Business 100 Unit 1 test
Which of the following BEST describes the term "economic system"?
AA nation's system for allocating resources among its citizens
Carolyn gets a bank loan in order to purchase new tanning beds for her salon. In terms of the factors of production, how would this bank loan be characterized?
Capital
Which of the following is NOT one of the elements of a private enterprise system?
Capital
Which of the following is a factor of production?
Capital
Which of the following groups or individuals would NOT be considered an organizational stakeholder?
Competitors
Which of the following indices measures inflation by examining changes in the prices of typical products purchased by consumers living in urban areas?
Consumer price index (CPI)
Numerous farmers in the Midwest pool their resources to buy seed, sell grain, store grain, and even help with marketing efforts. This is an example of which type of business entity?
Cooperative
A company that produces and distributes alcoholic beverages places all legally required warning labels on its products. However, in countries where such warning labels are not required, it does not do so. What approach to social responsibility does this BEST demonstrate?
Defensive stance
Which of the following is deemed as the single MOST effective step an organization can take in order to encourage ethical behavior in the workplace?
Demonstrate top management support of ethical standards.
Which of the following is an advantage of a sole proprietorship?
Ease of formation
Which of the following represents one of the existing trends for small business start-ups?
Emergence of e-commerce
The dean takes a visiting delegation from a foreign university on a tour of the campus. Which managerial role does this BEST describe?
Figurehead
A manager must decide whether a particular course of action is ethical. What is the FIRST step the manager should take in reaching this decision?
Gather the relevant factual information.
Which of the following is an advantage of a partnership over a sole proprietorship?
Growth is possible through the addition of new talent and money.
Alejandro owns a small landscaping business. He hires a part-time employee to handle the bookkeeping activities. Which factor of production does this employee represent?
Human capital
A manager who is examining an action or policy based on the ethical norm of justice would likely ask which of the following questions?
Is the action or policy consistent with what is considered fair or equitable?
Which of the following questions would a manager ask if s/he were examining an action or policy based upon the ethical norm of caring?
Is this action consistent with people's responsibilities to each another?
Which of the following is an advantage of corporations over sole proprietorships or general partnerships?
Limited liability of owners
Sam and Henry want to open a restaurant. Henry is willing to contribute start-up capital to the business but wants to have no role in the day-to-day operation of the restaurant. Which form of business ownership would be most appropriate for them?
Limited partnership
A company donates a share of its profits to charitable programs and is a corporate sponsor of the philharmonic orchestra. The company is demonstrating social responsibility toward which of the following organizational stakeholders?
Local community
Which of the following scenarios BEST describes perfect competition?
Many small sellers offer identical products.
Which type of partnership acts much like a corporation in that it sells shares (partnership interests) to investors on public markets?
Master limited partnership
Which of the following is true of master limited partnerships?
Master limited partnerships sell partnership interests to investors on public markets like the New York Stock Exchange.
Which of the following terms refers to two companies combining to form a new company?
Merger
Which of the following BEST defines the U.S. economic system?
Mixed market economy
Alison owns a coffee shop in a small city in which there are many similar establishments. She advertises that her coffee is the best in town because the coffee beans she roasts are fair trade certified, shade grown, and organic. Which degree of competition would this BEST describe?
Monopolistic competition
Which of the following terms identifies the model explaining why countries engage in international trade?
National competitive advantage
An automobile manufacturer learns about an ignition switch defect that may cause serious safety issues but rather than enact an expensive recall of hundreds of thousands of vehicles, management covers it up. Which approach to social responsibility would this BEST demonstrate?
Obstructionist stance
Which of the following approaches to social responsibility reflects the lowest degree of socially responsible practices?
Obstructionist stance
"First lie, then deny" would be consistent with which approach to social responsibility?
Obstructionist stance
In which of the following does the seller of a product or service have the LEAST amount of control over the price?
Perfect competition
Natural resources and raw materials, offices, production facilities, parts and supplies, and manufacturing equipment would be considered which factor of production?
Physical resources
Alysia's cosmetic company was at the forefront of the move to ban testing on animals. Her firm has adopted an aggressive energy conservation approach to manufacturing, and it actively participates in programs to reduce poverty and illiteracy in the community. Which of the following would BEST describe the company's approach to social responsibility?
Proactive stance
The number of people in the United States who are age 65+ is increasing rapidly, creating opportunities for products and services to meet the demands of an aging population. Which element of the external business environment does this population shift reflect?
Sociocultural environment
In a corporation, who elects the board of directors?
Stockholders
Which of the following is the BEST description of the law of demand?
The quantity demanded increases as the price decreases.
According to the laws of demand and supply, if the price of beef increases, which of the following likely will occur?
The quantity demanded will decrease
Due to ideal growing conditions in New Zealand vineyards and an overabundance of grapes, the price of Sauvignon Blanc wine decreases dramatically. Which of the following is likely to occur as a result?
