question

c

answer

As a factor of production, capital would include a) machines, money, tools, and buildings. b) money, land, labor, and entrepreneurship. c) machines, tools, buildings, and technology. d) an entrepreneur's freedoms.

question

c

answer

Which of the following statements is most consistent with the marketing concept? a) The primary purpose of a business is to dominate its market. b) Consumers always care more about price than about quality. c) All aspects of a business organization should focus on the needs of the customer. d) Controlling the market for natural resources can give a firm a huge competitive advantage.

question

True

answer

A core goal for successful businesses is to deliver value to customers while generating long-term profits.

question

True

answer

Successful firms generate long-term profits by delivering unsurpassed value to their customers.

question

True

answer

Businesses focus on consumer needs and long-term profitability.

question

True

answer

Entrepenurs embrace change and take reasonable risks.

question

True

answer

Capital, as a factor of production, includes machines, tools, buildings, information, and technology.

question

True

answer

The four factors of production are natural resources, capital, human resources, and entrepreneurship.

question

True

answer

Demographic factors that affect business include population size and density, age, gender, race, education, and income.

question

True

answer

Diversity, the aging population, rising worker expectations, ethics, and social responsibility are all challenges for human resource managers in recruiting, training, and managing employees.

question

B

answer

The four major categories of factors of production are a) technology, law, capital, and ingenuity. b) natural resources, capital, human resources, and entrepreneurship. c) economic power, money, technology, and agriculture. d) knowledge, human resources, capital, and technology.

question

B

answer

India and the Philippines consistently attract sizeable amounts of foreign investment for services performed in the domestic market and sold internationally. The main reason for this foreign interest is that a) these countries have outstanding infrastructure, with world class transportation and power supply facilities. b) these nations have large numbers of highly educated workers who are paid much less than American workers. c) The dollar's value is higher in the Asian market than in the American market. d) the average income of consumers in these nations is among the highest in the world, so these markets have a lot of potential.

question

A

answer

When comparing a nation's balance of trade with its balance of payments, it is important to realize that a) the balance of payments includes the balance of trade, but it also includes other financial flows such as foreign borrowing and lending. b) the two concepts should yield the same value, because the value of goods traded must equal the total payments made to buy those goods. c) these two concepts are totally unrelated, so such a comparison is not really meaningful. d) the balance of trade only includes exports and imports of goods, while the balance of payments includes exports and imports of both goods and services.

question

C

answer

Companies that do business with customers in developing nations that lack access to hard currencies are likely to make extensive use of a) goodwill payment schedules. b) foreign exchange. c) countertrading. d) accumulated bank reserves.

question

A

answer

Foreign _____ is contracting with foreign suppliers to produce products usually at a fraction of the cost of domestic production a) outsourcing b) importing c) direct investment d) market manipulation

question

A

answer

Foreign licensing involves _____ risk and _____ control than foreign direct investment. a) lower; less b) higher; more c) lower; more d) more; less

question

A

answer

Honda's construction of automobile assembly plants in the United States is an example of foreign _____ for Honda Corporation. a) direct investment b) outsourcing c) importing d) licensing

question

C

answer

Key infrastructure challenges to consider when entering a foreign market include: a) language, attitudes, and values. b) laws and regulations the government creates. c) transportation, communication, and energy. d) civil war, riots, and economic viability.

question

B

answer

Due to the rising prices of gasoline, Harleen is looking for a car with better gas mileage. She hopes to purchase the newest Preo, an imported car using hybrid technology. But Preos are hard to find, because the government in Harleen's country has limited the number of them that can be imported each year. Harleen is witnessing the impact of a(n) a) tariff. b) quota. c) voluntary export restriction. d) embargo.

question

C

answer

The _____ influences the global economy by providing technical advice to the governments of developing countries for projects in a range of areas including infrastructure and education. a) International Monetary Fund b) World Trade Organization c) World Bank d) General Agreement on Tariffs and Trade

question

B

answer

Trading blocs are groups of countries a) that are freely trading. b) that have reduced or eliminated tariffs allowing for a free flow of goods among member nations. c) using a common currency in order to borrow from member nations. d) prohibiting trade with nonmember nations.

