Economics Quiz

Business and Economics Terms

• In a pure capitalism system, the market serves as a self-correcting mechanism according to Adam Smith.
• The prices of inputs used to produce a good are not a determinant of demand.
• Flour is both a type of food and a type of commodity.

Stock and Corporation

• Most stock issued by corporations is common stock.
• Real GDP is the production of final goods and services valued at market prices.

Organizational Structure

• A centralized organization structure may work best in a time of crisis when an organization must stay focused on immediate goals.
• Jorge and Christina, as department head and office manager, are considered first-line managers.
• Don, as a top manager, establishes the structure for the organization as a whole and selects people for upper-level positions.

Marketing

• Strategic marketing planning is a process of examining an organization's current marketing situation, assessing opportunities, and setting objectives, then developing a marketing strategy to reach those objectives.
• Jason, as a member of a reference group, regularly shares information about athletic shoes and other sports gear with his teammates.
• Market segmentation is the division of a diverse market into smaller, relatively homogeneous groups with similar needs, wants, and purchase behaviors.
• Jessica bought convenience products, including milk, bread, and toothpaste.

Business and Finance

• The United States gives its farmers $19 billion every year in subsidies to help them compete in the global marketplace.
• The biggest drawback of a sole proprietorship is limited liability.
• Time Warner uses a product divisional structure, organizing itself around four distinct units in its publishing division.
• Financial information is important to businesses for various reasons, except to help governments levy appropriate taxes on businesses.

International Trade and Economy

• The rate at which the money of one country is traded for the money of another is known as the exchange rate.
• Goods-producing businesses produce tangible goods by engaging in activities such as manufacturing, construction, mining, and agriculture.
• The government of a small country allowing the "invisible hand" of competition to guide production and resource allocation decisions is an example of a capitalist economic system.
• Sanctions are politically motivated embargoes that revoke a country's normal trade relations status.