Name_________________________________

Student # ___________________________

Exam 1 September 17, 2013

Form A
Short answer- 4 points; Multiple choice/ Fill in the Blank/ T or F - 2 points
1. Explain how consumers benefit from business competition.

2. Describe the difference between outsourcing, offshoring, and nearshoring.

3. The factors of production in an economic system are ___________________

a. land, rent, capital, and human resources
b. capital, perseverance, natural resources, and human resources
c. rent, wages, interest, and profit
d. natural resources, human resources, capital and entrepreneurship
4. Newmans own is a food product line that gives 100 percent of its after-tax profits to charity. This
company is practicing ________.
a. business ethics
b. social responsibility
c. customer satisfaction
d. creativity
5. Another name for the private enterprise system is :
a. Socialism
b. Communism
c. Capitalism
d. Mixed economy
6. Fill in the Blank: The ____________________________ era focused on finding out what
customers wanted and needed and then designing a product to meet those needs, while the
________________________ era brought a period of customer building focus, where companies
aimed to connect with their markets directly and manage interactions.
7. What is a long term partnership of a firm designed to improve overall competitiveness?
a. Relationship building
b. Strategic alliance

c. Competitive advantage
d. Competition
8. If Lindsay leaves her current position at an investment bank to start a coffee shop with her sister,
how could Lindsay best be described?
a. Risk taker
b. Visionary
c. Entrepreneur
d. All of the above
9. What is the unique combination of organizational abilities, products, and approaches that sets a
company apart from competitors?
a. Factors of production
b. Competitive differentiation
c. Consumerism
d. Vision
10. Non-profit organizations include all of the following except:
a. Relief organizations
b. Labor unions
c. Churches
d. Sports Authority stores
11. Fill in the blank: Differences in gender, age, culture and religion in the workforce can be
described as having ___________________ in the workplace.
12. How could loyalty versus truth create an ethical dilemma for a businessperson?

13. Briefly describe one of the three stages of moral and ethical development.

14. A company removes a profitable product from the market because it may be dangerous. This
company is demonstrating ________.
a. Ethical behavior
b. Green marketing
c. Conflict of interest

d. Social welfare
15. Which of the following is not an example of unethical or illegal acts in the workplace?
a. Safety violations
b. Personal internet usage
c. Misreporting time on the job
d. Whistle-blowing
16. Mike was a foreman at Hi-Way Construction and discovered his company was deliberately using
faulty materials for a project. Although Mike was worried about his familys financial security if
he lost his job, he went to authorities and informed them of the potentially dangerous
construction. Mikes action is called ________.
a. Ethical compliance
b. Good intentions
c. Whistle blowing
d. Ethical allegations
17. ___________ requires that firms in the private sector provide procedures for anonymous
reporting of accusations of fraud.
a. Americans with Disabilities Act
b. Sarbanes-Oxley Act
c. Consumer Rights Act
d. Title VII
18. When Target donates 5 percent of its federally taxable income to nonprofit groups, the company
is highlighting its ________.
a. Social audit
b. Code of conduct
c. Business ethics
d. Social responsibility
19. The ____________ of a coffee-growing company include its employees, customers, suppliers,
and the community members where the company is located.
a. Social responsibility
b. Corporate philanthropy
c. Social audit
d. Stakeholders
20. All of the following are examples of corporate philanthropy EXCEPT ________.
a. Supporting the local public school
b. Sponsoring a Red Cross blood drive
c. Paying local property taxes
d. Giving employees release time to participate in volunteer activities
21. Matt was diagnosed with a serious illness that requires aggressive treatment. Because his
company employs 50 or more people, it must allow Matt up to 12 weeks unpaid time off in one
year, as granted by the ________.
a. Vocational Rehabilitation Act
b. Equal Employment Opportunity Commission

c. Occupational Safety and Health Administration

d. Family and Medical Leave Act
22. True or False: Businesses must find a balance between doing what is right and doing what is
profitable. T F
23. What is the difference between macroeconomics and microeconomics?