question

A

answer

A nation's legal system provides businesses with _____ for examining ethical standards. a) a starting point b) very little useful guidance c) comprehensive guidelines d) a way to distinguish between ethical issues and nonethical issues

question

D

answer

The function of laws in the United States is to establish and enforce _____ that apply to everyone in society. a) social norms b) financial norms c) advanced standards d) ethical norms

question

D

answer

The goal of universal ethical standards is to a) demonstrate to employees that most ethical dilemmas fall neatly into a handful of categories. b) allow the United States to establish legal standards that are applicable to all firms. c) help people base ethical decisions on relative standards. d) provide guidelines that apply to everyone across a broad spectrum of situations.

question

C

answer

The primary duty of socially responsible companies to their investors is to a) consistently pursue the maximum possible profit each and every period. b) expand the business to achieve a monopoly position. c) seek to generate long-term profits while meeting responsibilities to all stakeholders. d) meet its legal requirements to accurately report on its financial performance.

question

B

answer

The core goal of human resource management is to a) minimize labor costs. b) get the highest possible return on investment from human resources. c) balance the internal and external recruitment of employees to ensure the best mix of human resources. d) satisfy all federal regulatory requirements that cover workforce issues.

question

A

answer

The goal of human resource management is to a) develop the company's human capital. b) create new products. c) develop plans for the reduction of the firms overall production cost. d) redesign workflow to help maximize productivity.

question

C

answer

From an HR perspective, which choice describes the current climate in regard to layoffs and outsourcing? a) HR should do all it can to ensure employees are well compensated for their work. High pay is commensurate with good work. b) HR should do all it can to foster functional interpersonal and interdepartmental communication among employees. c) HR's responsibility is to manage what it has been given—and that is a situation in which employees feel increasingly at risk at the hand of their employers. d) HR should be sure to disseminate encouraging information to employees as often as possible, even if it's speculative.

question

D

answer

The practice of outsourcing a) currently only affects workers in low-skill, low-wage jobs. b) has failed to catch on in the United States as much as it has in Europe and Asia. c) only occurs when a firm contracts with foreign producers. d) has begun to impact high-tech, high-pay positions as well as low-end jobs.

question

B

answer

According to a report in Fast Company, a major reason why many HR managers struggle to add value to their firm is that they a) focus on people rather than on revenue-earning products. b) lack sufficient business acumen, including strategic skills. c) are in staff positions rather than in line positions. d) don't have well-honed communications skills.

question

C

answer

In order to gain the respect of other managers within their organizations, HR managers must: a) focus more of their efforts on the legal aspects of their company's human resource problems. b) learn to trust their own judgment and become more assertive. c) become knowledgeable about their company's broad goals, key customers, and competition. d) concentrate on the nonmonetary aspects of the organization that other managers tend to ignore.

question

C

answer

Temporary full-time workers, on-call workers, and contract agency workers are all examples of: a) part-time employees. b) content workers. c) contingent workers. d) short-term employees.

question

D

answer

Contingent workers are likely to be most important to firms with a) a need to fill highly technical jobs. b) prospects for steady, long-term growth that results in the need to build a highly trained and committed workforce. c) stable markets that don't expect to grow significantly over the next few years. d) highly seasonal demand for their goods and services.

question

A

answer

To reduce costs, companies often use _____ to fill in workload gaps during high production times. a) contingent workers b) disabled workers c) young workers d) women workers

question

D

answer

Kalrye Manufacturing found that putting inexperienced workers on an assembly line slows down other workers and results in a significant increase in errors and a decline in quality. Which of the following techniques could Kalrye use to give new workers experience using real assembly line machinery without having them actually work on a real assembly line? a) apprenticeships. b) virtual reality modules. c) latch-key training. d) vestibule training.

question

D

answer

As an HR manager for a high-tech firm that needs to attract the best and brightest talent, Lacey will want to consider all of the following strategies EXCEPT a) what competing firms pay for similar professionals. b) how much each professional in these capacities contributes to the bottom line. c) how much is a reasonable compensation for that position, in the location where the professional would live and work. d) whether employees are interested in participating in the medicare and social security programs.

