The U'S' Business Environment

1
The U.S. Business Environment

• Chapter 1 CRS Questions and Answers

2
A firm operates in and derives its revenues from
the _____ environment.

• Economic
• Competitive
• Sociocultural
• Technological
• Domestic Business

3
A firm operates in and derives its revenues from
the _____ environment.

• Economic
• Competitive
• Sociocultural
• Technological
• Domestic Business

The domestic business environment is where a
firm conducts its operations and derives its
revenues.
4
Which of the following is not a factor of
production?

• Labor
• Capital
• Entrepreneurs
• Economic systems
• Information resources

5
Which of the following is not a factor of
production?

• Labor
• Capital
• Entrepreneurs
• Economic systems
• Information resources

Factors of production include labor, capital,
entrepreneurs, and physical and information
resources.
6
In a market economy, items produced and prices
paid are determined by _____.

• Supply and demand
• Competitive forces
• Advertising programs
• Information and promotion
• Centralized government control

7
In a market economy, items produced and prices
paid are determined by _____.

• Supply and demand
• Competitive forces
• Advertising programs
• Information and promotion
• Centralized government control

The interplay between supply and demand
determines items produced and prices paid in a
market economy.
8
Socialism is a _____ economic system.

• Free-market
• Mixed-market
• Pure planned
• Supply-demand
• None of the above

9
Socialism is a _____ economic system.

• Free-market
• Mixed-market
• Pure planned
• Supply-demand
• None of the above

Socialism is a mixed-market system in which the
government owns and operates selected
industries.
10
The _____ of a product is the point where its
supply and demand curves intersect.

• Retail price
• Equilibrium price
• Fair-market price
• Break-even price
• Open-market price

11
The _____ of a product is the point where its
supply and demand curves intersect.

• Retail price
• Equilibrium price
• Fair-market price
• Break-even price
• Open-market price

The equilibrium price is the price at which the
quantity of goods demanded equals quantity of
goods supplied.
12
Private enterprise requires the presence of all
of the following except _____.

• Profits
• Competition
• Private property
• Freedom of choice
• Government intervention

13
Private enterprise requires the presence of all
of the following except _____.

• Profits
• Competition
• Private property
• Freedom of choice
• Government intervention

The private enterprise system requires the
presence of private property, freedom of choice,
profits, and competition.
14
_____ is characterized by many small firms
producing identical products.

• Oligopoly
• Monopoly
• Perfect competition
• Monopolistic competition
• The market enterprise system

15
_____ is characterized by many small firms
producing identical products.

• Oligopoly
• Monopoly
• Perfect competition
• Monopolistic competition
• The market enterprise system

Perfect competition exists in an industry if
there are numerous firms (all of them small)
producing virtually identical products.
16
_____ is not an economic indicator that is used
to measure economic growth.

• Productivity
• Unemployment
• Standard of living
• Aggregate output
• Gross domestic product

17
_____ is not an indicator that is used to measure
economic growth.

• Productivity
• Unemployment
• Standard of living
• Aggregate output
• Gross domestic product

The following economic indicators are used to
measure economic growth productivity, aggregate
output, standard of living, and gross domestic
product.
18
A countrys _____ is the economic value of all
its exports minus its imports.

• Fiscal burden
• National debt
• Balance of trade
• Supply shortage
• Consumption equation

19
A countrys _____ is the economic value of all
its exports minus its imports.

• Fiscal burden
• National debt
• Balance of trade
• Supply shortage
• Consumption equation

A countrys balance of trade is the economic
value of all the products that it exports minus
the products that it imports.
20
The _____ measures the prices of typical products
bought by urban consumers.

• Fiscal year index (FYI)
• Per capita index (PCI)
• Real growth rate (RGR)
• Gross domestic index (GDI)
• Consumer price index (CPI)

21
The _____ measures the prices of typical products
bought by urban consumers.

• Fiscal year index (FYI)
• Per capita index (PCI)
• Real growth rate (RGR)
• Gross domestic index (GDI)
• Consumer price index (CPI)

The consumer price index (CPI) measures the
prices of typical products purchased by
consumers in urban areas.