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- in the history of US business, the marketing era was characterized by increased production and an emphasis on manufacturing activity. t/f?
- false
- the only way a business can increase its profits is to increase its sales revenues. t/f?
- true
- bob earns the same amount of money this year as last year. thus, his standard of living must be the same this year. t/f?
- false
- "stakeholders" refers only to the owners of a business. t/f?
- false
- public schools, charities, and gov. agencies are not classified as businesses because they:
- do not seek to earn a profit
- the study of economics focuses on how people, businesses and gov. choose to allocate resources. t/f?
- true
- the key difference between micro- and macro-economics is that macro- looks primarily at long run or long term problems when micro looks at short term. t/f?
- false
- adam smith believed that countries would prosper if businesspeople were free to start there own businesses, because they would make a profit by providing goods, services, and ideas that others want. this is called the:
- invisible hand
- archer daniels midland is a US food-processing company with operations throughout the world; its earnings from olive processing in spain would be calculated in the US's GDP and spains GNP. t/f?
- false
- the equilibrium point is the point at which the supply curve intersects the demand curve. t/f?
- true
- according to the theory of supply and demand, if more lentils are planted in Wash, but the demand for lentils stays the same, the price for lentils would:
- decrease
- the role of profits in business is to:
- all of the above provide savings, reward, provide money for growth
- homer notices that most of the beers sold at his neighborhood store are the products of just a few sellers. this means that the beer industry can be described as:
- an oligarchy
- one of the most significant economic problems faced in communist nations is:
- persistent shortages of basic goods such as food and clothing
- the consumer price index is based on the prices of a market basket of goods, all of which consumers can purchase in a typical supermarket. t/f?
- false
- efforts by the federal reserve system to control the money supply and interest rates are known as:
- monetary policy
- lass than 40% of gov. revenues comes from individual income taxes. t/f?
- false
- assume that bad weather adversely affects coffee crops in brazil, and the price of coffee beans from that nation doubles. for starbucks this means that:
- variable costs will increase
- free trade between nations generally results in:
- mutually beneficial exchange relationships
- last year the nation cymru reported that it had a favorable balance of trade even though it imported over $9 billion worth of goods. this indicates that cymru:
- exported more than $9 billion of goods
- the balance of payments includes foreign borrowing and lending, foreign air, and investments. t/f?
- true
- the cost of producing lumber is lower in canada than in sweden. taiwan pruduces tv's but does not produce lumber. hence, we can deduce that:
- canada has a comparative advantage in the production of lumber
- a nation's balance of trade is a major component of its balance of payments. t/f?
- true
- a hard currency is one whose value is increasing rapidly on the foreign exchange markets. t/f?
- false
- ford manufactures cars in mexico in a joint venture with mazda; the problems ford can encounter with this means of going international include:
- both a and b disagreements with mazda, having to share profits from the JV with mazda
- akrid snell is a US businessperson who closely follows international business conditions. she recently read a newspaper article predicting that the value of the dollar will soon fall. if this prediction proves correct, snell should expect:
- prices of imported goods to rise, and prices of US goods exported to rise as well
- some businesses in China are notorious for piracy of intellectual property; these actions are illegal under the foreign corrupt practices act if 1978. t/f?
- true
- to help protect winemakers, france uses a quota system for importing wine made in other countries; this means that the french:
- set limits on the number of bottles of wine that can be imported
- in many foreign nations labor is less expensive than here in the US. however, this is the only true for unskilled or lowskilled work. the costs of skilled labor are the same overseas as they are in this country, offering no saving to american companies. t
- false