question

A

answer

_____ are a form of compensation in which payment is based on a percentage of sales. a) Commissions b) Salaries c) Option plans d) Bonuses

question

D

answer

Telecommuting has been shown to a) decrease productivity. b) increase costs. c) increase fast-track career potential. d) increase annual cost savings.

question

D

answer

_____ would appeal to employees who want to have some flexibility in the choice of the benefits they receive. a) Buffet benefits b) Pick-four plans c) Smorgasbord benefit plans d) Cafeteria-style benefits

question

B

answer

Many experts believe employment levels will a) return to pre-recession levels within the next year. b) not return to pre-recession levels for many years. c) continue to increase in relation to people's individual performances. d) increase to more than pre-recession levels within the next two years.

question

C

answer

Title VII of the Civil Rights Act of 1964 created the _____ to enforce the act's provisions. a) Occupational Nondiscrimination Commission b) Fair Labor Practices Agency c) Equal Employment Opportunity Commission d) Title VII Enforcement Board

question

D

answer

Which of the following laws provided the broadest protection against discrimination by employers? a) The Equal Pay Act of 1963 b) The Fair Labor Standards Act of 1938 c) The Labor Management Reporting Act of 1959 d) The Civil Rights Act of 1964

question

B

answer

Affirmative Action refers to a) a policy for making certain that all company employees have opportunity to participate in profit sharing. b) a policy for increasing employment opportunities for minorities. c) a former Supreme Court case where a small company did not support diversity in its hiring practices. d) a policy that promotes the hiring of recent immigrants who are not yet able to communicate in English.

question

A

answer

Which choice best describes some key reasons for starting up your own business? a) Some people just need a good challenge. As an entrepreneur they will find it; along with the independence to meet it however they see fit. b) Being your own boss provides security and is statistically proven in a recent study conducted at Harvard. c) While starting up your own business may actually crowd the schedule a little bit more, this lack of flexibility up front is worth it in the end, for some. d) Most small businesses are taken public in the first five years, netting their entrepreneurial founders huge profits. Just look at Google, Apple, Microsoft, and others.

question

B

answer

In 2010, the overall U.S. entrepreneurship rates reached their highest level in 15 years. The rate increase is partially driven by a) lower interest rates for loans associated with new businesses. b) unemployed workers looking to stay afloat as they seek new jobs. c) teenagers interested in launching their own business one day. d) the unethical behavior by large corporations.

question

B

answer

Technological developments over the past two decades, such as the rise of the Internet and email, have a) reduced the role of entrepreneurship in the U.S. economy. b) given small business owners more flexibility in how they manage their businesses. c) made it harder for small businesses to compete successfully against large corporations. d) given small business owners a greater ability to compete with big companies but have reduced the flexibility they have in managing their businesses.

question

B

answer

All of the following are entrepreneurial characteristics, EXCEPT a) self-reliance. b) aversion to risk. c) vision. d) tolerance of uncertainty.

question

D

answer

Entrepreneurs who find new solutions to old problems and develop new products that people didn't even realize they needed are said to have a) an internal locus. b) an external locus. c) corporate savvy. d) vision.

question

D

answer

Entrepreneurs with a strong internal locus of control tend to a) be unwilling to accept personal responsibility for their actions. b) have trouble learning from past mistakes. c) put too much faith in the ability of others within their business. d) feel that the success or failure of their companies are largely the result of their own actions and decisions.

question

D

answer

Emily is a successful entrepreneur. As such, she is likely to a) be very laid back in her approach to running a business. b) believe that most of her success is due to luck and the hard work of others. c) have very little tolerance for uncertainty. d) have a great deal of faith in her business ideas, even when others express doubts.

question

D

answer

Kerry Higgins believes his efforts will not have much impact, feels buffeted by forces such as luck, and feels no control over his own destiny. Harry has a a) low external locus of control. b) strong internal locus of control. c) low internal locus of control. d) strong external locus of control.

question

C

answer

Mary Kate wants to start a business. She takes a personality test at school and discovers she possesses a trait that may reduce the likelihood she will succeed. Which of the following traits does Mary Kate likely possess that will increase her risk of being successful at her own business? a) vision. b) internal locus of control. c) external locus of control. d) tolerance of failure.

