Intro to Business

21. A _____ offers the same liability protection as a corporation but may be taxed as either a partnership or a corporation.

LLC

19. A type of business entity that provides liability protection but is taxed like a partnership is a:

NOT a joint venture

23. A group of cotton growers in North Georgia and North Alabama pooled their resources to build a cotton gin and storage area for the ginned cotton. They marketed their cotton to textile mills under one label. This collective ownership organization is a:

NOT a joint venture

22. Which of the following statements about a socialist economic system is true?

The government owns or controls the major industries.

14. A corporation:

all of the above

16. Social responsibility should extend beyond the shareholders to include:

all of the above

20. Which of the following statements about limited liability companies (LLCs) is true?

all of the above

24. Clarence Danvers is buying a Cinnabon franchise at the airport in Tulsa. Danvers knows that he will get all of the following benefits EXCEPT:

assistance in personal income tax preparation

24. Understanding the external business environment requires marketers to be aware of:

changes in the law which impact how business is conducted

19. 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

8. Registration procedures for incorporation are uniform from state to state across the U.S.

false

8. To be a useful code of ethics, the code should offer broad policies and procedures rather than detailed rules.

false

9. Articles of incorporation usually specify the life of a corporation as a certain number of predetermined years.

false

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

favorable balance of trade

13. In 2018, Austria exported $122.5 billion and imported products valued at $118.8 billion. Austria had a(n):

favorable balance of trade

11. Wal-Mart has announced that it will only sell fresh and frozen fish that come from environmentally sound sources and bear the label of the Marine Stewardship Council. Wal-Mart's size gives it a unique opportunity to improve the fishing industry. This concern for _____ is one of many initiatives Wal-Mart is introducing to improve our environment.

social responsibility

18. _____ are all the individuals or groups to whom a business has a responsibility.

stakeholders

3. The distributive process by which the burdens and rewards that society has to offer are shared varies from society to society.

true

4. Factors of production are common to all productive activities, regardless of the economic system.

true

5. The difference in value between a country's imports and exports is called its balance of trade.

true

6. A disadvantage of a partnership is that any partner may have to pay all of the debts of the company regardless of who incurred the debts.

true

7. People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs.

true

8. Many people consider knowledge to be a fifth factor of production.

true

9. Business owners and managers have a great deal of control over the internal environment of business, which covers the day-to-day business decisions.

true

9. Social responsibility is a voluntary obligation.

true

9. The opposite of free trade is protectionism.

true

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

unfavorable balance of trade

11. A term that means that business damages and/or debts can also be attached to the personal assets of the owners is ______ liability.

unlimited

13. Which of the following is a disadvantage of sole proprietor ownership?

unlimited liability

23. In Canada, the government owns the communications, transportation, and utilities industries, while most other activity is carried on by private enterprise. Canada is an example of:

a mixed economy

4. Telecommunications equipment manufacturers in the United States sell their products to people who live in Canada. To Canadians, the telecommunications equipment is an export.

false

5. Ethics training programs typically teach how to disguise unethical behavior and not how to avoid unethical behavior.

false

5. Labor, as a factor of production, relates only to the production of manufactured goods; services are not included.

false

6. Armenia had a favorable balance of trade in 2018 when it exported $800 million in goods and services and imported $1.5 billion.

false

6. As a factor of production, capital includes money.

false

6. If the company wants employees to take ethical training seriously, the training should not include games.

false

7. All businesses approach ethics the same way.

false

8. According to the principle of absolute advantage, each country should specialize in the products that it can produce most readily and cheaply and trade those products for products that foreign countries can produce most readily and cheaply.

false

3. Not-for-profit organizations have the same goals as for-profit organizations.

false

3. The sole proprietorship is considered a legal entity; therefore, it is taxed separately from the owner.

false

4. Ethical decision making begins in the marketing department.

false

4. For partnerships to be legal, they must be established in writing.

false

15. Iris Souza started the summer with $30. She took $10 and made signs for her dog walking service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. What was Souza's profit for her summer job?

$125

17. Rudy and Ritchie Ling ran a camp this summer for children in their neighborhood. Rudy spent $135 on supplies and earned $250 before expenses. Ritchie spent $140 on supplies and made $210 before expenses. What is the combined revenue for the two brothers?

$460

16. Iris Souza started the summer with $30. She took $10 and made signs for her dog walking service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. Calculate Souza's costs for her summer job?

$80

7. Dissolving a partnership is easier than dissolving a sole proprietorship.

false

21. The government of Cuba owns or controls all of the basic industries in their economy. Cuba operates in which type of economic system?

Communism

7. The exchange rate is the interest rate that foreign banks receive when borrowing money from the United States.

false

16. When Linda McAnem began Stirya, a New York-based computer services company, she ran it as a sole proprietorship. As the business grew, she realized that she did not want to be personally liable for the business's debts and wanted her business accounts to be separate from her personal accounts. Therefore, she should have:

NOT created an S

24. A total prohibition against importing certain products is called a(n):

NOT import quota

25. In 1914, the United States prohibited the importation of Mexican avocados even though Mexico is the world's largest producer of the fruit. This prohibition remained in effect until 1996. The ban on importing Mexican avocados is an example of a(n):

NOT import quota

24. _____ is the practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates.

NOT social investing

13. _____ is the amount of money remaining from a firm's sales revenue after it deducts production costs, interest costs, and taxes.

