Business Exam Number 1 Chapters 1, 4, and 7

_____ refers to business contributions to the community through the actions of the business itself rather than donations of money and time. a. Corporate philanthropy b. Corporate governance c. Corporate responsibility d. Corporate sustenance

c. Corporate responsibility

are four fundamental resources—natural resources, capital, human resources, and entrepreneurship—that both businesses and nonprofits rely on. a. Terms of union b. Aspects of competition c. Factors of production d. Basics of living

c. Factors of production

In the context of responsibility to the community, which of the following statements is true of corporate philanthropy? a. It refers to the obligation of a business to offer high wages to the underprivileged. b. It is the application of right and wrong as well as good and bad in a business setting. c. It includes all business donations to nonprofit groups. d. It involves a partnership between a business and a nonprofit.

c. It includes all business donations to nonprofit groups.

In a business, which of the following statements best describes profit? a. It is the total revenue that a business generates, including the cost of salaries. b. It is the income that a firm receives from its secondary business activities. c. It is the money that a business earns in sales, minus expenses. d. It is the increase in the value of a firm's assets that are not resold.

c. It is the money that a business earns in sales, minus expenses.

In the context of the history of American business, which of the following statements is true of the production era? a. Laws were passed for the first time by the government to protect consumers and workers. b. Balance of power shifted away from producers and toward consumers, flooding the market with enticing choices. c. Jobs became specialized, increasing productivity and lowering costs and prices. d. Factories hired large numbers of semiskilled workers who specialized in a limited number of tasks.

c. Jobs became specialized, increasing productivity and lowering costs and prices

In the context of the history of American business, which of the following statements is true of the entrepreneurship era? a. Entrepreneurs focused on aggressive persuasion to separate consumers from their cash. b. Balance of power shifted away from entrepreneurs and toward consumers, flooding the market with enticing choices. c. Large-scale entrepreneurs emerged in the second half of the 1800s, building business empires. d. Entrepreneurs chose to replace huge factories with skilled artisan workshops.

c. Large-scale entrepreneurs emerged in the second half of the 1800s, building business empires.

Check My Work In the context of a business environment, which of the following is a key element of the U.S. economic environment? a. Protocols that restrict mergers between nonprofits and private businesses b. Policies that ensure high federal tax rates for businesses c. Legislation that supports enforceable contracts d. Regulations that decrease corporate accountability

c. Legislation that supports enforceable contracts

_____ are business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain. a. Credit unions b. Plutocracies c. Nonprofits d. Restricted mergers

c. Nonprofits

In the context of ethical choices, which of the following is a strong predictor of ethical leadership? a. Collusive bidding b. Ethnocentrism c. Personal empathy d. Lobbying

c. Personal empathy

Check My Work Which of the following is a key dimension of the business environment? a. The physiological environment b. The communal environment c. The economic environment d. The natural environment

c. The economic environment

Which of the following is a characteristic of successful entrepreneurs? a. Confidence b. Intolerance of failure c. Intolerance of uncertainty d. Apathy

a. Confidence

In the context of socially responsible companies, codes of conduct work best with _____. a. the absence of monitoring and enforcement b. rigorous compliance of rules even when faced with ethical dilemmas c. a commitment to finding solutions that work for all parties involved d. a resolve to maximize financial benefits for the business

c. a commitment to finding solutions that work for all parties involved

According to _____, customers can freely purchase the products that meet their needs. a. the right to choose b. the right to be heard c. the right to be informed d. the right to be safe

a. the right to choose

Businesses that strongly focus on customer satisfaction tend to: a. transform their current customers into loyal advocates for themselves. b. believe that the cheapest product represents the best value for customers. c. develop new products for customers while compromising on its features when competition is tough. d. be less successful as there is deterioration in the quality of the products they offer to their customers.

a. transform their current customers into loyal advocates for themselves.

In the context of factors of production that businesses and nonprofits rely on, which of the following can be classified as capital? a. Money b. Machine c. Labor d. Land

b. Machine

Socially responsible companies make it easy for consumers to express legitimate complaints and develop highly trained customer service people to respond to the complaints. This ensures customers _____. a. the right to be safe b. the right to be heard c. the right to be informed d. the right to choose

b. the right to be heard

Anya is an administrator at Zenorx Inc., a start-up software company. She is responsible for acquiring capital for the company. In the context of the various factors of production that businesses rely on, which of the following functions is most likely to be a part of Anya's responsibilities? a. Looking for opportunities to expand the business and to increase profits b. Conducting training sessions for new employees c. Acquiring synthetic resources like computers and telephones d. Conducting interviews to recruit employees to the firm

