This exam consists of 25 multiple choice questions and covers the material in Chapters 1 through 3.

Question 1 

Reprocessing used materials so that they can be reused is known as ________.

Answer 

Rotation

rotation

recycling

ecology

Question 2 

___________ requires that firms in the private sector provide procedures for anonymous reporting of accusations of fraud.

Answer

Americans with Disabilities Act

 Sarbanes-Oxley Act

Consumer Rights Act

Title VII

Question 3 

A strategy that promotes environmentally friendly products and production methods is called ________.

Answer 

consumerism

recycling

ethical awareness

green marketing

Question 4 

At the federal level, the _________________ investigates suspicions of unethical or illegal behavior by publicly traded firms. 

Answer 

SEC

EEOC

FDA

OSHA

Question 5 

Individuals who focus only on their own interests when making decisions are at the ________ stage of ethical development.

Answer 

preconventional

conventional    

postconventional

concentrations

Question 6 

Ethical __________ charges each employee personally to uphold the company’s core values and be willing to base their actions on them.

Answer 

leadership

awareness

action

reasoning

Question 7 

Despite the recession, the ethical climate seems to be ___________.

Answer 

Declining

staying the same

improving

becoming less confusing

Question 8 

When management considers social and economic issues in decision making, the company is practicing ________.

Answer 

business ethics

consumerism

social responsibility

social welfare

Question 9 

Technology, tools, information, and physical facilities for the operation of a business are examples of ________.

Answer 

profits

wages

capital

interest

Question 10 

The human resources of a firm refer to ________.

Answer 

everyone over 18 years of age

everyone who works for the business

full-time employees

top management

Question 11 

By offering a lifetime warranty on its products, Warner Electronics has set itself apart from its competition. This difference is known as Warner Electronics’ ___________.

Answer 

private enterprise system

competitive differentiation

capitalism

natural resources

Question 12 

The factors of production in an economic system are ________.

Answer 

land, rent, capital, and human resources

capital, perseverance, natural resources, and human resources

rent, wages, interest, and profit

natural resources, human resources, capital, and entrepreneurship

Question 13 

When management adheres to a set of standards involving the right and wrong actions arising in the work environment, management is practicing ________.

Answer 

social responsibility

business ethics

social welfare

creativity

Question 14 

Capitalism is founded on ________.

Answer 

the social changes that followed the Industrial Revolution

the idea that 80 percent of the nation’s wealth should be owned by no more than 20 percent of the people

the belief that competition among business firms best serves the needs of society

the idea that the government must own all factors of production

Question 15 

Concentrating on building and promoting products in hopes that enough customers will buy them in order to cover costs and earn acceptable profits is called ________.

Answer 

relationship management

marketing management

a strategic alliance

transaction management

Question 16 

Nurturing customer loyalty by gathering knowledge of customer needs and preferences is an approach known as ________.

Answer 

relationship management

transaction management

a strategic alliance

marketing management

Question 17 

________ provides a running measure of consumer price changes.

Answer 

The Consumer Price Index (CPI)

Devaluation

Per capita income

The Producer Price Index (PPI)

Question 18 

The four different types of market structure in a private enterprise system are ________.

Answer 

pure competition, monopolistic competition, oligopoly, and monopoly

communism, socialism, capitalism, and mixed systems

socialism, oligopoly, monopoly, and pure competition

mixed, socialism, communism, and pure competition

Question 19 

According to a supply curve, ________.

Answer 

as prices rise, quantity of a product supplied falls

as prices fall, quantity of a product supplied increases

as prices rise, the quantity of a product that is supplied also rises

as prices rise, consumers will buy in larger quantities

Question 20 

The willingness and ability of sellers to provide goods and services for sale in a market is referred to as ________.

Answer 

the equilibrium price

demand

microeconomics

supply

Question 21 

During an economic recession, consumer spending ________ and unemployment ________.

Answer 

increases; increases

increases; decreases

decreases; increases

decreases; decreases

Question 22 

________ refers to the willingness and ability of buyers to purchase goods and services.

Answer 

Consumer behavior

Customer preference

Supply

Demand

Question 23 

Entrepreneurs have the most economic freedom in which type of economy?

Answer 

socialism

capitalism

communism

mixed economy

Question 24 

Monopolistic competition has ________.

Answer 

many buyers and sellers, and the sellers have some control over price

many buyers and sellers, none of whom can control prices

only one seller

only a few sellers

Question 25 

The three major types of economic systems are ________.

Answer 

capitalism, oligopoly, and planned economies

capitalism, pure competition, and planned economies

capitalism, monopoly, and mixed economies

capitalism, planned economies, and mixed economies