OLS 274 Old test questions
Milwaukee Fabrication has $80 million in assets and $50 million in owners' equity. How much does the firm have in liabilities?
$30 million
The maximum number of shareholders is limited to ________ for a firm to qualify as a subchapter S corporation.
100
A firm has total assets of $50 million and owner's equity of $40 million. What is the firm's debt ratio?
20%
All of the following are examples of flexible working arrangements EXCEPT :
401K plans
What percent of U.S. companies are considered small businesses ?
99.7
Which of the following persons is LEAST likely to become an entrepreneur ?
A calm, low-energy person
________ has a blend of both planned and free enterprise system.
A mixed market economy
Which of the following is considered to be the BEST example of pure competition in today's business environment?
Agriculture
James is putting together a business plan for his new bookstore and café. Which of the following will NOT be part of his business plan?
An detailed, itemized budget for the entire fiscal year
Which of the following represents the accounting equation?
Assets = Liabilities + Owners' Equity
Devon and Keith opened a restaurant as a partnership. Two years later, Keith left the restaurant, and Devon discovered that Keith had charged numerous expenses to their account. These expenses resulted in thousands of dollars' worth of debt for the restaurant. What option does Devon have in this situation?
Business creditors will expect full payment from Devon.
___________ must verify in writing the accuracy of their corporation's financial statements.
CEOs and CFOs
The ________ is most likely an example of public ownership.
City sewer system
Isabella owns 100 shares of IBM ________ stock, which means she has voting rights on company decisions at IBM, but only residual claims on the company's assets.
Common
Dunkin' Donuts uses __________ advertising when it tells people that "hard-working" people prefer their coffee over the high-priced Starbucks.
Comparative
When 3M managers decided to manufacture Post-it notes, a new product was born. This was an example of ________ in action.
Creativity
An understanding of religious holidays is essential in order to overcome ________ international trade barriers.
Cultural
Kayla is opening a home health care business that she knows will do well in her community based on prior research. Although she must repay borrowed funds, Kayla chooses to maintain complete control over the business without having to answer to investors or partners.
Debt Financing
Genuine Products has been involved in intensive price competition with one of its products. Profits are low and market researchers are concerned that losses will soon occur due to a reduced market for the item. This product has reached the ________ stage of the product life cycle.
Decline
What is the first step in the organizing process?
Determine specific work activities necessary to implement plans and achieve objectives.
If a foreign company offers steel in the United States below the company's cost of production, the company might be accused of ________.
Dumping
A company removes a profitable product from the market because it may be dangerous. This company is demonstrating ________.
Ethical behavior
In recent years, the value of the dollar relative to the euro has declined. What does this mean for European businesses exporting to the United States?
European countries are more likely to import U.S. goods or services.
22. In consumer orientation, a company creates a product first, and then determines if the consumer will likely purchase the product.
False
A corporation operating outside its state of incorporation is known as a domestic corporation.
False
A key element of the production era was the use of consumer research.
False
Employees should always be loyal, regardless of the situation
False
Entrepreneurs enjoy guaranteed job security because no one can fire them.
False
Even with advances in management and communications, manufacturing still accounts for most of the annual output in the United States.
False
If the price of an imported product sells for more in the United States than it does in the producing country, the producing country could be accused of dumping.
False
In order to remain viable, not-for-profit organizations need to focus on profits even more than the public service they provide.
False
Inflation benefits consumers with fixed incomes.
False
Joint ventures are not ideal for international companies due to logistics and conflicting business laws.
False
Just as with a for-profit business, the first priority for a not-for-profit organization is making a profit.
False
Mass production is highly efficient for producing small quantities of unique items.
False
Most of the small businesses today are run by Caucasian males.
False
Owning a business, by definition, means that you are an entrepreneur.
False
Paying corporate taxes is an example of corporate philanthropy.
False
SWOT is an acronym for strategies, weaknesses, opportunities, and teamwork.
False
Small businesses are not required to pay any taxes.
False
Sole proprietorships are concentrated mainly in corporations.
False
The Equal Employment Opportunity Commission is beginning to focus on individual situations rather than systemic discrimination.
False
The Hewlett Packard purchase of Compaq is an example of a conglomerate merger.
False
The decision to make, buy, or lease never hinges on the availability of outside suppliers that can dependably meet a firm's standards for quality and quantity.
False
When McDonald's franchises into foreign countries, they are engaging in direct international investment.
False
During the performing stage, team members ________.
Focus on solving problems
Anita established a corporation in Nebraska, but she recently moved to Colorado where she now conducts her business. What type of corporation does Anita own?
Foreign corporation
________ is a commonly used measure of productivity.
GDP (Gross Domestic Product)
When the Small Business Administration (SBA) assists a small business in applying for a major loan, it acts as the lender's ________.
Guarantor
________ involves the use of innovative, low-cost marketing efforts to attract customer attention.
Guerrilla marketing
2. All of the following are typically part of the not-for-profit sector EXCEPT ________.
Hotels
Who is recognized worldwide as the body with sole responsibility and authority to issue pronouncements on international accounting standards?