c. Acquiring synthetic resources like computers and telephones

Which of the following is an appealing benefit that entrepreneurs enjoy? a. Minimal workload b. Fixed income c. Flexible schedule d. Minimal risk

c. Flexible schedule

Which of the following is one of the largest crowdfunding sites in terms of traffic? a. Businessinsider.com b. Futurelearn.com c. Kickstarter.com d. Cesim.com

c. Kickstarter.com

_____ is the obligation of a business to contribute to society. a. Social opportunism b. Social governance c. A social audit d. Social responsibility

d. Social responsibility

Which of the following statements is true of entrepreneurs? a. They serve the society instead of creating wealth for themselves. b. They are bound to face recurring loses before making a profit. c. They do not risk their time and money when managing a business. d. They produce a ripple effect that enriches everyone around them.

d. They produce a ripple effect that enriches everyone around them.

A _____ is a formal, written document that defines the moral standards of an organization and gives employees the information they need to make moral decisions across a range of situations. a. bench memorandum b. tender of performance c. commercial invoice d. code of ethics

d. code of ethics

During the _____, as mass production took hold, huge factories replaced skilled artisan workshops. a. marketing revolution b. relationship era c. entrepreneurship era d. industrial revolution

d. industrial revolution

During the production era, in the early part of the 1900s, major businesses focused on: a. differentiating themselves from their competitors. b. creating wealth by manipulating prices and exploiting workers. c. customer satisfaction and building long-term relationships with customers. d. refining the production process and creating greater efficiencies.

d. refining the production process and creating greater efficiencies.

are individuals who finance start-up companies with high growth potential in exchange for a share of ownership. a. Crowdfunders b. Angel investors c. Philanthropists d. Peer-to-peer lenders

b. Angel investors

Which of the following is a similarity between ethics and social responsibility? a. Both are mandated by law and are codified in the legal system. b. Both rarely influence the decisions of individual employees in a workplace. c. Both play a vital role in building profitable businesses and a vibrant community. d. Both refer to abstract philosophies about right and wrong on an individual level.

c. Both play a vital role in building profitable businesses and a vibrant community.

Universal ethical standards are ethical norms: a. that have been laid down by the United Nations. b. set up for employees by individual organizations depending on their office culture. c. that apply to all people across a broad spectrum of situations. d. established for the senior citizens of every nation.

c. that apply to all people across a broad spectrum of situations.

_ is an international economic and political movement designed to help goods and services flow more conveniently across international boundaries. a. Retail trade b. Wholesale trade c. Bulk trade d. Free trade

d. Free trade

_____ refers to developing and promoting environmentally sound products and practices to gain a competitive edge. a. Crowdsourcing b. Bioremediation c. 360 degree branding d. Green marketing

d. Green marketing

Which of the following marketing concepts emerged during the marketing era? a. A consumer focus that permeates successful companies in every department, at every level b. A need to identify whether an overall economy thrives or disintegrates c. A focus on increasing profits that result in high standards of living for people across the country d. A need for nonprofit organizations to work together with businesses to improve the quality of life in a society

a. A consumer focus that permeates successful companies in every department, at every level

are small segments of a market with fewer competitors than the market as a whole. a. Market niches b. Exhaustive markets c. Market collectives d. Target markets

a. Market niches

_____ refers to marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit. a. Double loop marketing b. Cause-related marketing c. Niche marketing d. 360-degree marketing

b. Cause-related marketing

A(n) _____ is a systematic evaluation of how well a firm is meeting its ethics and social responsibility goals. a. social progress map b. social audit c. ethics plan index d. ethical loop

b. social audit

Which of the following scenarios illustrates the utilization of human resources as a factor of production? a. Fred capitalizes on the demand in the market for animation and starts his own design company. b. Tia obtains machines required to create iron blocks that her company sells. c. Carlos hires a content writer to develop content for his online portal that sells fashion accessories. d. Serena's company extracts and purifies coal deposits to use as a feedstock in the manufacture of chemical fertilizers

c. Carlos hires a content writer to develop content for his online portal that sells fashion accessories.

