intro to bus final

Under free-market capitalism, people have four (4) basic rights. List the fours (4) rights below:

1. Own private property 2. Own a business & keep all that business's profits 3. Freedom of competition 4. Freedom of choice

List the three (3) "basic forms" of business ownership:

1. Sole proprietorship 2. Partnership 3. Corppration

Small businesses create about __________ percent of the new jobs in the United States.

65

The two major types of e-commerce are

B2B and B2C.

What is the exchange of goods or services for other goods or services without the exchange of money?

Bartering

What does double taxation mean?

Corporations pay income taxes on their profits, and stockholders pay taxes on their dividends.

The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials to secure business contracts is the

Foreign Corrupt Practices Act.

What is a benefit of owning your own business?

Freedom to keep the profits from your business

__________ is illegally obtaining and illegally using private information about a person, such as using someone's credit card number.

Identity theft

__________ refers to a general rise in the price level of goods and services over time.

Inflation

__________ refers to the amount of output generated with a given amount of input, e.g., the number of pizzas produced per worker per hour.

Productivity

What does SBA stand for?

Small Business Administration

t/f: Starting a business is a riskier path toward business success than working your way up the ranks of a large business.

True

What is the fee paid to a firm in a licensing agreement that gives another firm the right to manufacture their product or use its trademark

a royalty.

For a firm to be considered a multinational corporation, which condition must be true? a. It must have manufacturing facilities and a physical presence in several countries. b. Its marketing arm must be based at the company's world corporate headquarters. c. Stock ownership must be domestic. d. All transactions must be financed through the International Monetary Fund.

a. It must have manufacturing facilities and a physical presence in several countries.

Creating intense competition between employees within the corporation a. can encourage employees to deceive customers. b. will improve customer service. c. must be ignored when corporate ethics are developed. d. can bring out the best in employees.

a. can encourage employees to deceive customers.

A __________ is the share of profits or percentage of sales a franchisee pays to a franchisor a. royalty b. co-pay c. premium d. dividend

a. royalty

Any debts or damages incurred by a firm organized as a sole proprietorship are a. the responsibility of the owner. b. limited to the amount the owner has invested in the firm. c. paid for out of a reserve contingency fund required by law. d. normally covered by liability insurance.

a. the responsibility of the owner.

All else being equal, socially responsible firms a. enjoy significantly higher profits. b. are viewed more favorably by consumers. c. fail to earn sufficient profits for their owners. d. often experience customer loyalty problems.

b. are viewed more favorably by consumers.

After personal savings, the most common source of capital for entrepreneurs is from a. large multinational banks. b. freinds and family c. the Small Business Administration. d. state and local governments.

b. freinds and family

What entity elects the board of directors for a corporation? a. creditors b. stockholders c. managers d. employees

b. stockholders

Which question can help us avoid a decision that would injure our self-esteem? a. Is it legal? b. Is it balanced? c. How will it make me feel about myself? d. How can I avoid taking the blame?

c. How will it make me feel about myself?

A review of small business successes and failures indicates that the: a. businesses that are easiest to start offer the greatest potential for long-term growth and profits. b. restaurant industry offers the least risk for entrepreneurs. c. buisnesses with the potential for high profit levels tend to be difficult to start and hard to keep going

c. buisnesses with the potential for high profit levels tend to be difficult to start and hard to keep going

One difference between partnerships and sole proprietorships is that partnerships a. have the advantage of limited liability. b. are managed by an elected board of directors. c. have a greater chance of long-term survival due to the accountability of each partner to the other. d. take less effort to form.

c. have a greater chance of long-term survival due to the accountability of each partner to the other

An ethical dilemma refers to a situation where you must

choose between equally unsatisfactory alternatives.

War and terrorism in many parts of the world often lead to

consumer and economic hardship due to increased military spending.

The __________ is a statistic used to measure the pace of inflation or deflation.

consumer price index

The form of business ownership best suited to raising large amounts of money for expansion is the

corporation.

Entrepreneurs seeking financial support from bankers and potential investors should

create a detailed business plan to help the bankers and investors understand why this business will succeed.

Which is the set of values, beliefs, rules, language, and institutions held by a specific group of people?

culture

In todays competitive environment, successful businesses are keenly focused on their

customers.

One way to lessen the U.S. government budget deficit is to

cut spending.

One disadvantage of a limited liability company is that it a. requires the owners to divide up profits and losses in a fixed proportion. b. requires all earnings of the business to be taxed at the corporate rate. c. has a more restrictive ownership requirement than S corporations. d. requires members' approval to transfer ownership.

d. requires members' approval to transfer ownership.

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on a. the prospects for business competition. b. the current owner's retirement plan. c. the amount of government contracts the company has. d. the value of what the business owns, what it earns, and what makes it unique.

d. the value of what the business owns, what it earns, and what makes it unique.

