1.

Under capitalism:

A)

most of the means of production and distribution are privately owned and operated for profit.

B)

the primary function of the government is to distribute wealth more evenly.

C)

utilities, health care, education, and other services are controlled by the government.

D)

markets operate to carry out the decisions made by central planners.

2.

The quantity of a good or service that manufacturers or owners are willing to sell at different prices during a specific time period is known as the:

A)

supply of that product.

B)

demand for that product.

C)

elasticity of that product.

D)

utility of that product.

3.

A typical demand curve shows that:

A)

as people earn more income, they buy more of a good.

B)

as supply increases, the amount purchased decreases.

C)

people tend to buy more of a good than they really want.

D)

people tend to buy more of a good when its price decreases.

4.

__________ is characterized by a large number of firms selling products that appear to be identical.

A)

Oligopoly

B)

Monopolistic competition

C)

Perfect competition

D)

Microeconomic competition

5.

___________ exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.

A)

Perfect competition

B)

Monopolistic competition

C)

Oligopoly

D)

A monopoly

6.

__________ exists when the entire supply of a good is controlled by a single seller.

A)

Perfect competition

B)

Oligopoly

C)

Pure Capitalism

D)

A monopoly

7.

Under socialism:

A)

the basic goal is to make sure that those that create wealth are allowed to keep  that wealth.

B)

a major goal of the government is to reduce the inequality in the distribution of wealth.

C)

a major goal of the government is to create incentives to encourage entrepreneurs to create jobs and economic growth.

D)

the most important goal of the government is to keep tax rates extremely low.

8.

Communism is an economic system in which:

A)

the government and private citizens own equal shares of the economic resources.

B)

all or most of the productive resources are owned by private businesses.

C)

the government makes most of the major economic decisions.

D)

individual consumers make all economic decisions.

9.

A major trend in the world today is that:

A)

free-market economies are moving more toward socialism and socialist economies are moving more toward capitalism.

B)

productivity in the service sector is increasing much more rapidly than productivity in agriculture and manufacturing.

C)

governments in socialist economies are increasing their use of social programs and relying on higher tax rates to finance these programs.

D)

governments in countries with capitalist economies are paying less attention to environmental concerns and issues involving social equality.

10.

The foundation of the U.S. economic system is:

A)

capitalism.

B)

based on the ideas of Thomas Malthus.

C)

described in detail in the U.S. Constitution.

D)

based on the saying, "from each according to ability, to each according to need."

11.

The ___________ is the most common form of business ownership.

A)

partnership.

B)

corporation.

C)

joint venture.

D)

sole proprietorship.

12.

____________ comprise about 20% of all businesses but account for about 87% of all business receipts.

A)

Corporations

B)

Partnerships

C)

Sole proprietorships

D)

Limited liability companies

13.

To many businesspeople, one of the major attractions of a sole proprietorship is:

A)

the ability to obtain additional financial resources.

B)

the protection of limited liability.

C)

an unlimited lifespan.

D)

the chance to be their own boss.

14.

One of the major disadvantages of a sole proprietorship is the:

A)

possibility of disagreements between owners.

B)

unlimited liability the owner has for the debts of the firm.

C)

fact that any income earned by this type of business is taxed twice.

D)

high cost of starting or ending the company.

15.

In a partnership, a(n) __________ partner is an owner who is active in managing the company and has unlimited liability for claims against the firm.

A)

unlimited

B)

limited

C)

general

D)

associate

16.

A partner who invests money in a business, but does not take an active role in management or assume unlimited liability for the firm's losses is known as a(n):

A)

implied partner.

B)

limited partner.

C)

partial partner.

D)

corporate partner.

17.

Compared to a sole proprietorship, which of the following is considered an advantage of a general partnership?

A)

Ability to pool financial resources.

B)

Limited liability for all owners.

C)

Equal division of profits among the owners.

D)

Ease and flexibility in transferring shares of ownership to others.

18.

When entering into a new partnership, the partners should:

A)

avoid putting  their agreement in writing since this would limit the flexibility of the partnership.

B)

put the partnership agreement in writing.

C)

plan to incorporate as soon as possible.

D)

agree to put the first year's profits back into the partnership.

19.

A(n)  ___________________ is a state-chartered legal entity with authority to act and to have liability separate from its owners.

A)

limited partnership

B)

conventional corporation

C)

unlimited partnership

D)

nonprofit organization

20.

An owner of a corporation is known as a(n):

A)

general partner.

B)

limited partner.

C)

director.

D)

stockholder.

21.

The majority of corporations in the U.S. are:

A)

small businesses.

B)

large, multinational organizations.

C)

owned by foreign investors.

D)

classified as S corporations.

22.

Compared to partnerships and sole proprietorships, a major advantage of the C (conventional) corporation as a form of business ownership is that it:

A)

has the ability to raise more money.

B)

is easier and less expensive to form.

C)

qualifies for simplified tax treatment.

D)

creates unlimited liability of owners.

23.

The form of business ownership that usually requires the most detailed record keeping is the:

A)

corporation.

