Gbs Exam 1 – Flashcards
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Which of the following is uncharacteristic of a socialist economy?
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All capital and capital goods are privately owned.
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Tandy Corporation has the right to manufacture and market a product, redesign its stores, and acquire other firms because it operates in a(n) _________ system.
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free-enterprise
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The relationship between sales and profits can be written as
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sales revenue - expenses = profit.
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Although the long-term trend for Brazil may show economic growth, this growth fluctuates from year to year as part of the
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business cycle.
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_________ is a loose subjective measure of how well off an individual or society is in terms of obtaining want-satisfying goods and services.
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Standard Living
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If the demand for a product declines, what happens to the price of the product?
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The price decreases.
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Spiffy Interiors is an interior decorating business. Greg installs hardwood floors and chair rails; Stephanie reupholsters furniture and takes care of the finances; Ryan designs and makes draperies and pillows; and Allison coordinates the overall color, look, and design. The process the Hamel family uses to run its business is
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specialization.
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Ima Genius decides to start a tutoring business. How would this business most likely be classified?
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Service business
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Susan Montgomery works at an institutional bakery and is paid a wage dictated by the government. She does not like her job but is not allowed other options. Susan must purchase necessities for her family at fixed prices. The country Susan lives in can be described as a __________ economy.
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Command
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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 a feature of laissez faire capitalism?
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Guaranteed income
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General Mills and a few other firms dominating the American cereal market are an example of _____.
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oligopoly
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Business ethics
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is the application of moral standards to business situations.
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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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What does the government encourage in order to protect the consumer's right to choose?
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Competition
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The socioeconomic model of social responsibility places primary emphasis on _____.
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quality of life
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By ensuring that products are safe and reliable, the Food and Drug Administration and the Consumer Product Safety Commission are taking part in a movement known as
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consumerism
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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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Certain executives were aware of the financial difficulties of WorldCom (which included unethical accounting practices). What action might they have taken to help the owners, employees, and communities involved?
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whistle-blowing
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By establishing Ronald McDonald Houses, temporary lodging for individuals with seriously ill family members, McDonald's has committed itself to more than just shareholder wealth maximization. The corporation's active role in improving societal conditions suggests that it is responsive to which of the following arguments?
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Social responsibility promotes environmental and social stability, in addition to long-run (sustainable) profitability.
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Some Enron executives were aware of the financial problems the company was facing and yet failed to reveal this information to the public. These actions taken by Enron executives were
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unethical.
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A program to implement social responsibility in business begins with
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total commitment of top management.
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Travis is in charge of writing a report for his company that talks about the quality and safety of his company's products, business practices, involvement in the community, human resources, and efforts to reduce pollution. This is called a(n) _____.
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social audit
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What is probably the most effective way for a company to encourage ethical behavior?
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develop and enforce a written code of ethics for the organization
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____ is the ability to produce a specific product more efficiently than any other product
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Comparative advantage
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Which of the following statements describes an economic basis for international business?
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a. Nations trade their surplus products for those in short supply. b. International trade can expand the global economy and increase standards of living. c. All of the above d. A nation has a comparative advantage with the goods it can produce most efficiently. e. International trade is based on specialization.
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If a company totally owns a facility somewhere overseas, this is an example of a(n)
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direct investment.
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The land of Narnack has very infertile soil but a large supply of oil. What action should Narnack take? Narnack should
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specialize in the production of crude oil and trade this for grain and other food products.
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General Motors and Ford products produced in the United States are found around the world. The United States 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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Ginger decides to take her small company international. Which of the following would most likely be Ginger's and other small business owners' first step in going global?
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She will advertise her products on the Internet and export them worldwide
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When the United States levies a tax on textiles from India, this tax is a type of
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tariff.
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When the U.S. government will not allow meat from another country to be marketed in the United States, it is imposing a(n)
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embargo.
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In addition to political considerations, all of the following are reasons for trade restrictions except
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a. protecting national security. b. equalizing a nation's balance of payments. c. protecting new and weak industries. d. protecting the health of citizens. e. all of the above are correct.
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The United States joined with Mexico and Canada to promote the movement of resources and products; it formed a(n)
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economic community.
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A small country is just beginning its international trade activities. In so doing, it wants to __________ and to develop a favorable balance of trade
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provide markets for its products
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Darrell inherited a large amount of money from his uncle. Darrell wishes to start his own business, and his lawyers encourage him to make it a corporation. What disadvantage of a sole proprietorship are the lawyers trying to avoid?
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Unlimited liability
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Nortons, Inc. hardware store is owned only by members of the Norton family, as well as a few close friends of the family. Traditionally, this company is most probably a(n)
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closed corporation
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The top governing body of a corporation is known as the
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board of directors.
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What do experts believe is likely to become one of the most popular types of business organizations?
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Limited-liability companies
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The most effective form of business organization for raising capital is the
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corporation.
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A limited-liability company is
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taxed like a partnership.
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Your company has had a rough 1st year in business. Ted, one of the owners in your legal partnership, announces that has to leave in order to take care of his family. What should you do?
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Create a new legal agreement with the remaining partners
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Twenty-five young investors decided that they want to start a dating service; however, they do not want to be held personally liable for losses of the company. They also want to avoid double taxation. Which type of business organization would best fit the needs of these individuals?
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Limited liability company
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When Alyssa decides that she no longer wants her Radio Shack stock, she will discover that a related benefit of a corporation is
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the ease of transfer of ownership.
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The purchase of one corporation by another is referred to as a
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check answer
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Common stock carries all the following rights except the right to
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check answer
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A distribution of earnings to the stockholders of a corporation is a(n)
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dividend
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A small business is all but which one of the following?
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Dominant in its field
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What is the primary reason that so many new businesses fail?
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Mismanagement resulting from lack of business know-how
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Before seeking financial backing for his new business, Tyler puts together a concise document explaining the nature, mission, and goals of his new business and its expected costs and potential. Tyler has constructed a(n)
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business plan.
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Which of the following statements is not true about small businesses?
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Small businesses pay the most taxes.
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Money that is invested in small and sometimes struggling firms that have the potential to become very successful is called
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venture capital.
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Eric decides to purchase and operate a Subway restaurant. His new business would be a
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franchise.
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Volunteers for SCORE are
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retired businesspeople from different industries.
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All of the following are disadvantages to the franchisee except
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high failure rate.
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Jason has decided to start his own business, but he is not quite sure what type of business he wants to own. He knows that the best two categories for small businesses are
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service and retailing
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What organization created by Congress in 1953 assists, counsels, and protects the interests of small businesses?
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SBA
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Jamie applies for a small-business loan from the SBA. If he is approved for the loan, where will the money actually come from?
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Private lenders such as banks
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All of the following are advantages that small businesses have except
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greater potential for making a profit.
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When a business has locations spread across several foreign countries, it is called a(n)
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multinational enterprise.
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Steve Jobs and Dave Wozniak, the founders of Apple Computer, Inc., were creative and free-spirited individuals who decided that being a corporate underling was not what they wanted from a career. They had an innovative idea for a product and desired to create their own business based on this idea. All of the following are factors that could have led them to go into business except
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the low risk and high rewards inherent in entrepreneurship.
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Extra Credit (Instructor's Question): Besides innovation and creativity, the most important "key" to a country's increased standard of living, a person's quality of life, a nation's ability to compete globally, a favorable balance of trade, and a thriving economy is probably:
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productivity.
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Extra Credit (Instructor's Question): Besides innovation and creativity, the most important "key" to a country's increased standard of living, a person's quality of life, a nation's ability to compete globally, a favorable balance of trade, and a thriving economy is probably:
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productivity.
