Business Chap 1, 2, 3, 4

Fiscal policy is concerned with:

taxation and spending

Which of the following is the best example of a service?

the pleasure you derive from seeing a good play

The Department of Natural Resources spent money to promote the use of national parks as perfect sites for a summer vacation causing motels, campgrounds and other tourist attractions in the private sector to become less attractive to consumers. Consequently consumers spent more money on trips to the national parks and less money in the private sector for their vacations resulting in _____.

crowding out

Active ownership of a foreign company, with direct investors having either a controlling or a large minority interest in the firm, is called a(n):

direct foreign investment

The Japanese automobile manufacturer Mazda produces the Premacy SUV in Haikou, China at a plant it built in the Chinese province. Mazda is using _____ to engage in global trading.

direct foreign investment

the Japanese automobile manufacturer Mazda produces the Premacy SUV in Haikou, China at a plant it built in the Chinese province. Mazda is using _____ to engage in global trading.

direct foreign investment

Utilitarianism:

is difficult to implement because it is hard to tell how one decision will impact a large number of people

_____ are laws that require a company earning foreign currency from its exports to sell the foreign currency to a control agency, usually a central bank.

Exchange controls

An enterprise in which two or more firms or investors (including governments) share ownership of a business and its property rights is called a(n):

Joint Venture

Another factor influencing business ethics is _____, or what is fair according to prevailing standards of society.

Justice

In a(n) _____, a few sellers can exert substantial control over prices.

Oligopoly

U.S. Steel has established an alcoholic rehabilitation program for the city of Pittsburgh. The company provides the facilities and the personnel to operate the program. U.S. Steel is practicing:

Social Responsibility

Which of the following statements about utilitarianism is true?

Utilitarianism is designed to create both winners and losers.

The merger of McKesson, the leading U.S. drug wholesaler, and HBOC, a producer of health-care inventory software, is an example of a(n) _____ merger.

Vertical

The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.

World Bank

An economic system based on competition in the marketplace and private ownership of the factors of production is known as:

Capitalism

_____ is the quantity of a good or service that people are willing to buy at various prices.

Demand

_____ inflation is inflation that occurs when the demand for goods and services is greater than the supply.

Demand-Pull

The _____ is an international bank that normally provides short-term loans to countries that are unable to meet their budgetary expenses.

International Monetary Fund

Laws have curtailed smoking, and as a result, the sale of cigarettes is down. Rather than fighting the law, the cigarette industry is looking for ways to take their business beyond cigarettes. Many experts believe that the cigarette producers have found a way around the law with the promotion and distribution of smokeless tobacco, which has shown consistent sales gains over the last decade. In terms of the social responsibility pyramid, at which level is the cigarette industry operating?

Legal

Peter Drucker, a well-known management scholar, has said that companies should be evaluated on two basic dimensions:

Legality and Profitability

The combination of two companies that join to form one company is called a:

Merger

Of all forms of business ownership, corporations account for the largest share of both:

Sales and Profits

Criticism of South Africa's post-apartheid government contends that the new government has not extended liberties to its black majority population, but has instead concentrated on proving to a white minority that a black-run administration can govern a reasonably sophisticated economy and society. The belief that the new South African government is behaving unethically is an expression of the philosophy associated with:

Utilitarianism

A country that exports more goods than it imports is said to have a(n):

favorable balance of trade

When the government raises taxes on consumers and businesses, it is dealing with _____ policy.

fiscal

Jarvis Washington recently quit his job as a veterinarian's assistant and is now trying to find a job with another veterinarian. This is an example of _____ unemployment.

frictional

A preferential tariff:

gives tariff advantages to one country over others

Think about all the restaurants that are located near your campus. You have probably noted some new ones appearing, and others closing because of lack of business. What type of competition exists in the restaurant business?

monopolistic competition

An industry in which a few firms produce most or all of the output of a product and in which large amounts of capital are needed is called a(n):

oligopoly

Ease of formation, flexibility, and diversity of management are advantages of the _____ form of business ownership.

partnership

Stewed Tomatoes was an "all-girl power-pop trio." Its three members realized that many musicians feel stifled when making music in a sterile studio environment while the clock ticked away expensive hours, so the three girl band members created Materville Studios, a multimedia production house and recording studio in downtown Chicago. They share work responsibilities and profits equally. Materville Studios is a(n):

partnership

The economic system under which basic industries are operated by the government or owned by the private sector under strong government control is called:

socialism

A German law that prohibited the use of hops grown outside of the country in the production of German-made beer was overturned in the late 1980s. This law was an example of a(n):

buy-national regulation

If a country specializes in goods that it can produce most readily and cheaply and trades those goods for the goods that another country can produce most readily and cheaply, then both countries are exercising the principle of:

comparative advantage

Venezuela can grow and sell cut flowers for floral bouquets more easily and more cheaply than most other countries can produce the same flowers. When it comes to flowers, Venezuela has a(n):

comparative advantage

Imagine you are trying to gather the information needed to calculate the balance of payments for an Eastern European country. To do your calculations, you would need to have information on all of the following EXCEPT:

military expenditures it makes in other countries

Mamma's Diner was a small restaurant that was a popular hangout for many Bedford College students, but because of the owner's inability to make the bathroom stalls handicapped accessible for the one wheel-chair student on campus, it was forced to close down. The belief that this it was morally wrong to deprive the majority of the people of this experience is an expression of the philosophy associated with:

Utilitarianism

It has been alleged that a Coca-Cola water bottling plant in India has caused illegal water shortages in fifty villages that surround the bottler. If this accusation is true, than Coke was operating at which stage of the social responsibility pyramid?

legal

Upward and downward changes in aggregate economic activity, as measured by GDP, are called:

Business cycles

The unemployment rate is the percentage of the total work force that is not working but is:

Actively looking for work

Why would a company choose to engage in a conglomerate merger instead of a vertical or horizontal merger?

A conglomerate merger is done to reduce risk.

IBM purchased MRO Software Inc. for $740 million. MRO was a niche provider of software and services to help customers including nuclear power plants and oil companies. IBM, plans to fold MRO into its software unit. This is an example of a(n):

Acquisition

Before selling stock to the public, a corporation must register with the:

SEC

The _____ is defined as the difference in value of a country's exports and imports over a period of time.

balance of trade

The slope of the demand curve is:

downward and to the left

U.S. plane manufacturer McDonnell-Douglas has authorized Mitsubishi Heavy Industries, a Japanese company, to use its trademarks, patents, and other proprietary knowledge to manufacture F-15 fighter planes. Mitsubishi Heavy Industries pays McDonnell-Douglas. This is an example of:

licensing

A market in which there are a large number of firms that differentiate their products is called:

monopolistic competition

Laws passed by the U.S. Congress concerning how U.S. businesses trade with Cuba would be an example of _____ factors that influence the business environment.

political and legal

Jayson Tully is contemplating the purchase of a Popeye's Chicken franchise. Tully has made a list of the disadvantages that he assumes he will face as a new business owner. Which of the following is actually an advantage?

assistance in building plans

The two types of cooperatives are:

buyer and seller

The Sara Lee Company sells the Hanes brand of hosiery in the United States. The manufacturer of this hosiery brand in Great Britain sells it under the brand name of Pretty Polly. The Sara Lee Company is using _____ to broaden its global marketing base without investing in overseas plants and equipment.

contract manufacturing

North American Van Lines and Allied Van Lines combined in a _____ merger that will create the world's largest moving company. Prior to the merger, North American was the leading company in moving high-end merchandise such as computer and hospital equipment, while Allied specialized in households.

horizontal

The implementation of a contractionary policy by the Federal Reserve would result in:

increased economic growth

An argument in favor of protective tariffs is the "infant-industry argument," which states that:

infant-industries should be protected by tariffs from established foreign competition

The _____ is the total amount of money that flows in and out of a country.

Balance of Payments

_____ are organizations formed by individuals or businesses with similar interests to achieve greater economies of scale and economic power through collective ownership.

Cooperatives

Rebecca Siddoway own and operate Country Candies. Siddoway specializes in making rich, creamy toffees that she packages in attractive gift boxes and sells through the mail. What would be the advantage to Siddoway if she decides to incorporate her business?

Corporations have an enhanced ability to attract financing.

Bribery translates to kuroi kiri (black mist) in Japan, schmiergeld (grease money), and baksheesh (tip or gratuity) in the Middle East. This differing way of looking at bribes is descriptive of differences in:

Culture

Archer Daniels Midland Co. (ADM) has joined with Baron Spices and Seasonings to market spices, seasonings and herbs to the foodservice industry. ADM will provide the raw materials, and Baron will act as the distributor and use its already existing relationships with participants in the food service industry to make a success of this:

Strategic Alliance

The quantity of a product or service that businesses will make available at various prices is called:

Supply

Double taxation in a corporation means:

earnings of the corporation and dividends of the shareholders both are taxed

The laborers displaced due to assembly line automation at the textile plant may not have the skills needed to operate the computerized machines that replaced them. This is an example of _____ unemployment.

structural

A country that imports more goods than it exports is said to have a(n):

unfavorable balance of trade

Laws relating to the alcoholic content of beer have required many imported brands of beer to be labeled malt liquor when it is sold in the United States. In addition, all beer sold in the U.S. must contain an expiration date or a "best-buy" date. These laws have made it difficult for small foreign breweries to enter the U.S. market. These laws are an example of:

Customs Regulations

Social responsibility goes beyond obligations provided by law or union contract. Two important aspects of social responsibility are that the obligation is both:

voluntary and broad

There are over 1,100 Corner Stores that market candy. When Valero Energy Corp. purchased the chain of retail stores, it was an example of a _____ merger.

conglomerate