IASC
Team norms are ________ and ________ standards of behavior.
Informal; unwritten
Logan is an entrepreneur who takes personal responsibility for the success or failure of his actions rather than believing in luck or fate. Which characteristic best describes Logan's entrepreneurial philosophy?
Internal locus of control
Collective bargaining encompasses all of the following issues EXCEPT ________.
Investor relations
Which of the following is a disadvantage of assembly lines?
It is inefficient for producing small batches.
In 2009, Walmart started working together with another company in India by forming a __________ with Bharti Enterprises, Inc., one of India's leading business groups.
Joint venture
Patents, trademarks, and intellectual property are important concerns in the ___________ environment.
Legal
Elian wants to start a business. He takes a personality test and discovers he possesses a trait that may reduce the likelihood he will succeed. Which of the following is that trait?
Low tolerance for risk
Angie wants to be her own boss, but she doesn't have an idea for a profitable business. What could Angie do to help her identify a successful business idea?
Make a list of her interests and abilities and a list of businesses that match these interests and abilities
Harriet uses a computer-based production planning system by which a firm can ensure that it has needed parts and materials available at the right time and place and in the correct amounts. Harriet uses:
Materials requirement planning
Tactical planning is primarily the responsibility of ________.
Middle managers
Before the patent expired on allergy medicine Claritin, pharmaceutical company Schering-Plough was able to set its own price in the marketplace. From which type of competition did the company benefit?
Monopoly
The two largest stock markets in the world are the ________ and the ________.
New York Stock Exchange; NASDAQ Stock Exchange
Concerning education and entrepreneurs, all of the following statements are correct EXCEPT:
Obtaining a college degree in entrepreneurship is essential before starting your own business.
When Google opened offices in Tokyo, London, and Sydney, they were utilizing ________ by relocating business activities to lower-cost locations overseas.
Offshoring
Which of the four functions of management creates a well-designed road map of the actions needed to lead a company forward?
Planning
Which phase of production control determines the amount of all resources needed to produce a certain amount of goods and services?
Production planning
________ is essential because it serves as a primary incentive for people to start companies, expand them, and provide consistently high-quality competitive goods and services.
Profit
Consumers often turn to lower-priced retailers for the goods they need during a business cycle of ________.
Recession
Nurturing customer loyalty by gathering knowledge of customer needs and preferences is an approach cultivated in the ____________.
Relationship Era
________ is the phase of production control that determines the sequence of work and specifies where and by whom each aspect of production will be performed.
Routing
Starr works in the bakery at Whole Foods Market. As part of a ________ team, she shares in the responsibility of managing her department's work schedule and ordering baking supplies.
Self-managed
The ________ industry represents the greatest percentage of minority-owned businesses.
Service
Sofia is an investment advisor and wants to recommend a stock she happens to own. How should Sofia best deal with this potential conflict of interest?
She should disclose the fact that she owns the stock while making the recommendation.
Although the average farm size has increased in recent years the majority of farmers operate as ________ businesses.
Small
___________ use their own capital supplemented with government loans to invest in small businesses.
Small business investment companies (SBICs)
In a particular country, the government owns all the transportation companies, the utilities, the energy suppliers, and major manufacturing firms. Small businesses are privately owned. What type of economic system does this country have?
Socialism
Top management usually spends the majority of time on ________ plans.
Strategic
Which of the following statements is true of subcontracting?
Subcontracting can unintentionally result in child labor or other unethical business practices
State and local governments may offer ________ to encourage businesses to locate in their area.
Tax incentives
________ provides a running measure of consumer price changes.
The Consumer Price Index (CPI)
Last year, the United States imported less from Switzerland, than it exported to Switzerland. Which of the following statements is true?
The United States has a trade surplus with Switzerland.
Which of the following is a concern about performance appraisals?
They may be skewed in favor of a single manager's subjective opinion.
All of the following are contributions of small businesses EXCEPT:
They provide more job security than large corporations.
Lucia is a chief financial officer in a large corporation. Her responsibilities include the full financial authority to make appropriations and authorize expenditures. Lucia is likely to be a member of ________ management.
Top
A U.S. company operating in the European Union (EU) is required to adhere to European regulations.
True
A company's vision should include flexibility.
True
A joint venture is a partnership between companies formed for a specific undertaking.
True
An advertising agency representing two companies that compete with one another has an obvious conflict of interest.
True
An inadvertent failure to comply with federal or state employment laws still leads to significant penalties for the firm involved.
True
Controversies involving the World Trade Organization (WTO) include pollution and human rights abuses.
True
Desire for improved quality of life is often a motivation for becoming an entrepreneur.
True
Each country's exchange rate is generally quoted in terms of another country's currency.
True
Employers expect employees to generally act in the best interests of the organization.
True
Entrepreneurial environments created within companies can help firms retain valuable employees who might otherwise leave to start their own businesses.
