Risk Rewarded LAP Quiz

1. The major reason most business owners are willing to take the risk of going into business is to

• 1. make a profit.

• 1. gain status.

• 1. own property.

• 1. feel important.

1. Which factor that affects profit can be controlled by a business?

• 1. Expenses

• 1. Economy

• 1. Chance

• 1. Demand

1. The routine costs involved in running a business are referred to as

• 1. cost of goods.

• 1. operating expenses.

• 1. cash flow.

• 1. cumulative costs.

1. What category of expense includes the money businesses spend to buy raw materials from which they make products to sell?

• Cost of goods

• 1. Production expense

• 1. Operating expense

• 1. Cost of sales

1. The money left after cost of goods is subtracted from total income is called __________ profit.

• 1. excessive

• 1. marginal

• 1. net

• 1. gross

1. The difference between the selling price of a product and all the costs and expenses of selling it is known as

• 1. net profit.

• 1. overhead.

• 1. risk.

• 1. gross profit.

1. A personal reason some individuals go into business for themselves is because it allows them to

• 1. serve the community.

• 1. join business organizations.

• 1. have a guaranteed income.

• 1. receive public recognition.

1. Profits that are created by a successful business help the economy by

• 1. increasing operational expenses for the business.

• 1. creating a higher cost for the selling of products.

• 1. providing employment opportunities for society.

• 1. lowering the risk involved in opening a business.

1. Most businesses can increase their profits by

• 1. obtaining a subsidy.

• 1. cutting workers’ hours.

• 1. improving worker efficiency.

     .

• 1. increasing sales quotas