Review Quiz On Types Of Business Organization! Trivia
The is the first of 3 quizzes that students can take online to review for the final.
Questions and Answers
- 1.
All of the following are factors of production EXCEPT
- A.
Land
- B.
Labor
- C.
Capital
- D.
Services
Correct Answer
D. ServicesExplanation
Services are not considered a factor of production because they are not tangible resources used in the production process. Factors of production refer to the inputs required to produce goods and services, and they typically include land, labor, and capital. Land refers to natural resources such as land itself, water, minerals, and other raw materials. Labor refers to the physical and mental effort exerted by individuals in the production process. Capital refers to the tools, machinery, buildings, and other physical assets used in production. Services, on the other hand, are intangible activities provided by individuals or businesses to fulfill a specific need or desire.Rate this question:
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- 2.
An entrepreneur doe NOT
- A.
Attempt to start a new business
- B.
Attempts to introduce a new product
- C.
Risks failure for financial gain
- D.
Has absolute control over the resources
Correct Answer
D. Has absolute control over the resourcesExplanation
An entrepreneur does NOT have absolute control over the resources. While entrepreneurs may have some control over the resources they use in their business, they typically do not have complete control. Resources such as capital, labor, and materials are often limited and subject to external factors beyond the entrepreneur's control. Entrepreneurs must often negotiate and make trade-offs to access and utilize resources effectively.Rate this question:
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- 3.
Which of the following is NOT a type of good
- A.
Capital
- B.
Service
- C.
Durable
- D.
Consumer
Correct Answer
B. ServiceExplanation
A service is not a type of good. Goods refer to tangible products that can be bought and sold, whereas services are intangible activities or tasks performed by individuals or businesses for others. While capital, durable, and consumer are all types of goods, service does not fall under this category.Rate this question:
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- 4.
Which of the following is a service?
- A.
Hair spray
- B.
A haircut
- C.
Scissors
- D.
A blow dryer
Correct Answer
B. A haircutExplanation
A service refers to an activity or task that is performed for someone else. In this case, a haircut is considered a service because it involves a professional providing a service to a client by cutting and styling their hair. Hair spray, scissors, and a blow dryer are all products or tools used in the process of providing a haircut, but they are not services themselves.Rate this question:
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- 5.
Which of the following is not an economic question?
- A.
What will it cost ?
- B.
What to produce?
- C.
How to produce it?
- D.
For whom to produce?
Correct Answer
A. What will it cost ?Explanation
The question "what will it cost?" is not an economic question because it pertains to the financial aspect of a decision rather than the allocation of resources or the study of production, consumption, and distribution of goods and services. Economic questions typically revolve around choices related to production, allocation, and distribution of resources, such as "what to produce?", "how to produce it?", and "for whom to produce?".Rate this question:
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- 6.
Which of the following is NOT a type of economy?
- A.
Command
- B.
Democracy
- C.
Traditional
- D.
Market
Correct Answer
B. DemocracyExplanation
Democracy is not a type of economy because it refers to a political system where the power is vested in the people, who exercise it either directly or through elected representatives. An economy, on the other hand, refers to the system of production, distribution, and consumption of goods and services in a society. The other options listed - command, traditional, and market - are all types of economies that represent different ways of organizing and managing economic activities.Rate this question:
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- 7.
All of the following are characteristics of a free enterprise system EXCEPT
- A.
Economic freedom
- B.
Government control
- C.
Voluntary exchange
- D.
Private property
Correct Answer
B. Government controlExplanation
A free enterprise system is characterized by economic freedom, voluntary exchange, and private property. These elements allow individuals and businesses to make their own economic decisions and engage in transactions freely. However, government control is not a characteristic of a free enterprise system. In a free enterprise system, the government's role is limited to ensuring fair competition, protecting property rights, and enforcing contracts. The absence of government control allows for a more competitive and dynamic economy, where businesses have the freedom to innovate and individuals have the opportunity to pursue their own economic interests.Rate this question:
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- 8.
Productivity refers to
- A.
The process of creating goods and services
- B.
The use of the four factors of production
- C.
The efficient use of productive resources
- D.
The specialization of productive inputs
Correct Answer
B. The use of the four factors of productionExplanation
Productivity refers to the use of the four factors of production, which are land, labor, capital, and entrepreneurship. This means efficiently utilizing these resources to create goods and services. The use of these factors in an effective and efficient manner leads to increased productivity, as it maximizes output while minimizing input. Therefore, the given answer accurately describes what productivity refers to.Rate this question:
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- 9.
Which of the following is an example of a good?
- A.
A car
- B.
A tune-up
- C.
A car wash
- D.
An oil exchange
Correct Answer
A. A carExplanation
A car is an example of a good because it is a tangible product that can be bought and sold in the market. It is a physical item that provides utility and satisfies a consumer's need or want. A car can be owned, used, and resold, making it a clear example of a good.Rate this question:
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- 10.
How do consumers exercise their power in the American economy?
- A.
By deciding what to purchase
- B.
By working for business
- C.
By becoming an entrepreneurs
- D.
By saving their money
Correct Answer
A. By deciding what to purchaseExplanation
Consumers exercise their power in the American economy by deciding what to purchase. This is because consumer demand drives the economy and influences businesses to produce goods and services that meet their preferences and needs. When consumers choose to buy certain products or services, they are essentially voting with their wallets and influencing the success or failure of businesses. Therefore, the power of consumers lies in their ability to shape the market through their purchasing decisions.Rate this question:
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- 11.
All of the following are major types of cooperatives EXCEPT
- A.
Consumer
- B.
Government
- C.
Producer
- D.
