Intro to Business Test 1

A partnership formed to operate for a specific time period or to accomplish a specific purpose is known as a

joint venture.

When Microsoft copyrighted its Windows software, it established a(n) ________________ monopoly.

legal

Bowflex, Inc., which manufactures total strength training systems for home use, obtained a patent on its power rods. Bowflex has a(n) _____________ for this product.

limited monopoly

Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of

losing the money he has invested in the corporation and not receiving profits

A price at which the demanded quantity is equal to the produced quantity of that product is called the _____________ price.

market

Raw materials, buildings, and machinery are ____________________ resources.

material

Although all casual clothing ultimately provides the same purpose, companies such as The Gap strive to make their brand seem unique from the many other brands available on the market. The market for casual clothing can best be characterized as

monopolistic competition.

Amy owns 100 shares of General Electric preferred stock. She wants to attend the annual stockholder meeting to cast her vote on company issues. Based on your knowledge from school, you caution Amy that

most preferred stock does not have voting rights.

All of the following are advantages to the franchisor except

no involvement in national advertising campaigns.

A corporation organized to provide a social, educational, religious, or other nonbusiness service is known as a(n)

not-for-profit corporation.

Habitat for Humanity and Girl Scouts are both examples of

not-for-profit corporations.

All of the following are disadvantages of corporations except

perpetual life.

If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80 worth of bows and arrows, it has a(n)

trade surplus.

A is a merger between firms operating at different but related levels in the production and marketing of a product.

vertical merger

Which form of franchising is the most common today?

A franchisor supplies brand names, techniques, or other services instead of a complete product.

Which of the following scenarios would not be considered international business?

A bearing manufacturer in South Carolina sells its parts to a Toyota plant in Kentucky.

The manager of a large chain recently spoke to a group of college students about making it in the business world. He focused particularly on the importance of fulfilling the purpose of the business organization: that is, to produce and market profitable products needed by society. In so doing, he indicated that a stockholder, not the society as a whole, invests in a corporation to earn a return on his or her investment and that a firm is legally obligated to act in stockholders' interests. What concept do the manager's comments reveal?

Economic model of social responsibility

The retail card and gift shop chain that Heidi started has since been incorporated. Which of the following best describes the limited liability that Heidi has as the primary stockholder in this corporation?

Heidi's personal assets will be protected in the event that the corporation fails, although she could lose her entire investment.

Cindy compiles a business plan for a business she hopes to start. This plan should answer all of the following questions except

How often will the business have a sale?

What is the significance of the name preferred stock?

Its claims on dividends are paid before those of common stock.

Ranee is a businessperson who works for a successful and admired Fortune 500 company. About how often is Ranee likely to encounter ethical issues in the workplace?

On a daily basis

Ed works in a position where there is very little supervision. In fact, although he considers himself ethical, he figures he could go away for a week without anyone noticing. Which general set of factors is most likely to influence Ed's ethical behavior?

Opportunity

Residents around Lake Gunter have been warned not to drink their water because it contains some unknown chemical contaminant that could be harmful. What is this called?

Pollution

"We are busy producing and marketing profitable products for society to enjoy! Now you want us to provide legal services, day-care centers, and counseling for AIDS victims and alcohol and drug abusers. If we do all these things, what role will the government, church, and family play?" exclaimed the vice president of Milam Corporation. This manager's comments reveal what concept?

The economic model of social responsibility

What is a common mistake that small-business owners make when their businesses begin growing?

They overexpand without proper planning.

Which of the following would least likely be stated in the articles of partnership?

What products the company will sell

A large computer manufacturer forbids its executives and managers from serving as directors or officers for Intel Corporation or any other corporations from which it might purchase component parts. The company is trying to prevent

a conflict of interest.

You are the executive vice president for Cooper Tire, the sixth largest U.S. tire maker. You have the responsibility to locate land for a new distribution center in Mississippi, and you own over 1,000 acres of land near one site in Tupelo. This could create for you

a conflict of interest.

A market or industry with only one seller is referred to as

a monopoly.

Corporate officers are

appointed by the board of directors.

American Airlines traded eight 747s for twelve DC-10s owned by United Airlines. This transaction is an example of

barter

All of the following are factors that affect the level of ethical behavior in an organization except

demographic factors.

The United States bans Cuban cigars and other Cuban products from entering the United States due to political difficulties. This action is called a(n)

embargo

The study of the morality of choices made by people is known as

ethics.

The United States sells industrial supplies and materials to many nations around the world. The United States thus engages in

exporting.

If a company deals with violations of its ethical codes ________________________, the opportunity to be unethical will be reduced.

firmly and consistently

Sears Holding Corporation is incorporated in Delaware, but when it operates in Illinois and Texas, it is considered a(n) ________________ corporation in those states.

foreign

Eric decides to purchase and operate a Subway restaurant. Eric is the

franchisee.

Victor owns his own motorcycle and ATV store. He notices that many of his customers talk about golf while in his store. He quickly adds golf carts and golf clubs to his merchandise selection. Rapidly adjusting to the needs of his customers is possible because small businesses

have the ability to quickly adapt to change.

A limit on the amount of a particular good that may be brought into a country during a given period of time is called a(n)

import quota.

An unfavorable balance of trade occurs when

imports are greater than exports.

The production and operations manager at a large shoe factory in Fall River, Massachusetts, notices that the total number of hours worked by production employees has increased 12 percent, while the number of pairs of shoes ready for shipping has dropped 6 percent this year over last year. This means

productivity has decreased.

Your friend Steve owns a considerable amount of common stock in Microsoft, a computer software company. He wants to cast his votes on various issues at the annual stockholders' meeting in Seattle, but he does not have the time to travel a great distance to the meeting. Instead of attending the meeting, Steve decides to register his votes by

proxy

The U.S. government imposes a tax on imported automobiles from Japan, Korea, Germany, and other foreign nations to increase government funds. This is best described as a(n)

revenue tariff.

The ultimate objective of every firm, such as IBM, Hewlett-Packard, JC Penney, and Cengage Learning, must be to

satisfy the needs of its customers.

The nationalization of key industries in countries such as Sweden and India is indicative of a(n) ________________ economy.

socialist

A temporary association organized to perform a specific task requiring a large amount of capital is known as a(n)

syndicate

The system in which raw materials are distributed by entrepreneurs to homes in which family members process those materials into finished products is referred to as

the domestic system.

An executive at a U.S. steel company uses growth in gross domestic product as one way to develop trends in industry steel use, so he records GDP change for each year on a graph. However, the executive's figures are considerably higher than those of the staff economist, who also has drawn a graph. This difference is most likely the result of

the economist adjusting the figures for the inflation rate

Steven Jobs and David Wozniak, the founders of Apple Computer, Inc., are creative, free-spirited individuals who decided that being corporate underlings was not what they wanted from a career. They had an innovative idea for a product and desired to create their own business based on this idea. All of the following are factors that could have led them to go into business except

the low risk and high rewards inherent in entrepreneurship.