The statistical study of human population to learn its size, density, and characteristics is called

demographics

Giving employees the authority to make decisions means

empowerment

A very critical last step in the process of establishing an ethics code is

enforcement

What represents the value of one nation's currency relative to the currencies of another country?

exchange rate

In recent years, most countries with communist economic and political systems have

experienced economic depression.

selling products to another country.

exporting

t/f: A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

false

t/f: Absolute advantage is the basis for most global trade today.

false

t/f: Compared to sole proprietorships, an advantage of partnerships is their ability to obtain more financial resources.

false

t/f: Few people today start their own business.

false

t/f: In capitalist countries, the government decides what to produce and how the goods and services will be produced.

false

t/f: Laws that protect us from fraud, theft, and violence determine ethical behavior.

false

t/f: Microeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

false

t/f: Most entrepreneurs prefer working for someone else.

false

t/f: Revenue is the amount a business earns above and beyond what it spends for expenses and costs.

false

t/f: Stockholders in a corporation accept unlimited liability for the corporation's debts.

false

t/f: Successful entrepreneurs are exclusively motivated by the desire to become rich.

false

t/f: Under capitalism, the government prohibits people and businesses from competing with each other.

false

t/f: Online businesses avoid the risk of failure faced by traditional start-up businesses.

fasle

One of the hurdles small businesses face when deciding to export is a. financing is often difficult to find. b. overseas buyers prefer dealing with large corporations. c. smaller companies must wait in line after large companies to qualify for tariffs. d. U.S. products are perceived as inferior.

financing is often difficult to find.

whats does it mean when a person who buys the right to use a business name and sell a product within a given territory?

franchise

A(n) __________ is an arrangement whereby someone with a proven idea for a business sells the rights to use the business model, to sell a product or service to others in a given territory.

franchise agreement

buying products from another country.

importing

Employers provide tools and technology for their employees in order to

improve their efficiency and productivity.

One advantage of free trade is

innovation for new products occurs which keeps firms competitively challenged.

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their

integrity and sound business idea.

Insider trading involves

investors using private company information to further their own fortunes.

what is a partnership in which two or more companies join to undertake a significant project? All parties commit financing and risk to the project.

joint venture

The U.S. economic system relies on

key economic indicators such as GDP to measure economic progress.

Laws represent the standards of __________ behavior.

legal

What refers to people with unsatisfied wants and needs who are willing and able to buy a product or service?

market

A __________ is two firms combining to form one company.

merger

Today, the economic systems of most nations could most accurately be classified as

mixed economies.

__________ exists when the entire supply of a good is controlled by a single seller.

monoploy

Free trade between nations generally results in

mutually beneficial exchange relationships.

Business incubators are usually government-funded facilities intended to

offer start-up firms low-cost office space and basic business services.

A typical demand curve shows that

people tend to buy more of a good when its price decreases.

Two key management functions that need particular attention when starting a business are

planning and financing

If global trade experts predict that the value of the dollar will soon fall, it will result in

prices of imported goods rising, but prices of U.S. goods sold overseas falling.

A __________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.

protective

In today's competitive environment, good value means

providing quality products and services at competitive prices.

A command economic system is characterized by

reliance on the government to determine what is produced and who gets the output.

What is usually the easiest form of buisness to start and end?

sole proprietorship

An owner of a corporation is known as a

stockholder

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called

the Service Corps of Retired Executives (SCORE).

Since 1975, the United States has had a(n)

trade deficit.

T/f: Corporations represent 20% of all the businesses in the United States and earn over 80% of the total U.S. business receipts.

true

t/f: A code of ethics designed to avoid criminal misconduct is an example of a compliance-based ethics code.

true

t/f: At the equilibrium price, the quantity consumers desire to buy equals the quantity sellers are supplying.

true

t/f: Businesses provide goods, jobs, and services to others.

true

t/f: Customers learn to trust companies that consistently demonstrate good behavior. Those same companies can lose this position with one socially irresponsible activity.

true

t/f: Employees observe behavior, which helps instill standards of right and wrong.

true

t/f: Entrepreneurship involves accepting the risk of starting and running a business.

true

t/f: Ethical behavior requires more than following the law.

true

t/f: If you are trying to prevent failure, it is a good idea to go into the business with good record-keeping techniques.

true

t/f: In a general partnership, all partners share in management of the business and in the liability for the firm's debts.

true

t/f: In the past, foreign companies have adapted to U.S. culture more easily than U.S. firms have adapted to foreign cultures.

true

t/f: International trade is not limited to multinational corporations. Small businesses do about one-third of all exporting out of the United States.

true

t/f: Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are

true

t/f: Stakeholders are all the people who stand to gain or lose by the policies and activities of a business.

true

t/f: Surveys show that a majority of Millennials are willing to agree to lower salaries if they know their employer is participating in socially responsible activities.

true

t/f: The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

true

t/f: The Federal Reserve Bank is responsible for controlling the money supply.

true

t/f: The SBA may guarantee loans made by a financial institution and repay them if the borrowers stop making payments

true

t/f: The United States' highest trade deficit is with China.

true

t/f: The amount of profit or loss earned by a business can be found by subtracting the firm's expenses from its revenues.

true

t/f: The business environment refers to the surrounding factors that either help or hinder the development of businesses.

true

t/f: The greed of some businesspeople represents a danger to the operation of a free market system.

true

t/f: Today, most companies doing business globally believe it is important for their employees to have experience working in other countries.

true

t/f: U.S. business success is largely due to an economic and social climate that allows businesses to operate freely.

true

t/fl: Trust between workers and managers must be based on a foundation of fairness, honesty, openness, and moral integrity.

true

What does it mean when you own your own business, you are responsible for all the business debts>

unlimited liabilty

When we compare the factors of production in wealthy versus poor nations, we find

wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas