Business 201 Mid Term Exam Study Guide

a statement of the assets, liabilities, and capital of a business

Balance sheet

_____ is the practice of comparing a company's own performance with that of a company which excels in the same activity. Benchmarking Sourcing Quality comparison Copycatting

Benchmarking

Which of the following statements about business ethics is false? Business ethics refer to actions taken by individuals to do the right thing. Business ethics concern the actions taken by a company to show concern for its stakeholders. Business ethics go beyond obeying applicable laws and regulations. Studying business ethics can help you learn to recognize and respond to ethical challenges.

Business ethics concern the actions taken by a company to show concern for its stakeholders.

A summary that shows total income and spending for a given time period

Cash Flow Statement

Which of the following is not a reason for advertising online? 90% of young adults (ages 18 to 29) engage in social media (which places them online). The average consumer spends more time online than watching TV and reading print media combined. Companies can collect personal information from those using their websites and possibly sell this information to others By capturing information on customers shopping online, marketers can send relevant ads that match a customer's shopping habits.

Companies can collect personal information from those using their websites and possibly sell this information to others

_____ is the selling price per unit minus the variable cost per unit. Contribution margin per unit The breakeven point in units Fixed price Survival price

Contribution margin per unit

The _____ section of the business plan describes the fundamental beliefs about what is and isn't appropriate in conducting company activities. "Core Values" "Mission Statement" "Dos and Don'ts" "Key Competencies"

Core values

_____ pricing bases the selling price of a product on its cost plus a reasonable profit. Rational Prestige Target Cost-based

Cost-based

Which two segmenting variables would be most important for a company that sells children's hiking boots? Geographic and behavioral Demographic and geographic Behavioral and psychographic Demographic and psychographic

Demographic and psychographic

Which of the following questions is not helpful to ask when researching an industry? Do companies in the industry make reasonable profits? Is the industry growing or contracting? How important is technology to the industry? Do other small business owners that I know find the industry interesting?

Do other small business owners that I know find the industry interesting?

Advantages of Sole Proprietorship

Easiest to start, Least regulated, Single owner keeps all the profits, Taxed once as personal income

_____ is the most effective method of ensuring that sensitive computer-stored information can't be accessed or altered by unauthorized parties. Privacy insurance Encryption Court protection Keycoding

Encryption

_____ is the process of encoding data so that only individuals (or computers) armed with a secret code (or key) can decode it. Encryption Decryption Hieroglyphics Number crunching

Encryption

Which of the following can cost a company developing a new product a great deal of money? Failure to be first to market with a promising new product. Making decisions under extreme time pressure. Determining whether the new product will sell at a profit. Guessing what the customer needs.

Failure to be first to market with a promising new product.

A common method of protecting domestic goods and trade is to boycott offending nations at home and abroad. T/F

False

A flexible manufacturing system (FMS) is particularly valuable to companies that produce a high volume of identical goods. T/F

False

A niche is a widely defined group of potential customers with a fairly broad set of needs. T/F

False

According to Abraham Maslow, safety needs, which are placed at the very bottom of his hierarchy of needs, are the easiest to satisfy. False True

False

An intranet is a software program that controls access to a company's files. T/F

False

Believe it or not, it's in the best interests of a company to operate unethically. True False

False

Boycotting means that workers walk away from their jobs and refuse to return until a labor-management dispute has been resolved. True False

False

Businesses in the same industry don't generally compete with each other. T/F

False

Contribution margin per unit is the excess of revenue per unit over fixed cost per unit. T/F

False

Contribution margin per unit is the shortage of revenue per unit over variable cost per unit. T/F

False

Credit bureaus compile a numerical credit score called a FDIO score for each credit user. T/F

False

During the production planning stage, operations managers oversee the purchasing of raw materials. T/F

False

Ethics in an organization is based solely on personal values. True False

False

Franchises generally don't include such complex products as hotels. True False

False

Gross profit is the negative difference between revenues and the cost of goods sold. T/F

False

If a commercial bank in which funds you have deposited fails (goes out of business), the FDIC would give you back all of your money. T/F

False

If you want to start a small business and need a bank loan, your banker will want primarily to see your mission statement. T/F

False

In determining your credit score, the length of your credit history is not nearly as important as the types of credit you use. T/F

False

In preparing financial statements, accountants adhere to a uniform set of rules called government-approved accounting principles (GAAP). T/F

False

Individuals with high FICO scores are likely to have to pay higher interest rates, if they can get a loan at all. T/F

False

It is not necessary to decide if the business should survive the owner(s) in the startup stage. True False

False

Manufactured goods are usually customized. T/F

False

Materials management includes these activities: product development, purchasing, inventory control and work scheduling. T/F

False

Mike gets 5% interest on his savings, but the inflation rate is 3%. So his rate of return is 8%. T/F

False

More than three-fourths of all U.S. adults are either self-employed or work for small businesses. True False

False

Most U.S. companies are attracted to international contract manufacturing, or outsourcing, because of high shipping, material, and marketing costs in the United States. T/F

False

Once you receive your patent from the U.S. Patent and Trademark Office, it is good around the world. T/F

False

One advantage of working for someone else is the likelihood of making more money than if you were running your own business. True False

False

PERT charts are simpler and easier to use than Gantt charts. T/F

False

Pat Smith and George Johnson own five flower shops in Manhattan. They want to open a wholesale flower business to supply their shops as well as others in their geographical area. They currently operate as a partnership but are considering changing their legal form of organization. One reason for doing this is to increase the likelihood that they will be able to raise the funds needed to expand.If they form a corporation and Pat Smith gets into an accident with the company's van and the van is not insured, George Johnson could be held personally liable for any damages resulting from the accident. True False

