BBA 303 - Exam 1

Which of the following is normally considered a disadvantage of the corporate form of business?

Double taxation of earnings

Which of the following statements about factors of production is the most accurate?

Entrepreneurship and knowledge are the most important in creating wealth.

True or False: A foreign corporation is chartered in a country outside the US

False

True or False: Aside from personal savings, the only other viable source of financing for an entrepreneur would be funds available from friends and family.

False

True or False: Business plans are necessarily a bit vague since these are prepared prior to the beginning of business operations.

False

True or False: Core inflation figures omit healthcare prices, but not energy prices.

False

True or False: In recent years, foreign firms were reluctant to merge with or acquire American corporations.

False

True or False: Jose earned the same amount of money this year as he did last year. Thus, his standard of living must be the same as it was last year.

False

True or False: Micropreneurs is a term used to describe entrepreneurs who focus on the continued growth of their businesses.

False

True or False: The owners of a corporation are known as general corporate partners.

False

True or False: The sole proprietorship form of ownership tends to be attractive to people who want to invest in a company without taking an active role in management.

False

Which of the following statements most accurately identifies a limitation of the free-market economic system?

Free-market economies tend to result in unequal distribution of wealth.

__________ is illegally obtaining and illegally using private information about a person, such as using someone's credit card number.

Identity Theft

Double taxation is experienced by corporations that pay dividends. Which of the following scenarios is an accurate example of double taxation?

If Game Guys, Inc. distributes 20% of its net profit after taxes to its stockholders, these funds will be taxed again, when each individual stockholder claims his/her portion as earnings.

True or False: According to the Uniform Partnership Act, the three key elements of any general partnership are (1) common ownership, (2) shared profits and losses, and (3) the right to participate in managing the operations of the business.

True

True or False: Attracting qualified workers presents a problem for small businesses since they usually offer less money, fewer benefits, and less room for advancements than larger firms offer.

True

True or False: Entrepreneurs are motivated by the desire to earn a profit.

True

True or False: Insourcing refers to the practice of global companies setting up design and production facilities in the United States.

True

True or False: Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

True

True or False: Micropreneurs are motivated by a desire to have both a satisfying family life and rewarding work.

True

True or False: Offering to manage an established business for a percentage of the profits plus a salary offers experience to the would-be entrepreneur and free time to the business owner.

True

True or False: One of the best things the governments of developing countries can do to increase wealth is to minimize interference with the free exchange of goods and services.

True

True or False: One way to control the legal costs associated with operating a small business is to purchase a prepaid legal plan.

True

True or False: Prestigious economics professor, Tom Ruland, recently urged government policy makers to cut taxes and increase government spending in order to pull the economy out of a downturn. The policy measures called for by the professor are examples of fiscal policy.

True

True or False: Structural unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills or location of job seekers and the requirements or location of available jobs.

True

True or False: Technology can help businesses become more efficient and productive.

True

True or False: The rise of online marketing has become particularly important in doing business in the B2B markets.

True

True or False: The threat of terrorism increases the costs of operating most businesses.

True

True or False: When two or more people legally agree to become co-owners of a business, the form of business is called a partnership.

True

Tyler Brown recently noticed that he was seeing more Facebook advertisements than he had in the past even though he had not requested any of them. Which of the following best explains why this is happening?

Tyrell gave his personal information to a business, which then traded it to other companies, and these companies then began targeting their advertisements.

Markus is in charge of production for a family-owned company that makes and sells kitchen utensils. He has stated that speed of delivery is the most important factor for success in the competitive environment. Which of the following would be the best response to Markus?

Well Markus, speed isn't everything. What would exceed our customers' expectations? Some consumers may put more importance on high quality and/or lower prices.

The Federal Reserve Bank operates

as a semi-private organization not under the direct control of the government.

When two firms which do not participate in the same industries, for example, a software company and a fast food restaurant company, decide to merge, the result is called a ____________ merger.

conglomerate

One way to lessen the U.S. government budget deficit is to

cut spending

__________ is a condition in which the average level of prices is actually falling.

deflation

A good business plan will

describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications.

Manufacturing firms in the U.S. have consistently been laying off workers. The best explanation of this trend is that

firms in many industries have become so efficient that they need fewer workers.

After personal savings, the next largest source of capital for entrepreneurs is from

friends and family.

In a partnership, a(n) __________ partner (owner) actively manages the company and has unlimited liability for claims against the firm.

general

Often in business the greater the risk, the __________.

greater the potential reward

The main goal of resource development is to find ways to

increase the amount of resources and create conditions that will make better use of those resources.

Just a few sellers dominate the markets for laundry detergents, soft drinks, and automobiles. Economists would classify these markets as

oligopolies.

Austin, Aiden, and Zara wanted to open A2Z Sports Bar that serves a unique offering of beer, weekend entertainment, and a limited menu of appetizers. In one of the preliminary meetings, Zara presented a list of reasons that small businesses fail. Although many of the ideas on this list were applicable to many types of business, one challenge pertained specifically to the restaurant and bar business. The challenge he referred to was

some of the easiest businesses to start have the least growth prospects and greatest failure rates.

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called:

the Service Corps of Retired Executives (SCORE).

A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a

venture capitalist

Dennis and Donna recently moved to Kansas on a three-acre site. They purchased their home within biking distance to the hospital where they work, and their bikes have room for groceries if they need to purchase food on the way home, although they plan to grow some crops on their own. Dennis and Donna are examples of a growing number of people who

want to change their lifestyle to be more in tune to saving energy.