1.A supply curve is a graphical illustration of the relationship between price and:

a.

supply.

b.

quantity supplied.

c.

quantity demanded.

d.

demand.

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1.________ is the way a service or good is produced and divided into a variety of tasks performed by different workers, instead of the same person performing all the tasks.

a.

division of labor

b.

production

c.

opportunity cost

d.

economics

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1.Because of our limited money, time, and effort, we are best off when we allocate those things:

a.

by constantly assessing the opportunity costs of our choices.

b.

with the goal of minimizing total costs.

c.

with the objective of maximizing opportunity costs.

d.

by choosing what society as a whole would want.

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1.When the price in some market is above its equilibrium price:

a.

the quantity supplied is less than the quantity demanded.

b.

a shortage exists.

c.

a surplus exists.

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1.A business cycle reflects changes in economic activity, particularly real GDP. The phases of a business cycle, in order, are:

a.

trough, expansion, recession and peak.

b.

expansion, trough, contraction and peak.

c.

contraction, recession, expansion and boom.

d.

expansion, peak, contraction and trough.

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1.Benefits of being a franchisee include:

a.

access to a template for the business.

b.

guaranteed success by using the franchisor's brand.

c.

the elimination of all business risks.

d.

access to startup funds from the franchiser.

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1.Which of the following entities are subject to limited liability?

a.

corporations

b.

sole proprietorships

c.

general partnerships

d.

limited partnerships