statement about the foreign exchange market:
a)
It is a decentralized market.
b)
It is the world’s second largest financial market.
c)
It is open three days a week.
27.
Why are unions a powerful force in business?
a)
They increase the number of concessions that employees must make in negotiations.
b)
They encourage non-striking employees to work in place of striking employees.
c)
They organize workers into a single bargaining unit and increase their bargaining power.
d)
They enable management to close businesses temporarily during labor conflicts.
28.
The degree of unionization in the United States varies based on a business’s
a)
type of industry and use of pressure strategies.
b)
type of industry and geographical location.
c)
geographical location and use of pressure strategies.
d)
geographical location and level of union organization.
29.
The United Association of Plumbers and Pipefitters is an example of a(n)
a)
industrial union.
b)
craft/trade union.
c)
union federation.
d)
professional union.
30.
A union worker who is just beginning in the occupation is referred to as a(n)
a)
apprentice.
b)
master.
c)
assistant.
d)
journeyman.
31.
Though employees who work for auto companies hold a variety of different jobs, they may all belong to the same union—the United Auto Workers. This is an example of a(n) __________ union.
a)
professional
b)
industrial
c)
craft
d)
trade
32.
Actors and athletes belong to what type of union?
a)
Industrial unions
b)
Craft unions
c)
Trade unions
d)
Professional unions
33.
What is the primary responsibility of a national union?
a)
To encourage picketing and boycotting at the local level
b)
To elect local leaders who are involved in contract negotiations
c)
To provide financial support for political candidates who favor labor
d)
To assist in contract negotiations for all its local unions
34.
Which of the following would provide you with information about the health of the U.S. economy:
a)
Medium of exchange
b)
Population data
c)
Economic order quantity
d)
Gross domestic product
35.
Marcus bought a new bicycle with special tires. In economic terms, the tires on this bike are considered
a)
accessory items.
b)
intermediate products.
c)
capital goods.
d)
uncounted production.
36.
A country’s gross domestic product is expressed in
a)
percentages.
b)
the number of items produced.
c)
the number of transfer payments.
d)
dollars.
37.
GDP figures for the United States include the value of
a)
goods that are not sold in the marketplace.
b)
transactions for which no receipts are kept.
c)
all production for which money is exchanged and receipts are kept.
d)
transfer payments.
38.
Honda is a Japanese firm that produces some of its cars in Ohio. In calculating GDP, the Ohio-produced cars would be part of
a)
Honda is a Japanese firm that produces some of its cars in Ohio. In calculating GDP, the Ohio-produced cars would be part of
b)
GDP for the United States.
c)
the underground economy.
d)
double counting.
39.
What category of GDP would include the money Kathy’s family pays to the state university for her college tuition?
a)
Gross private domestic investment
b)
Net exports of goods and services
c)
Government purchases of goods and services
d)
Personal consumption expenditures
40.
Mr. Barnes has bought several rental properties. The money Mr. Barnes spent to buy these buildings would be included in which category of GDP?
a)
Gross private domestic investment
b)
Net exports of goods and services
c)
Government purchases of goods and services
d)
Personal consumption expenditures
41.
Octavia’s father receives veterans’ benefits, and her grandmother gets Social Security. Are these payments counted in GDP?
a)
No, these are transfer payments.
b)
No, the recipients produce goods and services.
c)
No, the recipients produce goods and services.
d)
Yes, these are government purchases.
42.
A country’s net exports are a negative figure in GDP calculations whenever
a)
uncounted production declines.
b)
there is a trade surplus.
c)
imports are greater than exports.
d)
business inventories decrease.
43.
Ups and downs in the level of economic activity over a period of time are called a(n)
a)
inventory level.
b)
business cycle.
c)
economic system.
d)
economic growth.
44.
Gross domestic product that has been adjusted for inflation is known as
a)
aggregate demand.
b)
real GDP.
c)
GDP per capita.
d)
capital goods.
45.