question

C

answer

Entrepreneurs tend to be tolerant of a) poverty; they are usually more interested in changing the world than in making money. b) incompetence in others; they tend to believe that the only way to get things done is to do it themselves. c) uncertainty; they view business uncertainty as something they can turn to their advantage. d) delays in their ability to get their companies up and running; they have enormous patience and unlimited faith that they will ultimately prevail.

question

C

answer

Consumer Reports found 68% of an entrepreneur's start-up financing comes from a) the SBA. b) bank loans. c) personal resources. d) peer-to-peer lending.

question

A

answer

A recent survey claims that half of all start-ups are funded _____, even though this source can result in very high financing costs. a) with credit cards b) with Small Business Administration microloans c) through revolving credit agreements with commercial banks d) by venture capital firms

question

A

answer

Small business start-ups are likely to find that getting commercial loans is a) hard to do, because commercial lenders are reluctant to make loans to firms that don't have an established record of successful performance. b) one of the easiest and most flexible sources of financing, because local bankers are usually eager to establish relationships with new companies. c) is fairly easy, but usually entails much higher financing costs than other sources. d) the best way to obtain 100 percent of the financing they need, but only if they give the lender an ownership stake in the company.

question

D

answer

A funding source that makes it easier for entrepreneurs to get money with favorable terms is referred to as a) the SBA. b) bank loans. c) venture capitalist d) peer-to-peer lending.

question

A

answer

_____ are wealthy individuals who invest in new and growing firms. a) Angel investors b) Commercial lenders c) Venture capitalists d) Personal resources

question

B

answer

_____ are companies that invest in start-up businesses with high growth potential in exchange for an ownership stake. Also in exchange for a share of ownership in company. a) Angel investors b) Venture capital firms c) Management Student Advocates d) Small Business Development Centers

question

D

answer

_____are small segments within a market that can offer profit potential to entrepreneurs who know how to serve them. a) Demographic segments b) Focus groups c) Market nodes d) Market niches

question

A

answer

Pop Goes the Weasel is a small toy store that competes effectively with much larger companies, since it focuses exclusively on selling nonelectronic toys made of wood. The company has been successful since it has a) exploited a market niche. b) worked to undercut larger competitors' prices. c) developed a human resource systems that has attracted excellent employees. d) received grants from the Small Business Administration.

question

C

answer

Overhead costs for small businesses a) tend to be much higher than they are for large businesses when expressed as a percentage of total expenses, which is one of the reasons for the high failure rate of small businesses. b) are about the same as they are for big companies when measured as a percentage of total expenses. c) are often lower than they are for big companies, giving small businesses a competitive opportunity. d) primarily arise because small businesses must hire so many outside consultants.

question

B

answer

One reason many small businesses fail is the founder's inability to a) develop a system to manage customer complaints. b) manage money wisely. (lack of business knowledge) c) successfully operate a web-based version of the company. d) expand into more luxurious office space.

question

B

answer

Which of the following places small businesses at a disadvantage compared to larger competitors? a) business location b) insurance costs c) finding market niches d) lower regulatory expectations

question

A

answer

The _____ is the federal government agency dedicated to maintaining and strengthening the national economy by aiding, counseling, assisting, and protecting the interests of small business. a) Small Business Administration b) Federal Trade Commission c) National Center for Business Development d) Federal Small Enterprise Resource Center

question

D

answer

A(n) _____ is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives. a) enterprise mission statement b) enterprise focus document c) strategic business outline d) business plan

question

C

answer

A business plan should include all of the following topics EXCEPT a) a description of the good or service and an explanation of the need it will fill. b) a financial plan, including how the firm intends to raise the money needed to get the business up and running. c) a detailed description of the firm's contingency plans. d) an appendix which describes the research about the firm's market and industry.

question

B

answer

For individuals starting a small business, writing a business plan is a) more work than it is worth. b) not always necessary, but it is essential if the company needs to obtain external financing. c) the first and most critical step toward getting the company up and running. Small businesses that aren't guided by a plan are almost never successful. d) a simple process that usually takes no more than a week or two to complete.