True
Equilibrium price is the prevailing market price at which consumers can buy an item.
True
Equilibrium price refers to the intersection of the supply and demand curves.
True
For small businesses, establishing a Website is generally cheaper than opening up a retail store.
True
Formally stating that employees must not discriminate on the basis of race, gender, or age in their dealings with customers is something that could be found in a company code of conduct.
True
Giant oil companies such as BP (British Petroleum) and ExxonMobil are engaged in oligopoly competition.
True
High start-up expenses sometimes prove to be challenging for owners of small businesses.
True
Horizontal mergers are popular in the auto and healthcare industries.
True
Joint ventures allow companies to share risks, costs, profits, and management responsibilities with one or more host country nationals.
True
Less-developed countries represent a lucrative market for U.S. firms because of their huge population.
True
Lilly's supervisor sends her an e-mail requesting updated financial figures as soon as possible. When Lilly interprets the message as meaning by the end of the day, she is decoding the message.
True
Many entrepreneurs rely on personal savings or loans from business associates, family members, or even friends for start-up funds.
True
Many small businesses prove successful when they become suppliers to large corporations.
True
Middle managers develop detailed plans and procedures to implement the firm's strategic plans.
True
Most owners of small businesses rely on loans from financial institutions for their start-up funds.
True
Most small businesses turn a profit within the first year
True
National governments sometimes take deliberate action to devalue their currencies as a way to increase exports and stimulate foreign investment.
True
Obtaining financing for an existing business is easier than it is for most start-up companies.
True
One disadvantage of a matrix organization is that employees may be confused and frustrated in reporting to two bosses.
True
Only a small percentage of labor-management contract negotiations involve a work stoppage.
True
Small businesses produce over 16 times more patents than large businesses each year.
True
Social entrepreneurs recognize a societal problem and use business principles to develop innovative solutions.
True
Starbucks' efforts to go green with recyclable cups is an example of social responsibility.
True
Students who graduate from entrepreneurship programs are more likely to be self-employed.
True
Tata Motors' purchase of Jaguar is an example of a horizontal merger.
True
The Federal Reserve can implement both expansionary and restrictive monetary policies.
True
The Occupational Safety and Health Administration (OSHA) sets standards for workplace safety and investigates workplace accidents.
True
The average amount rewarded to owners of small businesses through Small Business Administration (SBA) microloans is $13,000.
True
The critical path in a PERT diagram illustrates the sequence of operations that requires the longest time for completion.
True
The government owns the railroads, utilities, energy companies, and financial institutions. Ownership of small businesses is in private hands. This is an example of socialism.
True
The managerial quality of vision is the ability to perceive marketplace needs and what an organization must do to satisfy them.
True
The set-aside program designates that a percentage of government contracts must be awarded to qualifying small businesses.
True
Twenty-first century innovations developed by small businesses include social networking sites and green energy industries.
True
When When customers enter a supermarket and select their favorite brand of laundry detergent, they are exercising their right to freedom of choice.
True
Which of the following would result from devaluation of the U.S. dollar?
U.S. goods would sell for less abroad.
Gavin's company has installed a system to make data transmission secure. Therefore, he can use the Internet to send and receive sensitive data. Gavin's company has installed a(n) ________.
Virtual private network
Emily works for a pharmaceutical company and gives a presentation on the need to expand the company's geriatric division within the next ten years. Emily is helping to establish the company's ________.
Vision
Wal-Mart's pricing objective is based primarily on ________ while a jewelry store's pricing objective is based primarily on ________.
Volume; prestige
________ tie geographic regions together using long-distance telephone lines or satellite transmissions.
Wide Area Networks
A formal statement that defines how the organization expects and requires employees to resolve ethical questions is ________.
a code of conduct
Dana's office in south Florida was destroyed by a hurricane last year, and she lost numerous company documents. After relocating, Dana took no chances and implemented ________, in which she backed up her data in a secure online storage service.
a disaster recovery plan
BMW and Toyota set up a factory in Brazil to produce minivans. Slightly different minivan versions are sold in Brazil—one as a Toyota and one as a BMW. This is an example of ________.
a joint venture
A country raises the tariff on imported cheese in order to increase its price above the price of domestically produced cheese. This is an example of ________.
a protective tariff
There is no direct competition in a particular industry, yet the firms have almost no control over pricing. This industry is an example of ________.
a regulated monopoly
Expenses that have been incurred (such as wages) but have yet to be paid, are reported on the balance sheet as ________.
accruals
A(n) ________ is a transaction in which one company buys another.
acquisition
M2 includes______ M1
all of
A university offers alumni a special Visa card with the university's logo printed on the front. Each time the cardholder uses the card, the university receives a small percentage of the amount charged. This is an example of ________.
an affinity program
A particular industry has only a few competitors, who have at least some control over price. Entry into the industry is difficult. This industry is an example of ________.
an oligopoly
Michael is a successful financial advisor looking to invest money directly into a new consulting business in return for equity in the company. Michael is an example of a(n) ________.
