2.05 Review Risk Factors Affecting Business Profits

In business terms, what is profit?

• Good investment

• Holiday bonus

• Monetary reward

• Risky venture

In business terms, income is the money

• produced

• supplied

• spent

• received

The money spent to run a business is called

• operating expense

• cost of goods

• net profit

• gross profit

Gross profit shows business owners the difference between what they've

• spent and received

• paid and risked

• received and billed

• estimated and invoiced

Which of the following is a general benefit profit provides

• more products

• better wages

• higher prices

• better supplies

Profitable businesses often help improve their local communities by

• investing in foreigh companies

• building facilities in other cities

• contributing to charitable causes

• increasing salaries of executives

A popular product is said to be

• in demand

• late

• out of style

• available

Businesses must be carful about increasing the prices of their goods to increase profits because the result may be that they

• have to find new suppliers

• lose sales to competitors

• increase their operating expenses

• lose their stockholders

Which activities are likely to increase a firm's profit?

• increasing sales and decreasing expenses

• increasing supplies and decreasing production

• decreasing sales and increasing expenses

• decreasing supplies and increasing production

To use resources wisely, business owners must reduce

• risk

• reward

• waste

• wages