AnswersIntroduction to Business - EL3501 AEconomic Basics

Introduction Answers

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1
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What is a commodity?

A
Something that producers are unable to sell to consumers.
B
A resource that is available in unlimited quantities.
C
An exchange between a producer and a consumer.
D
Something of value that can be bought, sold, or traded.
2
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Which of the following is an indirect competitor for a company that makes chocolate chip cookies?

A
Another company that makes chocolate chip cookies
B
A company that makes potato chips
C
A company that makes baking pans
D
A company that makes brownies
3

In a planned economy, prices of commodities are controlled by _________.

A
Supply and demand
B
Producers and consumers
C
The government
D
Private enterprises
4

What is likely to happen if the price of a product goes up?

A
The supply is likely to increase.
B
The supply is likely to decrease.
C
The demand is likely to cause scarcity.
D
The demand is likely to increase.
5

Which of the following is a sign of a strong economy?

A
An increase in GDP
B
A shrinking economy
C
An increase in unemployment
D
A decrease in spending power
6

Which of the following commodities is a good?

A
A swimming lesson
B
A desk
C
House cleaning
D
Dog walking
7

A producer is _____________.

A
someone who makes a commodity available for sale or exchange
B
someone who buys or trades in order to receive a commodity
C
someone who is in the market for a commodity
D
someone who receives a commodity from a business
8

Which two factors and their interaction regulate the market economy?

A
Goods and services
B
Producers and consumers
C
Product-based and service-based businesses
D
Public and private sectors
9

If your company uses a nonprice competition strategy, what should you focus on?

A
Lower prices
B
Differentiation
C
Create direct competitors
D
Partner with the public sector
10

As a factor of production, how is capital created?

A
By adding land to entrepreneurship.
B
By adding human labor to land.
C
By removing land from services.
D
By using labor to create services.

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