angel investor
Drew purchases a new game for his computer. He will load the program onto the computer's hard drive. Drew is buying ________.
application software
According to a supply curve, ________.
as prices rise, the quantity of a product that is supplied also rises
Central Valley Pharmaceuticals needs to raise funds to buy new production equipment. The financial manager would probably suggest that his company raise debt capital by ________.
borrowing money from a bank
Luis wants a particular brand of golf ball, but his local pro shop is out of stock. Instead of buying a substitute, Luis goes home and orders his preferred brand online. Luis is at which stage of brand loyalty?
brand insistence
Customers who choose one brand over another are displaying ________.
brand preference
The Small Business Administration (SBA) provides all of the following EXCEPT:
business incubators
Which classification of business goods is consumed over a long period and usually involves large sums of money?
capital items
All of the following are types of securities EXCEPT ________.
cash
Franz and Arlene had an idea for a different type of ice cream. They struggled to open their own small business, and later, to expand production and distribution. Their products are distributed nationwide and their sales continue to increase. Franz and Arlene are examples of ________.
classic entrepreneurs
According to surveys, the largest lenders to small businesses are ________ .
commercial banks
The most basic form of corporate ownership is ________.
common stock
Even though the United States manufactures textiles, China is able to produce them more efficiently. Thus, China has a(n) ________________ in manufacturing textiles.
comparative advantage
Jana's firm allows her to work four 10-hour days each week. This type of flexible work arrangement is known as ________.
compressed workweek
Mac downloaded some company information into a spreadsheet so that he could work on it at home. When he returned to work, he inserted his memory card into his company computer. Within minutes, all of his hard drive files were corrupted. The most likely cause was a(n) ________.
computer virus
Elizabeth and Tom have an in-ground swimming pool installed in their back yard. About one week after installation, the salesperson telephones and asks if everything about the pool has met with their approval. The salesperson is ________________.
conducting a follow-up
Tanisha is a diabetes educator at a local clinic. Recently, she was offered a lavish trip by a sales representative who has been pushing the clinic to use his company's diabetes supplies. Tanisha declined the gift. Which ethical challenge did she face?
conflict of interest
Assume that Microsoft decides to invest some of its excess cash by acquiring fellow Seattle-based Starbucks Coffee. This would be a ________.
conglomerate merger
The business philosophy that advocates determining what consumers want and need, and then designing products to satisfy those needs, is known as ________.
consumer orientation
Goods and services such as haircuts, GPS systems, and computers that are purchased for end users are examples of ________.
consumer products
Nearly a week before Hurricane Katrina reached New Orleans, Home Depot began moving trucks and supplies into position, as specified in the company's ________ plan.
contingency
Which production process describes a manufacturing operation in which long production runs generate finished products over a period of time?
continuous
Ben is the owner of a small mushroom farm in Pennsylvania. Ben would like to join with other growers to create an organization that will promote and distribute mushrooms. The form of ownership that would be most suited for the growers is the ________.
cooperative
Danny works for a home electronics store and is a member of a team created to increase communication among various departments. Danny has networked with new people and now has strong contacts for each department when he needs them. Danny is a member of a ________ team.
cross-functional
The purpose of a restrictive monetary policy is to:
curb rising prices and overexpansion
If a firm has a current ratio of 2.5, it means that for every $2.50 in ________ it has $1.00 in ________.
current assets; liabilities
Peapod is an online grocery service that saves customers time by selecting, packing, and delivering groceries to customers. Peapod is utilizing a ________ retail strategy.
customer service
Bill is listening to one of his fellow team members speak at a meeting. He believes she is just trying to get the team leader to adopt her idea. Bill is being a(n) ________ listener.
cynical
Tabitha is a research specialist in a marketing division. She is working on a project that involves searching through customer files to detect spending patterns or trends that her company could target to increase sales. Tabitha is ________.
data mining
In general, as price of a good or service increases, the quantity demanded:
decreases
One of the most common forms of segmenting consumer markets uses characteristics such as age, income, household size, and/or ethnic group. This is known as ________ segmentation.
demographic
Aaron is sitting at his computer preparing a new sales brochure. The brochure combines high-quality type, graphics, and photographs. What type of software is Aaron likely using to create the brochure?
desktop publishing program
If a company's target market is small and buyers are concentrated in a specific geographical area, which distribution channel would be most effective?
direct channel
Amit, CEO of Charter Chemical, has recognized the financial opportunities in China. Amit has hired a foreign freight forwarder to coordinate selling Charter Chemical's products outside the United States. Charter Chemical is now involved in ________.
direct exporting
All of the following are current social issues related to business's responsibilities to employees EXCEPT ________.
discrimination against workers under 40 years of age
Ida works on creating ways to ensure that customers receive goods at the right time and correct location. Ida is involved in her firm's ________ strategy.
distribution
Teams at Google come from many different countries, with skills ranging from creativity to communication to search engine optimization. This is an example of team ____________.
diversity
The stock of Old Germany Brewery is totally owned by the Prechter family. When the family elected to move from a sole proprietorship to a corporation, the greatest concern was ________.
double taxation
All of the following are examples of external communications EXCEPT:
e-mail sent to sales representatives
Pin-yuan is trying to promote the cohesiveness of his team. Which of the following would LEAST likely improve his team's cohesiveness?
encouraging team members to socialize during and after working hours
Which of the following is NOT part of the mission of ISO?
enforce quality standards
Dina is a single mother who is required to work evenings and weekends at a local retail store. She is thinking of starting a consulting business primarily so she can ________.
enjoy a higher quality of life
Information technology can help entrepreneurs in all of the following ways EXCEPT:
ensure financial success.
