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Test Bank For Business in Action 7e by Bovee 0133773892
Test Bank For Business in Action 7e by Bovee 0133773892
5) is lead by innovation, initiative, and the willingness to take the risks in creating and
operating businesses.
A) Capitalization
B) Socialization
C) Macroeconomics
D) Economic freedom
E) Entrepreneurship
Answer: E
Explanation: Entrepreneurship is the spirit of innovation, the initiative, and the willingness to
take the risks involved in creating and operating businesses.
Difficulty: 2: Moderate
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
6) Which of the following has the effect of creating competition for finite resources, thereby
forcing trade-offs by participants in the economy?
A) redundancy
B) scarcity
C) opportunity costs
D) free market systems
E) planned systems
Answer: B
Explanation: Scarcity doesn't mean a shortage of a particular resource; rather, it means that the
resource has a finite supply. Scarcity has two powerful effects: It creates competition for
resources, and it forces trade-offs on the part of every participant in the economy.
Difficulty: 2: Moderate
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
2
Copyright © 2017 Pearson Education, Inc.
7) Of all the alternatives not selected, the one with the highest value represents the of
the action taken.
A) opportunity cost
B) trade-offs
C) scarcity value
D) finite supply
E) affordability
Answer: A
Explanation: Opportunity cost is a way to measure the value of what you gave up when you
pursued a different opportunity.
Difficulty: 2: Moderate
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
8) Who are those employees whose main contribution to an organization is the application of
business knowledge?
A) entrepreneurs
B) knowledge workers
C) economists
D) capitalist
E) human resources
Answer: B
Explanation: Knowledge workers, employees whose primary contribution is the acquisition and
application of business knowledge, are a key economic resource for businesses in today's
economy.
Difficulty: 2: Moderate
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
3
Copyright © 2017 Pearson Education, Inc.
10) In the global marketplace, which of the following is often a type of key asset needed to
successfully utilize an advantage?
A) capital
B) supplies
C) intellectual
D) production location
E) workforce
Answer: C
Explanation: Traditionally, a business or a country was considered to have an advantage if its
location offered plentiful supplies of natural resources, human resources, capital, and
entrepreneurs. In today's global marketplace, however, intellectual assets are often the key.
Difficulty: 2: Moderate
AACSB: Analytical thinking
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
11) Economics is the study of how a society uses its scarce resources to produce and distribute
goods and services to its citizens.
Answer: TRUE
Explanation: Economics is the study of how a society uses its scarce resources to produce and
distribute goods and services to its citizens.
Difficulty: 1: Easy
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
12) Macroeconomics studies economic behavior among consumers, businesses, and industries
that collectively determine the quantity of goods and services demanded and supplied at different
prices.
Answer: FALSE
Explanation: The study of a country's larger economic issues, such as how firms compete, the
effect of government policies, and how an economy maintains and allocates its scarce resources,
is termed macroeconomics.
Difficulty: 1: Easy
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
13) Capital includes land and minerals that a business needs in order to produce goods and
services.
Answer: FALSE
Explanation: Capital includes money, computers, machines, tools, and buildings that a business
needs in order to produce goods and services.
Difficulty: 1: Easy
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
4
Copyright © 2017 Pearson Education, Inc.
14) Capital is the collective intelligence of an organization.
Answer: FALSE
Explanation: Capital includes money, computers, machines, tools, and buildings that a business
needs in order to produce goods and services.
Difficulty: 1: Easy
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
15) Scarcity creates competition for resources, and forces trade-offs on the part of every
participant in the economy.
Answer: TRUE
Explanation: Scarcity has two powerful effects: It creates competition for resources, and it
forces trade-offs on the part of every participant in the economy.
Difficulty: 2: Moderate
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
16) Deciding how much money to spend on new manufacturing equipment versus launching a
new advertising campaign is described as opportunity cost.
Answer: FALSE
Explanation: Opportunity cost refers to the value of the most appealing alternative from all those
that weren't chosen. In other words, opportunity cost is a way to measure the value of what you
gave up when you pursued a different opportunity.
Difficulty: 2: Moderate
AACSB: Application of knowledge
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
17) What is economics? Compare and contrast between microeconomics and macroeconomics.
Answer: Economics is the study of how a society uses its scarce resources to produce and
distribute goods and services. Economics is divided into a small-scale perspective and a large-
scale perspective. The study of economic behavior among consumers, businesses, and industries
that collectively determine the quantity of goods and services demanded and supplied at different
prices is termed microeconomics. The study of a country's larger economic issues, such as how
firms compete, the effect of government policies, and how an economy maintains and allocates
its scarce resources, is termed macroeconomics. While microeconomics looks at the small
picture and macroeconomics looks at the big picture, understanding the economy at either scale
requires an understanding of how the small and large forces interact. For instance, a number of
macro forces and policies determine whether homeowners can afford to install solar energy
systems. In turn, the aggregate behavior of all those homeowners at the micro level affects the
vitality and direction of the overall economy.
Difficulty: 2: Moderate
AACSB: Analytical thinking
LO: 2.1: Define economics, and explain why scarcity is central to economic decision making.
5
Copyright © 2017 Pearson Education, Inc.
Another random document with
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defeats Porras, 261.
Columbus, Christopher, born, 1;
translated, 3;
anecdotes of boyhood, 5;
goes to Pavia, 9;
becomes sailor, 11;
engages in Neapolitan expedition, 12;
deceives sailors or posterity, 13;
does not arrive in Portugal, 16;
does arrive there, 18;
marries, 19;
makes maps, 20;
lives at Porto Santo, 21;
goes to Iceland or elsewhere, 28;
talks to King John, 35;
goes to Spain, 38;
deposited with Quintanilla, 41;
meets Scientific Congress, 43;
goes to Convent of Rabida, 49;
meets committee on exploration, 54;
starts for France, 56;
goes to Palos, 61;
sails on first voyage, 67;
keeps false reckoning, 72;
discovers San Salvador, 89;
sails for Spain, 97;
wrecked, 102;
founds colony, 105;
sees Mermaids, 110;
displays seamanship, 115;
arrives at Azores, 116;
arrives at Palos, 125;
flattens egg, 135;
sails on second voyage, 138;
discovers Dominica, 141;
returns to Spain, 191;
loses popularity, 196;
sails on third voyage, 200;
discovers Trinidad, 204;
invents ingenious theory, 205;
arrives at Hispaniola, 208;
arrested, 228;
sent to Spain, 229;
arrives in Spain, 230;
sails on fourth voyage, 237;
reaches Honduras, 240;
searches for Panama Canal, 240;
founds colony at Veragua, 243;
sails away, 250;
reaches Jamaica, 251;
manages lunar eclipse, 258;
reaches Hispaniola, 262;
returns to Spain, 264;
dies, 268;
is extensively buried, 268;
perhaps is a sun-myth, 269;
character, 284.
Columbus, Diego, born, 4;
Governor of Isabella, 162;
sent to Spain to wait for opening in Connecticut, 177;
returns to Hispaniola, 187;
arrested by Bobadilla, 227.
Columbus, Dominico, combs wool, 3.
Compass, variation of, 55.
Congress of Salamanca, 46;
its tediousness, 45.
Correo, Pedro, 21;
he winks, 25;
is talked to death, 34.
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