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Business is the activity of making one’s living or making money by producing or buying and selling products (goods and services). Simply put, it is “any activity or enterprise entered into for profit. It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to General Motors.”The term is also often used colloquially (but not by lawyers or public officials) to refer to a company, but this article will deal with top 15 examination question and answer on business for business students.
1.Question:
What does ‘indirect signature required’ mean?
Answer :
Indirect signature required is a delivery option for occasions where you are unable to sign for your own delivery package. For example, someone else in your home (e.g., the delivery address) could sign for the package on your behalf. This is what makes it ‘indirect’.
2.Question:
How does Social Darwinism apply to business?
Answer:
Social Darwinism applies to business by emphasizing that successful businesses, making the most money due to their ideas, processes, or products, should be allowed to take over as much of the industry as possible. By contrast, Social Darwinism holds that businesses that fail deserve to fail, as they are not flexible, creative, or important enough to deserve survival. This position is held by capitalist and pro-business advocates who argue against government intervention in business, such as corporate welfare or anti-monopoly positions, claiming that the economy runs at maximum efficiency when companies are given the greatest amount of freedom.
3.Question:
Define resignation in the context of business.
Answer :
A resignation is an act of giving up a current position or office. It is considered a voluntary termination. When an employee resigns, they leave the post during their term with a minimum of two weeks’ notice.
It is accompanied by a resignation letter, which acts as an official notice to leave the company and is given to the employer for a future reference. Often, resignations are accompanied with reasons like better opportunities, undesirable work environment in the current company and conflicted incidents with employee’s work life.
4.Question:
What type of business did Martha Stewart start in 1970?
Answer :
Martha Stewart’s career began in 1970 with her own catering business. She had previously worked in finance but left that behind after deciding to master French cooking. Her catering company grew in reputation, and by 1980 Martha Stewart, Inc. was a million dollar business with many famous clients.
5.Question:
What is the meaning of interstate commerce?
Answer :
Interstate commerce refers to the commerce between states. The word ‘Inter’ refers to between and is not be confused with ‘Intra’ meaning within. For example, customers in state 1 buying from a firm in state 2 is an example of interstate commerce.
6.Question:
Suppose Simone earns $600 per week working as a jewelry appraiser for Classy’s Jewelry Store. She uses $8 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Rajiv $325 per week to wash cars. Rajiv uses $150 to purchase a necklace from Classy’s Jewelry Store.
Identify whether each of the events in this scenario occurs in the market for factors of production or the market for goods and services.
Answer :
In the market for factors of production, households (people) are the suppliers of inputs that firms use to produce goods and services. Specifically, households supply the land, labor, and capital firms needed in exchange for payment. In the market for goods and services, firm production is purchased by the households. In short, firms are the suppliers in the market for goods and services, and households are the buyers.
Let us break the problem into the following transactions:
1. Classy’s Jewelry Store pays Simone $600 per week for her services.
2. Simone pays $8 to get her car washed at Spotless Car Wash.
3. Spotless Car Wash pays Rajiv $325 per week for his services.
4. Rajiv purchases a necklace for $150 from Classy’s Jewelry Store.
Using the explanation, we can see that (1) and (3) are transactions that would take place in the market for factors of production. By comparison, (2) and (4) are examples of transactions that would take place in the market for goods and services.
7.Question:
What is the main argument of the Communist Manifesto?
Answer :
A spectre is haunting Europe – the spectre of communism. – The Communist Manifesto
The main argument of the Communist Manifesto is that material forces will make communism inevitable. The Communist Manifesto outlines the history of economic systems and argues that the material conditions of each type inherently leads to its collapse. The manifesto served as the platform of communist and socialist parties in the 19th and 20th centuries.
8.Question:
Socialist countries are sometimes called welfare states because?
Answer :
Socialist countries are sometimes called welfare states because they provide different types of welfare (including but not limited to education, housing, employment, health, and even food) to their citizens. While citizens do not pay for these services directly, as they would in a capitalist economy, the costs are paid for by much higher levels of taxation. The term ‘welfare state’ is used both negatively and positively; it can be a criticism of high government spending, or reflect positively on a government committed to providing a higher quality of life.
9.Question::
What is a synonym for economic?
Answer :
There are many business-related or financial synonyms for economic that include fiscal, monetary, budgetary, and commercial. Some commonly used collocations with the word economic are the economic downturn, economic policy, or economic development.
10.Question:
The invention of the assembly line made automobiles do what?
