Georgia Milestones: Making Business Decisions Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Mark met with four physicians about having surgery on his foot. He has enough money saved to undergo surgery and is able to take off six weeks of paid leave from work. He has an additional two weeks of vacation time, and his mom will stay with him for the first two weeks to help out. Knowing this information, that he is being rational, and that he wants to be free of pain, which alternative should Mark choose?

Question 2 2. Which of the following is the final step in the decision-making process?

Question 3 3. Which of the following BEST describes the importance behind the rational choice theory?

Question 4 4. Jesse decides to leave his job as a programmer with a salary of $70,000 to form his own startup, and he elects not to take a salary in the company's first year. Why would the $70,000 in lost income not be calculated in his company's financial records?

Question 5 5. People who commonly face trade-offs in economics are called:

Page 2

Question 6 6. Which is calculated in economic profit and NOT included while calculating accounting profit?

Question 7 7.

Before starting her business, Judith used to work as a salesperson in a flower shop and earned an annual salary of $30,000.

In the first year of its operation, her business produced a total revenue of $70,000. The various payments made by the business amounted to $35,000. Calculate the economic profit of Judith's business in its first year.

Question 8 8. In a college class of 100 students, the professor asks the students if they would prefer a candy bar or ball-point pen as part of an experiment. 50 students indicate a preference for candy bars. The other 50 students prefer a ball-point pen. He gives out 50 ball-point pens and 50 candy bars randomly to the students. Because the process is random some students receive their preferred item while others do not. According to the theory of rational choice, if students were given the option of trading what would we expect to see in terms of student trading candy bars and ball-point pens?

Question 9 9. What are the four phases of the business cycle?

Question 10 10. What might a peak mean to a production manager for a consumer electronics firm?

Page 3

Question 11 11. From observing people's behavior, economists believe the best theory for why individuals make the economic decisions they do is that they make choices that are in their best self-interest. This theory is known as:

Question 12 12. What are explicit costs?

Question 13 13. What type of decision making uses analytics, facts and a step-by-step process to come to a solution?

Question 14 14. How do implicit costs and explicit costs differ?

Question 15 15. Which of the following indicators would not be a good indicator of the possibility a peak is near?

Page 4

Question 16 16. The theory that people make economic choices based on their own self-interest is called what?

Question 17 17. Which of the following is NOT an explicit cost of a business?

Question 18 18. The aim of economic theory is:

Question 19 19. Understanding a trade-off involves:

Question 20 20.

Read the scenario and identify which decision-making strategy was MOST likely utilized:

A project manager must decide by the end of the day which colleague to move to an important project with a looming deadline. One candidate is still in training, but has proven to be a quick study who brings fresh ideas to the project. The second candidate has worked at the company for ten years and is a dedicated and knowledgeable employee. The project manager chooses the new hire for the project.

Page 5

Question 21 21. Determining the feasibility, while assessing the costs and benefits comes into play during which phase of the decision-making process?

Question 22 22. If Mark is considering having an experimental surgery on his foot to alleviate the pain he has while walking, which of the following is NOT part of the relevant information that he should collect in order to make an informed decision?

Question 23 23. All of the following are alternative terms for implicit costs, EXCEPT:

Question 24 24. Which of the following regarding accounting and economic profits of a single business is true?

Question 25 25. Which of the following is the formula to calculate economic profit?

Page 6

Question 26 26. Which of the following statements is TRUE?

Question 27 27. On average, how often does the U.S. economy experience an economic peak?

Question 28 28. What is the most recommended way for business people to make decisions?

Question 29 29. What are the two umbrella categories of expenses?

Question 30 30.

Read the scenario and identify which decision-making strategy was MOST likely utilized:

A supervisor overhears some members of his team complaining about workplace issues. He decides to take a survey of his employees' attitudes about the workplace. Next, he analyzes the results, discusses the data with his assistant supervisor, and then begins the process to implement changes to some workplace policies.

Georgia Milestones: Making Business Decisions Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Georgia Milestones - Economics/Business/Free Enterprise EOC: Test Prep & Practice  /  Business Courses
Support