Service
Correct Answer
B. GovernmentExplanation
Cooperatives are organizations that are owned and operated by their members, who typically have common interests or goals. They are formed to provide goods or services to their members at a lower cost or to improve their members' economic or social well-being. The major types of cooperatives include consumer cooperatives, producer cooperatives, and service cooperatives. Consumer cooperatives are formed to meet the needs of consumers, while producer cooperatives are formed by producers to market and sell their products. Service cooperatives provide services to their members. However, government is not a major type of cooperative as it does not fit the definition of a cooperative being member-owned and operated.Rate this question:
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- 12.
What is the main strength of the corporate form of business organization?
- A.
Ease of raising money
- B.
Ease of establishment
- C.
Ease of management
- D.
Freedom from business income tax
Correct Answer
A. Ease of raising moneyExplanation
The main strength of the corporate form of business organization is the ease of raising money. Unlike other forms of business organization, such as sole proprietorships or partnerships, corporations can issue stocks and bonds to raise capital. This allows corporations to attract investors and access a larger pool of funds, enabling them to finance their operations, expand their business, and invest in new projects. Additionally, the ability to raise money through the sale of securities also provides corporations with greater financial flexibility and stability.Rate this question:
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- 13.
Which is the least common business organization in the United States?
- A.
Sole proprietorship
- B.
Partnership
- C.
Corporation
- D.
Cooperative
Correct Answer
B. PartnershipExplanation
A partnership is the least common business organization in the United States because it involves two or more individuals sharing the ownership and responsibilities of a business. Compared to sole proprietorships, which are the most common form of business organization, partnerships require more coordination and cooperation between partners. Corporations, on the other hand, offer more advantages such as limited liability and easier access to capital, making them a more popular choice for entrepreneurs. Cooperatives, while less common than corporations, still have a larger presence in certain industries such as agriculture and consumer goods.Rate this question:
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- 14.
Which of the following is NOT characteristic of the corporate form of business?
- A.
Proxy
- B.
Unlimited liability
- C.
Limited life
- D.
Board of directors
Correct Answer
C. Limited lifeExplanation
Limited life is not characteristic of the corporate form of business. The corporate form of business allows for perpetual existence, meaning that the corporation can continue to exist even if the owners or shareholders change. This is in contrast to other forms of business, such as sole proprietorships or partnerships, where the business ceases to exist upon the death or departure of the owner(s). Therefore, limited life does not align with the characteristics of the corporate form of business.Rate this question:
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- 15.
Which is NOT a characteristics of Capitalism?
- A.
Closest to the pure-market model
- B.
Individuals own and control almost all factors of production
- C.
Government intervention is limited
- D.
Profits are limited
Correct Answer
D. Profits are limitedExplanation
In capitalism, profits are not limited. One of the main characteristics of capitalism is the pursuit of profit and the ability for individuals and businesses to earn as much profit as they can through market competition. This incentivizes innovation, efficiency, and growth in the economy. Therefore, the statement "profits are limited" contradicts the nature of capitalism.Rate this question:
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- 16.
Adam Smith did NOT
- A.
Attribute economic growth to the Invisible Hand
- B.
Was one of the people to explain how the market operates in a pure economy
- C.
Believed producers must sell the right products for the most profit
- D.
Was the Founder of Socialism
Correct Answer
D. Was the Founder of SocialismExplanation
The given answer is incorrect. Adam Smith was not the founder of socialism. He is actually known as the father of modern economics and capitalism. Smith's famous book, "The Wealth of Nations," introduced the concept of the invisible hand, which refers to the idea that individuals pursuing their self-interest in a free market economy can unintentionally benefit society as a whole. Smith emphasized the importance of free markets, specialization, and division of labor in promoting economic growth.Rate this question:
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- 17.
A PPF curve does not
- A.
Show the possible combinations of two products
- B.
Measure production combinations in terms of opportunity costs
- C.
Assumes that the amount of available resources will change with time
- D.
Assumes that resources and technology are being used most efficiently
Correct Answer
C. Assumes that the amount of available resources will change with timeExplanation
The correct answer is that a PPF curve assumes that the amount of available resources will change with time. This means that the curve takes into account the fact that the quantity and quality of resources may vary over time, impacting the production possibilities of an economy. The PPF curve is a graphical representation of the different combinations of two goods that can be produced given the available resources and technology at a specific point in time. It shows the trade-offs and opportunity costs involved in producing more of one good at the expense of another.Rate this question:
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- 18.
Corporate combinations can increase
- A.
Competition
- B.
Costs
- C.
Efficiency
- D.
Employment
Correct Answer
C. EfficiencyExplanation
Corporate combinations can increase efficiency by allowing companies to streamline their operations, eliminate redundancies, and take advantage of economies of scale. When two or more companies merge or form a strategic partnership, they can pool their resources, share expertise, and optimize their processes. This can lead to improved productivity, reduced costs, and enhanced performance. By leveraging their combined strengths and eliminating inefficiencies, corporate combinations can help companies operate more efficiently and effectively in the market.Rate this question:
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- 19.
What is the term refers to the value of a trade-off?
- A.
Production possibility
- B.
Opportunity costs
- C.
Choice
- D.
Frontier
Correct Answer
B. Opportunity costsExplanation
Opportunity costs refer to the value of a trade-off. When making a choice, one must consider the potential benefits of the chosen option as well as the benefits that could have been gained from the next best alternative. These foregone benefits, or opportunity costs, represent the value of the trade-off. By choosing one option, one gives up the opportunity to benefit from another option, and this value is known as the opportunity cost.Rate this question:
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Mar 21, 2023Quiz Edited by
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May 10, 2010Quiz Created by
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