BUS 100 Midterm Study Guide

The CEO of Natural Foods Markets is Wyatt DeSilva. Natural Foods is divided into about eight functional teams and each new employee is hired provisionally to a store team. After four weeks of work, the team votes whether to hire him or her; a two-thirds yes vote is necessary to join the staff permanently. Which leadership style appears to be used by Natural Foods?

Democratic (participative)

Dafne Herrera, a medical diagnostic equipment specialist, was asked to attend a medical conference in which the attendees discussed new uses for laser technology in diagnosing certain types of cancer. Herrera exerted considerable influence over the decisions to adopt the laser technology because of her _____ power.

Expert

Dr. Pepper Enterprises (DPE) is the largest bottler and distributor of Dr. Pepper products in the world. It is organized around its North America division and its European division. This departmentalization by _____ allows DPE to respond to the demands of different markets.

Geography

The most basic measure of economic growth is the:

Gross Domestic Product

The development of new drugs is very expensive. For this reason Cybex, a large biotechnical company, has entered into a _____ with Austrian-owned Bios to develop a vaccine for smallpox. When the vaccine is developed or when the two biotechnical companies determine the vaccine cannot be developed using their current methodology, this relationship will dissolve.

joint venture

_____ is the sense of national consciousness that boosts the culture and interests of one country over those of all other countries.

Nationalism

One of the primary goals of Eddie Bauer is to expand its market. When the company allocated resources so that it could open two stores in India, it was engaged in which management function?

Organizing

_____ are individual investors or groups of experienced investors who provide funding for start-up businesses.

angel investors

In 1993, Purdue Pharmaceuticals applied for patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin. Purdue's patents acted as a(n) _____ and prevented Endo from entering the market.

barrier to entry

Which of the following is NOT one of the four functions of management?

budgeting

Bolivia can grow and sell cut flowers for floral arrangements more easily and more cheaply than most other countries can produce the same flowers. When it comes to flowers, Bolivia has a(n):

comparative advantage

Which of the following is NOT an example of a factor of production?

competition

The _____ represents the prices of a market basket of goods and services as measured monthly by the Department of Labor.

consumer price index (CPI)

Italian customers view toothpaste as a cosmetic while consumers in Norway view it as a necessary part of daily hygiene and use three times as much their Italian counterparts. This example of _____ shows how important it is for marketers to understand.

cultural differences

Taylor Long makes furniture according to the specifications of the customer who ordered it. Each piece of furniture he makes is unique. He only makes one piece of furniture at a time. Long is engaged in:

customization

_____ inflation is inflation that occurs when the demand for goods and services is greater than the supply.

demand-pull

The slope of the demand curve is:

downward and to the right

Double taxation in a corporation means:

earnings of the corporation and dividends of the shareholders both are taxed

In the early 1900s, the U.S. prohibited importing Brazilian mangoes even though Brazil is the world's largest producer of the fruit. This prohibition remained in effect until 1993. The ban on importing Brazilian mangoes is an example of a(n):

embargo

Julian Longoria is the founder of Happy Hawaii LLC, a company that markets Pure Hawaiian Air. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. Retailing for about $5 apiece, the bottles are sold at gift shops in Hawaii, as well as to travel agents nationwide who give them to clients. As a(n) _____, Longoria's annual income exceeds $100,000 annually.

entrepreneur

The _____ is the value of one currency in terms of another.

exchange rate

A well-written business plan should contain:

executive summary or company overview a marketing plan a vision and mission statement a management plan

Zimbabwe produces textiles, silver, diamonds, nickel, and meat, which it sells to European countries. To Zimbabwe, the materials it produces are examples of:

export

Chad Dumdei quit his landscaping job in Florida and has moved to British Colombia, where he is actively seeking employment in the real estate industry. This is an example of _____ unemployment.

frictional

A firm's stockholders have the right to do all of the following EXCEPT:

get discounts on the company's product or service

World Trade Organization (WTO)

has emerged as the world's most powerful institution for reducing trade barriers and opening markets

