Principles of Business Final
49. A popular product is said to be
B. in demand.
48. Each purchase strengthens the economy by encouraging
B. trade.
95. One internal factor that affects the business environment is
C. management style.
139. Information management can be a challenge because
D. many people don't understand what it is.
1. What is one reason why the federal government awards patents to businesses that have invented new products or manufacturing processes?
B. To encourage research
11. Which one of the following groups of words best describes wants:
B. Unlimited, changing, and competing
12. In economics. the term capital goods includes
B. buildings and equipment.
84. Formal relationships and a distinctive chain of command are characteristics of the organizational business structure.
B. mechanistic
72. A socially responsible business will attempt to give customers
C. the best products at the best prices.
62. A nation that exports more than it imports maintains a
C. trade surplus.
59. One waythat competition helps to build a prosperous society is by
creating new jobs.
81. One reason why many small businesses develop an organizational design that requires a board of directors is because a board usually
A. provides experience that increases the business's credibility.
89. Which of the following factors has aided the most in creating a global business environment:
B. Technology
96. Which of the following is a true statement about business ethics and the law:
B. The two are not the same thing, but they do overlap.
39. What is the government doing when it buys wheat to keep the price high enough for farmers to make a profit?
B. Using price supports
131. A main reason that environmental scanning is important is so that businesses can be aware of
B. potential threats.
9. One reason a physicians' practice might form a partnership as an LLP is to
B. protect innocent partners from the malpractice of another partner.
111. Accounting is distinct from finance because its main focus is on
B. record-keeping activities.
5. An advantage to a business of filing Chapter 11 bankruptcy is that the process allows the business to
B. reorganize.
85. One reason that businesses use a matrix organizational design is to
B. share human resources.
82. Three primary factors that affect the organizational structure of a business include interpersonal relationships, tasks, and
D. authority.
54. Management decides to hold its annual meeting in one lJ.S. city rather than another because of crime in that city. This is an example of _________ the risk.
D. avoiding
15. Consumers are typically most willing to pay more for goods and services that bring them greater
D. satisfaction.
26. To discover a product's level of utility, marketers measure the consumer's
D. satisfaction.
75. Retailing takes place whenever goods are
C. sold to the ultimate consumer.
35. Which of the following is a potential problem in market economies?
D. Financial loss
134. Which of the following would be done first in an environmental scan:
D. Identifying participants and responsibilities
156. A manager studies the business's previous sales statistics as well as the sales forecast before making purchasing decisions. What type of resource is the manager using?
D. Information
3. What type of property is a business protecting when it registers its trademark?
D. Intellectual
80. Which of the following demonstrates the interrelationship among primary business activities:
D. One business activity changes, so the others must adjust in response.
86. Which of the following is an environmental factor that affects the performance of businesses that market products on a global level:
D. Political risk
30. What role does utility play in the implementation of the marketing concept?
A. A satisfaction gauge
114. Which of the following is a key component of managing working capital:
B. Cash conversion cycle
45. Why are entrepreneurs important in a private enterprise system?
a. They encourage the development of new products.
105. In recent years, the employment of workers has significantly increased.
0. knowledge
63. Which of the following is a benefit of international trade:
A. An improved standard of living
149. How does marketing-research data help a business's production planning?
A. By identifying consumers' needs and wants
129. What type of trend are businesses considering when they analyze where customers live and their ethnic backgrounds?
A. Demographic
117. After a company's training needs are determined, what is the next step in training and development?
A. Determining what training resources are available
ln a communist command economy who decides how the economic questions will be answered?
A. Government
140. Which of the following is a trend in information management:
A. Increased compliance laws and regulations
127. What is one way that the trend towards protecting the environment has a negative effect on many businesses?
A. Increases costs
2. The law that requires businesses to hire, train, transfer, and promote employees without regard to race, color, gender, religion, or national origin is the Act.
B. Civil Rights
92. Which of the following is a factor that would encourage businesses to start a business at a particular location:
B. Easy access to natural resources
94. Which of the following factors affecting the business environment is represented by the business's location:
B. Environmental
23. Which of the following economic resources is responsible for combining the other resources to produce goods and services:
B. Human resources
50. Which activities are likely to increase a firm's profit?
B. Increasing sales and decreasing expenses
147. Why is production important to businesses?
B. It creates goods and services businesses can sell.
112. How does the finance function relate to company spending?
B. It plans and controls spending.
107. Why is a good accounting system important to a business?
B. It shows the business how it is doing.
109. A business is planning a sale and needs to know what sales were for a particular weekend in the previous year. Which of the following accounting records would provide this information:
B. Sales journal
27. Changing a good's form involves which of the following:
C. Adding a new feature to the good
98. Why should a business practice good ethics?
C. An ethical business contributes toward its own success.
93. Which of the following factors affects society's basic values and behaviors that influence their buying decisions:
C. Cultural
100. Which.of the following is an example of increased financial risk for a company with poor business ethics:
C. Decreased company value
83. Which of the following is a characteristic of the organic organizational business structure:
C. Delegation emphasis
60. Which of the following are qualities of monopolies:
C. High prices and low production
22. Which of the following occurs when the supply of individuals who are able and willing to work diminishes:
C. Human resources become limited.
67. Which of the following is a situation that might make businesspeople from other countries feel uncomfortable and impact their ability to conduct business:
C. Standing very close to others during conversations
133. Which of the following examples illustrates how environmental factors are interrelated:
C. The economy affects what competitors are doing.
143. Annika, the purchasing specialist for Dottie's Donut Shop, just located a new, less expensive sugar supplier. Dottie does not plan to lower donut prices. If Annika buys the shop's sugar from this cheaper supplier, what is likely to happen?
C. The profit margin for donuts will increase.
110. A bank denies a business owner's application for credit saying, 'We feel that you would be unable to make the monthly payments because of your other debts." What financial report did the bank review?
D. Balance sheet
8. Jake wanted to run his own business but was unsure that he had adequate business skills to be successful. Which type of business would give Jake the help he needs?
D. Business-format franchise
137. How does appropriate information management affect a business's relationship with its customers?
D. Businesses serve customers more effectively.
116. In what way might a human resources manager be involved in employee benefits?
D. Determining eligibility and costs of benefits
77. Human resources management is demonstrated in which of the following statements:
A. The business takes care of the responsibilities associated with having employees.
43. Private enterprise is based on the idea that everyone is better served when
B. individuals are free to set their own goals.
31. Government owns the basic means of production but there is some private ownership of businesses under
C. socialism.
104. Which of the following financial institutions was established after World War II to facilitate global economic growth:
A. International Monetary Fund (IMF)
37. Which of the following is a public good that is provided by the government:
A. Interstate highways
38. Which of the following government actions is most likely to stimulate the economy:
A. Lowering tax rates
42. Which of the following is a disadvantage of private enterprise:
A. Periods of unemployment
79. Franco's Bread Shop is introducing a new type of sandwich bread to the community this week. Which of the following describes the business activity the bread shop is likely involved in:
A. Promoting the new bread through advertising
115. Which of the following is a measure of how well a business generates cash flow:
A. Return on capital
150. Why is routing an important production activity?
A. Routing establishes the production path of inputs.
132. Which of the following is an example of a demographic trend:
A. The aging of the population
88. Which of the following is a reason that a U.S. company would decide to offer its products in other countries:
A. To expand to new,untapped markets
36. Why does the government set and collect taxes?
A. To help pay the expenses of government
13. What are the three _basic economic questions?
A. What products will be produced; how will products be produced; and how will products be allocated?
16. What determines whether an economic product is an industrial product or a consumer product?
A. Who buys and uses the product
61. The U.S.produces fidgets faster and cheaper than Switzerland. In this example, the U.S. has a(n) ______advantage.
A. absolute
20. A student purchased a laptop to use for homework assignments. In economic terms, this computer would be classified as a(n) __________ good.
A. consumer
87. Companies that operate at the international level should be aware of political factors that affect trade, such as civil unrest or
A. embargoes.
152. A clothing manufacturer checks one pair of pants out of every shipment to ensure the quality of its product. This process is known as quality
A. inspection.
99. A business suddenly moves its operations to a new town, leaving its current employees jobless. Its reason for taking this action, which some consider unethical, might be that the action
A. is not illegal.
10. ABC Specialty Wear is the only company that has written permission to use a national football team's logo on its sportswear. This is an example of a
A. licensing agreement.
153. Running out of inventory can result in
A. lost sales.
70. When meeting with business people from other countries, it is important to understand social differences, such as bowing, handshaking, and spatial comfort, which are often called
A. non-verbal cues.
102. In the late 1800s, market domination by a small number of extremely large, powerful companies led to the
A. passage of antitrust laws.
151. Operations managers have two main goals in mind-efficiency (keeping costs low) and
A. productivity (keeping business running fast). C. effectiveness (keeping customers satisfied).
40. Government can prevent unqualified persons from operating a business by
A. refusing to grant them a license.
126. One reason why it is important for businesses to identify and respond to current business trends is to
A. remain competitive.
52. Contractual agreements such as guarantees, surety bondst and leases are examples of handling business risks through
A. transfer.
19. If a good or service is scarce, consumers will usually be
A. willing to pay money to get it.
66. Which of the following is an example of nonverbal communication that might have a different meaning to business people in other parts of the world:
B. Shaking hands when greeting a customer
29. Which change provides the most time utility for a consumer?
B. Staying open for business on the weekend
65. A country with a weak currency value tends to
B. decrease its imports and increase its exports.
90. One reason that some U.S. businesses have moved some of their operations to foreign countries is to
B. lower their labor costs.
21. Using a stream to supply water to a field in order to grow crops is an example of using
B. natural resources.
57. Offering high quality, large assortments, and free shipping are examples of
B. nonprice competition.
142. Which of the following is a detail that a buyer should know prior to placing an order for raw materials?
C. Whether the company has storage space for the raw materials
69. An American business person in London was offered a "cuppa" by the company's receptionist. The businessperson did not know that the receptionist was offering a cup of tea. This is an example of
C. a language barrier.
108. In order for an accounting system to be useful to the business, the accounting information it contains must be
C. accurate and up-to-date.
130. The growth of e•commerce is changing the way companies do business by allowing them to
C. be accessible to customers at all times.
28. When marketers provide information about an available product, consumers are more likely to
C. buy the product.
97. A business's philanthropic responsibility involves its contributions to
C. charity.
144. Jaron, the district technology coordinator for Abington City Schools, is responsible for purchasing new computers for the district. He recently sent out a request for price quotes to five different computer companies, and he is waiting to hear what the various suppliers' proposed·prices will be. Jaron is conducting
C. competitive bidding.
14. The ultimate goal of all economic activity is
C. consumption.
106. The overall purpose of accounting is to
C. control the finances of the business.
51. Carefully selecting goods or services to sell is an example of handling business risks by the risk.
C. controlling·
6. Wendys sells the right to operate its restaurants to individuals who meet the companyis criteria. The arrangement between Wendy's and these individuals is an example of
C. franchising.
32. The way in which an economic system answers the basic economic questions depends upon the country's
C. government.
18. Producers respond to consumers' positive economic votes by
C. increasing production.
4. A business that fails to protect its employees from unnecessary risk or health hazards on the job may be sued for
C. negligence.
58. One way that competition benefits business is by encouraging the creation of
C. new companies.
7. John, Robert, and Charles were college friends who wanted to start a business. John has creative ability, Robert's expertise is selling, and Charles' expertise is management. However, each has limited capital. The ideal business ownership for these young men is a
C. partnership.
101. During the Industrial Revolution, the factory system caused
C. production costs to decrease.
55. Businesses can protect themselves from the risk associated with lost shipments by
C. purchasing transportation insurance.
46. If expenses are greater than income there's no
C. reward.
135. A business should conduct environmental scans on a continuous basis so that it can
C. save money. D. respond to opportunities and threats quickly.
34. Lack of economic growth is a major problem for economic systems.
C. traditional
148. Efficient production enables businesses to
C. tum out the most products at the least cost.
74. A manufacturer is a type of business that
C. turns raw goods into useful products.
17. A characteristic of human wants is that they are
C. unlimited.
56. Most businesses put their greatest competitive efforts into competing
C. with direct competitors.
24. Over the next few years, members of Generation X and Generation Y are expected to fill many job positions vacated by retiring Baby Boomers. This is an example of a change in
C. workforce demographics.
25. Which of the following situations involves finding an alternative resource to use in place of a nonrenewable natural resource:
D. Powering a motor vehicle with biodiesel instead of gasoline.
145. Which of the following is a way to evaluate supplier performance after the purchased goods . or services have been delivered:
D. Review the invoice
154. Complying with environmental laws is part of which operations activity?
D. Safety and security
141. Jeremiah purchases sterling silver necklaces and bracelets from Native American artisans and sells the items to jewelry stores and gift shops. What kind of buyer is Jeremiah?
D. Wholesale
One way in which many businesses demonstrate their social responsibility toward employees is by providing them with
D. a safe working environment.
78. TeJuan's Fishing Shack demonstrates effective information management by
D. accessing a list of fishing equipment appropriate for a particular customer.
64. Levels of inflation and unemployment are factors that affect _______ in the world market.
D. competition
146. One of the benefits of production to consumers is that production
D. creates form utility.
53. Changes in the market that cause prices to go up or down, products to changet and businesses to succeed or fail are examples of __________ risks.
D. economic
138. Managing information-regarding copyrights and trademarks helps a company to preserve its
D. identity.
155. Because operations managers control so much of a business's money, they must focus on
D. keeping costs low
136. Appropriate information management saves businesses time and money by
D. maintaining higher levels of productivity.
113. The finance function would definitely be involved in a decision regarding
D. new business projects and strategies.
76. With Rosita's pizza shop, financial analysis is used to
D. obtain funding for supplies
41. Alex owns a guitar, several books, a car, and a telescope. Alex's possessions are examples of
D. private property.
71. Businesses can show their social responsibility by contributing to
D. public interests.
128. As the use of information-management systems continues to grow, it is important for businesses to be concerned with their customers'
D. rights to privacy.
68. Online chats, forums, and communities that enable businesses to learn about the wants and needs of their worldwide target market have created a new form of
D. social relationships.
47. Gross profit shows business owners the difference between what they've
D. spent and received.
91. An important factor that has a significant effect on the general business environment is
D. technology.
103. To reduce the time, effort, and cost needed to produce its Model T cars, the Ford Motor Company developed
D. the assembly line.
44. One of the freedoms provided to individuals by the private enterprise system is the freedom to choose
D. where they will work.