Jada is opening her own bakery. Jada is an example of a(n) ________.
entrepreneur
The Fair Labor Standards Act ________.
established the federal minimum wage
According to Maslow, the desire to be valued and recognized by others is a(n) ________ need.
esteem
Philippe owns a store that sells lampshades. The process of receiving money in return for lamp shades is ________.
exchange
Darren decided to change jobs. Before he left the company, he talked to someone in the human resources department about the reasons why he was leaving. Darren went through a(n) ________ interview.
exit
Feedback from customers is an example of a(n) ________ that requires organizational change.
external force
A buyer's market is one characterized by a shortage of goods and services.
false
A firm has $12 million in current assets, of which $8 million is inventory. If the company has $4 million in current liabilities, then its current ratio equals 1.0.
false
A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities.
false
All short-term bank loans are secured, meaning that the borrower pledges specific assets as collateral.
false
Assume a company buys a machine worth $1 million and pays for it by borrowing the funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease by $1 million.
false
Bonds with the highest level of risk are rated AAA
false
Compared to other techniques for empowering employees, information technology has minimal risks.
false
Custom low-volume machine shops are typically organized in a product layout.
false
Daily business decisions are generally unaffected by accounting information; long-term decisions, however, are affected by accounting information and the interpretation of financial reports.
false
Diversity among team members often decrease the chances of conflict.
false
If a product sells for $20 and the variable costs are $14, then the per-unit contribution to fixed costs is $34.
false
In the secondary market, firms and governments issue securities and sell them initially to the public.
false
Madison thinks that employees must be closely supervised and controlled at all times. Madison is an example of a Theory Y manager.
false
Miles is an accountant and works for a firm that provides tax planning and preparation services to other businesses. Miles is a management accountant.
false
Polite listeners are attentive listeners.
false
Promotion activities increase substantially when a product begins to enter the decline stage.
false
Raising reserve requirement tends to increase the supply of money, thereby lowering interest rates.
false
The Fed's only tool to enact monetary policy is open market operations.
false
The Internet is considered an indirect method for connecting with customers.
false
The breakeven point determines at which point to halt production because sales beyond the breakeven point result in losses to the firm.
false
The end of the supply chain is when goods or services are delivered to marketing intermediaries.
false
Water transportation is generally more expensive than transportation by truck.
false
Corporations have all of the following advantages EXCEPT ________.
favorable tax treatment
Many people rationalize unethical acts because they ________.
feel pressured on their jobs to meet performance goals
The process that periodically checks actual revenues and expenses against forecast values is ________.
financial control
________ activities provide the necessary funds to start a business and to expand it after it begins operations.
financing
Kate is a full-time nurse and would like to vary her starting and ending time to better accommodate her children's school hours. Which flexible work plan would be ideal for her situation?
flextime
Corporate vision should be ________ and ________.
focused; flexible
If the Fed pushes interest rates lower, policymakers at other nations' central banks will most likely ________.
follow suit, and drop their rates as well
The three types of unemployment are ________.
frictional, cyclical, and structural
Guadalupe's firm is divided into work units representing human resources, marketing, production, and finance. This is known as ________ departmentalization.
functional
Small-business owners want to determine whether their companies meet the standards for small-business designation because:
government agencies offer benefits designed to help small businesses compete with larger firms.
In which stage of the product life cycle do competitors enter the field with similar offerings?
growth stage
All of the following are duties of the board of directors of a corporation EXCEPT ________.
guaranteeing the payment of cash dividends every year
Japan is considered to be a ________ context country and thus, Japanese businesspeople place importance on ________ communications.
high; both verbal and nonverbal
The joining of Chemical Bank and Chase Manhattan Bank was an example of a ________.
horizontal merger
United Airlines' purchase of Continental Airlines combines the resources and capabilities of both firms to create the world's largest airline. The newly formed company is an example of a _____________.
horizontal merger
Which type of merger results in decreased competition within the same industry?
horizontal merger
The orientation program is typically administered jointly by the ________.
human resource department and the department in which the employee will work
Which of the following is the first step in the employee recruitment process?
identify job requirements
A trade deficit occurs when ________.
imports exceed exports
Many businesses fail during the early years because of ________.
inadequate financing
Kate is the Executive Director of a local food bank and is assessing the financial situation of her not-for-profit organization. Kate uses a(n) ________ to determine whether revenues from contributions and other sources will cover operating costs.
