Intro to busg- 129 Ch. 1-6

Which of the following would be a unique focus of an integrity-based ethics code?

Shared accountability among employees

America's business success is largely due to an economic and social climate that allows businesses to operate freely.

True

Online businesses avoid the risk of failure faced by traditional start-up businesses.

false

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

true

Entrepreneurship involves accepting the risk of starting and running a business.

true

Ethical behavior requires more than following the law.

true

An owner of a corporation is known as a

stockholders.

Unlimited liability means

when you own your own business you are responsible for all the business debts.

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

1. The right to own private property 2. The right to own a business and keep all that business's profits 3. The right to freedom of competition 4. The right to freedom of choice

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

1.sole proprietorship 2.partnership 3.corporation

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

65

The two main types of e-commerce are:

B2B and B2C

Laws that protect us from fraud, theft, and violence determine ethical behavior.

false

Most entrepreneurs prefer working for someone else.

false

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

Consumer and economic hardship due to increased military spending

Successful businesses are keenly focused on their

Customers

exporting and importing

Exporting- goods/services produced in one country yet supplied to consumers in another. To ship a product out of a country to be sold elsewhere. Importing- Goods/services purchased by consumers from overseas producers.To bring a product into a country to be sold.

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

False

Microeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

False

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

False

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.

Which of the following is a benefit of owning your own business?

Freedom to keep the profits from your business

Which of the following is a characteristic of an effective ethics officer?

Has a capacity to serve as a counselor and an investigator

Which of the following industries will most likely benefit from an aging population?

Home health care businesses

Which of the following questions can help us avoid a decision that would injure our self-esteem?

How will it make me feel about myself?

For a firm to be considered a multinational corporation, which of the following conditions must be true?

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

Which of the following is a reason why a business should be managed ethically?

It's the right thing to do.

A typical demand curve shows that

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

___________ 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 entity elects the board of directors for a corporation?

Stockholders

Which of the following explains why individuals accept the risks of business ownership?

The sense of self-satisfaction and independence

At the equilibrium price, the quantity consumers desire to buy equals the quantity sellers desire to sell.

True

Businesses provide goods, jobs, and services to others.

True

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

True

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

True

The amount of profit or loss earned by a business can be found by subtracting the firm's expenses from its revenues.

True

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

True

The concept of the invisible hand begins with the assumption that the primary motivation of entrepreneurs is that they will prosper from their own hard work.

True

Which of the following terms describes someone who reports illegal or unethical behavior?

Whistleblower

The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes.

World Trade Organization

Which of the following indicators provides the clearest indication that an economy is experiencing deflation?

a decrease in the CPI

The majority of CEOs blame unethical employee conduct on

a failure of leadership to establish ethical standards.

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

a monopoly

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

a royalty

All else being equal, socially responsible firms

are viewed more favorably by consumers.

A review of small business successes and failures indicates that the

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

Creating competition between employees within the corporation

can encourage employees to deceive customers.

An ethical dilemma refers to a situation where you must

choose between equally unsatisfactory alternatives.

Under the __________ system there is very little incentive to work hard or to produce quality goods or services.

communist

To improve America's business ethics

company leaders should adopt and support a corporate code of ethics.

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.

Double taxation means

corporations pay taxes on their profits. If they distribute after-tax profits to the stockholders, the stockholders also pay taxes on the distribution.

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 of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?

culture

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

cut spending

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

demographics

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

enforcement.

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

exchange rate

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

experienced economic depression.

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

false

Absolute advantage is the basis for most global trade today.

false

Few people today start their own business.

false

Stockholders in a corporation accept unlimited liability for the corporation's debts.

false

Successful entrepreneurs are exclusively motivated by the desire to become rich.

false

One of the hurdles small businesses face when deciding to export is

financing is often difficult to find.

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

A person who buys the right to use a business name and sell a product within a given territory is called a

franchisee.

After personal savings, the next largest source of capital for entrepreneurs is from

friends and family.

Empowerment means:

giving employees authority to make decisions

One disadvantage of a limited liability company is that it

has a limited life span.

Globalization

has greatly improved living standards around the world.

One difference between partnerships and sole proprietorships is that partnerships

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

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

identity theft

Employers provide tools and technology for their employees in order to:

improve their efficiency and productivity

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

inflation

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.

The global environment:

is far reaching and affects all the other business environments.

A __________ is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.

joint venture

The U.S. economic system relies on

key economic indicators such as GDP, to measure economic progress.

Which of the following is a factor of production?

knowledge

Laws represent the standards of ________ behavior.

legal

A __________ 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

Under capitalism

most of the means of production and distribution are privately owned and operated for profit

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.

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 fair prices.

A command economic system is characterized by

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

A ____________ is the share of profits or percentage of sales a franchisee pays to a franchisor.

royalty

Due to the credit crunch that developed during the Great Recession, many small businesses found that __________ were more willing to lend money to smaller operations.

smaller, community banks

The __________ is usually the easiest form of business to start and end.

sole proprietorship

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).

Any debts or damages incurred by a firm organized as a sole proprietorship are

the responsibility of the owner.

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

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

Since 1975, the U.S. has had a(n) ____________.

trade deficit

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

true

A joint venture is a partnership in which two or more companies join to undertake a major project. All parties commit financing and risk to the project.

true

Bartering is the exchange of goods or services for other goods or services without the exchange of money.

true

Compared to sole proprietorships, partnerships offer the advantage of shared management and pooled knowledge.

true

Corporations represent 20 percent of all the businesses in the U.S. and earn over 80 percent of the total U.S. business receipts.

true

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

true

Employees observe behavior and adopt standards of right and wrong.

true

In a general partnership, all partners share in management of the business and in the liability for the firm's debts.

true

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

true

International trade is not limited to multinational corporations. Small businesses do about 30% of all exporting out of the U.S.

true

Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are.

true

Surveys show that students are willing to agree to lower salaries if they know their employer is participating in socially responsible activities.

true

The Federal Reserve Bank is responsible for controlling the money supply.

true

The SBA may guarantee loans made by a financial institution and repay them if the borrowers stop making payments.

true

The United States' highest trade deficit is with China.

true

The greed of businesspeople represents one of the greatest dangers to the operation of a free market system.

true

Today, over 90% of the companies doing business globally believe it is important for their employees to have experience working in other countries.

true

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

true