Intro to Business Ch. 1-3 – Flashcards
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A written guide to acceptable and ethical behavior as defined by an organization
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Code of Ethics
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All activities undertaken to protect the right of consumers
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Consumerism
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A law that adopted tough provisions to deter and punish corporate and accounting fraud and corruption
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Sarbanes-Oxley Act of 2002
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In the early 1900s, buyers had no recourse after purchasing a product; buyer beware
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Caveat Emptor
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The application of moral standards to business situations
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Business Ethics
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The recognition that business activities have an impact on society and the consideration of that impact in business decision making
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Social Responsibility
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Informing the press or government officials about unethical practices within one's organization
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Whistleblowing
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Customers expect a firm's products to
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be safe, reliable, and reasonably priced
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The Jackson Springs Coal Mine recently discovered that the mine was contaminating the local drinking water. Cleaning up the mine and the surrounding areas would probably bankrupt the mine, causing the loss of hundreds of local jobs, but doing nothing would endanger the health of the community. The mine faces a serious _____ decision.
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Ethical
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Investors expect management to do all of the following except
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Consult them on ethical decisions
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You are the executive vice president for Cooper Tire, the sixth largest US tire maker. you have the responsibility to locate land for a new distribution center in Mississippi, and you own over 1000 acres of land near one site of Tupelo. This could create for you ____.
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A conflict of interest
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Taking credit for others' ideas or work or not meeting one's commitments in a mutual agreement are ethical issues concerning ____.
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Organizational relationships
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When medical research indicated that a high-fiber diet might help reduce one's risk of colon cancer, a few producers of fiber cereals suggested in their advertisements that if you eat fiber cereal, you will not get cancer. This is an example of _____.
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Unethical communications
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Publisher's Clearing House has a policy that no employees or their family members are eligible to win the big sweepstakes. This policy was likely implemented to ____.
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Avoid an apparent conflict of interest
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All of the following are factors that affect the level of ethical behavior in an organization except
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demographic factors
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At Victoria's Secret, managerial approval is required whenever an employee makes a purchase at the store using an employee discount. Which factor affecting ethical behavior is Victoria's Secret seeking to control?
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Opportunity
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Dell's global outreach programs that help bring technology to underserved communities in various parts of the world is an example of
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Social Responsibility
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T/F A consumer education class is required at all Illinois high schools
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True
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T/F Major advances in consumerism have come through federal legislation.
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True
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T/F The Consumer Bill of Rights was first enacted by Bill Clinton
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False
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The exportation of large quantities of a product as at prices lower than that of the same product in the home market
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Dumping
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A negative (unfavorable) balance of trade where imports exceed exports in value
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Trade Deficit
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A complete halt to trading with a particular nation or in a particular product
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Embargo
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The ability to produce a specific product more efficiently than any other nation
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Comparative Advantage
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A contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation
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Licensing
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Partnerships formed to create competitive advantage on a worldwide basis
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Strategic Alliances
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A partnership formed to achieve a specific goal or to operate for a specific period of time
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Joint Venture
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A tax levied on a particular foreign product entering a country
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Tariff
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Because Saudi Arabia and Australia have ________, Saudi Arabia can specialize in the production of crude oil and petroleum products, and Australia can specialize in the production of wool.
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A comparative advantage
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Purchasing products or materials in other nations and bringing them into one's own country is
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importing
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The UK sells industrial supplies and materials to many nations around the world. The UK thus engages in
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exporting
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General Motors and Ford products produced in the US are found around the world. The US is ______ these automobiles.
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exporting
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If the Land of Mercury had total exports of $150 billion and total imports of $234 billion, it had a ___
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trade deficit
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An unfavorable balance of trade occurs when
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imports are greater than exports
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China is selling school supplies in the US for very low prices, even lower than the prevailing prices in China, and thus making it extremely difficult for American manufacturers to compete. This is referred to as
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dumping
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Taiwanese manufacturers are dumping toys in Germany. What will happen to German toy manufacturers if the German gov't allows this dumping to continue?
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The will be put out of business because they can not compete with the prices
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The US bans Cuban cigars and other Cuban products from entering the US due to political difficulties. This action is called
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embargo
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When the US gov't will NOT allow meat from another country to be marketed in the US, it is imposing an
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embargo
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At present, the US has an embargo against North Korea because
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the two countries have extremely poor political relations
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In addition to political considerations, all of the following are reasons for trade restrictions EXCEPT
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(All of the following are reasons for trade restrictions)
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The US does not sell fighter jets, such as F-16s, to Libya. The rationale for this restriction is most likely to
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Protect national security
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T/F Walmart is considered a multinational company.
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True
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T/F Texas exports more merchandise than any other US state
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True
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T/F As of August 2012, the US has a trade surplus of $44.2 billion
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False
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T/F The US imports more goods from Japan than any other country
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False
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The total amount the federal government owes
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National Debt
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The constant shifting of strategies and tactics to reshape the business and take competitors by surprise
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Perpetual Innovation
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An index that measures prices that producers receive for their finished goods
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PPI (Producer Price Index)
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The separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals
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Specialization
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Individuals are free to decide what to produce, how to produce it, and at what price to sell it
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Free Enterprise
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The study of how wealth is created and distributed
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Economics
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The state of the economy when there is a severe, extended recession and a decline in business activity
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Depression
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The total value of all goods and services produced within a country during a one-year period
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GDP (Gross Domestic Product)
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What remains after all business expenses have been deducted from sales revenue
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Profit
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The average level of output per worker per hour
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Productivity Index
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A person who risks his or her time, effort, or money to start and operate a business
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Entrepreneur
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When a business makes a profit by buying products from manufacturers and reselling to customers
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Marketing Intermediary
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A monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
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CPI (Consumer Price Index)
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The state of the economy when there are 2 or more consecutive three-month periods of decline in a country's GDP
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Recession
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A shortfall created when the federal government spends more in a fiscal year than it receives
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Federal Deficit
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All the people who are affected by the policies and decisions made by an organization
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Stakeholders
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The relationship between sales and profit can be written as
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sales revenue - expenses = profit
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Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of
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losing the money he has invested in the corporation and not receiving profits
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The study of an individual's economic decisions would be an example of
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microeconomics
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When economists study the national economy or global economy, they are using a(n) ______ approach.
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macroeconomics
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According to economists, natural resources, labor, capital, and entrepreneurship are called
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factors or production
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Which of the following is not a feature of laissez faire capitalism?
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Guaranteed income
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The US, whose economy exhibits elements of both capitalism and socialism, has what is known as a ____ economy.
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mixed
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According to economists, inflation is
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a general rise in the level of prices
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Which of the following is not one of the four states included in a typical business cycle?
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Repression
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During which phase of the business cycle would a company like GE introduce new products?
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Peak
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Exxon/Mobil and Shell are two of the relatively few sellers in the oil-refining industry. This market situation is referred to as
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oligopoly
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A market or industry with only one seller is referred to as
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a monopoly
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Who is the head of the US Federal Reserve?
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Janet Yellen
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Which of the following is not one of the four resources used by businesses today?
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Governmental
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T/F Most small businesses show a profit after the first fiscal year.
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False
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T/F Adam Smith argued the creation of wealth is properly the concern of private individuals, not the government
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True
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T/F If you were to get a loan from the bank, they would use the current Prime Rate to calculate interest.
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True
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T/F Currently, our economy would be in the Contraction phase of the business cycle.
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False