LESSON 7

2.Which of the following best summarizes how savings bonds benefit investors?

A. Savings bonds are bought for full face value. Each year the bond is saved, its worth increases by 10 percent.

B. Savings bonds are bought for the full face value. Each year the bond is saved, its worth increases by 20 percent.

C. Savings bonds are bought for half of the face value and increase every month as long as it is saved.

D. Savings bonds are bought for half of the face value and increase every month until the face value is reached.

3.Companies and all three levels of the government sell bonds to borrow money. Types of bonds are:

A. Tax-exempt & savings bonds

B. Treasury bills and notes

C. Municipal stocks

D. Money market certificates of deposit

4.Spreading one's money over several different types of investments is knows as _______________.

A. risk avoidance

B. loss mitigation

C. risk aversion

D. diversification

5.When an individual saves money in a bank, how does the bank use the money?

A. Banks loan the money to other individuals.

B. Banks invest the money to help the bank grow.

C. Banks hold the money in the vault until the individual who is saving money needs it.

D. Banks invest the money directly into local businesses which helps them grow.

6.Which of the following generalizations is correct concerning risk and return?

A. Risk increases with increased return.

B. Risk decreases with increased return.

C. Risk increases with decreased return.

D. Rick increases as return remains stationary.

7.Ways that individuals can save for retirement are:

A. Pension plans

B. Keogh plans

C. IRS's (Individual Retirement Accounts)

D. All of the choices

8.A certificate of deposit ____________________.

A. is the same as a savings account

B. Identical to a savings deposit.

C. is a type of a time deposit

D. is a type of time deposit which offers higher rates than a savings account, but requires leaving funds in for a longer period of time

9.Why is real estate investment a high-risk investment?

A. There is no guarantee that a property will meet zoning requirements in the future.

B. In most cases, real estate properties depreciate in value over time.

C. Natural disasters could occur over time which could totally wipe out the investment.

D. There is no guarantee that a property will increase in value over time.

10.What is a main difference between stocks and bonds?

A. Stocks pay interest and dividends; bonds only pay dividends.

B. Stocks result in capital gains; bonds result in capital losses.

C. Stocks represent ownership; bonds represent debt.

D. Stocks always increase in value; bonds fluctuate over time.

LESSON 8

1.The real income effect is __________.

A. the inverse relationship between quantity demanded and price

B. the relationship between the seller and consumer

C. the purchasing power of a consumer

D. the relationship of utility to price

2.Explain the equilibrium price.

A. The point in which supply and demand are equal

B. The point at which the government sets price

C. The point in which quantity demanded and quantity supplied are equal

D. The point in which the price cannot be raised

3.The quantity demanded of a good or service is ________________ related to its price.

A. not

B. inversely

C. sometimes

D. independently

4.A product is considered elastic if __________.

A. the quantity demanded of the particular good or service is very dependent on price

B. the quantity demanded of a particular good or service is not dependent on price

C. the market forces for the quantity demanded of a particular good or service is protected by taxes

D. the quantity supplied of the particular good or service is not dependent on price

5.Which of the following generalizations best describes the relationship between the price of goods and services and the demand for them?

A. As the price of goods and services go up, the demand for them goes up as well.

B. As the price of goods and services go down, the demand for them goes down as well.

C. As the price of goods and services go up, the demand for them goes down.

D. As the price of goods and services go down, other things remaining equal, the demand remains the same.

6.When consumers decide when to buy a product at a certain price, what are they determining?

A. Demand

B. Supply

C.Rational choice versus want

D. The Law of Diminishing Marginal Utility

7.Which of the following causes an outward shift in thesupply curve for baseballs?

A. A sudden rise in the price of baseballs.

B. A decrease in price and increase in the supply of baseballs due to changes in technology.

C. An increase in the price and decrease in supply of baseballs due to non-availability of raw materials.

D. A rise in price and rise in the supply of baseballs.

8.What is the point at which the quantity supplied and quantity demanded meet?

A. A price ceiling

B. A price floor

C. The equilibrium price

D. The optimal utility point

LESSON 9

1.What is the role of a general partner in a limited partnership?

A. A general partner is responsible for all management decisions and any debts of the business.

B. A general partner is an equal partner with all other partners in a business.

C. A general partner owns more than 50% of the business and has limited liability.

D. A general partner is one of two people responsible for all business decisions and liability.

2.In a start-up business, employee wages should be _____ the wages that may be earned in established businesses.

A. equal to

B. less than

C. greater than

D. less than or equal to

3.Which of the following is not considered inventory?

A. Raw materials

B. Machines that convert raw materials to finished goods

C. Labor used to convert raw materials to finished goods

D. Finished goods

4.A corporation can do everything but which of the following?

A. Own property

B. Enter into legal contracts

C. Sue and be sued for its actions

D. Pay fewer taxes than a partnership

5.Which of the following best describes the similarities shared by a sole proprietorship and a franchise?