False

Pat Smith and George Johnson own five flower shops in Manhattan. They want to open a wholesale flower business to supply their shops as well as others in their geographical area. They currently operate as a partnership but are considering changing their legal form of organization. One reason for doing this is to increase the likelihood that they will be able to raise the funds needed to expand.They would most likely form a public corporation. True False

False

Perfect competition exists when many consumers are buying standardized products from a few small businesses. True False

False

Realizing more efficient economies of scale is not practical through mergers or acquisitions. True False

False

Scuffy the Tugboat is a family-run business that makes tugboats. It is owned by three brothers, Jack, Frank, and Bob. Their first tugboat is still towing ships in Boston Harbor, and over the years, success has allowed them to grow the company by plowing money back into it. Now, however, they want to expand but they are not sure how they should do this. They are also unsure about which legal form of organization is best for them.If Scuffy the Tugboat operates as a partnership each of its owners would have limited liability. True False

False

Strikebreakers are union workers who are willing to cross picket lines to replace strikers. True False

False

Studies show that partnerships are more successful than sole proprietorships. True False

False

The basic philosophy of satisfying customer needs while meeting organizational goals is called the marketing strategy. T/F

False

The earnings of a limited liability company (LLC) are only taxed once-when they are paid out to employees in the form of wages and salaries. True False

False

The service-producing sector includes manufacturing, construction, and agriculture. True False

False

To find an inventory turnover ratio, you multiply ending inventory by Cost of goods sold. T/F

False

Under accrual accounting, accounts receivable are recorded when sales are made and accounts payable when payments have been received. T/F

False

When stock prices are rising, we call the market a bear market; when prices are following we call the market a bull market. T/F

False

While importing is widely practiced throughout the world, exporting is not. T/F

False

accounting information and analyses prepared for people outside the organization

Financial Accounting

The _____ section of a business plan specifies the firm's cash needs and explains how the owners will be able to repay its debts. "Financial Plan" "Development and Production" "Industry Analysis" "Management"

Financial plan

The two most important institutions that monitor international trade policies are _____. NAFTA (North American Free Trade Association) and the World Bank the World Bank and the EU (European Union) GATT (General Agreement on Tariffs and Trade) and WTO (World Trade Organization) WTO (World Trade Organization) and NAFTA (North American Free Trade Association)

GATT (General Agreement on Tariffs and Trade) and WTO (World Trade Organization)

A chef put two frogs in a pot of warm soup water. Recognizing danger, the first frog jumped out, but the second frog didn't. In terms of ethics, what's the moral of the story? A friend in need is a friend indeed. If it smells like onions, it probably is onions. Get out before the water gets too hot. Look before you leap.

Get out before the water gets too hot.

What is the best way to get a copy of your credit report? Ask someone at your bank Ask your credit card company Go online and request a free copy Buy a copy from one of the three credit report agencies.

Go online and request a free copy

Which of the following items is not directly related to the problem of dealing with ethical issues? Bribes Conflicts of loyalty Whistle-blowing Hiring practices

Hiring practices

A financial statement showing the revenue and expenses for a fiscal period.

Income statement

advantages of small business

Independence, Costs, Flexibility, Focus, Reputation

The question "What is the outlook for the industry?" is taken up in the _____ section of the business plan. "Description of Proposed Business" "Mission Statement" "Industry Analysis" "Competitive Overview"

Industry Analysis

_____ can erode the value of money over time. Deflation Inflation Interest Poor economic times

Inflation

To analyze the market to see whether you should go forward with the development of a new product, you should answer all of the following questions except: How will customers benefit from my product? who would my customers be? Is this product something I want to sell? why will customers buy the product from me?

Is this product something I want to sell?

An example of a company known for responding appropriately to an ethical dilemma is _____. WorldCom Johnson & Johnson Sears Roebuck & Company Tyco

Johnson & Johnson

accounting that focuses on reporting information to management

Management Accounting

Five Functional areas of business

Management, Operations, Marketing, Finance, Accounting.

Which of the following is the best reason why money exchange is more efficient than barter? Money isn't too heavy to carry. Money is a more precise measure of value. Money doesn't take up space allotted to goods. Money has greater value than any goods.

Money is a more precise measure of value.

Which of the following organizations is a powerful world trading block? IMF - International Monetary Fund NAFTA - North American Free Trade Association WTO - World Trade Organization WBG -World Bank Group

NAFTA - North American Free Trade Association

What is the bottom line of a cash flow statement? Net income Net cash flow Net worth Total cash inflow

Net cash flow

_____ is the difference between a company's revenues and all of its expenses. Net profit Gross profit Gross margin Profit surplus

Net profit

Which of the following is the smallest division of customers? Segment Industry Market Niche

Niche

_____ is not an aspect of marketing strategy. Selecting a target market Implementing strategies for promoting products Distributing products Performing sales-related accounting tasks

Performing sales-related accounting tasks

4 P's of Marketing

Product, Price, Place, Promotion

Donna Graves has just completed research to determine the types of advertising to use in her proposed business. She will discuss advertising under the _____ heading in the "Marketing" section of her business plan. "Pricing" "Target Market" "Promotion" "Distribution"

Promotion

Which of the following statements is not true about the critical path: Saving time on the non-critical paths helps to finish the product faster it is the sequence of activities that will require the greatest amount of time It is identified by creating a PERT diagram If you want to produce a product quicker, you have to save time on the critical path