question

C

answer

The business plan has two main purposes a) it guarantees success; can be used to secure financing easily. b) provides a document customers can review; used as a production tool. c) provides a document to keep employees focused; necessary to seek outside funding. d) often requested by vendors; required by the federal government.

question

C

answer

Which of the following is the best description of a typical business plan for a small business? A business plan is a(n) a) short document, usually no more than 10-15 pages in length, that provides a basic overview of the company's mission and products. b) annual report that the company provides to partners or stockholders, discussing the company's objectives and assessing its challenges for the coming year. c) formal document, often 25-50 pages in length, that describes the company, sets forth its key objectives, and provides details as to how and when the organization plans to achieve these objectives. d) legally required document that the company must file with the Small Business Administration on an annual basis. Each annual plan explains the company's goals for the next fiscal year and details how much external funding the company will need to achieve these goals.

question

B

answer

In a business plan, a commercial lender would expect to find a) a description of the business, the appendix, and a list of references. b) a description of the business, competitive analysis, operating procedures, and financial data. c) a description of products offered, description of relationship with suppliers, operating procedures, and description of needs in the community. d) a community market survey, description of the business, and operating procedures.

question

B

answer

As an artificial person, a(n) _____ can legally engage in almost any business activity a natural person can, including owning property, entering into binding contracts, and initiate legal actions. a) partnership b) corporation c) Enterprise d) sole proprietorship

question

A

answer

Hans is considering forming a company that specializes in international consultations. He wants to serve as a liaison between domestic and Chinese toy distributors, offering the U.S. firms access to lower cost labor and offering the Chinese firms access to one of the largest markets in the world. In addition, he will need to capitalize the operation by offering shares of common stock. Which business entity should he choose? a) a corporation b) an LLP c) an LLC d) a sole proprietorship

question

A

answer

A _____ maintains limited liability but offers more flexibility in terms of tax treatment than other forms of business ownership. a) limited liability company b) sole proprietorship c) corporation d) limited liability partnership

question

C

answer

From the standpoint of an owner, a major advantage of the sole proprietorship is the: a) ability to pool financial resources. b) ability to capitalize on complementary skills. c) retention of control. d) permanence of the business.

question

D

answer

A well-written partnership agreement for a general partnership can help the partners deal with all of the following issues EXCEPT how to a) share the profits. b) handle disagreements among partners. c) handle the withdrawal of a partner. d) avoid unlimited liability.

question

C

answer

All of the following are drawbacks of general partnerships EXCEPT a) lack of continuity. b) unlimited liability. c) inability to pool financial resources. d) potential for disagreements among owners.

question

C

answer

The _____ allows all partners to participate in management while also offering them limited liability. a) nominal partnership b) general partnership c) limited liability partnership d) limited partnership

question

A

answer

Cathy and Denise open a business as a limited liability partnership in a state that offers partial shield protection. From Cathy's perspective, this means that she a) has unlimited liability for most types of debts the firm incurs, but she is protected from any debts that result from Denise's negligence or malpractice. b) is protected from any debts that arise from her own negligence or business errors but has unlimited liability for any other business debts. c) may lose any money she initially invests in the company but has no further liability. d) will split responsibility for any company debts evenly with Denise, so she can never be held responsible for more than 50 percent of any claims against their business.

question

A

answer

In most states, the document that owners must file in order to form a corporation is referred to as the a) articles of incorporation. b) prospectus. c) registration statement. d) election of incorporation certificate.

question

B

answer

Suzanne Limley was just elected to the board of directors at United Bank Corporation. As a board member, she is expected to represent the interests of a) senior bank management. b) shareholders. c) creditors. d) customers.

question

A

answer

What is the role of the board of directors? a) They are elected by the stockholders and serve to manage the big picture elements of the company. They in turn appoint executives to handle daily concerns. b) They are special stockholders who get to enjoy company perks in return for aggressively managing the day-to-day affairs of the company. c) They are appointed by the CEO to ensure the details of regulatory concerns with agencies like the SEC are taken care of. d) They are appointed by the stockholders to help the CEO and other executives run the company at peak efficiency.

question

D

answer

A statutory close (or closed) corporation gives its shareholders a) an automatic seat on the board of directors. b) a guaranteed dividend. c) rights to manage the company in exchange for unlimited liability. d) limited liability and opportunities to participate in management.