income statement
A company includes an "instant coupon" as part of a product's package, giving the buyer a reduction off the retail price. What is the company attempting to do?
increase sales
The Federal Reserve reduces the amount of money banks can lend. As a result, interest rates will ________ and economic growth will ________.
increase; fall
Since potential customers are unaware of a product during its introductory stage, initial promotion concentrates on ________.
informing the market about the item and explaining its features, uses, and benefits
Leadership is most often associated with the ability to ________.
inspire others toward higher levels of achievement
If the Fed reduced reserve requirements, ________.
interest rates would fall
Which of the following current assets is NOT included when calculating the acid-test ratio?
inventory
Democratic leaders ________.
involve their subordinates in making decisions
Which of the following statements is correct regarding team conflict?
it often improves team performance
Assume a nation has a comparative advantage in the production of clothing. If the value of this country's currency rises, ________.
its comparative advantage will decrease
Entrepreneurs possess all of the following traits EXCEPT ________.
low self-confidence
Countries like the United States which tend to rely on explicit written and verbal messages are considered ________ cultures
low-content
How can a firm best protect itself against an interruption in the supply of parts?
maintain more than one supply source
Autocratic leaders ________.
make decisions on their own, often without consulting others
Social responsibility would include all of the following EXCEPT ________.
making campaign contributions to politicians in the hope of obtaining a government contract
Which of the following is the leading cause of today's small business failures?
management shortcomings
In which stage of the product life cycle do sales reach a saturation level, making further sales expansion difficult?
maturity stage
Which level of management includes job titles such as general manager, division manager, or plant manager?
middle management
The two major policy tools available for controlling economic activity are ________.
monetary and fiscal policies
A country with a balance of payments surplus means ________.
monetary inflow exceeds monetary outflow
Diverse employee teams tend to perform ________ and develop ________ than do homogenous employee groups.
more effectively; better solutions
The factors of production in an economic system are ________.
natural resources, human resources, capital, and entrepreneurship
Television is an attractive advertising medium because it ________.
offers mass coverage and flexibility
Companies that adhere to high ethical standards ________.
often make better investments in the long run
Jacob begins working an apprentice plumber. He will most likely receive:
on-the-job-training
An acquisition occurs when ________.
one company purchases the property and assumes the obligations of another company
Serguis is a member of his firm's strategic planning team. He has identified several untapped markets that exist in other countries. His observation should be listed as a(n) ________.
opportunity
Robert's company contracted with an outside business to provide technical and computer support. This is an example of ________.
outsourcing
When a business employs an outside company to handle all customer correspondence and phone calls, the business is ________ its customer service department.
outsourcing
The utility that is created when a salesperson at a car dealership completes the sales contract is ________ utility.
ownership
All of the following are examples of corporate philanthropy EXCEPT ________.
paying local property taxes
The buyer-seller communication in _________ occurs during a face-to-face meeting or via telephone, videoconference, or interactive computer link.
personal selling
A surplus will occur when ________.
price is above the equilibrium point
Devin obtains research data based on the number of unique visitors to his company's Web site, as well as tracking types of orders and amount of money spent. Devin is acquiring what type of research data?
primary
When Kroger's grocery store puts its own line of detergent on the shelf next to Tide, the store is promoting its ________ brand.
private
Most industrialized nations operate economies based on ________.
private enterprise systems
________ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies.
private equity funds
The conversion of a publicly held company into privately held businesses would be an example of ________.
privatization
When Toyota was faced with serious quality problems and was forced to recall thousands of vehicles, the company quickly formed a temporary group of employees to brainstorm the problem. This is an example of a _______ team.
problem-solving
A food producer's goods are carried by thousands of grocery stores across the country. Which of the following distribution channels is the manufacturer most likely to use?
producer to wholesaler to retailer to consumer
A plant where plastic 2-liter bottles are manufactured probably uses a ________ layout.
product
Coppertone manufactures sunscreens with various SPF factors, which constitutes the company's ________.
product line
In the movie, The Social Network, the actor portraying Mark Zuckerberg is featured wearing products by Gap and the North Face. This form of promotion is known as ________.
product placement
The era in marketing history characterized by the notion that a good product will sell itself is known as the ________ era.
production
When a cabinet maker combines wood, tools, and skill to create finished kitchen cabinets for a new home, the cabinet maker is engaging in ________.
production
Henry Ford is noted in business history for introducing the moving assembly line, which greatly reduced the cost of producing a car. Assembly lines first became common during the ________.
production era
Businesses exercise social responsibility for all of the following reasons EXCEPT ________.
profits are guaranteed
Pham is a human resource manager. His responsibilities might include all of the following activities EXCEPT ________.
projecting sales for the coming six-month period
The objective of an import quota is to ________.
protect domestic industries
Tamara is the owner of Baker's Dozen, a bakery with all perishable products. What will be her primary consideration in regard to location?
proximity to her market
The equilibrium price is established when the quantity ________.
