Question:

Answer: Being socially responsible is considered a resource for a firm.

Question: A firm’s good reputation for quality customer service is categorized as its _____.

capital resources

human resources

financial resources

natural resources

intangible resources

Answer: Intangible Resources

(A firm can have an intangible resource such as a good reputation for quality products or being socially responsible. The goal is to turn the factors of production and)

Question:

Answer: under pure capitalism, there is less government regulation.

(In addition to its human, natural, and financial resources, a firm can have intangible resources such as a good reputation for quality products or being socially responsible.)

Question:

Answer: Individuals have the right to choose what career to pursue.

(In pure capitalism, all economic decisions are made without government intervention. In modified capitalism, the government intervenes and regulates business to some extent.)

Question: An economist analyzes the quantity of goods or services that businesses are willing to sell at different prices at specific times. He is focusing on:

competition.

pure competition.

demand.

supply.

equilibrium.

Answer: Supply

(For a free-enterprise system to work, individuals must have the right to choose what career to pursue, where to live, what goods and services to purchase, and more. Businesses must have the right to choose where to locate, what goods and services to produce, what resources to use in the production process, and so on.)

Question: Critics of supply and demand say the system:

does not distribute resources equally.

does not allow the poor to get rich.

prevents sellers from selling at lower prices.

helps inefficient producers to succeed.

gives the government complete control over production.

Answer: does not distribute resources equally.

(The economist is focusing on supply. Supply is the number of products that businesses are willing to sell at different prices at a specific time. In general, because the potential for profits is higher, businesses are willing to supply more of a good or service at higher prices.)

Question:

Answer: They engage in management activities to help reach their goals.

(For-profit as well as nonprofit organizations engage in management, marketing, and finance activities to help reach their goals. Nonprofit organizations, such as National Public Radio (NPR), Habitat for Humanity, and other charities and social causes, do not have the fundamental purpose of earning profits, although they may provide goods or services and engage in fundraising.)

Question:

Answer: Individuals are free to keep profits and use them as they wish

(In a capitalist economy, individuals are free to keep profits and use them as they wish. The United States, Canada, Japan, and Australia are examples of economic systems based on capitalism.)

Question: Monopolies such as utility companies that supply electricity or water are likely to have prices determined by:

law of supply.

law of demand.

interaction of supply and demand.

equilibrium interaction.

government regulation.

Answer: Government Regulation

(Utility companies that supply electricity, natural gas, and water are monopolies. The government permits such monopolies because the cost of creating the good or supplying the service is so great that new producers cannot compete for sales. Government-granted monopolies are subject to government-regulated prices.)

Question: Which of the following products are most likely to have a market characterized by pure competition?

Medicines

Vacuum cleaners

Agricultural commodities

Soft drinks

Cars

Answer: Agricultural commodities

(Pure competition exists when there are many small businesses selling one standardized product, such as agricultural commodities like wheat, corn, and cotton.)