question

B

answer

A key difference between S Corporations and C Corporations is that a) the owners of C corporations have limited liability while the owners of S corporations have unlimited liability. b) S corporations may have no more than 100 shareholders who must all be citizens or permanent residents of the United States, while C corporations do not have these restrictions on ownership. c) C corporations seek profits while S corporations operate as not-for-profit organizations. d) C corporations have stockholders who have the right to vote in stockholders' meetings while S corporations have members with no voting rights.

question

D

answer

A _____ merger is the combination of firms in the same industry. a) hostile b) conglomerate c) vertical d) horizontal

question

C

answer

Although currently no longer part of the Kraft portfolio of companies, in 1988, Philip Morris, the leading cigarette manufacturer in the United States, merged with Kraft, Inc., the maker of several leading food brands, such as Miracle Whip, Velveeta, and Maxwell House. This combination would be classified as a _____ merger. a) Horizontal b) Vertical c) conglomerate d) Macro

question

B

answer

To reduce risk of vulnerability to downturns in single markets, corporations would consider a _____ merger a) downward b) conglomerate c) vertical d) horizontal

question

C

answer

How is forming an LLC similar to forming a corporation? a) As with corporations, there are no documents to file. b) LLC owners are also called stockholders, just like in a corporation. c) Organizers of most LLCs also draft an operating agreement, which is similar to the bylaws of a corporation. d) Similar to a corporation, all owners of an LLC have unlimited liability.

question

C

answer

Tim, Bob, and Sal want to start a business to rehab homes. Each wants to take an active role in managing their company while also protecting their personal assets from unlimited liability. They are likely to find that forming a _____ will meet their needs. a) nonprofit corporation b) limited partnership c) limited liability company d) general partnership

question

B

answer

Like a statutory close corporation, a limited liability company (LLC) a) files articles of incorporation outlining operational and organizational levels. b) is not required to elect a board of directors or hold annual stockholders' meetings. c) follows the same state laws that C corporations follow. d) has no more than 50 shareholders.

question

A

answer

Which statement is true about limited liability companies (LLCs)? a) LLCs are taxed like partnerships, and each member's income is accounted for with his or her personal income tax. b) LLCs do not pay franchise taxes. c) LLCs in their most common forms are banks, insurance companies, and nonprofit organizations. d) LLCs are the same entities state to state.

question

C

answer

Compared to C corporations, an advantage of an LLC is that a) C corporations must file paperwork with the state when they are formed, while no paperwork needs to be filed to form an LLC. b) C corporations are limited to no more than 100 owners, while LLCs can have an unlimited number of owners. c) after-tax earnings of C corporations that are distributed to owners are subject to double taxation, but the earnings of LLCs pass through the company and are taxed only as personal income. d) LLCs are classified as domestic firms in all of the states where they operate, while corporations are classified as "foreign" business entities in states other than the one in which they are incorporated.

question

B

answer

The _____is a relatively new and increasingly popular form of business ownership that is like a corporation in some ways and like a partnership in others. a) joint venture b) limited liability company c) cooperative d) sole proprietorship

question

C

answer

The _____ is the business entity in a franchise relationship that allows others to operate a business using resources it supplies in exchange for money and other considerations. a) general corporation b) partner c) franchisor d) franchisee

question

C

answer

Which choice best describes what kind of relationship Ford has with the local Ford dealer? a) mutually beneficial product franchise b) business format franchise c) distributorship d) receivership

question

A

answer

The most common type of franchise agreement is the a) business format franchise agreement. b) general partnership agreement. c) limited liability corporate agreement. d) operation agreement.

question

B

answer

Successful firms of today would a) take risks. b) embrace change. c) focus on generating short-term profits. d) avoid new opportunities if what they are currently doing works well.

question

D

answer

_____ refers to the quality and quantity of products and goods available to a population at a given time. a) Quality of life b) Economic growth c) Entrepreneurship d) Standard of living

question

D

answer

_____ refers to the quality and quantity of products and goods available to a population at a given time. a) Quality of life b) Economic growth c) Entrepreneurship d) Standard of living

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