purchased is equal to the quantity offered
Goods and services are classified as either consumer or business, depending on the ________.
purchasers of the particular item
A particular industry has many competitors, each of whom has little control over price. In addition, it is fairly easy to enter the industry. This industry is an example of ________.
pure competition
The four different types of market structure in a private enterprise system are ________.
pure competition, monopolistic competition, oligopoly, and monopoly
Salespeople determine if prospects have the financial ability and authority to buy through ________.
qualifying
Dell Computer is offering $100 cash back on the purchase of a computer. This is an example of a(n) ________.
rebate
The current marketing period where companies emphasize customer satisfaction is referred to as the ________ era.
relationship
The new-product development stage that deals with the elimination of ideas that do not mesh with overall company objectives is ________.
screening
Aidan is tired of doing his laundry at the local laundromat and would like to buy a washer and dryer for his apartment. In the Saturday paper, he notices that a retail store is having a half-price sale. Aidan is at what step of the consumer behavior process?
searching for alternatives
Luke works as a marketing researcher and goes online to obtain information from government publications for census data and demographics. What type of data is Luke researching?
secondary
The ________ is a collection of financial markets in which previously issued securities are traded among investors.
secondary market
A singles business aims its promotions toward singles between the ages of 25 and 40 who reside in a specific county. The business has ________.
selected a target market
After starting a web design company while still in college, Rodrigo sold the company after graduation. He then opened a computer repair shop; and most recently, he has started a marketing firm that specializes in social media. Rodrigo is an example of a(n):
serial entrepreneur.
The United States has a trade surplus with which of the following items?
services
If business owners in a partnership wish to limit liability, they have the option to ________.
set up a limited partnership
Rene's boss has offered him a raise if Rene agrees to spend the night with her. This is an example of:
sexual harassment
Products purchased only after the consumer has compared competing products in competing stores on the basis of price, quality, style, and color would be classified as ________.
shopping products
The future attitudes of most prospects are affected by the first impression they form of the salesperson. Therefore, salespeople ________.
should carefully prepare their approach to potential customers
The goal of ________ is for companies to eliminate virtually all defects in output, processes, and transactions.
six-sigma programs
Louis works as an artist for a major textile company and created an innovation for producing designs. The company will implement Louis's idea as part of its ________ strategy.
skunkworks
________ are pioneers of innovations that benefit humanity.
social entrepreneurs
"Newman's Own" is a food product line that gives 100 percent of its after-tax profits to charity. This company is practicing ________.
social responsibility
When Target donates 5 percent of its federally taxable income to nonprofit groups, the company is highlighting its ________.
social responsibility
Tiffany is a first-line manager at an electronics retailer. The number of employees that Tiffany supervises is known as:
span of management
The production manager in a manufacturing company divides employee work into small segments so each employee can concentrate on just a few tasks. This manager is involved in ________.
specialization
Maria owns a store that prepares gourmet chocolates, which are hand-made and sold on the premises. What type of product is Maria selling?
specialty
The ____________ of a coffee-growing company include its employees, customers, suppliers, and the community members where the company is located.
stakeholders
Major current assets include all of the following EXCEPT ________.
stockholders' equity
Which stage of team development is marked by conflicts over the team's mission and the roles of team members?
storming stage
A balanced budget occurs when ________.
taxes, fees, and borrowings are equal to government spending for the year
Capitalism is founded on ________.
the belief that competition among business firms best serves the needs of society
Deposit insurance shifts most of the financial risk of bank failures from depositors to ________.
the federal government
When Greenlawn Inc. finds itself losing contracts because Lo-Price Lawn Co. charges less money, Greenlawn responds by lowering its bids. This reaction demonstrates ________.
the invisible hand of competition
If you did a breakeven analysis for your firm, it would be possible for you to show management the point at which ________.
the level of sales that will cover all of the company's costs
A balance of payments deficit occurs when ________.
the net outflow of money from a country exceeds the net inflow of money from abroad
Businesses that operate in an environment where success or failure is determined by how well they match and counter the offerings of competitors are operating under ________.
the private enterprise system
The primary reasons people become entrepreneurs include all of the following reasons EXCEPT:
to create employment opportunities for other people.
Alexander has just opened a bakery & café in a busy New York City neighborhood. He has received an SBA-guaranteed microloan of $13,000. Alexander can use the microloan for all of the following, EXCEPT:
to pay off outstanding business-related credit card bills
When a firm receives goods or services from a supplier and agrees to pay for them at a later date, this arrangement is called ________.
trade credit
What method of transportation accounts for the majority of finished goods finding their way to consumers?
trucks
A company's overall operating budget is a composite of many individual budgets for separate units of the firm.
true
A consumer who is at the stage of brand insistence will go out of their way to buy a product belonging to that brand, whether it be traveling to a store farther away or making an online purchase.
true
A firm's human resource plans often correspond with competitive strategies.
true
A manufacturer of a new moisturizing shampoo offers free samples to all potential consumers. The product is generally in the introductory stage.
