Marketing Principles Midterm Practice 2
1.
Which of the following is not one of the three basic economic questions? a.
What should we produce? b. How much should it cost? c. How should we produce it? d. Who should get the products?
2.
The period of the business cycle where there are more jobs and greater production in the economy is referred to as__________. a.
depression b. recession c. contraction d. expansion
3.
Which business management process measures performance, evaluates results, and takes action to improve the business? a.
Organizing b. Controlling c. Leading d. Planning
4.
What is the main reason individuals and nations must make economic choices? a.
It would be greedy to take everything. b.
They lack a clear economic plan. c.
There are not enough resources to meet all of the needs and wants. d.
Making choices makes people and nations stronger.
5.
Which function of management makes computers from plastic and metal? a.
Human Resources b. Operations c. Marketing d. Management
6.
An economic resource may be used__________. a.
at least twice b. only once c. endlessly d. more than twice
7.
What happens to supply when prices rise? a.
Supply falls. b. Supply stays the same. c. Supply rises. d. none of these
8.
An advantage of a partnership is a.
you have limited liability. b.
you have unlimited liability c.
you keep all of the profit earned by the business. d.
it is inexpensive to form with few government regulations.
9.
What happens to price when demand is low, but supply is high? a.
Prices rise. b. Prices fall. c. Prices stay the same. d. none of these
10.
Sales and receipts are examples of__________. a.
Expenses b. Debt c. Revenue d. Interest
11.
Play by the rules, obey laws, do your share, respect authority, stay informed, vote, protect your neighbors, pay your taxes, be charitable, help your community, protect the environment, and conserve resources is the definition of ____________. a.
Responsibility. b. Respect. c. Citizenship. d. Caring
12.
The four main areas of business management are: a.
planning, marketing, researching, and goal setting. b.
planning, organizing, leading, and controlling. c.
setting goals, achieving goals, research, and development. d.
finance, accounting, marketing, and operations.

Marketing Principles Midterm Practice 2
13.
What happens to supply when prices fall? a.
Supply rises. b. Supply falls. c. Supply stays the same. d. none of these.
14.
Mobile marketing is a.
only used by “mom and pop” types of businesses. b.
marketing on a mobile device. c.
becoming a thing of the past. d.
very expensive.
15.
This function of management sets the prices for a new product. a.
Marketing. b. Management c. Human Resources d. Operations
16.
Soil, air, and water are examples of___________. a.
Human resources b. Capital resources c. Property resources d. Natural resources
17.
This function of management recruits, hires, and trains employees. a.
Marketing. b. Management c. Human Resources d. Operations
18.
When a business needs money to expand, it will most likely a.
set up a bank account. b. invest in stocks, bonds, and mutual funds. i.
c. buy insurance. d. take out a loan.
19.
What happens to demand when prices fall? a.
Demand rises. b. Demand falls. c. Demand stays the same. d. none of these.
20.
The right of individuals to decide where to work and what kind of work to do is an example of ______. a.
enterprise. b. market forces c. economic freedom d. a command economy
21.
What happens to demand when prices rise? a.
Demand rises. b. Demand falls. c. Demand stays the same. d. none of these.
22.
Which of the following are the written and unwritten codes of principles and values that govern the decisions and actions within a company? a.
Business Ethics. b. Functions of business c. Corporate Responsibility d. Business Activities
23.
The equation income – (expenses + costs) = profit is used to calculate the a.
Income statement b. Interest statement c. Budget d. Balance Sheet
24.
Why should a business use ethics in their business? a.
It is cheap and easy to make ethical decisions. b.
Ethical practices will motivate employees to do their best. c.
So business owners will learn to use ethics in their own lives. d.
Ethical practices will tend to maximize profit and minimize conflict.
25.
Which of the following is not true about a balance sheet? a.
A balance sheet uses a record of the company’s assets and liabilities to calculate the company’s value. b.
A balance sheet is based on the equation: Assets + Liabilities = Net Worth (Equity) c.
A balance sheet is a financial record of the company’s net worth. d.
A balance sheet has a standard format.

