Chapter 1 - Taking Risks and Making Profits within the Dynamic Business Environment

Select all the ways that the Internet has impacted business operations. A. It allows businesses to target customers directly with products they use. B. It makes purchases more secure and eliminates identity theft. C. It allows retailers to collect consumer data at the point of sale on what types of products are selling. D. It allows consumers to shop from home.

A. It allows businesses to target customers directly with products they use. C. It allows retailers to collect consumer data at the point of sale on what types of products are selling. D. It allows consumers to shop from home.

What are two challenges faced by new leaders since the global information-based revolution? A. Learning about world quality standards. B. Recognizing that the service era is coming to a close. C. Training employees takes too much time. D. Manufacturing jobs are the only ones that pay well

A. Learning about world quality standards B. Recognizing that the service era is coming to a close

Despite laws to prevent it, many companies have acted illegally by using corrupt practices to: [multiple] A. Operate without a permit B. Increase competition C. Bribe officials in other countries D. Reduce competition

A. Operate without a permit C. Bribe officials in other countries D. Reduce competition

What are two reasons that companies trade database information? A. So they know what customers buy and from whom. B. So they can send customers direct mail advertising products that they are likely to want. C. So they can steal each others' customers. D. So they can send product information to a wider, less focused customer base.

A. So they know what customers buy and from whom. B. So they can send customers direct mail advertising products that they are likely to want.

What is the term of all of the groups that stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address? A. Stakeholders B. Employees C. Stockholders D. Shareholders

A. Stakeholders

The amount of goods and services people can buy with the money they have is known as the: A. Standard of living B. Quality of life C. Economy D. Employment rate

A. Standard of living

Equipment such as phones, fax machines, and computers are all examples of which of the elements of the business environment? A. Technological B. Competitive C. Legal and social D. Economic

A. Technological

Which two factors are key in making the global environment of business so important that it encompasses all of the other environmental influence? A. The growth of global competition B. Government protection of domestic producers C. Fluctuating currency exchange rates D. The negotiation of trade agreements among nations

A. The growth of global competition D. The negotiation of trade agreements among nations

A country's quality of life includes such elements as:

health care and leisure time education and safety political freedom and natural environment

A product that is tangible and can be touched or held in your hand is: A. A good B. Not reusable C. Either a good or a service D. A service

A. A good

Technology improves the productivity of a farmer by enabling access to the latest prices for commodities and using satellites to view his fields. What are two other ways that technology has improved the productivity of a farmer? [multiple] A. Accessing websites to communicate with farmers around the world B. Using co-ops to reduce the costs of farming C. Showing the farmer how to seed and fertilize to get the best yields D. Using high tech equipment to minimize the farmer's yields to reduce the costs of fertilizer and seed

A. Accessing websites to communicate with farmers around the world C. Showing the farmer how to seed and fertilize to get the best yields

Businesses are part of a country's: A. Economic system B. Regional system C. Political system D. Social system

A. Economic system

Giving front-line workers the responsibility, authority, training, and equipment they need to respond quickly to customers is the definition of: A. Empowerment B. Consumer readiness C. Zero defects D. Successful decision making

A. Empowerment

To balance the money coming in with that going out of the Social Security program: A. Government will have to raise taxes, reduce benefits, spend less on other programs, or borrow on the world market. B. Government will have to increase payments throughout all other social programs. C. Government will have to increase payments to Medicaid, education, and other social welfare programs. D. Government will have to increase benefits, reduce spending elsewhere, decrease taxes, or borrow on the world markets.

A. Government will have to raise taxes, reduce benefits, spend less on other programs, or borrow on the world market.

The service sector employs which percentage of the U.S. workforce today? A. 45 percent B. 85 percent C. 75 percent D. 55 percent

B. 85 percent

When Apple, Nike, and other companies contract with companies in other countries to manufacture their products or answer their call centers, it is known as: A. Insourcing B. Job-sharing C. Outsourcing D. Capitalization

C. Outsourcing

Demography is the statistical study of _____. A. Businesses and their locations, sizes, and production levels. B. The environment and changes that affect global business. C. The human population's characteristics such as size, density, age, gender, and income. D. Global warming and its affect on wildlife, air quality, and water levels.