A benefit to producers and consumers of a growing economy is that it provides
a)
workers with guaranteed employment.
b)
an increase in government control.
c)
solutions to international problems.
d)
a higher standard of living.
46.
Why should a businessperson understand business cycles?
a)
To determine the cause of each cycle
b)
To determine the cause of each cycle
c)
To make plans that will help to level out cycles
d)
To prevent the cycles from happening
47.
How long do most business cycles last?
a)
Varying lengths of time
b)
Two full years
c)
Two consecutive quarters
d)
At least 10 years
48.
The period of time during the business cycle when production and employment increase is called a(n)
a)
contraction.
b)
trough.
c)
expansion.
d)
peak.
49.
Which of the following factors characterizes the growth phase of business cycles:
a)
Consumers are putting more money into savings.
b)
Producers are reducing their purchases of new goods.
c)
Consumers and producers are borrowing more money.
d)
Demand for resources exceeds their availability.
50.
The top of a business cycle is known as the
a)
expansion.
b)
trough.
c)
contraction.
d)
peak.
51.
During which phase of the business cycle would there most likely be shortages of workers in certain skill areas?
a)
Expansion
b)
Contraction
c)
Trough
d)
Peak
52.
During which phase of the business cycle are industries and businesses producing and selling goods at their maximum?
a)
Trough
b)
Expansion
c)
Contraction
d)
Peak
53.
A business manager realizes that the demand for his/her products now exceeds producers’ capabilities, and producers have raised their prices to offset the high demand. Under these conditions, what phase of the business cycle should the manager begin to prepare for?
a)
Contraction
b)
Peak
c)
Expansion
d)
Trough
54.
Which of the following is a widely used set of quality-management standards:
a)
ISO 31000
b)
ISO 1000
c)
ISO 8000
d)
ISO 9000
55.
Which of the following is an example of a change in the relative price ratio when the original price of red apples is 60¢ per pound and the original price of green apples is 80¢ per pound:
a)
Red apples @ 45¢ per pound; green apples @ 60¢ per pound
b)
Red apples @ 90¢ per pound; green apples @ 80¢ per pound
c)
Red apples @ 30¢ per pound; green apples @ 40¢ per pound
56.
Prices set higher than the equilibrium price will result in
a)
increased profits.
b)
excess supply.
c)
decreased supply.
57.
Which of the following is a widely used set of quality-management standards:
a)
ISO 31000
b)
ISO 1000
c)
ISO 8000
d)
ISO 9000
58.
The equipment, ingredients, and employee labor at a restaurant are all
a)
objectives.
b)
productivity.
c)
inputs.
d)
mass production.
59.
The amount and value of outputs produced from set amounts of resources are known as
a)
productivity.
b)
inputs.
c)
objectives.
d)
mass production.
60.
One way that the productivity of a business can be measured is by
a)
dividing the number of products made by the cost of distributing those items.
b)
dividing the dollar value of total sales by the costs of making those sales.
c)
calculating the total monetary costs of all inputs used.
d)
determining the amount of time needed to gather all necessary inputs.
61.
Why is the productivity of service businesses measured differently than that of manufacturing businesses?
a)
Service businesses are concerned about the appropriateness of their products.
b)
Service businesses are less efficient than manufacturers.
c)
Manufacturers measure their productivity on a regular basis.
d)
Manufacturers produce intangible goods.
62.
How does increased business productivity benefit consumers?
a)
The gross domestic product goes down, so inflation goes up.
b)
More goods and services become available, so prices go down.
c)
Costs of labor and prices increase, so inflation goes up.
d)
Costs of labor and prices increase, so inflation goes up.
63.
Gross domestic product per capita is a measure of
a)
everything a country produces within its borders.
b)
the average worker’s productivity.
c)
everything a country imports from foreign countries.
d)
everything a country exports.
64.
Which of the following is an example of using capital investment to increase productivity:
a)
Giving performance-based bonuses
b)
Purchasing new computers
c)
Making suggestions to improve the organization
d)
Renegotiating a supplier’s contract
65.