In the context of a business environment, which of the following is a key element of the U.S. economic environment? a. Policies that ensure high federal tax rates for businesses b. Protocols that restrict mergers between nonprofits and private businesses c. Legislation that supports enforceable contracts d. Regulations that decrease corporate accountability

c. Legislation that supports enforceable contracts

Which of following was a result of the bold steps taken by the General Agreement on Tariffs and Trade (GATT) to reduce trade restrictions worldwide? a. Legislations against international dumping of goods increased. b. Subsidies to local firms were increased so that they could compete with importers. c. Import quotas were imposed to benefit domestic producers. d. Goods moved more freely than ever across international boundaries.

d. Goods moved more freely than ever across international boundaries

The quality and quantity of goods and services available to a population is referred to as the _____. a. expectancy margin b. gross domestic revenue c. per capita income d. standard of living

d. standard of living

In the context of code of ethics, the best-known code is the Johnson & Johnson Credo, which has guided the company profitably through a number of crises. One of the striking elements of the credo is: a. the firm focus on ethnocentrism. b. the firm focus on collusion. c. that it commits to a centralized organizational structure. d. that it commits to a fair return for stockholders.

d. that it commits to a fair return for stockholders.

Check My Work Which of the following statements is true when a person makes a career choice based on what he or she loves doing? a. Chances of personal success are boosted. b. It hinders a person's chances of acquiring financial gains. c. Less-routine abilities are not valued. d. It guarantees a fat paycheck.

a. Chances of personal success are boosted.

In the context of the history of American business, which of the following statements is true of the industrial revolution? a. Factories hired large numbers of semiskilled workers who specialized in a limited number of tasks. b. Individual ownership in various production processes was promoted. c. The government passed laws to regulate business and protect consumers and workers, creating balance in the economy. d. Balance of power shifted away from producers and toward consumers.

a. Factories hired large numbers of semiskilled workers who specialized in a limited number of tasks.

In the context of various launching options when starting a new business, which of the following statements is a drawback associated with buying a franchise? a. It has less opportunity for creativity. b. It lacks management expertise and consulting. c. Its logistics can be challenging. d. It involves a lot of pressure.

a. It has less opportunity for creativity.

Which of the following is a drawback of buying an established business? a. It may entail inheriting the previous owner's mistakes. b. It is more challenging to get financing and credit. c. It takes time and money to build a new customer base. d. It lacks a developed organizational structure.

a. It may entail inheriting the previous owner's mistakes

Which of the following is an advantage of starting a business from scratch? a. The entrepreneur gets to build his or her own business concept and structure. b. The entrepreneur has access to an established customer base. c. The entrepreneur can secure funding easily. d. The entrepreneur faces less pressure in terms of securing permits and hiring employees.

a. The entrepreneur gets to build his or her own business concept and structure.

In the context of the competitive environment, which of the following statements is true of bleeding-edge firms? a. They launch products that fail because they are too far ahead of the market. b. They launch innovative products that have a small existing market. c. They launch successful products that are in high demand among consumers. d. They launch cheaper versions of already existing successful products.

a. They launch products that fail because they are too far ahead of the market.

In the context of factors of production, which of the following is a natural resource? a. Wind b. Information c. A computer d. An investmen

a. Wind

In the context of social responsibility, stakeholders refer to: a. any groups that have a personal interest in the performance and actions of an organization. b. officials who review company records to identify the accrued revenue of an organization. c. workers of all ages who continue to seek undue advantages from their employers. d. employees who report their employer's illegal activities to the media or higher official authorities.

a. any groups that have a personal interest in the performance and actions of an organization.

In the context of factors of production that businesses and nonprofits rely on, _____ cannot be considered a natural resource. a. cereal crops b. water c. mineral deposits d. land

a. cereal crops

In the context of the global environment, the _____ has lowered prices and increased quality across virtually every product category, as competition becomes truly global. a. free-trade movement b. federal sales act c. foreign globalization measure d. bulk-pack protocol

a. free-trade movement

Check My Work Oponium, a laptop manufacturer, offers a variety of gaming laptops at discounted prices. However, the laptops have been designed in such a way that they have performance issues after being used for six months, thereby generating revenue for the company through service charges. In this scenario, Oponium's business conduct is: a. legal but unethical. b. illegal and unethical. c. legal and ethical. d. illegal but ethical.

a. legal but unethical.

Aquin, a cell phone manufacturer, has released a new model of smartphones. The smartphones have been designed in such a way that they offer excellent performance in the first few months, but develop technical issues after a certain period. Thus, the customers are bound to repurchase a new phone within a short period. In this scenario, Aquin's strategy is an example of _____. a. planned obsolescence b. whistle-blowing c. modular function deployment d. crash simulation

a. planned obsolescence

Companies that step in with on-site day care programs for workers facing challenges such as raising kids are fulfilling their: a. social responsibility. b. legal roles. c. consumerism duties. d. stakeholder criterion.

a. social responsibility.