C. The human population's characteristics such as size, density, age, gender, and income.

When businesses and their employees pay taxes in a community: A. The standard of living is reduced. B. Public services can be decreased. C. The quality of life is improved for many.

C. The quality of life is improved for many.

Farmers now use computers to track each year's harvest and show where to spread fertilizer and seed. This relates to which aspect of the business? A. The economic environment B. The social environment C. The technological environment D. The legal environment

C. The technological environment

What is the most likely reason you see "made in China" stickers on products sold in the United States? A. government embargoes on domestic products B. poor quality of U.S. products C. increase in demand for foreign made products D. an increase in globalization

D. an increase in globalization

The United States has experienced strong economic growth and increased productivity _____. A. as the standard of living has decreased B. as people left the cities for the country C. as smaller farms became the norm D. since the 1800s

D. since the 1800s

A good strategy for college graduates in a rapidly changing world is to remain _____ and observe where jobs are being created.

Flexible or Adaptable

Identity theft is when an individual's _____ information such as Social Security and credit card numbers is obtained for illegal purposes.

personal

As the economy evolves, the use of new technologies means the need for jobs in some industries disappears and: A. productivity overall decreases as countries change over B. workers may lose their jobs in one industry, but then have different opportunities C. workers can stay in their old jobs if they re-train D. workers are able to remain with the same job for a lifetime

B. workers may lose their jobs in one industry, but then have different opportunities

Match the element of business environment with the correct sector. LEGAL TECHNOLOGICAL SOCIAL COMPETITIVE CONTRACT LAWS THE INTERNET DEMOGRAPHIC CHANGES CUSTOEMER SERVICE

LEGAL --> CONTRACT LAWS TECHNOLOGICAL --> THE INTERNET SOCIAL --> DEMOGRAPHIC CHANGES COMPETITIVE --> CUSTOMER SERVICE

Groups that have a strong interest in the success and outcomes of a business, such as employees, neighbors, or government regulators, are called _____.

Stakeholders

As a result of changes in _____ we are able to communicate with people around the world instantaneously.

Technology

True or False: The business environment either encourages or discourages entrepreneurship, which explains why some states and countries are richer than others.

True

Acting illegally or unethically by bribing an official to get a permit or avoid regulations can threaten the free-market system because it unfairly reduces _____.

competition

The _____ environment of business impacts all of the other environmental influences.

global

What three benefits do businesses provide to their communities?

goods and services revenue from tax payments jobs

The fastest-growing businesses today are in the _____ sector of the economy.

service

The movement of the temperature up or down over time is: A. Part of the technological environment B. Part of the sociological environment C. Climate change D. A demographic trend

C. Climate change

Students today can expect to respond to rapid changes in the business environment by: A. Maintaining their old job skills B. Saving their money and retiring early C. Continuously educating themselves to meet new job opportunities D. Relying on their employers to help them adjust to the changes

C. Continuously educating themselves to meet new job opportunities.

It is important to empower front-line workers because they most often interact with which group of stakeholders? A. Advocacy groups B. Competitors C. Customers D. Employees

C. Customers

In the information age, a company's value is based on its: A. Number of service employees B. Manufacturing equipment C. Intellectual capital D. Quality processes

C. Intellectual capital

Some of the world's largest firms that believe in climate change are: A. British Airways, DuPont, and Shanghai Electric B. Exxon/Mobil, Halliburton, and Iraqi Oil C. General Electric, Shell, and Coca-Cola D. Johnson and Johnson and Nestle

A. British Airways, DuPont, and Shanghai Electric C. General Electric, Shell, and Coca-Cola D. Johnson and Johnson and Nestle

Businesses that listen carefully to their customers, believe their "customers are kind" and adjust their products and services to meet customer needs are ______. A. Customer-driven B. Productive C. Profitable D. Cost-driven

A. Customer-driven

Retailers scan bar codes on products to build a(n) _____ containing information about customers. A. Database B. Resource C. Warehouse D. Inventory

A. Database

Businesses can be more successful by responding to a customer's needs and wants they track using: [multiple] A. Databases that track a customer's specific choices. B. Databases that use bar codes to track customer's purchases. C. Databases of customer buying preferences. D. Competitors' patentend information.