The quantity demanded will increase.
Employees in the United States are comfortable with commission- and incentive-based pay plans, whereas employees in Italy and Mexico prefer pay plans that are more predictable, like seniority pay. Which of Hofstede's cultural dimensions would explain this difference?
Uncertainty orientation
Pete has started an electronics firm with the potential for high growth. He obtains funding for the business from a group of investors who demand partial ownership of the business and representation on the board of directors. What type of financing has Pete procured?
Venture capital
Which of the following BEST describes a conflict of interest?
When an activity may benefit an individual to the detriment of his or her employer
Which of the following is the BEST description of deflation?
Widespread decreases in the prices of goods and services
John, a purchasing agent, is offered an all-expense paid trip to Hawaii by a supplier if he agrees to award a substantial amount of business to the supplier. Accepting this trip would constitute _______.
a conflict of interest
In order to enter the market in Eastern Europe, DNC Enterprises enters into a contract with a firm in the Ukraine that allows that firm to use its brand name, operating procedures, and proprietary technology in making its products. This BEST describes _______.
a licensing arrangement
Wired Beverages, a producer of energy drinks, enters into a contract with a firm in South America in which the South American firm can produce and market its energy drinks in South America. Wired Beverages will receive a percentage of the South American firm's sales of the energy drinks. This is an example of _______.
a licensing arrangement
A rare gem known as Tanzanite is found only in the country of Tanzania. Because no mines have been discovered in other countries, Tanzania would be said to have a(n) _______ advantage in the production of this gem.
absolute
Absco Enterprises meticulously follows all laws and regulations and attempts to satisfy ethical requirements, but it does not go out of its way to address social or environmental issues unless it is persuaded to do so. This would suggest that the company has adopted a(n) _______ stance to social responsibility.
accommodative
One of the primary advantages of purchasing a franchise rather than starting a business from scratch is that a franchise offers _______.
a ready-made business model
A country's _______ is the flow of money into or out of a country, including the value of its imports and exports, money spent on tourism, foreign aid programs, and currency trading.
balance of payments
A manager who discriminates against a member of a protected class in an employment decision such as hiring, firing, training, or promotion demonstrates _______ behavior.
both unethical and illegal
Ethical or unethical behaviors by employees and managers in the context of their jobs are referred to as _______.
business ethics
Tyler, Dusty, and Matt own all shares of stock in Abels Enterprises, and shares of stock are not offered to the general public. Abels Enterprises is likely a _______.
closely held corporation
The two basic forms of planned economies are _______ and _______
communism; socialism
The climate, altitude, and terrain in India are particularly suitable for growing bananas. Although bananas are grown in other countries, India's production far exceeds the production of other countries. This would suggest that India has a(n) _______ advantage in the production of bananas.
comparative
Many electronics sold in the United States are imported from Taiwan because Taiwan can produce such products more efficiently than companies in the U.S. This is an example of a(n) _______.
comparative advantage
A nation is extremely efficient in the production of electronics. However, its climate and terrain make it difficult to grow grain. Economists suggest that the country should _______.
concentrate on production of electronics and import grain from another nation
Organized efforts by individuals, groups, and the government to help protect consumers from unfair business practices are referred to as _______.
consumerism
A(n) _______is an organization comprised of sole proprietorships and/or partnerships who work together for common benefits, such as enhanced financial power, greater production power, and/or superior marketing power.
cooperative
A _______has state-chartered legal status as a separate entity, along with property rights and obligations and an indefinite life span.
corporation
One disadvantage of ________ is double taxation.
corporations
n order to allow the company to focus on more lucrative products, Johnson & Johnson sold its Ortho Clinical Diagnostics Division. This is an example of a(n) _______.
divestiture
A group of American firms accused Japanese manufacturers of selling flat screens used in laptop computers at prices as much as 70% less than manufacturing cost. This is an example of _______.
dumping
A manufacturer of microwave ovens exports its products to another country at a price lower than the cost of production in the home country in order to quickly gain market share. This practice is known as _______.
dumping
A complete ban on the importing or exporting of products from a specific country is a(n) _______.
embargo
People who are collectivist in their values _______.
emphasize the needs of the group over the needs of the individual
Last year, a Pacific Island nation imported over $3.2 billion of goods and reported a trade surplus. This would suggest that the nation had _______.
exported more than $3.2 billion worth of goods
In order to encourage people to spend more money and stimulate the economy, the government slashes the individual income tax rate, effectively putting more money in people's pockets. This is an example of the government exercising _______ policies.
fiscal
Samsung Electronics Co., headquartered in Seoul, Korea, has announced plans to build a new smartphone factory in Vietnam. Samsung is engaged in _______.
foreign direct investment
In a partnership, a(n) _______ partner actively manages the business and has unlimited liability for the debts of the business
general
Regina's Rug Emporium offers the widest variety of Persian and Oriental rugs in the area. Regina regularly travels worldwide to find and buy the most exquisite and unusual rugs that foreign producers have to offer. Regina is a(n) _______.