In the context of responsibility to the environment, _____ refers to doing business to meet the needs of the current generation without harming the ability of future generations to meet their needs. a. sustainable development b. cause-related marketing c. planned obsolescence d. corporate philanthropy

a. sustainable development

Gladys, a doctor at Talthron Hospital, notices that one of the trustees of the hospital is falsifying the data of Medicare patients when submitting reports to the government. She reports this misconduct to the media. In this scenario, Gladys can be considered a _____. a. whistle-blower b. social auditor c. corporate philanthropist d. grandstander

a. whistle-blower

In the context of the history of American business, which of the following statements is true of the marketing era? a. Businesses lost individual ownership as large factories emerged to increase production. b. Businesses began to develop brands to help customers understand the differences among various products. c. Businesses that dominated their markets ousted competitors, manipulated prices, and exploited workers. d. Businesses focused on refining production processes and creating greater efficiencies.

b. Businesses began to develop brands to help customers understand the differences among various products.

In the context of the history of American business, which of the following is a feature of the relationship era? a. Jobs become specialized, increasing productivity and lowering costs and prices. b. Cultivating current customers turn out to be more profitable than constantly seeking new ones. c. Manufacturing firms hire skilled artisans to facilitate mass production of goods. d. Major businesses focus more on refining production processes than on competing with each other.

b. Cultivating current customers turn out to be more profitable than constantly seeking new ones.

The _____ is an international trade agreement that has taken bold steps to lower tariffs and promote free trade worldwide. a. Greater American Free Trade Protocol b. General Agreement on Tariffs and Trade c. North American Integrative Trade Plan d. Trans-Atlantic Trading Partnership Agreement

b. General Agreement on Tariffs and Trade

Which of the following factors of production encompasses the physical, intellectual, and creative contributions of people working within an economy? a. Natural resources b. Human resources c. Capital d. Entrepreneurship

b. Human resources

Which of the following statements is true of corporate responsibility? a. It refers to the need for commitments from an organization's senior management. b. It focuses on contributions made to the community through the efforts of a business. c. It is designed to spike sales for the company and raise money for a nonprofit. d. It ensures that the code of ethics of an organization is both global and local in scope.

b. It focuses on contributions made to the community through the efforts of a business.

In the context of the technological environment, which of the following statements is true of business technology? a. It is the rate at which a new product moves from conception to commercialization. b. It includes any tools that companies can use to become more efficient and effective. c. It includes the creative contributions of everyone who works within an economy. d. It is the rate at which similar products from competitive brands attract consumers.

b. It includes any tools that companies can use to become more efficient and effective.

Which of the following statements is true of the Sarbanes-Oxley Act? a. It ensures the application of right and wrong as well as good and bad in a business setting. b. It requires that financial officers personally certify the validity of their financial statements. c. It ensures that a code of ethics is applied both globally and locally in organizations. d. It requires senior managers to contribute a percentage of their income for social responsibility

b. It requires that financial officers personally certify the validity of their financial statements.

Conela is a nonprofit organization that renovates abandoned government schools and facilitates their functioning. It is headed by two social activists and is funded by the government. Which of the following statements is true of Conela? a. Its primary goal is financial gain. b. It takes in revenue like any other business. c. It does not contribute to the nation's economy. d. It does not employ people.

b. It takes in revenue like any other business.

In the context of factors of production that businesses and nonprofits rely on, which of the following statements is true of natural resources? a. Most of their value tends to decline as demand increases or supply decreases. b. Most of them must be extracted, purified, or harnessed. c. They are created and upgraded by businesses using capital. d. They include agricultural products, which people create through planting and tending.

b. Most of them must be extracted, purified, or harnessed

Which of the following steps should an organization follow to bring its code of ethics to life? a. The code of ethics should be limited to being local in scope and need not address global issues. b. Protection should be established for people who report illegal or unethical behavior. c. The code of ethics should not apply to outside parties such as suppliers, distributors, and customers of the organization. d. Employees should be allowed to choose the kind of moral principles that they wish to follow.

b. Protection should be established for people who report illegal or unethical behavior.

Shayla is performing a social audit of her company. She needs to evaluate how well the firm is meeting its ethics and social responsibility objectives. To do this, she first establishes the goals that the company should strive to meet. Which of the following is most likely to be the subsequent step performed by Shayla? a. She would quantify the involvement of the firm in community activities. b. She would determine how to measure the achievement of the established goals. c. She would evaluate future goals and seek funding to achieve them. d. She would do a research on how competitors are working toward the achievement of social responsibilities.

b. She would determine how to measure the achievement of the established goals.

Which of the following statements is true of people with an external locus of control? a. They validate their own efforts. b. They believe that the actions of others can control their fate. c. They are extremely self-reliant. d. They feel that they have complete control over their lives

b. They believe that the actions of others can control their fate.