Saving time on the non-critical paths helps to finish the product faster

Brothers Ronnie and Jacob are both in college; Ronnie is a senior and Jacob a sophomore. They're both majoring in business administration and want to open a small business a few years after graduation. They understand that it's important to gain more management experience and build good credit ratings. Ronnie wants more security in his work and would be satisfied working with an older partner until he "learns the ropes." More than Jacob, he'd prefer a business that's been established for a few years. Although he likes a certain degree of independence, he's willing to follow directions and take advice. Jacob, on the other hand, wants more freedom to make his own choices and to succeed or fail on his own merits. He's quite creative and likes to set his own rules.As Jacob's business advisor, what would you probably advise him to do? Start a business from scratch. Buy an existing business. Buy a franchise. Go into business with his brother.

Start a business from scratch

Which of the following about apps is not true? owners of companies that come out with a super successful app become very rich companies coming out with a new app have to compete with close to 3 million apps currently available The Oculus Rift is an app which is used mainly for entertainment the education market makes up only a small slice of the app industry

The Oculus Rift is an app which is used mainly for entertainment

Which of the following is an important principle in the expectancy theory of motivation? The employee must believe that setting balanced goals with his or her supervisor is step one. The employee must value a reward enough to perform the work required to get it. The employee cannot be convinced that acceptable performance will lead to a desired outcome. The employee must believe that his or her efforts will result in unacceptable performance.

The employee must value a reward enough to perform the work required to get it.

Which of the following is not among the four consumer rights identified by President John F. Kennedy in 1962? The right to be informed about a product The right to safe products The right to have products available The right to choose what to buy

The right to have products available

The government compiles two measures for the purpose of tracking the money supply: M-1 and M-2. Which of the following is not included in the government's calculation of M-2? Checking-account funds Cash Savings accounts Time deposits greater than $100,000

Time deposits greater than $100,000

By making Christmas decorations available the day after Thanksgiving, Holly's Holiday Shop is offering customers what kind of utility? Time utility Form utility Place utility Ownership utility

Time utility

A business that has perishable goods will have high inventory turnover. T/F

True

A major disadvantage of a partnership is that partners may disagree on how to operate the business and divide the profits. True False

True

A street vendor selling hotdogs outside an office building is creating place utility. T/F

True

According to some experts, American businesspeople are at a competitive disadvantage when they're prohibited from giving bribes or undercover payments to foreign officials or businesspeople. T/F

True

According to the law, people must be hired, evaluated, promoted, and rewarded on the basis of merit, not personal characteristics. True False

True

Among the consumer rights cited by President John F. Kennedy in 1962 is the right to safe products. True False

True

An alternative to a credit card is a debit card, which pulls money out of your checking account whenever you use the card to buy something or get cash from an ATM. T/F

True

An online store is better able to capture data on its customers and their preferences than is a brick-and-mortar store. T/F

True

As an employee, your primary responsibility is to your employer. True False

True

Because internal hiring signals an employee that he or she can move up in a company, it's a good policy for motivating current employees. True False

True

Benefits are forms of compensation other than salaries. True False

True

Besides enhancing political and social cooperation, the European Union (EU) allows unrestricted trade among member nations and permits people with EU passports to work in any EU nation. T/F

True

By law, employers must provide workers' compensation. True False

True

Companies are motivated to merge or acquire other companies for a number of reasons, including gaining complementary products. True False

True

Companies tainted by questionable ethics suffer from higher employee turnover than trustworthy firms. True False

True

Companies that are committed to total quality management (TQM) strive to satisfy the needs of customers while generating a reasonable profit. T/F

True

Content marketing creates attention-grabbing content and distributes this content to customers and others through social media. T/F

True

Data mining is the process of searching and analyzing large amounts of data to reveal patterns and trends that can be used to predict future behavior. T/F

True

Databases are electronic collections of related data that can be accessed by various members of an organization. T/F

True

Debt financing means raising needed capital by selling bonds. T/F

True

Equity theory focuses on our perceptions of how fairly we're treated relative to others. True False

True

Expenses are divided into two categories-cost of goods sold and operating expenses. T/F

True

Feedback on an employee's performance gathered from all directions (supervisors, subordinates, coworkers, customers) is called 360-degree feedback. True False

True

For complex schedules, operations managers may use PERT charts to diagram the activities required to produce a good. T/F

True

If a country is the only source of a particular product or it can make more of a product using the same amount of or fewer resources than other countries we say that the country has an absolute advantage in economic terms. T/F

True

In a limited partnership the limited partners' losses are limited to their investment in the business and not their personal assets. True False

True

In a partnership one partner can be sued for unpaid debts incurred by another partner. True False

True

Its fiscal year is a company's designated business year. T/F

True

Labor-union density has steadily declined since the mid-1950s. False True

True

Make-to-order strategy is commonly used in such businesses as print shops. T/F

True

Many multinational corporations (MNCs) have adopted the motto "Think globally and act locally." T/F

True

Mass customization combines the advantages of customized products with the advantages of mass production. T/F

True

Mass marketing is the practice of sending out messages to a vast audience of anonymous people. T/F

True

Money market accounts are considered liquid assets because they can be easily accessed to get cash. T/F

True

Money market mutual funds pay interest to investors who have pooled funds to make short-term loans to businesses and government bodies. T/F

True

Nations engage in trade primarily because no nation can produce all of the goods and services that it needs. T/F