Profit

19. _____ is the money a company earns from providing services or selling goods to customers.

Revenue

18. Curtiss Anaya is planning to sell kites on the beach this summer to pay for next year's school expenses. _____ refers to the potential that Curtiss will lose money and waste his time and end up at the end of the summer with not enough money to cover his expenses.

Risk

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

cooperatives

17. With its ease of registration and pro-corporate policies, _____ is called the "state of incorporation." About half of the Fortune 500 companies are incorporated there.

delaware

12. Which of the following is a disadvantage of sole proprietor ownership?

difficulty in raising capital

22. Which of the following is an example of a natural trade barrier?

distance

23. A natural barrier that faces Argentina when it sells beef to Siberia is:

distance

15. A corporation:

does not have a size limitation

2. One of the disadvantages of the sole proprietorship is that the owner has unlimited liability.

true

25. If you were told the output of goods and services produced in Tajikistan, a former Soviet Republic had increased by eight percent in 2006, you would correctly refer to this increase as:

economic growth

1. Having a global vision simply means having a willingness to sell outside one's national borders if, and when, the opportunity arises.

false

1. If the sole proprietorship acquires a legal business name, the owner then has limited liability.

false

1. The philosophy of utilitarianism is used to explain why restaurants, theaters, and hotels should make themselves handicapped accessible.

false

10. Some global corporations are large enough to create major changes in the external environment.

false

2. The major difference between a good and a service is how the producer uses the factors of production to create each.

false

5. In a limited partnership, all of the partners have limited liability.

false

20. Social investing:

is the practice of limiting investments to companies that have ethical policies that match those of the investor

11. The standard of living is low in Honduras. This means:

its citizens cannot afford to buy much

15. Many weight-loss programs advertise that they can help individuals lose a great deal of weight without any changes in the individual's lifestyle. Typically when the person who has lost the weight leaves the program, he or she regains all the lost weight. This yo-yoing is almost as bad for the body as the excess weight. These weight-loss programs are engaged in _____ behavior.

legal but irresponsible

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

legality and responsibility

17. In 2018, if the country of Serbia had imports of $10.58 billion and had an unfavorable balance of trade. This means that Serbia had:

less than $10.58 billion in exports

20. _____ refers to sending work functions to another country resulting in domestic workers losing their jobs.

outsourcing

21. Shell Oil Company used Intertek Caleb Brett, an Australian research laboratory, to provide all analytical services needed to support one of its full scale refinery. With this _____, Shell replaced domestic employees at the site of the refinery with employees from the Australian firm.

outsourcing

13. The highest level of the corporate social responsibility pyramid is:

philanthropic responsibilities

25. Which of the following is a disadvantage for the fast-food franchisee?

royalty fees

18. The first step to incorporating a company is to:

select the company's name

19. A group of investors in a retirement fund removed their money from the fund when they learned the fund manager had invested in a gambling casino. The investors' religious beliefs lead them to believe in the fundamental evil of all forms of gambling. These investors were engaging in:

social investing

3. Mines in Colombia produce emeralds and sell them to jewelers in the United States. To Colombia miners, emeralds are an export.

true

14. Hudson Kling mows yards during the summer. Which of the following is an example of revenue for Kling?

the $10 tip Mrs. Pierre gave him for doing such a fine job of mowing her yard

20. Which of the following is the BEST example of a not-for-profit business?

the American Cancer Society

12. The quality of life is:

the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time

16. In 2018, Country A exported $1.237 billion and imported products valued at $5.552 billion. The difference between the dollar value of its exports and imports represents a:

trade deficit

14. In 2018, Country A exported $84.9 billion and imported products valued at $74.69 billion. The difference between the dollar value of its exports and imports represents a:

trade surplus

1. A business is an organization that strives for a profit by providing goods and services desired by its customers.

true

10. The corporation's board of directors elects the corporate officers.

true

10. The most basic responsibility of all businesses is its economic responsibility.

true

10. The tax that the United States imposes on imported carbon steel products is called a tariff.

true

2. Human rights include an individual's right to life, to freedom, and to the pursuit of happiness.

true

2. International trade-dependent jobs have grown at a rate three times the growth of U.S.-dependent jobs.

true

12. 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

15. In 2018, Rwanda exported $98 million and imported products valued at $243 million. Rwanda has a(n):

unfavorable balance of trade

17. Which of the following statements about social responsibility is true?

NOT all of the above

18. All of the following terms are associated with international trade EXCEPT:

NOT balance of payments

21. Strategic giving:

NOT reflects

23. Kraft Foods Inc. joined with the National Latino Children's Institute to announce Salsa, Sabor y Salud - a first-of-its-kind healthy lifestyles educational program designed by Latinos for Latinos. The program was created by NLCI in partnership with Kraft to support Hispanic families, a population particularly at risk for obesity and accompanying health problems. Kraft donated $2 million to the program's startup. This donation is an example of:

NOT social investing

22. The Home Depot supplies all the materials and the labor expertise for Habitat Homes in various regions of the country where the retail giant has a store. Its top management believes that this type of philanthropy better reflects the company's commitment to the community than simple donations to the American Cancer Society and similar national charities. The Home Depot is using the practice of:

NOT social philanthropy

25. Which of the following is an example of a trend in ethics and social responsibility?

NOT the addition