A. Databases that track a customer's specific choices. B. Databases that use bar codes to track customer's purchases. C. Databases of customer buying preferences.

What are two reasons that many companies strive for high-quality products with "zero defects"? A. Their customers are happier with their products. B. Fewer defects means less material wasted doing it over. C. They produce more scrap materials and byproducts. D. It increases production time and labor.

A. Their customers are happier with their products. B. Fewer defects mean less material wasted doing it over.

What will be a result of businesses expanding to serve global markets? A. There will be new jobs created in both manufacturing and service industries. B. There will be fewer jobs created in both manufacturing and service industries. C. The manufacturing industry will create more jobs; the service industry will lose jobs. D. The service industry will create more jobs; the manufacturing industry will lose jobs.

A. There will be new jobs created in both manufacturing and service industries.

What are two advantages of being an entrepreneur? [multiple] A. You get to be your own boss. B. You have the opportunity to keep any profits from the business. C. You have to provide your own benefits. D. You assume the risk of failure.

A. You get to be your own boss. B. You have the opportunity to keep any profits from the business.

Expenditures on war and terrorism have: A. drained money from the economy B. reduced risks for businesses C. increased risks for businesses D. benefited all sectors of the economy

A. drained money from the economy C. increased risks for businesses

It is important for a government to have a currency that is easily exchanged in world markets because it: A. Enables businesses in the home country to trade with one another, but not in foreign countries. B. Makes your home currency more expensive. C. Lets you buy and sell goods and services anywhere in the world. D. Makes your home currency cheaper.

C. Lets you buy and sell goods and services anywhere in the world.

What change has been realized in the agricultural industry in the United States? A. The agricultural industry has all but died. B. The number of farm workers has increased dramatically. C. Many small farms have been replaced by huge farms. D. Huge farms have been broken down into many smaller farms.

C. Many small farms have been replaced by huge farms.

What is the goal of a nonprofit organization? A. To provide a lot of jobs and improve the economy. B. To make money for the people who start them. C. To make a constitution to the welfare of society. D. To make a profit so as to start new businesses.

C. To make a constitution to the welfare of society

The U.S. government's ability to pay for Social Security in the near future is a problem: A. there will be more workers to support each retiree. B. there will be fewer retirees drawing Social Security than when the program started. C. demographic shifts mean there are fewer workers to support more retirees. D. the ratio of people in the labor force for each retiree will be far lower than when the program started in the 1940s.

C. demographic shifts mean there are fewer workers to support more retirees. D. the ratio of people in the labor force for each retiree will be far lower than when the program started in the 1940s.

Limiting those to whom you give personal information such as your Social Security number, credit cards, and using antivirus software on your computer: A. leaves you open to charges by Internal Revenue Service B. reduces the cost of doing business for you C. reduces the potential for identity theft D. eliminates the potential for identity theft

C. reduces the potential for identity theft.

Minimizing government interference with the free exchange of goods and services can help developing countries. Why? A. It is harder to do business when contracts legally enforced. B. It discourages entrepreneurs who want to start their own businesses. C. The lack of legal restrictions makes it impossible to enforce contracts. D. It encourages entrepreneurs to start businesses that create jobs and wealth.

D. It encourages entrepreneurs to start businesses that create jobs and wealth.

Entrepreneurs who start a business risk time and money. Those who take bigger risks do so because they hope to: A. Make less profit, but succeed B. Have a safer venture C. Succeed with or without profits D. Make big profits

D. Make big profits

Projections are that although service jobs are growing now, the economy is continuing to evolve to one based on the information-based global revolution. The best strategy for college graduates is to: A. Work a lot harder to retain your job B. Plan to retire early C. Continue to improve performance in the existing job market D. Remain flexible and see where new jobs are being created

D. Remain flexible and see where new jobs are being created

Which demographic group is currently the richest in the United States? A. Middle class workers aged 18-29 B. Children from 0-12 C. Children from 8-14 D. Seniors 75 and older