true
A problem-solving team is usually temporary.
true
A process layout groups machinery and other equipment according to their functions.
true
A trend toward decentralization has pushed decision making down to operating employees.
true
Advertising can be a global activity.
true
An international firm's consolidated financial statements must reflect any gains or losses due to changes in exchange rates during specific periods of time.
true
An outdoor store sells rafting and camping permits for a close-by national park. The store is creating place utility.
true
Assets can include intangible possessions such as patents and trademarks.
true
Barnes and Noble starts earning 30 percent more profit a month after their new e-reader hit the shelves. Consumers continuously recommend the new product to friends. The e-reader is in the growth stage.
true
Because changing the reserve requirement can have a sudden and dramatic impact on the money supply, the Fed rarely uses this tool.
true
Bondholders are creditors; therefore, they have a claim on the firm's assets that must be satisfied before any claims of stockholders in the event of the firm's bankruptcy, reorganization, or liquidation.
true
Camille is an accountant who works for a firm providing auditing services to other businesses. Camille is a public accountant.
true
Corn processing is an example of analytic production.
true
Decision support systems provide support to people making business decisions.
true
Depreciation is reported as an expense on the firm's income statement but does not involve any actual cash.
true
During the adjourning stage, team members may celebrate by distributing plaques or awards.
true
Employers may obtain valuable information regarding employee satisfaction from exit interviews.
true
Explaining the hidden benefits of ownership can enhance a product's value.
true
Free-rein leaders allow subordinates to make most of the decisions and communicate with employees when situations arise.
true
Gantt charts are most effective for indicating projected and actual work progress over time.
true
Gender is an example of a factor in demographic segmentation.
true
Grid computing is a cost-effective solution for smaller-sized companies.
true
Hedge funds are private investment companies open only to qualified large investors.
true
In a cafeteria plan, each employee receives a set allowance to pay for benefits depending on his or her needs.
true
In most firms the controller is the chief accounting manager.
true
Increasing leverage decreases management's flexibility in future financing decisions.
true
Jeff wants to purchase a lower-risk bond. Therefore, he should buy a government bond.
true
Karen is aware of both Coke and Pepsi, but she buys whichever is on sale. Karen is at the stage of brand recognition but not yet at the stage of brand preference.
true
Local area networks allow computers to share the same printers, documents, and information.
true
Logistics is the process of coordinating the flow of goods, services, and information among all members of the supply chain.
true
Management development programs are designed to improve the skills and broaden the knowledge of current or future managers and executives.
true
Many large retailers sell both a private brand and a manufacturer's brand, which are produced by the same manufacturer.
true
Many marketers pay placement fees to promote their products in television shows or movies.
true
McDonalds including a toy in each Happy Meal purchase is an example of a premium.
true
On a balance sheet, total assets must always equal the sum of liabilities and owners' equity.
true
One of the most difficult areas of marketing decision making is pricing because these decisions are often subject to government regulation and public scrutiny.
true
One product may be considered a shopping product by one consumer and a convenience product by another consumer.
true
Organizing involves the process of logically classifying tasks that will be assigned to employees.
true
Outsourcing is the use of outside vendors to produce goods or fulfill services and functions that were previously handled in-house or in-country.
true
Owners of common stock expect returns on their investment in the form of cash dividend payments, expected price appreciation, or both.
true
Personal selling is often used for technically complex products.
true
Physical distribution is a major focus for logistics management.
true
Price decreases become common during a product's maturity stage.
true
Sales figures are an example of data.
true
Some firms will avoid the process of test marketing in order to avoid having their competition learn of their strategies.
true
Some products can be highly profitable during the later stages of their life cycle because the initial development costs already have been recovered.
true
The New York Stock Exchange (NYSE) is a secondary market.
true
The SEC requires virtually all new public issues of corporate securities to be registered.
true
The first step in developing a competitive retailing strategy is identifying a target market.
true
The first step in the sales process is to identify the potential customer.
true
The fundamental purpose of promotion is to persuade and influence customers to purchase a product.
true
The price of a bond is affected by its interest rate.
true
Trademark protection extends to pictorial designs and slogans.
true
When a company offers stock for sale to the general public for the first time, it is called an initial public offering.
true
team cohesiveness increase with frequent team member interaction
true
Owners of small businesses can increase their chances of success if they:
understand their own limitations.
Sole proprietorships have all of the following advantages EXCEPT ________.
unlimited life
What can a firm do if it is too difficult or expensive to have salespeople meet all potential customers in person?
use telemarketing
In breakeven analysis, the costs that change with the level of production are considered ________ costs.
variable
If Smith Steel buys Kennedy Iron Ore to assure itself of a constant flow of ore, this is an example of a ________.
vertical merger
Mike was a foreman at Hi-Way Construction and discovered his company was deliberately using faulty materials for a project. Although Mike was worried about his family's financial security if he lost his job, he went to authorities and informed them of the potentially dangerous construction. Mike's action is called ________.
whistle-blowing