FBLA International Business Practice Questions 2026-27 (Global Trade, Economic Systems, B…
Practice questions with explanations for FBLA International Business (2026-27). 174 multiple-choice and true/false questions covering global trade, fundamental economic concepts, nature of business, economic systems, impact of government, and business law.
Questions
Which of the following is an example of an economic good rather than a service?
- A pair of running shoes
- A haircut
- A tax preparation appointment
- A guided city tour
A service differs from a good mainly because a service is:
- Intangible
- Always cheaper
- Produced only by governments
- Unaffected by demand
Which characteristic of services means they cannot be stored in inventory for later sale?
- Perishability
- Tangibility
- Durability
- Standardization
The four categories of economic resources (factors of production) are land, labor, capital, and:
- Entrepreneurship
- Money
- Consumers
- Government regulation
In economics, a factory's machinery and tools are classified as which economic resource?
- Capital goods
- Land
- Labor
- Consumer goods
Crude oil, timber, and fresh water are examples of which factor of production?
- Land
- Capital
- Labor
- Entrepreneurship
The basic economic problem that every society faces is:
- Scarcity
- Inflation
- Unemployment
- Trade deficits
The value of the next best alternative given up when making a choice is called:
- Opportunity cost
- Sunk cost
- Marginal revenue
- Fixed cost
A country that can produce a good at a lower opportunity cost than another country has a(n):
- Comparative advantage
- Absolute advantage
- Trade surplus
- Monopoly position
A country that can produce more of a good than another country using the same resources has a(n):
- Absolute advantage
- Comparative advantage
- Balance of trade
- Economy of scale
Changing raw cotton into a finished T-shirt creates which type of economic utility?
- Form utility
- Place utility
- Time utility
- Possession utility
Shipping products from a warehouse in China to stores in Atlanta creates:
- Place utility
- Form utility
- Time utility
- Information utility
A store that stocks snow shovels before the first winter storm is creating:
- Time utility
- Form utility
- Possession utility
- Place utility
Offering financing so customers can take ownership of a car creates:
- Possession utility
- Form utility
- Time utility
- Place utility
According to the law of demand, when the price of a product rises, the quantity demanded:
- Falls, all else being equal
- Rises, all else being equal
- Stays exactly the same
- Becomes perfectly elastic
According to the law of supply, as the price of a product rises, producers will generally:
- Offer more of the product for sale
- Offer less of the product for sale
- Stop producing the product
- Lower their costs immediately
The price at which quantity supplied equals quantity demanded is called the:
- Equilibrium price
- Price ceiling
- Price floor
- Reservation price
If the market price is set below equilibrium, the result is usually a:
- Shortage
- Surplus
- Recession
- Trade surplus
If the market price is above equilibrium, the result is usually a:
- Surplus
- Shortage
- Price ceiling
- Rise in demand
A government-imposed maximum legal price, such as rent control, is called a:
- Price ceiling
- Price floor
- Tariff
- Subsidy
A minimum wage law is an example of a:
- Price floor
- Price ceiling
- Quota
- Embargo
Which event would most likely shift the demand curve for electric cars to the right?
- Gasoline prices rise sharply
- Electric car prices rise
- Battery production costs increase
- Consumer incomes fall
Demand is considered price elastic when:
- A small price change causes a large change in quantity demanded
- Quantity demanded barely responds to even large price changes
- Price and quantity move in the same direction
- Supply cannot change in the short run
Which product is most likely to have inelastic demand?
- Insulin
- Designer sunglasses
- A specific brand of soda
- Restaurant meals
Goods that are commonly used together, such as printers and ink cartridges, are called:
- Complementary goods
- Substitute goods
- Inferior goods
- Public goods
A change in the price of a good itself causes:
- A movement along the demand curve
- A shift of the demand curve
- A shift of the supply curve
- No change in quantity demanded
Which function of prices helps allocate scarce resources to the uses buyers value most?
- Prices signal buyers and sellers
- Prices eliminate scarcity
- Prices guarantee equal outcomes
- Prices are set by central planners
A market is best defined as:
- Any setting where buyers and sellers exchange
- Only a physical building where goods are bought and sold
- A government agency that sets prices
- A list of a company's competitors
Gross Domestic Product (GDP) measures:
- The total market value of final goods and services produced within a country in a year
- The total value of all goods and services a country's citizens buy from foreign producers in a year
- The amount of money a government spends
- The average income of a country's citizens
Inflation is best described as:
- A general rise in the price level over time
- A decline in the number of jobs
- A rise in a country's exports
- An increase in the value of the currency
Microeconomics studies the economy as a whole, including national unemployment and inflation.
The primary role of business in society is to:
- Satisfy customer needs and wants
- Collect taxes and administer public programs for the government
- Eliminate competition in the market
- Set prices for the whole economy
Which business activity is responsible for creating goods and services?
- Production
- Marketing
- Finance
- Human resources
Which business function involves obtaining and managing money for the firm?
- Finance
- Production
- Marketing
- Management
The business function of planning, organizing, staffing, leading, and controlling is:
- Management
- Marketing
- Accounting
- Production
A company that owns and operates facilities in more than one country is a:
- Multinational corporation
- Sole proprietorship
- Domestic cooperative
- Franchisee
The 'PEST' factors that affect the business environment are political, economic, social, and:
- Technological
- Personal
- Promotional
- Physical
Which of the following is an internal factor in a business's environment?
- Employee skills
- A new trade agreement
- Rising interest rates
- A competitor's price cut
In a SWOT analysis, a new competitor entering the market is classified as a(n):
- Threat
- Strength
- Weakness
- Opportunity
Business ethics refers to:
- Moral principles that guide decisions and behavior in business
- Only the specific laws passed by Congress to regulate interstate trade
- Rules for calculating corporate taxes
- Methods for increasing market share
A company that voluntarily reduces pollution and supports community programs is practicing:
- Corporate social responsibility
- Protectionism
- Dumping
- Vertical integration of its supply chain
A written document that states a company's ethical standards for employees is called a:
- Code of ethics
- Mission statement
- Bill of lading
- Letter of credit
Stakeholders of a business include:
- Employees, customers, suppliers, owners, and the community
- Only the shareholders who hold voting stock in the company
- Only the company's managers
- Only government regulators
An employee who reports illegal or unethical company practices to authorities is called a:
- Whistleblower
- Lobbyist
- Arbitrator
- Free rider
Which situation is the clearest example of a conflict of interest?
- A buyer awards a contract to her brother's firm
- A firm lowers prices to compete
- A manager hires the most qualified applicant after interviews
- A company enters a new foreign market
A business that adapts its products to meet the tastes of local consumers in each country is using:
- Localization
- Standardization
- Dumping
- Countertrade
McDonald's offering a McAloo Tikki burger in India instead of beef burgers is an example of:
- Product adaptation
- Product standardization
- Price discrimination
- Vertical integration
The phrase 'think global, act local' describes which strategy?
- Glocalization
- Isolationism
- Protectionism
- Mercantilism
Outsourcing is best defined as:
- Hiring an outside firm to do work once done in-house
- Selling a company's shares of stock to investors located in other countries
- Moving company headquarters to a new state
- Producing all inputs within the company
Moving a business process to another country, often to reduce costs, is called:
- Offshoring
- Insourcing
- Reshoring
- Franchising