D. Seniors 75 and older

The resources of land, labor, capital, entrepreneurship, and knowledge are: A. Products of a country B. Needed by governments to succeed C. Not important to the creation of wealth D. The factors of production

D. The factors of production

The sector of the economy that has more high-paying jobs than the others is: A. The farm sector B. The manufacturing sector C. The mining sector D. The service sector

D. The service sector

Climate change can be defined as the:

movement of the temperature of the planet up or down over time

Some local governments are making efforts to adapt to a more diverse population by: A. changing signs to include languages other than English B. changing websites and telephone messaging to include more language choices C. developing brochures in more than one language D. trying to rely only on English as a language choice

A. changing signs to include languages other than English B. changing websites and telephone messaging to include more language choices C. developing brochures in more than one language

Some businesses have responded to demographic changes, such as the increase in single parent households, by: A. creating flexible schedules B. increasing Social Security payments C. offering family leave time D. increasing work hours

A. creating flexible schedules C. offering family leave time

Globalization has led to _____ with countries such as China and India. A. increased competition B. less technological advances C. inefficiency in distribution systems D. decreased competition

A. increased competition

The trend called greening is important because it: [multiple] A. saves energy B. reduces harm to the environment C. reduces the number of employees needed D. requires businesses to spend more

A. saves energy B. reduces harm to the environment

Increases in the legal and illegal immigrant population have affected: [multiple] A. schools in many regions of the U.S. B. hospitals in many regions of the U.S. C. businesses in many regions of the U.S. D. very little in most regions of the U.S.

A. schools in many regions of the U.S. B. hospitals in many regions of the U.S. C. businesses in many regions of the U.S.

Capitalist and mixed economies provide incentives for entrepreneurs by: A. Writing a lot of regulations about the exchange of goods and services B. Allowing private ownership of business. C. Passing laws that support writing enforceable contracts. D. Establishing a currency trade able in world markets.

B. Allowing private ownership of business C. Establishing a currency tradeable in world markets D. Passing laws that support writing enforceable contracts

A business can be defined as: A. Any group of individuals that come together to achieve a goal. B. Any activity that seeks to provide goods and services to others while operating at a profit. C. A socially responsible organization that is a not for profit. D. An organization that provides services to a community.

B. Any activity that seeks to provide goods and services to others while operating at a profit.

The definition of e-commerce is: A. Using electronic payment methods instead of cash in retail stores. B. Buying and selling goods online. C. Increasing productivity through the use of technology. D. Building databases to market goods.

B. Buying and selling goods online.

Globalization has improved living standards in developing countries such as: A. the European Union B. China and India C. Germany D. the United States

B. China and India

Which of these are elements of the business environment? [multiple] A. Financial environment B. Competitive environment C. Economic and legal environments D. Corporate structure E. Technological environment

B. Competitive environment C. Economic and legal environments E. Technological environment

A result of business expansion to global markets is that it creates new jobs in manufacturing and service businesses. It also: A. Makes it much easier for existing businesses to maintain the status quo. B. Creates greater global competition between businesses and for jobs. C. Maintains the existing job base here. D. Means some jobs have moved to different locations around the world.

B. Creates greater global competition between businesses and for jobs D. Means some jobs have moved to different locations around the world.

One of the main explanations for the relatively sharp increases in the U.S. manufacturing sector productively is _____. A. Today most manufacturing works are college graduates. B. Improved technology makes the production process faster. C. The corresponding decrease in the service sector productivity. D. The increase in service sector jobs.

B. Improved technology makes the production process faster.

What two products are classified as a service? A. New car B. Life insurance C. Pair of shoes D. Plane flight to Ireland

B. Life insurance D. Plane flight to Ireland

Entrepreneurs start businesses because they expect to be profitable and add to their wealth. IT is also true that: A. Almost all small businesses grow much larger. B. Many small businesses fail to be profitable. C. Small businesses seldom fail. D. The risk of opening a business always pays off financially.

B. Many small businesses fail to be profitable.

When you take a company's revenues and subtract the expenses needed to operate the business, you end up with _____. A. The amount left over for taxes. B. Total sales. C. Either a profit or loss. D. Total costs.

