A Friend of Yours Starts His Own Business

question 143

Multiple Choice

A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him

• A) that he's absolutely right, the government doesn't deal with small businesses.
• B) although the government will deal with small businesses, he will never make a profit off a government contract.
• C) that any government, federal, state, or local would laugh at the size of his business.
• D) the government rarely considers new suppliers when making purchasing decisions.
• E) the government buys products from all sizes of business, but there is some red tape.

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Definitions:

Consumer Behavior

The study of how individuals make decisions to spend their resources on consumption-related items.

Marginal Utility

The boost in satisfaction from the consumption of an additional item of a good or service.

Total Utility

The overall satisfaction or pleasure a consumer derives from consuming a certain quantity of goods or services.

Marginal Utility

The extra fulfillment or advantage a person gains by consuming an additional unit of a product or service.