True

Orientation refers to the means by which employers introduce new employees to their jobs. False True

True

Pat Smith and George Johnson own five flower shops in Manhattan. They want to open a wholesale flower business to supply their shops as well as others in their geographical area. They currently operate as a partnership but are considering changing their legal form of organization. One reason for doing this is to increase the likelihood that they will be able to raise the funds needed to expand.An S-corporation would give them a more favorable tax treatment than a regular corporation. True False

True

Pillows have labels identifying the materials used to make them because of President John F. Kennedy's bill of consumer rights. True False

True

Scuffy the Tugboat is a family-run business that makes tugboats. It is owned by three brothers, Jack, Frank, and Bob. Their first tugboat is still towing ships in Boston Harbor, and over the years, success has allowed them to grow the company by plowing money back into it. Now, however, they want to expand but they are not sure how they should do this. They are also unsure about which legal form of organization is best for them.Scuffy the Tugboat could not operate as a sole proprietorship. True False

True

Small businesses in the U.S. generate close to 50% of our gross domestic product (GDP). True False

True

Sole proprietorship, partnership, and corporation are the three legal forms of business ownership. True False

True

The "Executive Summary" provides an overview of your business plan by paraphrasing key sentences from each section of the plan. True False

True

The "Management Plan" section of the business plan provides information about the qualifications of each member of the management team. True False

True

The adjustable-rate mortgage (ARM) has an interest rate tied to the increase or decrease of certain interest rates that your lender has to pay. T/F

True

The key to surviving in business is generating cash to keep operating. T/F

True

The major areas of responsibility for operations managers include production planning, production control, and quality control. T/F

True

The majority of product ideas come from entrepreneurs and small business owners. T/F

True

The most important benefit of incorporation is the limited liability to which the owners are exposed. True False

True

The process of settling differences and establishing mutually agreeable conditions under which employees will work is called collective bargaining. True False

True

Treasury bills mature in one year. T/F

True

Whenever you use credit, those you borrow from provide information on your debt and payment habits to three national credit bureaus. T/F

True

With computer-aided design, engineers can test computer models digitally before moving new products into the prototype stage. T/F

True

Advantages of Partnership

Two or more owners, More capital available, Relatively easy to start, Income taxed once as personal income

Disadvantages of Partnership

Unlimited liability, Management disagreements, Lack of continuity, Frozen investment

_____ is the most productive way to conduct surveys. Asking customers face to face in stores Mailing out questionnaires Phoning people Using the Internet

Using the Internet

You are a U.S. importer of goods from Switzerland. You owe your supplier 1,000 Swiss Francs for goods recently purchased. You had a choice for paying for the goods the day you purchased them or paying for them 30 days later. On the day the goods were purchased the exchange rate was 1 Swiss franc = $0.78 (one franc costs $0.78 cents). Thirty days later, the exchange rate is 1 Swiss franc = $0.87 (one franc costs $0.87). You waited the 30 days to pay the bill. Which of the following statements is true? You were worse off You were better off It did not matter The value of the Swiss franc relative to the U.S. dollar went down

You were worse off

Your balance sheet is based on the _____ equation: Assets = Liabilities + Owner's equity. accounting bookkeeping financial profit

accounting

On a company's balance sheet,_____ reflects the amount that a business has charged as depreciation expense on its long-term assets accumulated depreciation expense depreciation straight-line depreciation FIFO

accumulated depreciation

one company purchases most or all of another company's shares to gain control of that company.

acquisition

Which of following steps is not part of a typical manufacturer's supply chain purchase of raw materials? manufacture of a product advertise product purchase of product by a customer shipment of product to a store

advertise product

Which of the following is/are approaches used to forecast demand for a product? reviewing industry data on the internet speaking with potential customers all of these approaches. speaking with competitors

all of these approaches.

Your _____ schedule is the schedule by which you'll reduce the balance of your debt. interest and depreciation maturity balance-abatement amortization

amortization

Purpose of a Gantt Chart

an agreed timescale with a client to outline the amount of time and resources required to complete a project

All of the following are conducive to economic growth except _____. a reliable banking system an unfavorable balance of trade and payments a strong stock market and a government that discourages corruption government policies that encourage investment and competition

an unfavorable balance of trade and payments

If you purchase a business, it is lawful for the previous owner to set up a competing business that draws its former and your current customers away from you _____. only by paying a stipulated fee any time he or she wants only after a stipulated time only in a mutually agreed-upon location

any time he or she wants

High-volume goods are produced efficiently by people, equipment, or departments arranged in a(n)_____. fixed-position layout process layout assembly line cellular layout

assembly line

Soup, Salad, & Sandwich is a regional chain of restaurants in the northeast that provides dine-in, carry-out, and catering services. Owners Jesse and Mataya Peña currently operate six locations and are in the process of opening a new restaurant in another state. Their operation is quite successful and appeals to health-conscious consumers, busy moms, and executives in a hurry. Staying open longer hours, enlarging the menu, and expanding the scope of the business are among the many goals set by the Peñas. They want to follow a traditional business model in reaching their goals.The Peñas hire a manager for each restaurant and assign specific goals and responsibilities. Each manager will perform each of the traditional management functions except _____. staffing organizing directing auditing

auditing

The customer value triad is based on all of the following except _____. quality service availability price

availability

the difference between a country's total exports and total imports

balance of trade

If you are seeking a bank loan to start a small business, your banker will want to see a _____. business plan testament of past business successes statement of purpose written description of collateral