Marketing Principles Midterm Practice 2
26.
The labor force includes__________. a.
Retired people who receive a pension from their last job. b.
children who think they want to work. c.
people who are capable of working and want to work. d.
people who are capable of working but are not currently looking for a job.
27.
Which of the following is not true about an income statement? a.
An income statement can be complicated especially for larger companies. b.
An income statement is a financial record that shows a company’s net worth. c.
An income statement is the same as a profit and loss statement. d.
An income statement shows the revenue, expenses, and profits for a stated time period.
28.
Which business management process communicates and motivates the organization to achieve its goals? a.
Leading b. Controlling c. Planning d. Organizing
29.
What happens to price when demand is high, but supply is low? a.
Price rises. b. Price stays the same. c. Price falls. d. none of these
30.
All of the following are part of the business cycle except a.
Recession b. Recovery c. Depression d. Prosperity
31.
Which business management process defines the mission and goals of the company? a.
Planning b. Controlling c. Organizing d. Leading
32.
Capital can be described as all of the following except a.
Equipment b. Capital goods c. Raw materials d. Financial capital
33.
The business document which shows the profit of a business after all expenses of running the business are paid is called __________. a.
an income statement b. a balance sheet c. a budget d. accounts payable
34.
Which of the following is not part of the basic economic question “How should we produce it??” a.
How much of each product should we produce? b.
Who should produce each type of product? c.
What production technique(s) should be used? d.
How should we use our natural resources?
35.
___________uses a record of a company’s assets and liabilities to calculate the value of a company. a.
A budget b. Accounts Payable c. A balance sheet d. An income statement
36.
Which of the following is not true about the term liabilities? a.
Interest adds to the amount owed on a loan. b.
The most common liabilities are loans and accounts payable. c.
Liabilities include money owed to the business. d.
Debt is another term for liability.

Marketing Principles Midterm Practice 2
37.
Why is competition good for consumers? a.
Competitors try to get more customers by creating clever commercials. b.
Competitors imitate each other. c.
Competitors try to steal each other’s customers. d.
Competitors work hard to meet customers’ needs and improve productivity.
38.
Which of the following is an example of a service? a.
A new car. b. A used cell phone. c. Dry cleaners d. Boys and Girls clubs
39.
Which form of business ownership has limited liability? a.
Corporation b. Partnership c. Not for Profit d. Sole Proprietorship
40.
Which of the following equation is used to determine profit? a.
Profit= Sales – (Expenses + Costs) b.
Profit= Sales + Costs+ Expenses c.
Profit = Sales / Expenses + Costs d.
Profit = Expenses + Costs / Sales
41.
When preparing for an interview, which of the following is important to remember? a.
Be general when asked questions about salary. b.
Send a thank-you for the interview. c.
Practice answering questions with a friend. d.
Write down the interviewer’s information.
42.
A budget is usually based on________ a.
a breakdown of inventory into various accounts. b.
a summary of accounts receivable and cash on hand. c.
an analysis of how the business performed over the past year or two. d.
an overview of the company’s projected earnings
43.
Which of the following is a not for profit business? a.
United Way b. the Atlanta Falcons c. Chic Fil A d. Disney World
44.
This function of management hires and fires employees. a.
Marketing. b. Operations c. Management d. Human Resources
45.
The aim to embrace responsibility for a company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders, and all members of the public sphere is called a.
Social awareness b. business ethics. c. corporate social responsibility d. public relations
46.
The political system in which citizens of the country control the government through voting is ______. a.
Capitalism. b. Free Market. c. Democracy d. Free Enterprise

Marketing Principles Midterm Practice 2
47.
The formula used to calculate profit is” a.
(expenses + costs) – income= profit b.
Income / ( costs + expenses)= profit c.
(income + costs) / expenses = profit d.
Income – (expenses + costs) = profit
48.
Financial service include all of the following except a.
Investments b. Insurance c. Cash d. Loans
49.
Another term for debt is_______. a.
Liability b. Asset c. Expenses d. Budget
50.
Which of the following is the reason that the United States has a mixed market economy? a.
The government owns and operates the major industries. b.
The government controls the labor of the individual. c.
The economy is allowed to succeed or fail without government involvement. d.
The people wanted the government to help keep the economy stable and assist those in need.