Chapter 01
The Dynamics of Business and Economics
True / False Questions
1. Businesses have the right to keep and use their profits as they choose, without
limitations.
FALSE
Within legal limitations, businesses have the right to keep and use their profits as they
choose.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Topic: Definition of Business
,2. Finance refers to all activities concerned with obtaining money and using it effectively.
TRUE
Finance refers to all activities concerned with obtaining money and using it effectively.
Financial resources must be managed effectively if the business aims to succeed.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.
Topic: Definition of Business
,3. Owners have little responsibility to provide funds for the operation of the business.
FALSE
The primary responsibility of the owners is to provide financial resources for the business.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.
Topic: Definition of Business
4. A central issue of economics is how to fulfill an unlimited demand for goods and services
in a world with limited resources.
TRUE
Economics is the study of how resources are distributed for the production of goods and
services.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-03 Define economics and compare the four types of economic systems.
Topic: Economics and the Types of Economic Systems
, 5. The equilibrium price is represented by the point where a product's supply and demand
curves intersect.
TRUE
The price at which the number of products that businesses are willing to supply is equal to
the amount of products that consumers are willing to buy at a specific point in time is the
equilibrium price.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 2 Medium
Learning Objective: 01-04 Describe the role of supply, demand, and competition in a free-enterprise system.
Topic: Key Economic Indicators and How they Affect Business
Multiple Choice Questions
6. _____ is the primary goal of business.
A. Charity
B. Profit
C. Bureaucracy
D. Quality
E. Strategy
The primary goal of all businesses is to earn a profit, the difference between what it costs to
make and sell a product and what a customer pays for it.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Topic: Definition of Business
The Dynamics of Business and Economics
True / False Questions
1. Businesses have the right to keep and use their profits as they choose, without
limitations.
FALSE
Within legal limitations, businesses have the right to keep and use their profits as they
choose.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Topic: Definition of Business
,2. Finance refers to all activities concerned with obtaining money and using it effectively.
TRUE
Finance refers to all activities concerned with obtaining money and using it effectively.
Financial resources must be managed effectively if the business aims to succeed.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.
Topic: Definition of Business
,3. Owners have little responsibility to provide funds for the operation of the business.
FALSE
The primary responsibility of the owners is to provide financial resources for the business.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.
Topic: Definition of Business
4. A central issue of economics is how to fulfill an unlimited demand for goods and services
in a world with limited resources.
TRUE
Economics is the study of how resources are distributed for the production of goods and
services.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-03 Define economics and compare the four types of economic systems.
Topic: Economics and the Types of Economic Systems
, 5. The equilibrium price is represented by the point where a product's supply and demand
curves intersect.
TRUE
The price at which the number of products that businesses are willing to supply is equal to
the amount of products that consumers are willing to buy at a specific point in time is the
equilibrium price.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 2 Medium
Learning Objective: 01-04 Describe the role of supply, demand, and competition in a free-enterprise system.
Topic: Key Economic Indicators and How they Affect Business
Multiple Choice Questions
6. _____ is the primary goal of business.
A. Charity
B. Profit
C. Bureaucracy
D. Quality
E. Strategy
The primary goal of all businesses is to earn a profit, the difference between what it costs to
make and sell a product and what a customer pays for it.
AACSB: Analytic
Accessibility: Keyboard Navigation
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Topic: Definition of Business
