Unit 2 - Understand the Business Environment

What is the name for markets with only a few sellers, such as the markets for automobiles, pharmaceuticals, or oil?

• A oligopolies

• B. monopolies

• C. perfect competition

• D. monopolistic competition

A business decides against opening a store in the next town because its research shows the location will be unprofitable. What form of risk management is this?

• A avoidance

• B. reduction

• C. retention

• D. transfer

What is the economic basis for the private enterprise economic system?

• A competition

• B. the marketplace

• c. the motive of profit

• D. manufacturer supply chain

Competition helps create a healthy society by:

• A creating new jobs.

• B. increasing the money supply.

• C. making new government regulations.

• D. replacing small businesses with large businesses.

The Candy Store is selling more and more chocolate each quarter. Applying the law of supply and demand, what is most likely to happen over the next few quarters?

• A The price will increase, and the supply will increase.

• B. The price will decrease, and the supply will increase.

• C. The price will increase, and the supply will decrease.

• D. The price will decrease, and the supply will decrease.

A large retailer wants to contribute to the well-being of society. It donates 10% of its proceeds to a charity that helps the environment. The retailer is demonstrating:

• A e-tailing.

• B. wholesaling.

• C. social responsibility.

• D. voluntary merchandise.

Economic resources that help people be more productive are:

• A human resources.

• B. natural resources.

• C. capital goods resources.

• D. nonrenewable resources.

A business that buys goods or services and sells them to the ultimate consumer is a:

• A manufacturer.

• B. producer.

• C. retailer.

• D. wholesaler.

A form of demand for products in which changes in price correspond to changes in demand is:

• A consumer.

• B. elastic.

• c. equilibrium.

• D. inelastic.

What do service businesses sell?

• A raw goods and services

• B. retail goods and services

• C. intangible goods and services

• D. wholesale goods and services