A. The owner of each type of business organization is required to sell the same product.

B. The owner of each type of business organization is the sole beneficiary of the profits and liable for losses.

C. The owner of each type of business benefits from each share of stock sold in the company.

D. The owner of both types of businesses benefit from limited liability of losses.

6.Which of the following is NOT a primary source for an entrepreneur?

A. The Small Business Administration

B. The Better Business Bureau

C. State universities and colleges

D. Small business incubators

7.If a business has multiple stores with the same name and same products, it is most likely what type of business organization?

A. Corporation

B. Franchise

C. Conglomerate

D. Proprietorship

8.Which of the following is an advantage of a sole proprietorship?

A. The owner bears unlimited liability for the business.

B. Personal assets may be sold to pay off debts.

C. It is the easiest and least expensive type of business to start.

D. Business competition is extremely low.

9.What are the differences between a sole proprietorship and a partnership?

A. A sole proprietorship is a one person business without any assets, while a partnership involves two or more individuals sharing all assets.

B. A sole proprietorship shares liability with employees in the business, while a partnership is exempt from liability.

C. A sole proprietorship is a business where one person assumes all risks and rewards, while a partnership shares both risks and rewards among two or more individuals.

D. A sole proprietorship must have a legally binding contract in order to conduct business, while a partnership is established through the division of labor.

10.The partner who holds most of the responsibility in a limited partnership is called the _____ partner.

A. lead

B. general

C. primary

D. chief

LESSON 10

1.Which of the following is the best example of a monopoly in the United States?

A. A local electric company

B. A fresh fish market

C. A fruit stand

D. A department store

2.What is an industry which is dominated by a few suppliers who exercise some control over market price called?

A. Oligopoly

B. Monopoly

C. Monopolistic competition

D. Pure competition

3.Which of the following is NOT a characteristic of a monopolistic competition?

A. Numerous sellers

B.Differentiated products

C. Some control of price

D. Identical products

4.Technological monopolies are often short lived because ___________________.

A. someone else can invent a similar product with slight modifications

B. patents cannot be obtained for technology

C. copyrights are easily overturned in courts

D. there are too many barriers to entry in technological industries

5.Oligopolies engage in nonprice competition, with product prices being set by __________________.

A. true supply and demand

B. collusion among industry leaders

C. product differentiation

D. newcomers to the market

6.Which is the only market in the United States that can be considered a perfect competition?

A. Health Care

B. Service

C. Industrial

D. Agriculture

7.In pure competition, what barriers are there for sellers to enter the market?

A. Large investment

B. Large inventory

C. No barriers

D. Large investment and inventory

8.In a perfectly competitive market, if a seller raises the price of a good or service above equilibrium, what is the buyer likely to do?

A. Buy less of the good or service

B. Buy the good or service from another seller

C. Buy less goods and services from other sellers to make up for the difference

D. Discontinue buying that good or service

9.What type of business structuremakes up the majority of industry in the United States?

A. Oligopoly

B. Monopoly

C. Monopolistic competition

D. Pure competition

10.Which of the following factors separates monopolistic competition from monopolies and oligopolies?

A. Monopolistic competition requires aggressive advertising campaigns.

B. There are only two sellers in a monopolistic competition.

C. There are huge barriers to entry in a monopolistic competition.

D. The products sold between monopolistic competition industries are exactly the same.

LESSON 11

1.What two factors are required to start a business?

A. Land and labor

B. Entrepreneurship and Labor

C. Capital and labor

D. Entrepreneurship and capital

2.The price of capital is ______________.

A. The opportunity cost of the funds

B. The rate of interest charged for the funds

C. Determined only by the demand curve

D. Determined only by the supply curve

3.Division of labor is a term most closely associated with which of the following?

A. An assembly line at an automobile factory

B. A parts warehouse at an automobile factory

C. A bureaucratic office at an automobile factory

D. The United Auto Workers (UAW) Labor Union

4.Which of the following is NOT an example of debt financing?

A. A mortgage on real property

B. A bond issuance

C. A stock issuance

D. An unsecured loan

5.A major technological advance that greatly improved productivity was the development of __________.

A. the assembly line

B. automated systems

C. robotics

D. all of the choices have improved productivity

6.How do financial institutions generally amass funds to loan to businesses?

A. From government assistance programs

B. From benefactors and patrons

C. From issuing stocks and bonds

D. From individual and business deposits

7.What type of loan allows you to borrow capital from a bank in increments until a certain amount is reached? Is this a short term, intermediate term, or long term debt financing option?

A. Lease; long term

B. Trade credit; short term

C. Secured loan; intermediate term

D. Line of credit; short term

8.What happens as less capital is available for borrowing?

A. A recession

B. Interest rates increase

C. A downturn in the economy

D. A depression

9.A cost-benefit analysis contains five steps. Which of the following is NOT one of the five steps?