Answer :
The invention of the assembly line in the automobile industry, made it so that where it once took about half a day to build the car, it would only take about two hours. In other words, Henry’s Ford’s application of the division of labor and technological and mechanical advantage significantly sped up the pace at which a new automobile could be built.
11.Question:
1. A firm has a total cost function SC(q)=3q^3-42q^2+200q+800
b) Calculate the profit if q=0 then find the profit-maximizing quantity and output in the short run for the prices of 53 and 20. Do you find the profit-maximizing q the same way as in part a) when the price was 260? Why or why not?
Answer :
If q = 0 solve for SC(0)
SC(0) = 800
The total costs are 800. At a quantity of 0 the total revenue is 0 so there is no profit only a loss of 800.
Solve for Marginal Cost
MC = 9q^2 – 84q + 200
Total revenue = P * Q = 53*Q
MR = 53
set MR = MC
53 = 9q^2 – 84q + 200
0 = 9q^2 – 84q + 147
q = 7/3 or q = 7
MR = 20
Set MR = MC
20 = 9q^2 – 84q + 200
q = 10/3 or q = 6
Yes, when price is 260 the quantity has an ambiguity point and could possibly be more than one quantity at both prices.
12.Question:
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The table above indicates the demand schedule for four types of consumers. Suppose there are 8,000 consumers, evenly divided between the four types of customers above (A-D). The quantity demanded at a price of $7 is:
a. 42,000
b. 58,000
c. 60,000
d. 40,000
Answer :
The answer is D. If there are 8,000 consumers, and they are divided evenly between the four types of customers, then there are 2,000 customers per category. At a price of $7, each customer demands a different amount. The total amount demanded is equal to:
3 × 2,000 + 4 × 2,000 + 7 × 2,000 + 6 × 2,000 = 6,000 + 8,000 + 14,000 + 12,000 = 40,000
13.Question:
2. Profit maximization of a seller in a monopolistically competitive market.
Consider a store that produces bagels in a monopolistically competitive market. The following graph shows its demand curve (Demand), marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Assume that the company is operating in the short run.
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a. The profit-maximizing level of output is _?_ bagels per day at a price of _?_ each.
b. At the profit-maximizing out and price, the store’s profit equals _?.
c. Given the profit-maximizing choice of output and price, the store is making _? profit, which means that there are _?_ stores in the industry relative to the long-run equilibrium.
Answer:
The profit-maximizing level of output is 800 bagels per day at a price of $2.50 each. At the profit-maximizing output and price, the store’s profit equals (2.5 – 2.25) * 800 = 200. Given the profit-maximizing choice of output and price, the store is making an economic profit. Which means that there are fewer stores in the industry relative to the long-run equilibrium. The profit-maximizing quantity is the quantity where MR=MC. The profit-maximizing price is the price of the demand curve where the output is the same as MR=MC. The profits are equal to the difference between ATC price and the price of the demand curve at the same output multiplied by the output at MR=MC. If ATC is less than the demand curve the store is making an economic profit. In the long-run, a monopolistic competitive firm produces at MC=ATC=D because there is an entry in the market. Since there is a future entry into the market there are fewer firms in the market now than in the long-run.
14.Question:
At a price of $200, a cellphone company manufactures 300,000 units. At a price of $150, the company produces 200,000 phones. What is the price elasticity of supply? Is it elastic or inelastic?
Answer :
Q=QuantityP=Price△=‘change in’Avg=AverageQ=QuantityP=Price△=’change in’Avg=Average
Price elasticity of supply (PES)=percentage change in quantity supplied percentage change in price=ΔQsQAvg×100ΔPPAvg×100Price elasticity of supply (PES)=percentage change in quantity suppliedpercentage change in price=ΔQsQAvg×100ΔPPAvg×100
Remember, we multiply by 100 to get a percentage.
Let’s break this equation up into sections:
Percentage change in quantity supplied=300000−200000300000+2000002×100=40%Percentage change in quantity supplied=300000−200000300000+2000002×100=40%
Percentage change in price=200−150200+1502×100=28,57%Percentage change in price=200−150200+1502×100=28,57%
Therefore,
Price elasticity of supply=40%28,57%=1,4.Price elasticity of supply=40%28,57%=1,4.
As the PES is > 1, therefore, supply is price elastic, where the percentage change in quantity supplied exceeds the percentage change in price.
15.Question:
Allocative efficiency occurs only at that output where
Answer:
Allocative efficiency occurs only at that output where the price of a product is the same as the marginal cost of the product. The marginal cost of production is the increase or decrease of production cost based on output. Therefore, the equality of marginal cost and product price determines an optimal level that can be a factor of perfect competition (where every business/product has the scope to compete).
