Intro to Business Final Review

According to the Javelin Strategy and Research 2009 Identity Fraud Survey Report, at least _____ million U.S. adults were victims of identity theft in 2009.

11

Social networks have existed in one form or another for over _______ years.

40

Using the supply and demand curves shown in the graph that follows, what is the equilibrium price for soft drinks?

55 cents

An estimated _____% of illegal software sharing is conducted by businesses.

90

Who ranked people's five basic needs in order of importance?

Abraham Maslow

Why is investment trading less expensive online?

Because investors can buy and sell investments themselves without hiring a trader

Which of the following have not been cited as incidents of unethical business activity recently?

Corporate charitable giving is high

Which of the following is not a difference between digital media and traditional media?

Digital media make communications more confusing

Which of the following statements is false?

Ethical issues are limited to for-profit organizations.

Nonprofit organizations such as Habitat for Humanity do not engage in management, marketing, or finance activities.

False

Owners always manage their businesses.

False

When a nation takes more from taxes than it spends, it has a budget deficit.

False

If Peru wants to purchase machine parts from a German company but does not have any euros, it will probably borrow the euros from which of the following institutions?

International Monetary Fund

Which of the following is not part of the definition of a small business?

It employs more than 500 employees

Businesses differ from nonprofit organizations in that a business's focus is on

Profit

Which of the following is not something that the International Monetary Fund does?

Provides individual home and auto loans

When purchasing, a consumer is actually buying a product's anticipated benefits and

Satisfaction

A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with limited resources.

True

Advertising first made consumers aware of differences in products and prices in the marketing economy.

True

The goal of business is to earn

a profit.

If a boat manufacturer orders 50 units of fiberglass material and secures trade credit, promising to pay the supplier at a later date, the manufacturer will record the amount to be paid as a(n)

account payable

The ability of a business to identify customers before they make a purchase is ________.

addressability

After the product orientation came the sales orientation of the mid-20th century. Supply exceeded demand and businesspeople and __________________ and __________________ became the most important marketing activities.

advertising; selling

A department store's organizational structure defines the relationships between

all the individuals working together to achieve its objectives.

What is owners' equity?

all the money that the firm has that doesn't have to be paid back

Frederick Taylor

analyzed jobs to improve efficiency.

Actual performance of the service provider's product typically occurs

at the point of consumption

A(n) __________________ leadership style is best for stimulating unskilled or unmotivated employees.

autocratic

One of the major reasons people want to own and operate their own business is to

be their own boss

If a company is studying the decision processes and actions of people who purchase and use products, the company is focusing on

buying behavior

Consumers vote against firms they view as socially irresponsible by not

buying the company's products.

The amount of money budgeted for the purchase of long-term assets is called the

capital budget

The following are types of bonds except

commercial

Which stockholders usually have the right to vote and control the board of directors?

common

The last in line for the payment of profits are the

common stockholders

The most common ethical issue identified by employees is _____________________.

conflict of interest

Digital media can reduce the cost of _______ and _________ transactions.

consumer, business

When Madison flies to Italy from the United States on a British airline, stays in Italian hotels, and buys clothing in Milan to bring home after her trip, she

contributes to the negative balance of payments.

Magazines located next to the checkout counter at a grocery store would probably be classified as

convenience products

According to your book, what is the main source of Internet identity theft?

credit card fraud

A company's assets that can be easily converted into cash are called

current assets

Managers at Sprocket Inc. have recognized declining sales on their ABC model product and must make a decision about what to do. Their next step is to

define the situation

All of the following steps are a part of the decision-making process except

delegating the decision

If Juan's manager gives him an assignment without providing Juan with the resources to complete the assignment, Juan's manager is exhibiting improper

delegation of authority

During the Industrial Revolution, new technologies fueled strong __________________ for products and a product orientation held sway.

demand

Unethical behavior in business can be reduced if management does all of the following except

depend totally on employees' personal ethics.

Countries measure the state of their economies to

determine whether they are expanding or contracting.

The major variable of the marketing mix that uses marketing middlemen is

distribution

The balance of payments includes all the following except

domestic investments.