business plan

Owners are the stakeholders who invest _____ in a firm in expectation of financial return. long working hours mutual funds blood and sweat capital

capital

Herb and Betty Cogwell are husband-and-wife owners of a regional chain of restaurants with 108 employees. Recently, one of their chefs discovered some spoiled produce that had been delivered by one of the company's regular suppliers. The products were sent only to one restaurant and Herb and Betty weren't aware of the problem until two customers became ill. Why hadn't the chef reported the tainted food? He didn't see any reason for implicating the supplier, and he thought that, with the proper preparation, he could avoid any problems with it. He was, of course, wrong. Subsequently, Kari, a waitress, overheard Herb and Betty discussing the problem and was ready to report them to the authorities if they didn't take responsibility for their chef's actions.Betty and Herb should probably have created a document detailing the procedures to follow in the event of such an incident (after all, it's not an uncommon occurrence in the food-services business). Such a document is usually called a _____. mission statement marketing plan code of conduct warranty policy

code of conduct

Owners of _____ stock bear the ultimate rewards and risks of ownership. cumulative preferred convertible preferred preferred common

common

interest earned on both the principal amount and any interest already earned

compound interest

With _____, the interest earned on your savings in a given time period is added to the money in your savings account, and the new total (principal plus interest) earns more interest. APY simple interest compounding bonds

compounding

The goods-producing sector is home to only 20 percent of all small businesses, the majority of which are in _____. construction and manufacturing food service direct marketing retailing

construction and manufacturing

The presence of an intermediary substantially reduces the number of ____ faced by both consumers and businesses. risks expenditures unpleasantries contacts

contacts

The growing number of individuals who work at temporary or part-time jobs are known as _____ workers. job-share contingent leased short-term

contingent

The selling price per unit minus the variable cost per unit is called _____. fixed price survival price contribution margin per unit the breakeven point in units

contribution margin per unit

a business's concern for society's welfare

corporate social responsibility

A _____ is entirely separate from the parties who own it. corporation limited partnership general partnership unlimited proprietorship

corporation

the use of small amounts of capital from a large number of individuals to finance a new business venture

crowd funding

Types of Liabilities

current and long term

cash and other assets expected to be exchanged for cash or consumed within a year

current assets

Obligations that a company expects to pay within the next year or operating cycle, whichever is longer.

current liabilities

To calculate a firm's current ratio, you divide its current assets divided by its _____. average liabilities current salaries current profit current liabilities

current liabilities

Types of Assets

current, fixed, intangible

Of the following, only ____ data are considered internal data. published government syndicated services customer Relationship Management (CRM) published secondary

customer Relationship Management (CRM)

In the _____ stage of the product life cycle, price competition becomes more intense and profits harder to come by. growth decline maturity development

decline

A(n) _____ is a form of retirement savings plan in which the employee contributes money each pay period to his or her retirement account and the employer matches a portion of the contribution. defined benefit plan open enrollment plan cafeteria plan defined contribution plan

defined contribution plan

_____ refers to the quantity of a product that buyers are willing to purchase at various prices. equilibrium supply competition demand

demand

Unethical behavior in organizations can be reduced if management does all of the following except: establish a formal code of ethical business conduct. let employees know how they can report violations of ethical behavior. punish unethical behavior. depend totally on employee's personal ethics.

depend totally on employee's personal ethics.

Information managers perform all of the following tasks except: determining the information needs of organizational members. determining the salaries of data-team members. applying technology to convert data into information. directing the flow of information to the right people.

determining the salaries of data-team members.

Disadvantages of a corporation

double taxation, cost of setup and report filing

A pricing strategy where the price of an item fluctuates frequently based on complicated algorithms is called ________. artificial intelligence competitive pricing dynamic pricing promotional pricing

dynamic pricing

If you're conducting business over the Internet, you're engaged in _____. entrepreneurship e-commerce surfing extracurricular transactions

e-commerce

According to experts, individual financial planning should begin in your _____. teenage years early 20's late 20's 30's

early 20's

Let's say that you bought a TV on eBay and paid for it electronically. To process your transaction and transmit all of your purchasing documents, the manufacturer might use an _____ system. Internet interchange e-purchase interchange electronic data interchange (EDI) electronic-buying

electronic data interchange (EDI)

If you're having personal problems, you might contact a(n) _____ specialist at your workplace employee-consultation employee-assistance employee-referral psychiatric

employee-assistance

To channel information to multiple users, many large and midsized companies rely on a highly integrated _____ system. enterprise resource planning enterprise information charting information networking stand-alone network

enterprise resource planning

When we plot a supply curve and a demand curve for apples on one graph, the point at which the two points intersect is the _____. stable price consumer price index equilibrium price gross product

equilibrium price

Brand _____, like that enjoyed by Coca-Cola, results from favorable consumer experience with a product. loyalty equity primacy status

equity

involve weighing a potential course of action against a set of ethical standards or guidelines

ethical decisions

a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal

ethical dilemma

The financial planning process consists of three steps: evaluate your current financial status, set financial goals, develop and use a budget. work with a financial planner, create a financial budget, devise a plan to maximize the likelihood that you will stay within your budget. calculate your total debt, determine the cash available per month to pay down the debt, develop a plan for paying off the debt. prepare a budget, prepare a list of assets and liabilities, prepare a statement of cash flows.

evaluate your current financial status, set financial goals, develop and use a budget.

