Economic Basics Quiz

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Questions and Answers

What are the basic survival needs critical for human existence?

Entertainment, hobbies, and technology

Healthcare, fitness, and socializing

Travel, education, and luxury items

Food, clothing, and shelter (correct)

Which of the following factors does NOT affect demand?

Changes in consumer income

Trends in consumer taste

Number of producers (correct)

Customer expectations

What does the Law of Supply state about price and quantity supplied?

Higher demand leads to lower prices

Supply is unaffected by changes in price

As price increases, quantity supplied increases (correct)

As price decreases, quantity supplied decreases

What best describes market equilibrium?

When supply equals demand Signup and view all the answers

Which business structure involves ownership by a single individual?

Sole Proprietorship Signup and view all the answers

What is a characteristic of an oligopoly market structure?

Few sellers control the market Signup and view all the answers

How is profit or loss calculated in a business?

Revenue - Expenses Signup and view all the answers

Which of the following is NOT an advantage of a partnership?

Unlimited liability Signup and view all the answers

What is a primary disadvantage of establishing a corporation?

High startup costs. Signup and view all the answers

Which of the following is NOT a key concept of Corporate Social Responsibility (CSR)?

Maximizing profits at all costs. Signup and view all the answers

What factor is considered a barrier to international business?

Tariffs on imports. Signup and view all the answers

Which of the following best describes a co-operative?

A business owned by its workers or members. Signup and view all the answers

What is one of the factors of production?

Raw materials. Signup and view all the answers

Which of the following is a component of the marketing mix known as the Four Ps?

Product quality. Signup and view all the answers

What does the Current Ratio formula assess in business?

Liquidity position. Signup and view all the answers

In which business type is the primary motive profit generation?

Service-based business. Signup and view all the answers

What is double taxation in relation to corporations?

Tax on corporate profits and dividends to shareholders. Signup and view all the answers

Which of the following defines the term 'sustainability' in a business context?

Practices that minimize environmental impact. Signup and view all the answers

Study Notes

Economic Basics

Basic Needs: Food, clothing, and shelter are essential for survival.
Wants: Non-essential items that add comfort or pleasure.
Attracting Consumers: Introduce new or improved products/services, promote current trends, and compete effectively with similar firms.
Demand: The quantity consumers are willing and able to buy at a specific price. Conditions include: consumer awareness, price, supply, and accessibility.
- Law of Demand: As prices decrease, demand increases; as prices increase, demand decreases. Inverse relationship.
- Factors Affecting Demand: Consumer income, changing tastes, consumer expectations, and population changes.
Supply: The quantity businesses are willing and able to provide at a range of prices.
- Law of Supply: As prices increase, supply increases. Direct relationship.
- Factors Affecting Supply: Number of producers, price/technology changes, and production costs.
Price and Equilibrium: Market equilibrium occurs when supply equals demand at a specific price. Disequilibrium leads to surplus or shortage.
Key Terms:
- Supply Schedule: A chart showing the relationship between quantity supplied and price.
- Profit/Loss Calculation: Revenue - Expenses = Profit/Loss.
- Solvent Business: A business that meets all financial obligations.
Market Structures:
- Monopoly: Single seller controlling supply.
- Oligopoly: Few sellers dominate.
- Perfect Competition: Many sellers competing equally.

Business Forms of Ownership

Sole Proprietorship: Owned and run by one person.
- Advantages: Easy management, owner keeps all profits.
- Disadvantages: Unlimited liability, funding limited to owner's resources.
Partnership: Two or more people operating together sharing profits and responsibilities.
- Advantages: Shared resources, increased productivity.
- Disadvantages: Shared liabilities, potential for conflicts.
Corporation: A separate legal entity owned by shareholders.
- Advantages: Limited liability for shareholders, potentially higher tax benefits.
- Disadvantages: High startup costs, double taxation.
Co-operatives: Owned by workers/members, profit not the primary motive.
Franchise: Franchiser licenses its business model to a franchisee.
- Advantages: Established model, high success rate.
- Disadvantages: High initial investment, limited operational freedom.

Types of Businesses

Retail: Buys and resells goods to consumers.
Service: Provides services.
Manufacturing: Produces goods.
Crown Corporations: Owned and operated by the government.

Ethics: Moral principles guiding decision-making.
Corporate Social Responsibility (CSR):
- Safe workplace, fair labor practices, environmental protection, avoiding discrimination and false advertising, supporting charitable causes.

Workplace Safety

OHSA (Occupational Health and Safety Act): Defines employee rights and responsibilities to ensure a safe workplace.

Environmental Responsibility

Sustainability: Practices that minimize environmental impact, such as reducing pollution and resource conservation.

International Business

Benefits: Access to wider markets, potentially lower labor costs, higher quality/quantity of goods, and access to resources.
The 5 Ps: Product, Price, Proximity, Preference, Promotion.
Barriers: Tariffs, social costs (e.g., offshore outsourcing, labor abuses, environmental degradation).

Functions of Business

Production: The process of creating goods or services.
Factors of Production: Natural resources, raw materials, labor, capital, and information, management.
Production Process Steps: Purchasing raw materials, processing them, quality control, and grading.

Human Resources

Importance: Productivity, skilled labor, positive attitudes.
Employee Rights: Safe workplace, fair wages and hours, equal opportunity.

Marketing

4 Ps: Product, Price, Place, Promotion.
2 Cs: Competitive Market, Consumer Market.

Accounting

Key Concepts: Assets, liabilities, owner's equity.
Income Statement Examples:
- Service Business: Revenue - Expenses = Net Income.
- Retail Business: Revenue - Cost of Goods Sold = Gross Profit.
Formulas: Working capital, current ratio, gross profit percentage.

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Description

Test your understanding of core economic concepts including basic needs, wants, supply, demand, and pricing strategies. This quiz covers essential principles that govern consumer behavior and market dynamics. Challenge your knowledge on how these factors interact within the economy.