B)

partnership.

C)

sole proprietorship.

D)

limited partnership.

24.

When consumers calculate the value of a product, they:

A)

subtract cost of production from market price.

B)

eliminate all nontangible elements that might affect their perception of the product.

C)

look at the benefits the product provides then subtract the cost.

D)

identify the variable and the fixed components of the product's benefits.

25.

The goal of __________ is to inform and remind people in a target market about specific products, eventually persuading them to purchase the products.

A)

promotion

B)

market research

C)

market segmentation

D)

marketing loyalty

26.

The combination of all the factors that consumers evaluate when deciding whether or not to buy a good or service is called a:

A)

total product offer.

B)

product mix.

C)

product differentiation.

D)

product package.

27.

The purpose of __________ is to create real or perceived product differences.

A)

niche marketing

B)

product differentiation

C)

product mixing

D)

target marketing

28.

Location is very important in marketing of ________ because consumers desire to purchase these goods with a minimum of shopping effort.

A)

unsought goods

B)

shopping goods

C)

specialty goods

D)

convenience goods

29.

Which of the following are products consumers buy after comparing quality, price, and style from a variety of sellers.

A)

Shopping goods

B)

Specialty goods

C)

Convenience goods

D)

Unsought goods

30.

__________ goods appeal to consumers who are willing to make an extra shopping effort to acquire them.

A)

Specialty

B)

Shopping

C)

Convenience

D)

Consumer

31.

________ goods and services represent those products that consumers are unaware of or haven't thought of buying.

A)

Inferior

B)

Convenience

C)

Shopping

D)

Unsought

32.

Pricing is:

A)

one of the 4 P's of the marketing mix.

B)

considered to be a part of promotion.

C)

normally a government regulated variable.

D)

totally based on the cost of products.

33.

Which of the following represents a pricing strategy that establishes a low price in hopes of attracting a great number of customers and attempts to discourage competitors?

A)

Penetration strategy.

B)

Odd pricing strategy.

C)

Skimming strategy.

D)

Price lining strategy.

34.

Those organizations that assist in the movement of goods and services from producer to industrial and consumer users are known as a:

A)

directed marketers.

B)

distributive specialists.

C)

marketing intermediaries.

D)

supplementary marketers.

35.

A _________ is a marketing intermediary that sells to other organizations.

A)

wholesaler

B)

retailer

C)

broker

D)

jobber

36.

A __________ is a marketing intermediary that sells to ultimate consumers.

A)

channel captain

B)

wholesaler

C)

secondary marketer

D)

retailer

37.

A(n) ___________ distribution strategy distributes a product through only a preferred group of retailers in a given area.

A)

intensive

B)

selective

C)

exclusive

D)

restrictive

38.

A(n) ______________ distribution strategy uses only one retail outlet in a given geographic area.

A)

selective

B)

restrictive

C)

exclusive

D)

solitary

39.

The combination of advertising, personal selling, public relations, and sales promotion activities used by an organization represents its:

A)

marketing communications system.

B)

marketing mix.

C)

public relations package.

D)

promotional mix.

40.

_________ refers to any paid, nonpersonal message communicated through various media by organizations who are in some way identified in the message.

A)

Publicity

B)

Promotion

C)

Public relations

D)

Advertising

41.

The best advertising medium to reach a specific target market is:

A)

radio.

B)

newspapers.

C)

television.

D)

direct mail.

42.

TV programs devoted exclusively to promoting goods and services are called:

A)

testimonials.

B)

Infomercials.

C)

interactive TV.

D)

online computer advertising.

43.

________ refers to the face-to-face presentation and promotion of products and services.  This also includes searching for prospects and providing follow-up services.

A)

Word-of-mouth promotion.

B)

Personal selling.

C)

Public relations.

D)

Internal marketing.

44.

________ refers to any information about a product or an organization that is communicated to the public through the media and is not paid for by the sponsor.

A)

A market presentation

B)

Promotion

C)

Public relations

D)

Publicity

45.

Compared to advertising, publicity offers the advantage of greater:

A)

flexibility.

B)

personal appeal.

C)

believability.

D)

message repetition.

46.

The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities, such as trade shows, samples, and contests, is known as:

A)

publicity.

B)

public relations.

C)

every day low prices.

D)

sales promotion.

47.

___________ encourages people to tell other people about goods or services they have enjoyed.

A)

Personal selling

B)

Publicity

C)

A trade show

D)

Word-of-mouth promotion

48.

The free tickets, backstage passes and merchandise firms give to people who agree to hype products through Internet chat rooms are called:

A)

virtual sweeteners.

B)

swag.

C)

chat cache.

D)

cookies.

49.

The strategy of directing advertising and sales promotion toward consumers to stimulate them to request the products from their local retailers is called a:

A)

pull strategy.

B)

segmentation strategy.

C)

push strategy.

D)

product placement strategy.

50.

The use of promotional tools to persuade wholesalers and retailers to stock and sell merchandise represents a:

A)

pull strategy.

B)

segmentation strategy.

C)

push strategy.

D)

product placement strategy.