Test Bank For Business In Action 7th Edition Bovee Thill

Business in Action, 7e (Bovee/Thill)
Chapter 2 Understanding Basic Economics

1) Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.
Answer: TRUE
Explanation: Economics is the study of how a society uses its scarce resources to produce and distribute goods and services to its citizens.
Diff: 1
AACSB: Application of knowledge
Chapter LO: 1
Course LO: Compare and contrast different economic systems
Classification: Concept

2) Macroeconomics studies economic behavior among consumers, businesses, and industries that collectively determine the quantity of goods and services demanded and supplied at different prices.
Answer: FALSE
Explanation: The study of a country's larger economic issues, such as how firms compete, the effect of government policies, and how an economy maintains and allocates its scarce resources, is termed macroeconomics.
Diff: 1
AACSB: Analytical thinking
Chapter LO: 1
Course LO: Compare and contrast different economic systems
Classification: Concept

3) Capital includes land and minerals that a business needs in order to produce goods and services.
Answer: FALSE
Explanation: Capital includes money, computers, machines, tools, and buildings that a business needs in order to produce goods and services.
Diff: 1
AACSB: Application of knowledge
Chapter LO: 1
Course LO: Compare and contrast different economic systems
Classification: Concept

4) Capital is the collective intelligence of an organization.
Answer: FALSE
Explanation: Capital includes money, computers, machines, tools, and buildings that a business needs in order to produce goods and services.
Diff: 1
AACSB: Application of knowledge
Chapter LO: 1
Course LO: Compare and contrast different economic systems
Classification: Concept
5) Scarcity creates competition for resources, and forces trade-offs on the part of every participant in the economy.
Answer: TRUE
Explanation: Scarcity has two