People who risk their time, money, and other resources to start and manage a business are known as _____. a. employees b. entrepreneurs c. regulators d. executives

b. entrepreneurs

The board of directors of a tile manufacturing company meet to discuss the installment of a new high-end machinery. They all agree that installing the machinery in the workplace could result in a lot of employees being laid off because of the reduced need for manual labor. At the same time, canceling the order placed for the machinery could cause legal issues as the company has already signed a contract with its suppliers. The board of directors thus weigh both the options to see which would cause them less inconvenience. In this scenario, the board of directors face a(n) _____. a. planned obsolescence b. ethical dilemma c. moral lapse d. illegal impasse

b. ethical dilemma

The starting point for socially responsible employers is to: a. practice collusion. b. meet legal standards. c. determine how to measure the achievements of each worker. d. maintain a clear reporting structure for ethical concerns and grievances.

b. meet legal standards

In the context of the competitive environment of a business, the best measure of value is the: a. difference in the market price and the selling price of a product. b. size of the gap between product benefits and price. c. total number of returning customers per quarter. d. relative difference in the selling price of a product across competitors.

b. size of the gap between product benefits and price

Deborah is an executive at Aviroend Inc. Her boss has assigned her the task of reviewing the firm's ethics and social responsibility objectives. To prepare a report, she gathers data from various sources, internal as well as external, and uses software tools to create graphs and charts that capture how socially responsible Aviroend has been since the establishment of its ethics and social responsibility goals. In this scenario, Deborah is performing a(n) _____ of Aviroend. a. socio-commercial analysis b. social audit c. quality check d. ethical review

b. social audit

In the context of factors of production, which of the following statements is true of entrepreneurial enterprises? a. They focus mostly on transforming customers into loyal advocates of the company's products. b. They concentrate mostly on merging with nonprofit organizations so that huge investments by the entrepreneurs can be avoided. c. They can kick-start an economy, creating a tidal wave of opportunity by harnessing other factors of production. d. They encompass the intellectual and creative contributions of everyone who works within an economy.

c. They can kick-start an economy, creating a tidal wave of opportunity by harnessing other factors of production.

are companies that invest in start-up businesses with high growth potential in exchange for a share of ownership. a. Peer-to-peer lenders b. Nonprofit organizations c. Venture capital firms d. Alternative lenders

c. Venture capital firms

In the context of business ethics, which of the following situations best describes an ethical dilemma? a. When a decision appears to be ethical in all senses that one tries to find faults with it b. When a person is forced to choose between a clearly right and a clearly wrong option c. When a person is forced to choose among bad options d. When a person is involved in clear misconduct

c. When a person is forced to choose among bad options

During the _____, the government of the United States stepped into the business realm to pass laws to regulate business and protect consumers and workers. a. relationship era b. production era c. entrepreneurship era d. marketing era

c. entrepreneurship era

In the context of the history of American business, which of the following statements is true of the relationship era? a. Businesses build strategies to constantly seek new customers as it is more profitable than cultivating current ones. b. Businesses focus on efficient production and concentrate only on each immediate transaction with a customer. c. Businesses identify ways to exploit workers and manipulate prices of goods offered to customers depending on changing government laws. d. Businesses aim to build long-term relationships with customers because satisfied customers can become advocates for a business.

d. Businesses aim to build long-term relationships with customers because satisfied customers can become advocates for a business.

To bring a code of ethics to life, experts advocate a forceful, integrated approach to ethics. In this context, which of the following steps is essential? a. Ensuring that a company's ethics code is local and not global in scope b. Preventing top managers from overcommunicating the importance of ethics c. Establishing and enforcing strict laws against whistle-blowers d. Integrating ethics into mandatory staff training

d. Integrating ethics into mandatory staff training

Which of the following is a similarity between millennials and digital natives? a. Like millennials, digital natives approach adulthood hoping to be discovered. b. Like millennials, digital natives feel entitled to a great job when they graduate college. c. Like millennials, digital natives tend to have very long attention spans. d. Like millennials, digital natives tend to be extremely tolerant and inclusive.

d. Like millennials, digital natives tend to be extremely tolerant and inclusive.

Which of the following factors is most likely to be covered by the social environment dimension of a business? a. Federal tax laws b. Internet traffic and e-commerce c. Bank interest rates d. Population size and density

d. Population size and density

Ethics refer to: a. the obligation of a business to contribute to society. b. social movements that focus on key consumer rights. c. legal codes written in a constitution. d. sets of beliefs about good and bad.

d. sets of beliefs about good and bad