importer
The general price level of goods and services in a nation is steadily increasing. This is known as _______
inflation
A senior level manager in a corporation learns that the Chief Financial Officer is going to be indicted the following day on charges of accounting fraud. He quickly sells his shares of stock in the corporation, fearing that the stock will fall after news of the indictment. This is an example of _______.
insider trading
Albertson Corp. is headquartered in the United States and has manufacturing facilities in South Carolina and Arkansas, as well as numerous sales offices in the U.S. The company recently opened a manufacturing facility in Ireland in order to capitalize on the European market. The company would be considered a(n) _______.
international firm
Amanda owns a small floral shop and operates the business as a sole proprietorship. If Amanda passes away, her business _______.
legally dissolves
One of the biggest advantages of corporations is that investors cannot be held personally responsible for the debts of the business. This is the concept of _______.
limited liability
The National Association of Realtors hires a consulting group to meet with members of Congress and the Senate and develop, advance, and influence legislation concerning the ownership and operation of real estate. This is an example of _______.
lobbying
Atlantis Electronics used to produce its products in a manufacturing facility in North Carolina, but has moved manufacturing to a contract manufacturing plant in Pakistan, where labor is significantly cheaper. This is an example of _______.
offshoring
Phyllis's company donates $1 million to the local humane shelter so that it can build a new facility in the area. This is an example of _______.
philanthropic giving
The National Weather Service is predicting that a major hurricane will impact the area within the next 48 hours. A local hardware store quickly doubles its prices on portable generators, plywood, and batteries in response to this weather forecast. This is an example of _______.
price gouging
A Midwestern city negotiates a deal with a company to operate its parking meter system. The city will receive a lump sum payment of several million dollars, and the company will have the rights to operate, maintain, and collect the revenue from the parking meters. This is an example of _______
privatization
The measure of economic performance that compares how much a system produces versus the resources required to produce it, is known as _______.
productivity
Shares of stock in a _______ corporation are available for sale to the public and are widely held.
publicly held
Direct influence to shape social responsibility practices by the government is most often accomplished through _______.
regulation
Under _______, the government owns and operates selected major industries such as transportation, communications, and banking, but smaller businesses are privately owned.
socialism
Misty wants to earn extra money and decides to open a cleaning service for dormitory rooms at her college campus. She posts fliers on the bulletin boards in each dormitory and buys some cleaning supplies. She plans to operate this business alone and keep all of the profits. Based on this information, it would appear that Misty's business is a _______.
sole proprietorship
A(n) _______ is the collaborative effort of two or more independent organizations on a project for mutual gain.
strategic alliance
Farmers receive payments from the government if prices for wheat, corn, soybeans, and certain other crops fall below a certain level in order to protect farmers from cheaper prices charged by foreign competitors. This is an example of a(n) _______.
subsidy
A nation's economy experiences periodic increases in economic activity, often followed by periods of economic slowdown or decline. This is known as _______.
the business cycle
The country of Belize exported $395 million of goods in 2009 and imported goods worth $616 million during the same year. This would suggest that Belize has a(n) _______.
trade deficit
The value of goods imported into Mexico exceeds the value of goods exported by that country. This suggests that Mexico has a _______
trade deficit
The cultural dimension that describes the degree to which people in a culture tolerate or feel threatened by ambiguity is known as _______ orientation
uncertainty
Employees from a culture that is characterized by power respect _______.
would expect their superiors to make decisions with little input from employees
When a firm wants to enter the international market, which of the following represents the lowest level of international involvement, and hence the LEAST risk?
Importing/exporting
Which of the following facets of the external environment of business reflects the relationship between government and business?
Political-legal environment
_______ involves public disclosure, often by an employee, of corruption, a wrongdoing, or illegal or unethical conduct on the part of others within an organization.
Whistle-blowing
A Subchapter S corporation (S corporation) is a hybrid between a _______ and a _______, in that owners enjoy the benefits of limited liability but profits are not subject to double taxation.
corporation; partnership
Deanna wants to open a sandwich shop near campus. Rather than start the business from scratch, she considers purchasing a franchise from Subway. If she decides to purchase the franchise, Deanna would be the _______, and Subway would be the _______.
franchisee; franchiser
Angelina has a small business in the U.S. in which she produces one-of-a-kind jewelry using semi-precious gemstone beads. She purchases a supply of gemstone beads from a company in Belgium, and sells several necklaces to a buyer in Canada. The beads are _______; the necklaces are _______.
imports; exports
A business earns profits when its _______ exceed(s) its ______
revenues; expenses
Jack discovers that his employer is dumping dangerous chemicals into the river rather than disposing of them correctly. When management refuses to listen to his concerns, he contacts the Environmental Protection Agency to report the firm's conduct. This is an example of _______.
whistle-blowing