A factory that mass produces clothing increases productivity because it reduces
a)
research and development costs.
b)
employee wages.
c)
wasted resources.
d)
levels of management.
66.
Even though Brad isn’t a manager, his boss encourages him to give his input on issues affecting the company. Brad’s boss is using
a)
specialization.
b)
participative decision-making.
c)
motivation.
d)
quality of work life.
67.
Capital and labor are both examples of
a)
products.
b)
inputs.
c)
margins.
d)
outputs.
68.
The tomatoes that a farm produces are considered the farm’s
a)
labor.
b)
inputs.
c)
capital.
d)
outputs
69.
Q = f(L, K) is an equation that expresses the __________ function.
a)
marginal
b)
capital
c)
production
d)
input
70.
The production function explains the relationship between
a)
goods and services.
b)
inputs and outputs.
c)
cost and revenue.
d)
businesses and customers.
71.
A bakery hires more employees, and at first, the number of baked goods it produces rises quite quickly. However, as more and more employees are hired, production starts to slow down. This is an example of the law of __________ returns.
a)
negligible
b)
growing
c)
increasing
d)
diminishing
72.
According to the law of diminishing returns, what will happen to the output of a taco truck if it continues to hire employees?
a)
Increases in output will increase with every employee.
b)
Increases in output will decrease and then begin to increase.
c)
Output will increase the same amount with each employee.
d)
Increases in output will eventually decline.
73.
A factory produces 20 parts with two employees. With three employees, it produces 45 parts. What is its marginal product?
a)
20 parts
b)
25 parts
c)
40 parts
d)
65 parts
74.
Which of the following is true of marginal product:
a)
It increases as long as inputs are added.
b)
It cannot be negative.
c)
It is found by multiplying price by quantity.
d)
It will eventually decrease as inputs are added.
75.
A company is facing negative returns. Which stage of production is the company in?
a)
First
b)
Fourth
c)
Second
d)
Third
76.
Which stage of production involves diminishing returns?
a)
First
b)
Fourth
c)
Third
d)
Second
77.
With each employee who a company hires, its marginal product is greater. Which stage of production is this company in?
a)
Fourth
b)
Third
c)
First
d)
Second
78.
Which of the following formulas would you use to find marginal cost:
a)
f(L, K)
b)
∆TR / ∆Q
c)
P X Q
d)
∆TC / ∆Q
79.
Marginal cost is inversely related to
a)
total revenue.
b)
marginal revenue.
c)
total cost.
d)
marginal product.
80.
In one day of selling pizzas, a pizza parlor takes in $1,500. This is the pizza parlor’s
a)
total revenue.
b)
marginal product.
c)
total cost.
d)
diminishing returns.
81.
A restaurant’s total cost of selling eight hamburgers is $10.00. Its total cost of selling nine hamburgers is $11.00. What is the marginal cost?
a)
$21.00
b)
$11.00
c)
$1.00
d)
$10.00
82.
If you divide the change in total revenue by the change in quantity sold, you’ll find
a)
marginal revenue.
b)
total revenue.
c)
total cost.
d)
marginal product.
83.
Maximum profit is achieved when
a)
marginal revenue equals marginal cost.
b)
marginal revenue equals total revenue.
c)
there are negative returns.
d)
there is no perfect competition.
84.
Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks:
a)
Relative price
b)
Incentives
c)
Inflated price
d)
Excess demand
85.
Which of the following is an example of a change in the relative price ratio when the original price of red apples is 60¢ per pound and the original price of green apples is 80¢ per pound:
a)
Red apples @ $1.20 per pound; green apples @ $1.60 per pound
b)
Red apples @ 45¢ per pound; green apples @ 60¢ per pound
c)
Red apples @ 90¢ per pound; green apples @ 80¢ per pound
d)
Red apples @ 30¢ per pound; green apples @ 40¢ per pound
86.
Prices set higher than the equilibrium price will result in
a)
excess demand.
b)
increased profits.
c)
excess supply.
d)
decreased supply.
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