Question 1

Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable.

Accepted Answer

This is an accurate definition of risk in entrepreneurship.

Question 2

Profits of a business include the salaries paid to its employees.

Accepted Answer

False

Question 3

Businesses provide goods, jobs, and services to others.

Accepted Answer

Businesses exist to serve the needs of their customers by providing goods and services, and in doing so they create jobs and contribute to the economy.

Question 4

Businesses seek to earn a profit by providing goods and services to others.

Accepted Answer

This statement is true. Businesses exist to provide goods and services to consumers in exchange for money, with the goal of earning a profit.

Question 5

Since all businesses make a profit, starting a business is not risky.

Accepted Answer

This statement is false. Not all businesses make a profit and starting a business carries inherent risks such as market competition, financial instability, and unpredictability of future earnings.

Question 6

If a business's costs and expenses are greater than its revenue, it will suffer a loss.

Accepted Answer

If a business's costs and expenses (including things like salaries, rent, supplies, and taxes) exceed its revenue (the money it brings in from sales or services), the business will have a negative profit margin and will suffer a loss. It is important for businesses to keep their costs low and their revenue high in order to remain profitable.

Question 7

The term "standard of living" refers to the amount of debt people can incur on a given income.

Accepted Answer

The term "standard of living" refers to the level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area. It is not related to the amount of debt people can incur on a given income.

Question 8

Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses.

Accepted Answer

Profit is the amount of money a business earns after deducting its expenses, including salaries and other costs.

Question 9

An entrepreneur risks time and money to start and manage a business.

Accepted Answer

This statement is true. An entrepreneur invests their time, resources, and finances to start and manage a business, which involves taking on significant risks.

Question 10

Maintaining a high quality of life requires the combined efforts of businesses, nonprofit organizations, and government agencies.

Accepted Answer

Maintaining a high quality of life requires the collaboration and cooperation of businesses, nonprofit organizations, and government agencies. Each entity plays an important role in ensuring the well-being and prosperity of society. Businesses create jobs and stimulate economic growth, nonprofits provide essential services and support for vulnerable populations, and government agencies establish regulations and policies to protect the public and promote social welfare. Together, these sectors can work towards achieving common goals and improving the overall quality of life in their communities.

Question 11

The United States has one of the highest standards of living in the world.

Accepted Answer

The United States has high wages, a high GDP per capita, and access to advanced technology, healthcare, and education, among other factors, which contribute to a high standard of living.

Question 12

Insourcing refers to the practice of global companies setting up design and production facilities in the United States.

Accepted Answer

Insourcing is the practice of bringing in-house, within the same country, services and operations that had been outsourced to other countries. In the context of the United States, insourcing refers to global companies establishing facilities in the country to create jobs and stimulate the economy.

Question 13

Revenue is the total amount of money a business takes in during a given period by selling goods and services.

Accepted Answer

Revenue is the total amount of money a business takes in from the sale of its goods and services.

Question 14

Outsourcing means selling goods and services to people in other countries.

Accepted Answer

Outsourcing refers to hiring people or companies in other countries to perform certain tasks or services, rather than selling goods and services to people in other countries.

Question 15

Health care availability, a clean environment, and good schools all contribute to a high quality of life.

Accepted Answer

These factors are known to contribute to an individual's quality of life.

Question 16

The knowledge and skills learned in business courses are seldom relevant to students who work for nonprofit organizations or volunteer groups.

Accepted Answer

Business courses often cover topics such as budgeting, fundraising, marketing, strategic planning, and leadership, which can be valuable to students working in nonprofit organizations or volunteer groups. Nonprofits often need to manage resources, develop partnerships, and communicate effectively with stakeholders, all of which are skills that can be learned in business courses. While there may be some differences in the language and culture of nonprofit work, the foundational knowledge and skills from business courses can still be applied in these settings.

Question 17

Revenue is the amount a business earns above and beyond what it spends for expenses and costs.

Accepted Answer

The answer of Revenue is the amount a business earns...

Question 18

Stakeholders are all the people who stand to gain or lose by the policies and activities of a business.

Accepted Answer

Stakeholders include not only shareholders, but also employees, suppliers, customers, government and the community in general.

Question 19

Stakeholders include customers, employees, stockholders, suppliers, dealers, bankers, government officials and environmentalists.

Accepted Answer

This is correct. These are all examples of groups or individuals who have an interest in or are affected by a company's operations or decisions, and therefore are considered stakeholders.

Question 20

Outsourcing has caused many complications in many states where jobs have been lost to overseas companies.

Accepted Answer

Outsourcing has led to a loss of jobs in many countries, as companies move their operations to countries where labor costs are cheaper. This has caused complications in many states, where workers have been left without jobs and struggling to make ends meet.

Quiz 1: Taking Risks and Making Profits Within the Dynamic Business Environment