Franchises are often quite _____. legally simple easily acquired attractive from a tax standpoint expensive

expensive

selling products to another country

exporting

Good _____ management is particularly important when a company is first formed because new businesses usually need to borrow start-up money. financial accounting operations marketing

financial

A company can assess its financial strengths by analyzing its _____ ratios. management efficiency financial condition cash muscle management effectiveness

financial condition

After identifying a group of potential customers, your next step is to _____. find funding for your product find out what they think of your product idea manufacture a prototype collate the industry data that you've collected

find out what they think of your product idea

Those costs that don't vary with quantity of goods sold are called ______. breakeven variable flat fixed

fixed

permanent; land, buildings, and equipment

fixed assets

In producing large items, manufacturers often use a(n) _____ layout, in which workers go to equipment and in-process products that stay in one place. fixed-position process cellular stationary

fixed-position

The formal establishment of business operations on foreign soil, such as factories, sales offices, or branch stores, is called _____. foreign direct investment a joint venture foreign licensing a strategic alliance

foreign direct investment

Usually driven by the size and attractiveness of the foreign market, _____ is generally the most expensive commitment that a company can make in an overseas market. foreign direct investment a joint venture foreign licensing a strategic alliance

foreign direct investment

Big Data is used by small retail stores in all of the following ways, except ______________. view store traffic through the use of sophisticated cameras generate revenue by selling their Big Data get to know their customers and do things, such as send personalized emails greet their customers when they enter the store

generate revenue by selling their Big Data

Which of the following is a mistake often associated with new-employee orientation: introducing the new employee to a few key coworkers providing limited facts about the company setting up a workspace for the new employee giving easy work to the new employee even if it is unrelated to his or her actual job

giving easy work to the new employee even if it is unrelated to his or her actual job

If a foreign currency _____ relative to the U.S. dollar, Americans will pay less for goods and services bought from sellers in the country that issues the currency. goes up goes down varies is unstable

goes down

Why should you have a business plan?

guides you through each stage of starting and managing your business

Organizational leaders must be willing to _____ and take appropriate action. fire unethical subordinates hold employees accountable for their conduct negotiate with unethical employees give and take in matters of situational ethics

hold employees accountable for their conduct

buying products from another country

importing

In compiling your credit score, the credit bureaus considers all of the following except_____. payment history total amount owed length of your credit history income

income

All of the following fall into one of three broad areas of finance except _____. commercial banking corporate finance investment industry individual finance

individual finance

If Kent Pulowski wants to open a personal retirement account to save money tax free until his retirement, he should look into a(n) _____. pension fund individual retirement account (IRA) money market account mutual fund

individual retirement account (IRA)

The percentage change in a price index is also known as the _____ rate. prime deflation inflation price stability

inflation

All of the following are common methods of financing a new business except _____. personal savings initial public offering borrow from family and friends bank loans

initial public offering

Businesses such as hospitals, insurance companies, financial institutions, and attorneys convert resources into _____ products. tangible secondary intangible operational

intangible

long-term assets that have no real physical form but do have value; patents, trademarks, copyrights

intangible assets

You can calculate inventory turnover dividing cost of goods sold by _____. inventory employee theft gross profit volume

inventory

Using a strategy of _____, a company orders only what it needs, thus cutting the time and cost required to move raw materials into and out of storage. right-now/right-here materials precision just-in-time production not-now/not-here

just-in-time production

High domestic ____ costs have made international contract manufacturing, or outsourcing, attractive to many U.S. companies. building material labor marketing

labor

Connor Industries Inc. constantly scans the environment to keep ahead of competition and to survive as a business. The owners seek statistics that provide valuable information about the future of the economy for periods ranging from three to twelve months. Knowing the level of the _______ is of great benefit to Connor. recession index leading economic indicators consumer price index inflation rate

leading economic indicators

If you work for a company that expects you to deceive customers about the quality of your product, you should: go along with the practice because it's in the company's best interests. follow the expected practice unless it's illegal. leave the organization. tell your customers what the company is doing.

leave the organization

The debt owed by a business to an outside individual or organization is called its _____. liability equity asset base variable outflow

liability

Clarke Santiago and his wife Teresa, parents of two children, opened a buffet restaurant last year. They've been so successful with their family-style atmosphere that some investor friends have offered funding to expand into two additional locations. The investors also want to consider opening several more restaurants each year. After thinking it over, the Santiagos decided to stick with one restaurant and add catering services-a move that should provide them with a satisfactory income. The Santiagos' business is a good example of a _____. lifestyle business start-up business sole proprietorship franchise

lifestyle business

Advantages of a corporation

limited liability, ability to raise capital and transfer ownership

A classified balance sheet lists assets in order of _____. useful life depreciation value date of acquisition liquidity

liquidity

obligations that a company expects to pay after one year or operating cycle

long term liabilities

All of the following are among the Fed's three major goals except _____. price stability sustainable economic growth full employment low inflation

low inflation

The _____ ratio may suggest that inventory is moving quickly even though the rate of turnover is slowing. profit margin management effectiveness management efficiency financial control

management efficiency

A _____ accountant prepares information, such as reports on the cost of materials used in the production process, for internal use only. financial marketing managerial staff

managerial

In order to put a marketing concept into practice, you need a _____ for performing two tasks: selecting a target market and developing your marketing mix. marketing scheme marketing plan marketing strategy marketing mix

marketing strategy

Combination of two or more companies into a single firm

merger

"To preserve and improve human life" best illustrates a _____. corporate responsibility statement statement of core value statement of consumer rights mission statement

mission statement

In a _____ economy, the government controls selected major industries, such as transportation and health care, while allowing individual ownership of other industries. free market centrally planned fiscally sound mixed market

mixed market

The U.S. government uses _____ policy regulate the money supply and interest rates. price-stability economic monetary fiscal

monetary

Exists when many companies offer competing products or services that are similar, but not perfect, substitutes.