When a dollar bill is handled hundreds of times and is still being used, it has which of the following characteristics?

durability

Which of the following is an advantage of a partnership?

ease of organization

Jane learned that, although she and June were both hired as part-time salesclerks at the same time and have similar backgrounds, June is paid $1 more per hour. Jane decided to stop cleaning dressing rooms on her shift because she thinks this is unfair. This is an example of which theory?

equity theory

High-quality items such as musical instruments, sailboats, and airplanes would probably use what distribution coverage?

exclusive

Long-term assets are

expected to last for many years

If the video game marketer Playstation were investigated for allegedly raising prices excessively during the Christmas buying season and thereby manipulating the supply of games available at that time, this was an ethical issue concerned primarily with

fairness and honesty

That businesspeople are expected not to harm customers, clients, and competitors knowingly through deception, misrepresentation, coercion, or discrimination is part of

fairness and honesty

A department manager is a first-line manager.

false

A leveraged buyout is an organization composed of small businesses that have banded together to reap the benefits of belonging to a larger organization.

false

A target market is a group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas.

false

Advertising is direct, two-way communication with buyers and potential buyers.

false

Although customer-generated videos are increasingly available, most companies still prefer to hire professional advertising firms.

false

Commercial paper is issued by large companies and backed by collateral.

false

Conceptual skills are the ability to identify relevant issues and recognize their importance, understand the relationships between them, and perceive their underlying causes.

false

Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their owners.

false

Effective implementation of a major decision does not require any planning.

false

Globalization refers only to products, not promotion or distribution.

false

Herzberg's motivational factors directly correspond to Maslow's physiological and security needs.

false

In organized exchanges, investors buy and sell only for their own accounts.

false

Intrinsic rewards are benefits and recognition you receive from someone else.

false

Large firms avoid entrepreneurship.

false

Managers can run a business with only human and physical resources.

false

Managing finished products and packaging them are activities most closely associated with marketing.

false

Many businesspeople today try to "think locally, act globally."

false

Most new product ideas are rejected during the business analysis phase.

false

Net income is the profit (or sometimes loss) after all expenses, excluding taxes, have been deducted from revenue.

false

Production refers to all the activities involved in producing products, while operations refers to the physical process of transforming resources into goods and services.

false

Profits are negative in the growth stage.

false

Retailers generally buy from producers or from other wholesalers and sell to other retailers but not ultimate consumers.

false

Retailers purchase goods and resell them to consumers and some distributors.

false

Service businesses cannot incorporate quality standards.

false

Technological advances have resulted in fewer opportunities for small businesses abroad.

false

The characteristic of addressability means digital communication allows consumers to find information about competing products, prices, and reviews and become more informed about a firm and the relative value of its products.

false

The degree to which a good or service meets the demands and requirements of customers is called customer satisfaction.

false

The forces in the marketing environment are totally uncontrollable

false

The transformation process occurs only in companies that manufacture tangible goods

false

Trying to determine buyers' needs and wants is easy because marketers fully understand what motivates people to buy things.

false

When a nation imports more than it exports, it has a positive balance of trade.

false

When making a decision, selecting the best option is an objective procedure.

false

Managers need adequate __________________ resources to pay for essential activities.

financial

A person who analyzes a firm's income and expenses over a specified period and selects appropriate ways to invest extra funds is involved in

financial management

A company that manufactures large products, such as houses or bridges, may require that all resources be brought to a central location during production. This type of facility layout is called

fixed-position

When market conditions change rapidly, a small business usually has fewer layers of management to work through in making decisions. This advantage of small business is

flexibility

If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan, the interest rate is said to be

floating

What is upward communication?

flows from lower organizational levels to higher ones

A corporation doing business outside the state in which it is chartered is known as a(n)

foreign corporation

When Karen allows her employees to do their work with little interference, her leadership style is

free-rein

Small businesses commonly employ

functional departmentalization

In a socialist economic system, many people work in _____________________ jobs.

government

_____________________ refers to attaching a positive environmental association on an unsuitable product or service.

greenwashing

Google is challenging established companies in all but one of the following industries:

grocery stores

To facilitate free trade among members, the European Union is working toward all of the following except

he creation of opportunities to trade with countries in South America.

Marketing creates value by

helping people obtain what they need and want

Of minority groups in the United States, __________________ own the most small businesses.

hispanics

Profitability ratios are used to measure

how much income (net or operating) a firm generates relative to its assets, equity, and sales.

A continuing rise in prices over a period of time refers to

inflation

Convenience products such as bread, milk, and gum would probably be marketed

intensively

_______________ allows customers to express their needs and wants directly to the firm in response to its communications.

interactivity

Individuals who take responsibility for the development of innovations of any kind within larger organizations are called

intrapreneurs

A mutual fund allows many small investors to

invest in a diversified stock market portfolio

A private corporation is one that

is owned only by a few people and not traded on the open market

Selling interest in a partnership may be difficult because

it is difficult to place a value on a share of a partnership.

When a group of investors borrows money to buy a company or division, using the company's assets to guarantee the loan, it is called a(n)

leveraged buyout

Coca-Cola allows a Mexican firm to use its name, formula, and brands in return for a royalty. This arrangement is known as

licensing.

An important advantage of a corporation is its

limited liability

All of the following are approaches to departmentalization except

line

Which of the following is an advantage of small-business ownership?

lower cost of formation

The term standardization means

making identical, interchangeable components or products.

All of the following are outsiders who rely on information from an organization's financial statements except

managers

In the history of the American economy, the period or stage following the Industrial Revolution was known for its emphasis on

manufacturing

Which of the following requires organizations to gather information about customer needs, share that information throughout the entire firm, and use that information to help build long-term relationships with customers?

market orientation

Because having idle cash on hand is undesirable, a manager may choose to invest in

marketable securities

If ABC Computer Company is determining demand for its future products and how much consumers are willing to pay, the company will likely rely on

marketing research

The American economic system is best described as _____________________ because the government regulates business to preserve competition and protect consumers and employees.

modified capitalism

Flextime is associated with a number of unexpected consequences. One of the major ones is

more physical activity and better sleeping habits

According to McGregor's Theory X,

most workers must be coerced to work

When Lever Brothers changes the formula of its bar soap to match different countries' water conditions and washing habits, this is an example of a

multinational strategy.

A corporation that operates in several countries but without significant ties to any of them is a(n)

multinational.

If a person invests in the stock market through a vehicle that pools funds from a large number of people and buys and professionally manages stock from a number of diversified companies, that person is investing in a(n)

mutual fund

Allie wants to be warm, but she is not; she has a _____________________ and may be motivated to satisfy it.

need

The Federal Reserve provides all of the following services except

offer certificates of deposits for interested individuals

A CPA has the right to

officially express an unbiased opinion about the accuracy of a firm's financial statements.

If an employee is involved with transforming resources into goods and services, then he is in

operations management

Dividing work into small units and assigning it to individuals are tasks related to

organizing

When seeking out information on a new product, consumers tend to trust _________ over _________.

other consumers, corporations

Which form of business organization is the least used in the U.S.?

partnership

When a computer company initially charged a low price for a new computer and then raised the price after gaining a large market share, it was using which pricing strategy?

penetration

Which of the promotion mix variables is best for promoting expensive products with specialized uses, such as houses?

personal selling

One of the things to consider when determining the appropriate span of management is

physical distances between subordinate and supervisor, and subordinate competence

Inventory handling, transportation, and warehousing are all examples of activities of

physical distribution

When a stock quote includes the stock symbol followed by the letters "pf," it indicates

preferred stock

If a company's goal is to develop an image of having very high-quality luxury products, it should employ a

prestige pricing strategy

A marketing research representative who interviews shoppers in a mall is collecting the following type of information:

primary data

Return on assets and return on equity are examples of which type of ratio?

profitability

Studies have found a direct link between social responsibility and _____________________ in business.

profitability

Upward communication conveys

progress reports and complaints

A written authorization assigning a stockholder's voting privilege to another is a

proxy

If a company markets to a segment of people who have a certain lifestyle, the type of segmentation being used is

psychographic

When a company uses advertising and sales promotion to inform consumers about a product so they will ask retailers to stock it, which strategy is being used?

pull strategy

Which of the following is formed to solve specific quality, service or productivity problems?

quality-assurance team

To reduce dollars flowing out of the country, the United States can take measures like limit the number of foreign cars from Japan that are imported by imposing a(n)

quota.

Common stockholders do not have the right to

receive dividends before preferred stockholders

Which of the following is not a reason why small businesses choose to become retailers?

retailing requires a large capital investment

An income statement shows

revenues, expenses, and net income over a period of time.

It is desirable to test only a sample of the product in all of the following circumstances except when

sampling is the cheapest option and does not destroy the product

A marketing strategy consists of

selecting a target market and developing a marketing mix to satisfy it.

Richard has acquired a supply of canned fruits and vegetables. He does not yet have a buyer for them but he's using promotion and other activities to find a buyer. He is performing the marketing function of

selling

Which of the following is not a point of difference between service providers and manufacturers?

services do not undergo a transformation process

The marketing concept states that an organization

should try to satisfy customer needs while also achieving its own goals.

Innovations in digital media have changed how marketers do their jobs in all of the following ways except

slowed down the speed at which they can work.

