Business Concepts and Definitions Quiz

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Questions and Answers

Which of the following is NOT an advantage of public sector funding?

Job security
Reasonable prices
High profit motivation (correct)
Production of public goods

Nationalization aims to decrease efficiency in the economy.

False (B)

What is one primary motive that drives the private sector?

Profit

In a planned economy, all resources are owned by the __________.

government Signup and view all the answers

What is a common drawback of nationalization?

Overemployment (C) Signup and view all the answers

Match the following economic systems with their characteristics:

Command Economy = All resources owned by the government Free Economy = Driven by profit motive Mixed Economy = Combination of public and private sectors Traditional Economy = Based on subsistence and barter Signup and view all the answers

Public sector businesses typically aim to make a profit.

False (B) Signup and view all the answers

What is one reason for nationalization of industries?

To maintain a stable level of prices Signup and view all the answers

What is the main purpose of specialization in labor?

To divide tasks and improve productivity (D) Signup and view all the answers

Barter allowed individuals to exchange goods without the use of money.

True (A) Signup and view all the answers

List two problems associated with the barter system.

Double coincidence of wants and storage of wealth. Signup and view all the answers

The earliest form of trade was known as the __________ economy.

subsistence Signup and view all the answers

Match the following instruments of early exchange with their characteristics:

Barter = Direct trade of goods without money Shells = Early form of money used for trade Gold = A precious metal used as an exchange medium Coins = Form of money that emerged later for easier transactions Signup and view all the answers

Which of the following is NOT a limitation of the barter system?

Ease of storage of goods (D) Signup and view all the answers

Money in the present day only exists as physical notes and coins.

False (B) Signup and view all the answers

As production increased, the need for a system of __________ arose to resolve trade issues.

money Signup and view all the answers

What is the main goal of entrepreneurship?

To establish a profitable venture (A) Signup and view all the answers

Barter involves the exchange of goods and services without using money.

True (A) Signup and view all the answers

Define 'producer' in the context of business.

Any individual or organization that makes goods and services. Signup and view all the answers

________ refers to the situation when total sales are insufficient to cover all expenses.

Loss Signup and view all the answers

Match each term with its correct definition:

Profit = Surplus funds after expenses are covered Consumer = Individual or organization that uses goods and services Exchange = Voluntary trade of goods and services Service = Intangible products produced for use Signup and view all the answers

Which of the following describes public goods?

Goods consumed collectively, usually paid for by taxation (B) Signup and view all the answers

Economy refers to the private mechanisms of production and exchange.

False (B) Signup and view all the answers

What is capital in the context of a business organization?

Money used to acquire assets and items used to create final products. Signup and view all the answers

What is a disadvantage of social/public goods production?

Limited consumer choice (B) Signup and view all the answers

In a free economy, government intervention is minimal.

True (A) Signup and view all the answers

What is the primary goal of a mixed economy?

To combine public and private sector elements. Signup and view all the answers

In a traditional economy, people grow most of their own _____ to meet basic needs.

food Signup and view all the answers

Match the types of economies with their characteristics:

Free Economy = Little government interference Mixed Economy = Combination of public and private sector Traditional Economy = Subsistence living Social Economy = Provision of public goods Signup and view all the answers

Which statement is true regarding the roles of employees?

Employees should minimize wastage during production. (A) Signup and view all the answers

The roles of owners include providing jobs and ensuring environmental protection.

True (A) Signup and view all the answers

What role does the government play in business activities?

Provide adequate legislation to control the business environment. Signup and view all the answers

What is the maximum number of partners allowed in a partnership?

20 (C) Signup and view all the answers

Limited partners are allowed to take part in the management of the partnership.

False (B) Signup and view all the answers

What document is typically written to establish a partnership?

Partnership deed Signup and view all the answers

In a co-operative, profits are distributed among ______.

members Signup and view all the answers

Match the types of co-operatives with their descriptions:

Financial co-ops = Credit unions offering savings and loans Consumer co-ops = Provision of goods and services Agricultural co-ops = Providing agricultural products and equipment Worker co-ops = Businesses owned and operated by employees Signup and view all the answers

Which of the following is an advantage of forming a partnership?

Shared workload (A) Signup and view all the answers

In a co-operative, all members have an equal vote.

True (A) Signup and view all the answers

What is one disadvantage of co-operatives related to management?

Poor management can hinder growth Signup and view all the answers

What is a primary feature of a sole trader business?

Quick decision-making (A) Signup and view all the answers

A debit card allows payments to be made directly from a credit account.

False (B) Signup and view all the answers

Name one reason why a person may start a business.

Financial independence Signup and view all the answers

A ________ allows multiple individuals to share profits and losses in a business.

partnership Signup and view all the answers

Match the payment methods to their descriptions:

Credit Cards = Payments made using borrowed money from a credit company Debit Cards = Payments made directly from a bank account Cheques = Paper payment taken from a bank account Electronic Transfer = Funds transferred via computer networks Signup and view all the answers

Which of the following is NOT a characteristic of a sole trader?

Can have multiple owners (D) Signup and view all the answers

In a limited partnership, limited partners are liable for debts beyond their investment.

False (B) Signup and view all the answers

What financial advantage do sole traders have compared to companies?

They pay lower personal tax Signup and view all the answers

Flashcards

Entrepreneurship

The act of risking resources to create and run a business with the goal of profit.

Goods

Goods are tangible products that have been produced, like cars, rice, or clothing. There are different types of goods, like free goods (air, sunshine), which are gifts of nature and available to all without cost. Public goods, like national defense, are consumed by everyone and paid for through taxation. Finally, merit goods, like health services and education, benefit both the individual and society.

Profit

A surplus of money remaining after all expenses are covered in a business.

Loss

The situation where total sales are not enough to cover all expenses, resulting in a financial loss for the business.