monopolistic competition

A market in which there are many buyers but only one seller.

monopoly

If you take out a $10,000 loan to buy a used car and pay the loan off in four years, your borrowing cost at 14% is _____ as it is at 6%. about the same more than twice as much three times as much four times as much

more than twice as much

The difference between gross profit and operating expenses is _____. net income gross income profit cost of goods sold

net income

Your _____ is the difference between your assets and your liabilities. statement of cash-flow liquidity net worth variance

net worth

Because they operate in a(n) _____ industry, a fare decrease at American Airlines will likely result in decreases at other carriers. socialistic monopolistic oligopolistic noncompetitive

oligopolistic

A state of limited competition, in which a market is shared by a small number of producers or sellers.

oligopoly

obtain goods or services from an outside or foreign supplier, especially in place of an internal source.

outsourcing

A(n) _____ protects an idea from being stolen by someone else. patent trademark injunction copyright

patent

The situation prevailing in a market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers.

perfect competition

Sources of funding for a business

personal assets, family, friends, bank loans, crowd funding

Where the product is sold

place

Generally speaking, economic systems can be divided into _____ and _____ systems. management / service financial / entrepreneurial profit / nonprofit planned / free market

planned / free market

An enterprise resource planning system does all of the following except _____. integrating companywide computer needs planning operations processes serving all users tracking sales and generating sales reports

planning operations processes

Four Functions of Management

planning, organizing, leading, controlling

The marketing mix consists of all of the following except _____. price product positioning place

positioning

The amount of money exchanged for a product

price

As a loan officer at a commercial bank, you must determine the _____ rate that you'll charge your best customers. discount federal funds preferred prime

prime

All of the following are types of utility that customers value except _____. product place time form

product

a good, service, or idea

product

A(n) ______ team consists of individuals from different functional areas assigned to work together throughout the product development process. project operations functional product

project

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

promotion

Which of the following is not a characteristic of a business? provides goods and/or services to customers establishes goals and meets them in an efficient manner provides society with social or educational services without concern for profits helps the economy by employing people

provides society with social or educational services without concern

Most organizations do whatever they can to retain qualified employees. Their efforts include all of the following except: offering a competitive compensation package. programs that help employees balance work and non-work lives. providing vague instructions. involving employees in decision making.

providing vague instructions

When choosing a location for an online call center, you would want to consider all of the following except: availability of skilled workers. proximity to your customers. favorable living conditions in the community amount of financial incentives offered by local governments.

proximity to your customers.

In many companies, employees who perform similar jobs work in _____ to identify efficiency and to propose solutions. excellence circles value groups quality circles troubleshooting teams

quality circles

A demand curve shows the _____ of a product that will be demanded at different prices. quality output quantity scarcity

quantity

The Fed performs all of the following functions except: processing the paperwork involved in buying and selling government securities. collecting federal tax payments. regulating state banks. holding the U.S. Treasury's checking account.

regulating state banks

All of the following influence the ethics of a business except _____. ethical leadership at the top of the organization an organization's culture top management's willingness to hold subordinates accountable for their conduct. relentless pressure to generate revenue

relentless pressure to generate revenue

Weight Off, a local weight-loss clinic, maintains a clientele of more than 200 busy executives who travel frequently and need specialized diet and exercise regimes. The activities needed to operate this business include all of the following except _____. research and development management marketing finance

research and development

disadvantages of small business

risk of failure, limited potential, limited ability to raise capital

The following is a good example of _____: "Congratulations! You've just won a month's free membership! All you have to do is sign up for one of our credit cards." sales promotion personal selling hype promotional luck

sales promotion

All of the following are advantages of social media marketing except: create brand awareness save time staying in touch with your customers and potential customers engage customers and potential customers in two-way conversations gather feedback on products and marketing initiatives

save time staying in touch with your customers and potential customers

Don left a high-paying, high-status job on Wall Street to run for governor of his state. Which need level would Maslow say Don is striving to fulfill by running for office? Social Physiological Self-actualization Esteem

self-actualization

Because Jenny Craig's bank provides payment services, loan and insurance products, investments, credit cards, and online banking, it is a _____ company. management service goods not-for-profit

service

With _____ pricing, a company tries to cover its initial costs by setting the highest price that keenly interested customers will pay. skimming penetration flexible bidding

skimming

Under the ____ form of ownership, the business dissolves upon the owner's death. partnership corporation sole proprietor limited liability

sole proprietor

Bob Grange has just opened a new pet shop on Main Street. If he selected the easiest and cheapest legal form to start a business, what legal form would Bob have selected? partnership joint venture sole proprietorship corporation

sole proprietorship

Maria Martin owns an advertising company. She gets to keep all of the income earned by the business. She operates it as a(n) _____. partnership sole proprietorship S Corporation corporation

sole proprietorship

Before managers can measure performance, they must _____. discuss evaluations with employees assess compensation packages complete written evaluations specify evaluation criteria

specify evaluation criteria

The fact that people are willing to save money for future purposes describes which function of money _____. bartering medium of exchange measure of value store of value

store of value

SWOT analysis

strengths, weaknesses, opportunities, threats

When a union declares a _____, workers walk away from their jobs and refuse to return until the issue at hand has been resolved. strike picket boycott grievance

strike

In order to get out of debt, it is recommended that you do all of the following except: cut up your credit cards. start living on a cash-only basis. try to lower your monthly bills. take out a cash advance on one card and pay off the others with the cash received.

take out a cash advance on one card and pay off the others with the cash received.