Maria and Harold have just finished interviewing four candidates who want to work for Jackson Office Supply, Inc. They are involved in which of the following management functions?

staffing

When used to accumulate wealth, money functions as a

store of wealth

When a grocery store maintains refrigerators to hold ice cream until customers buy it, the store is engaged in the marketing function of

storing

After analyzing its own resources and unique abilities, a company is now trying to determine what group of customers it can satisfy with a good or service. It is in the process of choosing a

target market

Which of the following is a temporary group of employees, usually chosen for their expertise, responsible for bringing out a specific change?

task force

If a nationwide sandwich shop company introduces a new sandwich in the Midwest to try out its marketing strategy before offering the product across the country, it is using

test marketing

The transformation process is

the conversion of human, financial, and physical resources into goods, services, and ideas.

In a capitalist system, individuals own and operate _____________________ businesses.

the majority of

The financial value placed on an object involved in an exchange is

the price

Corporations usually employ an investment banking firm to help sell their securities in _____________________, which is where firms raise their financial capital.

the primary market

Good money managers strive to keep just enough cash on hand to pay bills. This cash is called _____________________.

transaction balances

The type of transportation specifically noted for its flexibility in transporting products is

trucking

A checking account is also called a demand deposit account.

true

A company with many layers of managers is considered tall.

true

Advantages of direct deposits of paychecks and other income to consumers include convenience, safety, and potential interest earnings.

true

All business transactions can be classified as assets, liabilities, or owner's equity.

true

An absolute advantage exists when a country has a monopoly on a natural resource. Correct!

true

An advantage of functional departmentalization is that managers need only the skills that apply to their department's function.

true

An estimated 90% of illegal software sharing is done by businesses.

true

An investment banker sells securities for corporations.

true

Assets are a firm's economic resources.

true

Bookkeeping is only one aspect of accounting and involves the recording of routine, day-to-day business transactions.

true

Digital marketing can enhance the value of products.

true

Establishing and enforcing ethical standards and policies within business can help reduce unethical behavior by prescribing which activities are acceptable and which are not and by removing the opportunity to act unethically.

true

Franchisees pay the franchiser a monthly or annual fee based on a percentage of sales or profits.

true

If an exchange is to occur, each participant must be willing to give up something of value to receive something the other has.

true

In a nonprofit organization like Habitat for Humanity, inputs such as money, materials, information, and volunteer time and labor are used to transform raw materials into homes for needy families.

true

In most states, corporations must have "corporation," "incorporated," or "limited" in their names to show that their owners have limited liability.

true

In the US, men are twice as likely as women to start their own business.

true

Liquidity is judged by how easily an asset can be turned into cash.

true

Maximizing profits and sales, boosting market share, maintaining the status quo, and survival are common pricing objectives.

true

Most business failures are the result of poor long-term financial planning.

true

Nations trade with other nations to obtain resources that would otherwise be unavailable to them.

true

One aspect of financial management involves managing cash flow for a business on a daily, weekly, monthly, and yearly basis.

true

Positive rewards for acceptable behavior tend to be more effective in the long run than negative punishments for unacceptable behavior.

true

Product departmentalization allows the coordination of all activities related to a product or product group and simplifies decision-making.

true

Quality assurance teams are groups of employees brought together to solve specific quality, productivity, or service problems.

true

Retained earnings may be used to finance long-term assets.

true

The Federal Reserve Board is responsible for supervising the insurance funds that protect deposits in member institutions, such as FDIC insured banks.

true

The Webb-Pomerene Export Trade Act allows selected American firms desiring international trade to form monopolies to compete with foreign cartels.

true

The financing function expedites purchases through making credit available.

true

The government usually will scrutinize high-profile mergers and acquisitions to ensure that they are not creating monopolies.

true

The most important characteristic of money is its acceptability for purchase of goods and services.

true

The size of the transaction, the history of personal relationships within the particular company, and many other factors may determine whether a customer gift will be judged as ethical.

true

Theory Z is more participative and encourages lifelong employee commitment more than traditional management approaches.

true

Trade credit is the most widely used source of short-term financing.

true

Under the Trouble Asset Relief Program (TARP), most of the big banks in the U.S. either needed to take a cash infusion from the U.S. Treasury or were forced to sell preferred stock to the Treasury in order to stay in business.

true

Voluntary responsibilities are optional activities that promote human welfare or goodwill.

true

When laid off, a person's attention probably shifts from fulfilling esteem needs to fulfilling physiological and security needs.

true

Ethical violations destroy

trust

Finance companies

typically function as the lender of last resort for individuals and businesses with poor credit ratings or whose other lines of credit have been exhausted.

The lack of funds to operate a business normally is called

undercapitalization

Although some businesses are less risky than others, overall the financial risks of running a small business are

very high

Maslow's hierarchy is important to managers because

workers won't be motivated to contribute to the organization's goals until their basic needs are met.

For most organizations, the ultimate objective is for produced outputs to be

worth more than the costs of input