Exam 1: Introduction

A) how choices are made under conditions of scarcity.
B) how money is used.
C) how goods and services are produced.
D) how businesses maximize profits.

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A) United Airlines buys Northwest Airlines.
B) Striking auto workers force General Motors to shut down its factories.
C) Banks raise their fees on late payments by credit card holders.
D) The FCC requires local telephone companies to provide access to their local networks before being able to offer long distance service.

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D

A) "Let's make this product because this is what we know how to do best."
B) "We should consider shifting to products where we can earn even more money."
C) "Everyone is opening video stores,why don't we?"
D) "We can't stop making this product.This product gave our company its start."

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A) money
B) machinery and equipment
C) land
D) unskilled labor

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A) how businesses can make the most profits.
B) how businesses can decide on the best use of scarce resources.
C) how businesses can operate at the lowest costs.
D) how businesses can sell the most products.

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A) market structure
B) resource scarcity
C) product demand
D) technology

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Such factors as market structure,supply ...

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Changes in supply and demand conditions,changes in technology,increased competition,changes in interest rates and inflation rates,exchange rate changes,and political risk are typical types of risk faced by firms.

A) the study of economics by managers.
B) the study of the aggregate economic activity.
C) the study of how managers make decisions about the use of scarce resources.
D) All of the above are good definitions.

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A) the use of a capital intensive versus a labor intensive process of manufacturing textiles
B) the production of SUVs versus the production of sub-compact cars
C) the manufacturing of computer workstations in China or in India
D) the leasing versus the purchasing of new capital equipment

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A) the amount given up when choosing one activity over all other alternatives.
B) the amount given up when choosing one activity over the next best alternative.
C) the opportunity to earn a profit that is greater than the one currently being made.
D) the amount that is given up when choosing an activity that is not as good as the next best alternative.

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Firms must choose WHAT goods and service...

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Cost leadership (lower costs than compet...

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Accounting,Finance,M...

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A) complying with the technical specifications in the production of an aircraft
B) the production of jet aircraft for the air force or for a commercial airline
C) the use of additional workers versus the use of machines in the production of goods
D) the production of a new manufacturing facility

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A) whether the need to grow revenues is being met.
B) should the firm be in the business in which it is operating.
C) whether the firm faces rising labor costs.
D) can the firm affect its market share.

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A) commercial bank mergers
B) minimum age limits for the purchase of alcoholic beverages
C) auctioning U.S.Treasury bills
D) colleges and universities give admissions preferences to children of alumni

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A) government subsidies for windmill energy production
B) laws regarding equal opportunity in employment
C) government allowance for the deduction of interest payments on private mortgages
D) government regulations concerning the dumping of hazardous waste

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