The Small Business Administration (SBA):

helps people start and manage small businesses

Max Mansfield is employed by International Paper, a company that values his vision and creativity. To stay ahead in a very competitive industry, International Paper gives Mansfield almost complete autonomy to develop innovative and effective communications. Mansfield is an example of a(n):

intrapreneur

Venture capital:

is financing obtained from investment firms that specialize in financing small, high-growth companies

The standard of living is low in Ethiopia. This means:

its citizens cannot afford to buy much

The three main types of facility layouts are:

product, process, and fixed-position

PGE supplies all of the electricity to Portland, Oregon. PGE is an example of:

pure monopoly

A company that has a global vision

recognizes and reacts to international business opportunities

The most common form of business organization is the:

sole proprietorship

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

American Cancer Society

Individual ownership of property is a key element in

Capitalism

Hanes wanted to make its distribution system more efficient. It decided to implant a tiny computer chip in each of its product's packages, so it could track its products and improve its inventory management. Which management function would be used to achieve the goal of greater efficiency?

Controlling

Juan Ramirez is a warehouse manager for a company that markets electric generators. In this small entrepreneurial firm, there are direct lines of communication and authority flowing from the company's CEO down to Ramirez and through him to the workers in the warehouse. Ramirez works in a _____ organization.

Line

Why do many people fear trade and globalization?

Many fear trade and globalization will lead to massive job losses.

KoolKids International has entered an agreement with Binney & Smith to create a line of frozen novelties based on the Crayola brand, including pops, bars, sandwiches, cups, cones, sundaes and shakes. KoolKids will pay Binney & Smith a royalty for the right to use the Crayola trademark. This is an example of:

a licensing agreement

Anahi Bahena leaned to sail, and after mastering sailing, she started an all-woman sailing school called Womanship. Bahena started small and plans to stay small. She would be correctly called a(n):

micropreneur

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:

mixed economy

_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.

multinational corporations

The Caucasus Mountains along the northeastern border of Georgia (one of the former Soviet republics) makes it difficult for the nation to trade with other former Soviet republics that are to its north and east. The mountain range acts as a(n):

natural trade barrier

In a(n) _____, a few sellers can exert substantial control over prices.

oligopoly

_____ is the management of the production conversion process for both goods and services.

operations management

A(n) _____ organization is characterized by a relatively low degree of job specialization, loose departmentalization, few levels of management, wide spans of control, decentralized decision making, and a short chain of command.

organic

Chipotle fast-food restaurant does not chop the lettuce and tomatoes and grate the cheese used to make its menu items, but hires someone outside the restaurant to perform these tasks. By _____ these tasks, Chipotle can keep its overhead low and concentrate its resources on taking customer orders and assembling food.

outsourcing

Angel Nelson and Johan Resendiz consider themselves to be experts on hunting in the mountains in North Carolina. As a result, the two men established a company that markets hunting expeditions. Nelson and Resendiz share responsibilities for booking the trips, gathering supplies, and guiding groups of five to seven hunters into locations where they can hunt for deer and bear. Since the two will share any profit equally, this would be an example of a(n):

partnership

Free trade:

permits people to buy and sell where they please

When Savannah Whiterock began Bytes, 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:

started Bytes as a corporation

The lowest level of management, which usually has the most people to manage, is called _____ management.

supervisory

LaDonna Merkel mows yards during the summer. Which of the following is an example of revenue for Merkel?

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

Which of the following is the best example of a service?

the experience of seeing a good play

The most fundamental reason for the growth in world trade is probably due to:

the need for businesses to expand their markets

All of the following are characteristics of an entrepreneurial personality EXCEPT:

the willingness to be a follower rather than a leader

The number of people or subordinates that a manager effectively controls and directs is called the manager's span of:

to control

_____ management emphasizes the use of quality principles in all aspects of a company's operations.

total quality

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

unfavorable balance of trade

Russian multinational oil companies such as Gazprom, Rosneft, and Lukoli are active all the way along the supply chain from locating crude oil deposits, drilling and extracting crude, transporting it around the world, refining it into petrochemicals such as gasoline, to distributing the fuel to company-owned retail stations, where it is sold to consumers. To gain this complete control of the various resources needed to produce oil and gas, the companies had to have engaged in _____ mergers.

vertical