A. Take an inventory to determine your assets

B. Calculate the cost of borrowing funds

C. Estimate the costs of expansion

D. Calculate the expected revenue

10.When a corporation sells stock, it is selling part of the ownership of the company. What type of financing is this considered?

A. Partnership

B. Management

C.Ownership

D. Equity

LESSON 12

1.Which of the following is NOT one of the four "p"s of marketing?

A. price

B. packaging

C. product

D. place

2.Imagine you are shopping for groceries. You notice the price on a particular brand's loaf of bread is much lower than all other brands. What is this an example of?

A. Price gouging

B. Penetration pricing

C. Price dissimilation

D. Dissimilation pricing

3.Which economic concept involves all activities that move goods and services from the producer to the consumer?

A. Logistics

B. Marketing

C. Production

D. Transportation

4.What business decision does the product life cycle help make?

A. The appropriate marketing strategies for old vs. new products

B. The amount of money to spend on total marketing

C. When to discontinue current brands and invent new ones

D. The right timing for a company to declare bankruptcy

5.Market research on products distributed to markets is conducted

A. before the product is released

B. after the product is released

C. during market trials

D. throughout the life of a product

6.Companies which sell products directly to customers but have no physical store are called _____________.

A. E-commerce stores

B. Virtual companies

C. Virtual retailers

D. Virtual wholesalers

7.When would a company typically perform market research for its goods and services?

A. Before the production process even begins

B. When the product dips in sales

C. After a test-marketing effort fails

D. It is useful to conduct market research at all stages of the product cycle

8.What is the difference between retailers and wholesalers?

A. Wholesalers are businesses that purchase large quantities of goods to sell to members of their club. Retailers are businesses that purchase large quantities of goods and sell to the general public.

B. Wholesalers are businesses that purchase large quantities of goods to sell to businesses. Retailers are businesses that purchase large quantities of goods and sell to members of their club.

C. Wholesalers are businesses that purchase large quantities of goods to sell to businesses. Retailers are businesses that purchase small quantities of goods and sell to the general public.

D. Wholesalers are businesses that purchase large quantities of goods to sell to businesses. Retailers are businesses that purchase large quantities of goods and sell to the general public.

9.Product, price, place, and promotion are all a component of which of the following?

A. Market strategy

B. Market survey

C. Market schedule

D. Market guideline

10.Imagine a clothing company runs an advertisement on television which depicts people wearing the company's products and having a great time at a party. Which type of utility is the advertisement appealing to?

A. Form utility

B. Satisfaction utility

C. Ownership utility

D. Place utility

LESSON 13

1.Which of the following professions is NOT considered a blue collar profession?

A. A foreman at an automobile factory

B. Office workers at a soda factory

C. Craft workers at a flea market

D. An assembly line worker at an automobile factory

2.Which of the following is NOT a current issue regarding labor unions?

A. Many people believe labor unions have outlived their usefulness.

B. Many people argue that unions artificially increase costs.

C. Many people feel labor unions have grown too large and have lost touch with the needs of its members.

D. Many people feel the leaders of many labor unions are corrupt.

3.Which of the following is considered a white collar worker?

A. A postal worker

B. A pre-school teacher

C. A welder

D. An inventory control clerk

4.Laws that allow workers to work in a shop without having to join a union are called ______________.

A. antitrust laws

B. right-to-work laws

C. closed shop laws

D. AFL-CIO laws

5.What is outsourcing?

A. Outsourcing occurs when members of management hire workers from other countries to work in businesses in the United States.

B. Outsourcing occurs when members of management hire workers to replace striking workers.

C. Outsourcing occurs when members of management send jobs to workers outside the country.

D. Outsourcing occurs when members of management buy products from outside the country in order to protest against high prices of American goods.

6.Prior to the Norris-Laguardia Act of 1932, many workers were required to sign a Yellow Dog contract in order to get a job. What did this contract guarantee?

A. The employee would not ask for a raise.

B. The employee would not bring a pet on company property.

C. The employee would not join a labor union.

D. The employee would not share company secrets.

7.Which would be an example of a white-collar worker?

A. A foreman at an auto factory

B. A waiter at a high-end restaurant

C. A laundress at a five star hotel

D. A stockbroker for a small firm

8.If a strike will endanger the safety and health of the United States, management may seek which of the following legal devices?

A. Mediation

B. Injunction

C. Sanction

D. Permit

9.How might an increase in the minimum wage actually hurt workers?

A. Labor unions may lay off qualified workers

B. Firms may hire less low-skilled workers, delaying their entry into the workforce

C. Firms may be shut down when they try to circumvent the law

D. Workers always benefit from an increase in the minimum wage

10.Service workers may best be described as _________ .

A. people whose work requires education and training

B. people whose work requires little training

C. individuals whose jobs provide some service directly to a consumer

D.unskilled laborers