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1. In a _______, consumers ultimately decide what should be produced.
A. macroeconomic system    C. free market system

B. socialist economy             D. command economy

 

 

2. Efficiency can best be defined as

A. the amount of output generated in a given amount of time.

B. producing items using the least amount of resources.

C. using high-tech equipment on a job.

D. producing as much as you can as fast as you can, regardless of cost.

 

3. _______ is the study of how to increase resources and create conditions that will make better use of resources.

A. Resource development    C. Macroeconomics

B. Economics                        D. Microeconomics

 

4. To help employees become more effectively productive, companies may form cross-______ teams that draw on people from different departments to work on a special project.
A. gender C. managerial
B. trained D. functional

 

5. The trend toward two-family income has led to
A. policies allowing only one family member to work for a company.
B. flexible work schedules, pregnancy benefits, and elder-care programs.
C. businesses paying lower wages and hiring fewer workers.
D. fewer opportunities in the field of human resource management.

 

6. The idea that countries should produce and sell goods that they produce most effectively and efficiently, and buy goods that other countries produce most effectively and efficiently, is known as
A. absolute advantage theory. C. efficiency balanced trade.
B. free trade. D. comparative advantage theory.

 

7. These days, the leading commercial firms are found in the _______ sector.
A. manufacturing C. service
B. agricultural D. government

 

8. In global trade, when the difference between money coming into a country from exports and money leaving a country due to imports or money flows from other factors is known as the
A. balance of payments. C. balance of trade.
B. trade offset. D. trade deficit.

 

9. Which statement best characterizes Adam Smith’s concept of the “invisible hand”?
A. Those who don’t work shouldn’t eat.
B. The quest for personal gain works for the common good.
C. When governments fail to regulate, greed conquers all.
D. Markets create money, and money creates demand.

 

10. Calendula, Inc. sells its herbal teas at a lower price in foreign countries than those charged to consumers in Calendula’s home nation. In global trade, this is known as
A. freeloading. C. brand infringement.
B. depreciation. D. dumping.

 

11. Often, the _______ the risk, the _______ the rewards.
A. higher; higher C. higher; lower
B. lower; higher D. faster; quicker

 

12. When the government of Indonesia imposes a tax on imported electronics products to help its young electronics industry compete in the global marketplace, it’s imposing a/an _______ on foreign electronics products.
A. import quota       C. embargo
B. protective tariff    D. revenue tariff

 

13. Typically, the quantity of products people are willing to buy will _______ when prices_______.
A. increase; increase C. decrease; increase
B. stay the same; increase D. increase; stay the same

 

14. The _______, created in 1995, is assigned the task of mediating international trade disputes.
A. EU C. GATT
B. WTO D. NAFTA

 

15. In general, a person who owns and operates his or her own business can be thought of as a/an
A. entrepreneur. C. gambler.
B. manager. D. pioneer.

 

16. Consider two used-car dealers: Bob’s Better Wheels and Dewey, Cheatum, and Howe Motors. Their prices are basically the same for similar vehicles even as their advertising screams that their products are different. Which kind of competition is going on here?
A. Perfect competition     C. Monopolistic competition
B. Monopoly                    D. Oligopoly

 

17. Americans are often accused of being ethnocentric. This means that
A. Americans welcome diversity in their work force
B. Americans feel their culture is superior to other cultures.
C. U.S. firms are actively seeking international markets.
D. U.S. businesses are pursuing a policy of multiculturalism.

 

18. Uniform product codes are also known as
A. bar codes.
B. product numbers.
C. customer service standards.
D. basic product quality standards.

 

19. Which of the following about a capitalist system is correct?
A. It guarantees the success of almost any business.
B. It’s one in which the factors of production are owned by the government.
C. It relies on honesty, integrity, and high ethical standards.
D. It isn’t substantially damaged by unethical business behavior.

 

20. Among developed nations, the United States is typical in that it has a _______economy.
A. mixed C. command
B. socialist D. free market

 

21. The EU is an example of a trading bloc, or _______, that has a common external tariff and no internal tariffs, and that coordinates laws to facilitate trade between member countries.
A. strategic alliance
B. joint venture
C. common market 
D. multinational export assistance center

 

22. The five factors of production include land, _______, capital, entrepreneurship, and_______.
A. effort; education C. energy; application
B. knowledge; effort D. labor; knowledge

 

23. When the value of exports from a country exceeds the value of imports into that country, there’s
A. a trade surplus. C. an imbalance of trade.
B. no balance of payments. D. a trade deficit.

 

24. The number of businesses owned by immigrants, minority groups, and women has_______ in recent years.
A. declined C. increased
B. stabilized D. been dramatically reduced

 

25. The _______ denotes a common pattern wherein there’s a period of rapid growth in the economy when supply and demand stimulate each other, alternating with a period of decline accompanied by diminishing demand and supply.
A. macroeconomic system C. unemployment rate
B. free market system D. business cycle