24. Describe the four categories of unemployment (frictional, seasonal, structural, cyclical)

25. In general, as price of a good or service increases, the quantity demanded:

a. Increases
b. Decreases
c. Stays the same
d. Depends on the type of good or service

26. The curve that shows the relationship between different prices and the quantity requested at each
price is the ________ curve.
a. Equilibrium
b. Supply
c. Buying
d. Demand
27. According to a supply curve, ________.
a. As prices rise, quantity of a product supplied falls
b. As prices fall, quantity of a product supplied increases
c. As prices rise, consumers will buy in larger quantities
d. As prices rise, the quantity of a product that is supplied also rises

28. Assume the price of gasoline triples. What will likely happen to the demand for small cars versus
large utility vehicles? The demand curve will shift to the ________ and demand will ________.
a. Left; decrease
b. Left; increase
c. Right; decrease
d. Right; increase
29. The equilibrium price is established when the quantity ________.
a. Purchased is equal to the quantity offered
b. Supplied is equal to the amount of raw materials available
c. Bought is equal to the quantity demanded
d. Demanded is equal to the quantity supplied at a lower price
30. Consumers can choose from hundreds of different kinds and producers of cheese, each with very
similar flavors and textures. This type of market structure is known as ________.
a. Pure competition
b. Monopolistic competition
c. Monopoly
d. Oligopoly
31. In a particular country, the government owns all the transportation companies, the utilities, the
energy suppliers, and major manufacturing firms. Small businesses are privately owned. What
type of economic system does this country have?
a. Communism
b. Socialism
c. Capitalism
d. Mixed economy
32.

33. A country has a strong private sector, along with publicly owned enterprises. Entrepreneurs and
private-sector investors are entitled to profits, after taxes, and even state-owned enterprises are
expected to at least break even. What type of economic system does this country have?
a. Capitalism
b. Communism
c. Socialism
d. Mixed economy
34. ________ is the relationship between the goods and services produced in a nation each year and
workers, raw materials, and other inputs necessary to produce them.
a. GDP
b. Per Capita Income
c. Prosperity
d. Productivity
35. ________ provides a running measure of consumer price changes.
a. The Consumer Price Index (CPI)
b. Devaluation
c. Per Capita Income
d. The Producer Price Index (PPI)

36. During an economic recession, consumer spending ________ and unemployment ________.
a. Increases; increases
b. Increases; decreases
c. Decreases; increases
d. Decreases; decreases
37.Briefly discuss 2 reasons why have U.S. firms become increasingly focused on international
business.

38.Computers that are manufactured in the United States and sold in Norway are categorized as U.S.
________.
a. Imports
b. Exports
c. Countertrades
d. Outsourcing

39. A country raises the tariff on imported cheese in order to increase its price above the price of
domestically produced cheese. This is an example of ________.
a. An exchange control
b. An import quota
c. A protective tariff
d. Dumping
40. A Canadian software company that specializes in developing computer games enters into an
agreement with a Japanese software company. Under this agreement, the Japanese firm has the
right to manufacture and sell the Canadian firms games in Japan. This agreement is an example
of ________.
a. Countertrade
b. Foreign licensing
c. International production
d. Direct exporting
e.

41.True or False: The North American Free Trade Agreement (NAFTA) is a trade
accord designed to reduce trade restrictions between the two neighboring
countries of the US and Canada.
T
F
42. Dumping _________ domestic consumers and _________ domestic producers.
a.
b.
c.
d.

Harms, benefits
Harms, harms
Benefits, harms
Benefits, benefits

43. All of the following constitute a countrys infrastructure EXCEPT ________.

a. Political climate
b. Communication
c. Energy facilities
d. Transportation
Extra Credit: Briefly discuss two examples we talked about in class and their main
points of relevance to their perspective topics. (4 points)