C. Either a profit or loss.

One of the challenges for future leaders is that the information-based global revolution is moving the economy in new directions that: A. Make low-tech businesses very attractive. B. Require innovation to succeed in global markets. C. Make it harder to succeed internationally because we are not an innovative country. D. Completely exclude the manufacturing sector.

B. Require innovation to succeed in global markets.

What is the term for the monetary value of all resources that come into the firm from operating activities? A. Gross sales B. Revenue C. Profit D. Net sales

B. Revenue

What two areas have been especially affected by legal and illegal immigration? A. Travel B. Schools C. Hospitals D. Entertainment

B. Schools C. Hospitals

Which of the following economic sectors has more high-paying jobs? A. Farm sector B. Service sector C. Manufacturing sector D. Mining sector

B. Service sector

Coca-Cola is able to do business in China because: A. The exchange rates are low. B. The United States and China have currencies that are easily exchanged. C. The currency exchange rates are high. D. The United States and China have currencies that are not easily exchanged.

B. The United States and China have currencies that are easily exchanged.

An important effect of changed communication technology is that we communicate: A. Only with those nearby. B. With people worldwide instantly. C. Less often than before. D. Nationally less than we do internationally.

B. With people worldwide instantly.

The next largest consumer group in the world will be Gen-Z, those born: A. before the mid-1990s B. after the mid-1990s C. before 1950 D. from 1980-1990

B. after the mid-1990s

When companies create a workplace that promotes inclusion and belonging, they are: A. less likely to be profitable B. effectively managing diversity C. creating competition among employeees D. practicing stereotypical behavior

B. effectively managing diversity

The increase in farm productivity as a result of the invention of the harvester and other farm equipment has _____. A. led to an oversupply of food worldwide B. increase the world's food supplies C. created starvation in many cities D. reduced the world's food supplies

B. increased the world's food supplies

An example of the effect of globalization on U.S. consumers is: A. many goods we use are now produced offshore, increasing delivery times and costs. B. many goods and services are provided more cheaply by outsourcing their production to India or China C. many U.S. employees have much better jobs D. that there has been an increase in the cost of health care

B. many goods and services are provided more cheaply by outsourcing their production to India or China

Managers today must be sensitive to differing cultural backgrounds because: A. there are heavy fines and penalties for insensitivity B. the workforce is increasingly diverse, with workers around the world C. it is illegal not to be aware of diversity D. it is easier than ignoring them and treating everyone the same

B. the workforce is increasingly diverse, with works around the world

One result of the wars in Afghanistan and Iraq is that: A. the U.S. economy has been unable to adjust to new safety procedures B. they have drained the U.S. economy of trillions of dollars C. the U.S. economy has benefited by adding billions of dollars in income D. businesses have found it easier to plan

B. they have drained the U.S. economy of trillions of dollars

The Uniform Commercial Code is important to businesses in the United States because: A. It makes business agreements such as contracts unenforceable by law. B. It shows businesses exactly how much they will be able to earn. C. It makes business agreements such as contracts enforceable by law. D. Businesses know exactly how much they will be taxed.

C. It makes business agreements such as contracts enforceable by law.

Many of the world's largest firms such as General Electric and Coca-Cola agree that the evidence of _____ _____ is overwhelming.

Climate change

Global trade means more markets and opportunities, but there is also more _____ for those markets.

Competition

Global trade means more opportunities, but it also means more global _____.

Competition or Competitors

Improved technology since the 1800s improved farm productivity: A. That increased the number of family farms B. That started a trend away from city living C. But reduced food productivity worldwide D. And led to large-scale farming

D. And led to large-scale farming

The service era is giving way to a new era based on: A. Mining B. Manufacturing C. Agriculture D. Information

D. Information

Retailers share information about customer preferences: A. by giving away their databases B. to steal customer identities C. to make it easier for competitors to locate customers D. to reach customers with specific needs and wants

D. to reach customers with specific needs and wants

True or False: All companies will be negatively affected when war and terrorism are present in the global economy.

False

One way for government to actively promote entrepreneurship is to allow private _____ of businesses.

ownership