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Business and economics quiz Flashcards | StudBud
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Business and economics quiz
Business and economics quiz
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Answers
1
Which of the following is an example of a fixed cost?
Monthly rent for an office
Employee bonuses
Raw materials for production
Electricity bill
2
What is the break-even point in business?
When revenue equals costs
When the business takes a loan
When a company closes down
When profits are highest
3
Which economic system is based on supply and demand with minimal government interference?
Command economy
Market economy
Mixed economy
Traditional economy
4
Which of the following is a disadvantage of starting your own business?
No need for customers
Guaranteed high salary
No work stress
Financial risk
5
What is the purpose of a business plan?
To reduce employee salaries
To determine taxes owed to the government
To avoid competition
To set goals and strategies for a business
6
What is a monopoly?
A company that only sells one product
A company that dominates the market
A business that competes with many others
A type of government tax
7
What is the main benefit of competition in a market economy?
It forces businesses to close
It reduces customer choices
It creates government control over businesses
It encourages innovation and better prices
8
What does GDP measure?
The number of businesses in a country
The country’s total production of goods and services
The amount of money people have in savings
The government’s spending
9
What is the purpose of a business budget?
To plan income and expenses
To avoid making financial decisions
To increase taxes
To eliminate all spending
10
Which of these is an example of an opportunity cost?
Getting a discount on a product
Taking a loan from the bank
Paying for groceries at the store
Buying a laptop instead of a smartphone
11
What is the role of an entrepreneur?
To start and run a business
To work as an employee
To manage government policies
To invest only in large corporations
12
Why do businesses invest in advertising?
To increase sales and brand awareness
To lose money
To test new products
To comply with legal requirements
13
What is the primary goal of a business?
To reduce competition
To create jobs
To follow government rules
To maximize profits
14
What does inflation mean?
The stock market crashes
Prices of goods and services increase over time
The government prints more money
Wages decrease
15
Why do companies conduct market research?
To increase prices randomly
To understand consumer needs and trends
To avoid hiring employees
To reduce production completely
16
What is the best way to reduce business risk?
Investing all money in one project
Diversifying investments
Ignoring competitors
Reducing production costs only
17
Which financial statement shows a company’s profits and losses?
Income statement
Cash flow statement
Balance sheet
Annual report
18
What is a key advantage of a sole proprietorship?
Full control over business decisions
Easy access to investors
No responsibility for losses
Limited financial risk
19
What does diversification mean in investing?
Avoiding risk completely
Investing only in real estate
Putting all money in one stock
Spreading investments across different assets
20
What is an example of a scarce resource?
WATER
OIL
SUNLIGHT
AIR