Taxes on imported goods

tariffs

Some business owners prefer to operate as a limited liability company (LLC) rather than an S-corporation for the following reason: unlike an S-corporations, a LLC's earnings are taxed at the personal level when paid out as dividends unlike an S-corporation, stockholders in a LLC are not personally liable for company debts the LLC form of organization does not have as many rules and regulations as does an S-corporation unlike an S-corporation, the LLC pays corporate taxes on its earnings

the LLC form of organization does not have as many rules and regulations as does an S-corporation

The stocks of the largest, most prestigious corporations in the world are traded on _____. the New York Stock Exchange the American Stock Exchange OTC (Over the Counter) Markets the Primary Market

the New York Stock Exchange

You own a share of stock in Hershey Foods. In reviewing the stock information in the Wall Street Journal, you note that Hershey's PE ratio is 19. The PE ratio indicates: the price Hershey Foods stock is trading at now. the amount investors are willing to pay for every $1 of Hershey Food's earnings. the percentage of Hershey Food's earnings paid out in dividends. the amount you can expect to earn on the stock.

the amount investors are willing to pay for every $1 of Hershey Food's earnings.

The term laissez-faire means that: the government should regulate industries. key industries should be owned by the government. there should be limited intervention by the government in business activity. the government should leave business activities to function according to the laws of economics.

the government should leave business activities to function

Making decisions on how to hold down the costs of materials and labor is the job of ______ each employee the accounts manager the operations manager the CEO

the operations manager

Because of _____ a dollar received today is worth more than a dollar received in the future. inflation the time value of money high interest rates deflation

the time value of money

Temporary work isn't very appealing primarily because _____. you don't acquire a variety of skills the pay tends to be low there are usually no benefits moving from firm to firm is a hassle

there are usually no benefits

All of the following are common criticisms of MNCs (multinational corporations) except: they destroy the livelihoods of home-country workers by exporting jobs. their constant demand for resources jeopardizes the physical environments of host countries. they weaken and Americanize the cultures and values of host countries. they inflate standards of living in host countries.

they inflate standards of living in host countries.

When it comes to the tendency of governments to control trade, we can safely say that _____. the trend is toward less rather than more control mutual-control policies will become the norm they'll continue doing it controls will eventually disappear

they'll continue doing it

Leading economic indicators predict the status of the economy over the course of _____. one to two months three to twelve months two years five years

three to twelve months

the increase of an amount of money due to earned interest or dividends

time value of money

Policies that restrict free trade among nations are called _____. import controls balance-of-trade laws trade controls economic sanctions

trade controls

Disadvantages of Sole Proprietorship

unlimited liability, lack of continuity, lack of money, limited management skills, difficulty in hiring employees

Customers buy products to satisfy _____ needs and expect to derive some value or _____ from them. logical / satisfaction unmet / benefit material / profit unmet / pleasure

unmet / benefit

An absolute quota (as opposed to a quota) puts a(n) _____ on the quantity of a good that can be imported during a given period of time. upper limit unreasonable limit temporary restriction salary cap

upper limit

The key to persuading customers to buy your products is delivering _____. value the goods customer satisfaction on time

value

A local bakery is acting as a _____ when it sells desserts to a restaurant. wholesaler retailer franchiser franchisee

wholesaler

Consisting of computers connected by telephone lines, wireless technology, or satellite, a(n) _____ network covers a relatively large geographical area. local area wide area advanced area large area

wide area

If no product existed prior to its invention, then the product is a(n) _____. "new-to-the-market" product improvement in an existing product extension to an existing product line new-to-the-company product

"new-to-the-market" product

If a customer pays $40 for a shirt that's been marked up 100 percent over cost, what price did the retailer pay for it? $15 $20 $22.50 $25

$20

Small business output in the United States generates about _____ of our gross domestic product. 10 percent 90 percent 50 percent 75 percent

50 percent

Which of the following is not true about young workers: 50% of young people who buy new cars do so in order to earn money as an Uber or Lyft driver To get a job with either company you need a good looking car. More than 40% of young people work at a second, part-time job called a side job or a side gig. Uber and Lyft hire individuals on a part-time basis.

50% of young people who buy new cars do so in order to earn money as an Uber or Lyft driver

A new business owner can expect to work _____ hours a week on average. 40 50 60 70

60

We call it "full employment" when _____ percent of those who want to work are employed. 90 percent 95 percent 97 percent 100 percent

95 percent

_____ is the most prevalent form of promotion. Personal selling Advertising Publicity Sales publicity

Advertising

Which of the following criteria are not helpful in distinguishing a bribe from a gift? Cost of the item Timing of the gift Connection between the giver and the receiver All these criteria are helpful in distinguishing a bribe from a gift

All

Which of the following do service providers have to consider when estimating demand and capacity? How long it will take to serve each customer How many customers they will have When customers will want their services All of these

All of these

Which of the following is a market segment? All of these Age groups People who live in the same climate Individuals who have adopted the same lifestyle

All of these

_____ refers to the science of developing computer systems that can mimic human behavior. Artificial intelligence Cybersimian intelligence Artificial intellect Animatronic intellect

Artificial intelligence

Accounting Equation

Assets = Liabilities + Owner's Equity