Business: Chapter 1-5 True and False

False

A policy of considering only nonminority applicants for job openings is called reverse discrimination

False

A small business is one that is dependent, operated as a not-for-profit organization, and is not dominant in its field

False

A vertical merger takes place between firms in completely different industries

True

Adam Smith argued that a society's interests are best served when individuals are allowed to pursue their own self-interest

True

Am monopoly is a market (or industry) with only one seller

False

An absolute advantage is the ability to produce a specific product more efficiently than other products

True

An advantage for the franchisee is the opportunity to start a business with limited capital

True

An advantage to the franchisor is that he or she gains fast and selective distribution of the product

True

An argument against trade restrictions is that they limit consumers' choices

False

An argument for increased social responsibility is the fact that, because business managers are primarily responsible to business owners, they must be concerned with providing a return on the owners investments

True

An argument for trade restrictions is that it protects national security

False

Approximately one-third of our nations total production consists of consumer products

False

Because of their small size, small businesses affect the U.S. economy very little

False

Before a corporation can receive articles of incorporation, it must submit charter information to the county clerk where the business is located

True

Business is the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society's needs

True

The General Agreement on Tariffs and Trade is an international organization whose goal is to reduce or eliminate tariffs and other barriers to world trade

False

The SBA is more likely to help non-minority small businesses

False

The ability to produce a specific product more efficiently than other nations is called comparative advantage

False

The balance of payments is the total value of a country's exports less the total value of its imports

True

The balance of trade is the total value of a country's exports less the total value of its imports over some period of time

False

The business cycle consists of two or more consecutive three-month periods of decline in a country's GDP

False

The corporate officers of a corporation are elected by the stockholders

False

The economic model of social responsibility places emphasis not only on profits but also on the impact of business decision on society

False

The majority of small businesses are found in the production industry

True

The people who start a corporation are called incorporators

True

The primary reason for small-business failure is mismanagement resulting from lack of business know-how

False

The term limited partnership is used to describe a business where all partners have general partnership status

True

The type of person likely to start a small business is independent, has a desire to determine his or her own destiny, and is willing to find and accept a challenge

True

There are more sole propritorships in the United States than there are partnerships or corporations

False

Today the terms business and e-business mean the same thing

True

Today, few firms are either purely economic or purely socioeconomic in their outlook

False

Today, there are more corporations than there are sole proprietorships and partnerships in the United States

True

Wal-Mart and Target are often referred to as marketing intermediaries

False

Whistle-blowing is an attempt by business to stop employees from exposing their unethical business behavior

False

Working conditions in the early twentieth century were not much different from those that exist today, except for more advanced technology involved

True

For a sole proprietorship and partnership, unlimited liability is a legal concept that holds a business owner personally responsible for all the debts of the business

True

Franchising is the actual granting of a franchise

True

Free Enterprise is a system of business in which individuals decide what to produce and how to produce it.

True

Government intervention into business increased after the Great Depression of the 1930s

True

International business consists of all business activities that involve exchanges across national boundaries

False

Less than 50 percent of small businesses fail within the first five years

True

Limited partners in a limited partnership can lose no more than the money they invest in the business

True

Planning is one vital element in the success of a small business

True

Preferred stockholders are paid dividends before common stockholders

True

Profit is the payment that business owners receive for assuming the considerable risks of ownership

True

Six basic rights of consumers are the right to safety, the right to be informed, the right to choose, the right to be heard, the right to consumer education, and the right to service

True

Social responsibility is the recognition that business activities have an impact on society and the consideration of that impact in business decisions

True

Licensing is a contractual agreement in which one firm permits another to produce and market its product and to use its brand name in return for a royalty or other compensation

False

Exporting is purchasing raw materials or products in other nations and bring them into ones own country

True

Consumerism consists of all those activities that are undertaken to protect the rights of consumers in their dealings with business