Future Business Leader Achievments (FBLA) Economics Practice Exam

Which of the following is one of the four economic functions of a business firm?

1. Organizing production

2. Maximizing owner satisfaction

3. Minimizing market competition

4. Reducing employee turnover

The correct answer is: Organizing production

Organizing production is a fundamental economic function of a business firm because it refers to the process of coordinating and managing the various resources—such as labor, materials, and capital—that are necessary to produce goods or services. This function ensures that production runs efficiently and effectively, which is crucial for meeting consumer demand and achieving economic goals. Businesses need to develop systems that allocate resources wisely, establish production schedules, and implement quality controls, all of which contribute to optimizing productivity and ultimately profitability. Organizing production not only involves assembling the necessary inputs but also entails making decisions about manufacturing processes, technology use, and workforce management. The other choices, while they may relate to business operations or goals, do not encompass a primary economic function in the same way that organizing production does. For instance, maximizing owner satisfaction relates more to the goals and outcomes of the business rather than a direct economic function. Similarly, minimizing market competition and reducing employee turnover focus on external and internal challenges respectively, rather than the core production functions that drive an organization's economic activities.