Business Basics

What is the law of demand?

• As the price of a good increases, the quantity demanded decreases, ceteris paribus.

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded remains unchanged.

• As the price of a good decreases, the supply of the good increases.

Which market structure is characterized by many sellers, differentiated products, and free entry and exit?

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

What is a key principle of business ethics?

• Profit maximization at any cost

• Transparency and accountability in all operations

• Ignoring stakeholder interests

• Prioritizing short-term gains over long-term sustainability

Which of the following best defines entrepreneurship?

• The process of purchasing stocks and bonds

• The act of managing and organizing any enterprise, especially a business, usually with considerable initiative and risk

• The practice of being employed by a large corporation

• The activity of working for the government

What is the primary goal of financial management within a company?

• To minimize operational costs only

• To maximize shareholder wealth

• To ensure that the company pays no taxes

• To sell as many products as possible regardless of profit

Globalization can best be described as:

• The process by which businesses or other organizations develop international influence or start operating on an international scale

• The act of a company moving its entire operation to another country

• A government policy to restrict international trade

• The process of a country isolating itself from the rest of the world

What happens to the equilibrium price when there is an increase in demand, assuming supply remains constant?

• It decreases

• It increases

• It remains unchanged

• It becomes negative

In which market structure is there a single seller and no close substitutes for the product?

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

Corporate Social Responsibility (CSR) is an example of:

• Business ethics

• Financial mismanagement

• Market demand

• Entrepreneurial risk

The process of starting a new business is known as:

• Diversification

• Entrepreneurship

• Liquidation

• Amortization