AB study guide for chpt. 1,2,3

Which of the following is uncharacteristic of a socialist economy?

a. All capital and capital good are privately owned.

What social factors have affected Fernanda's ethics?

a. Co- workers

Refer to Thomas Bernerd, Inc. Which of the following options is not one of the steps needed for entering an international market?

a. Contact local government to see if taxes on trade can be waived.

Which basic consumer rights was violated by the ladder company?

a. the right to safety

While the global economy continued to grow robustly until 2007, economic performance ______.

a. was sluggish then stopped in 2009.

When did the U.S. government become more deeply involved in business than it had been previously?

b. After Franklin D. Roosevelt became president

What is to business relationship between Allen and his Chinese contact?

b. Allen is an importer and the contact is an exporter.

The use of the factory system in the United States helped to usher in the _____

b. Industrial Revolution.

Perfect competition is characterized by _____

a. many buyers and many sellers.

The economics term used to describe the Federal Reserve's actions to determine the size of the supply of money in the nation and the level of interest rates is ___.

a. monetary policy

Sherry Garcia begins her first job after graduation form college and starts putting money away in a savings account. She believes she has removed this money from the circular flow between buyers and sellers that she studied in Introduction to Business. Is Sherry correct?

b. No, even though she has saved this money, the bank will turn invest the money back into the circular flow.

Which of the following industries would most likely have the characteristics of an oligopoly?

c. Automobiles

Kai promised to repair Krystal's car on Thursday. After picking up the necessary part at the junkyard, he discovered he would not buy back the part. Krystal does not know about these developments. However, she thinks Kai will be finished with her car sometime today. What should Kai do?

c. Call Krystal to inform her of the problem, and recommend a reputable repair shop

Refer to Thomas Bernerd, Inc. Initially, the managers believed that ____ would be the best option for entering the foreign market.

c. licensing

During which stage of the business cycle would a company such as 3M begin to focus on being more value conscious in its production decision?

c. recession

If the Korean gov. charged tariffs on Japanese automobiles and in turn the Japanese gov. put tariffs on Korean automobiles, Japan's major rationale for imposing these tariffs would be to ___?

c. retaliate for Korea's tariffs

Erica buys a new pillow and rips off the manufactures tag. She then reads the tag and is amused at its warning that, under penalty of law, the tag should not be removed and the pillow could cause suffocation. What consumer right is manufactured guarding against?

c. the right to be informed

Will works in a position where there is very little supervision. In fact, although he considers himself ethical, he figures he could go away for a week without anyone noticing. Which general set of factors is most likely to influence Will's ethical behavior?

e. Opportunity

Derek lives in Phoenix where he hears almost daily reports about the high levels of ozone along with suggestions on when individuals should purchase gasoline. As he views the hazy condition in the sky, he decides the government is basically ignoring environmental problems. Which statement best describes the government's involvement?

e. The government is spending several billions of dollars a year to reduce various types of pollution.

Arthur Jones distributes rawhide to several different homes. In turn, each household produces a product such as satchels, belts, shoes, and boots, and then Arthur sells the finished goods. This represents a(n) ______

.b. domestic system.

One example of an economic community is the organization started by France, Germany, Belgium, Italy, the Netherlands, and Luxembourg. This organization is known as the ____

d. European Union.

Which president stated that consumers have the right to consumer education?

d. Gerald R. Ford

Zach is an environmentalist with very strong beliefs about who should pay for environmental cleanup. What is most likely to be Zach's views?

d. He feels environmental costs are a part of doing business, which should be paid by business and in turn by higher prices for consumer.

Which of the following is false concerning the International Monetary Fund?

d. its loans to development countries are interest free

. Anthony chooses to work only thirty hours a week as an engineering assistant while trying to shield himself from additional responsibilities at work. Anthony seems to value ___

d. more free time.

Refer to Manna's Coffee. If Eun-Samg were Caucasian and the company employees were mostly Asian the way she was treated would be referred to as ___.

d. reverse discrimination

When the United States levies a tax on textiles from India, this tax is a type of ______

d. tariff

When the US gov. spends more than it receives within a fiscal year, this is called the ___.

b. federal deficit

Melanie worked at a meat packing plant during the 1920s. What would she have been most surprised to see happening at the plant?

a. Employees earning vacation time

In a communist country such as Cuba, emphasis is placed on producing what type of goods?

a. Goods needed by the government

Although it lacks sources of timber and oil, Chablis has a plentiful supply of grapes for its many wineries. Which statement about Chablis is true?

a. It has a comparative advantage in wine production.

What is the most likely state of D'Jeanea's portfolio?

a. It has most likely gained value due to the uptick in the business cycle and economic growth experienced since 2011 and it is no doubt worth as much or more than it was worth in 2007.

Residents around Lake Gunter have been warned not to drink their water because it contains some unknown chemical contaminant that could be harmful. What is this called?

a. Pollution

What are the two major problems that affirmative action programs have faced?

a. Quotas and lack of acceptance by some businesspeople

William and Carrie go to the local Farmer's Market every Saturday morning. The market has many vegetable stands, many flower stalls, many artisan craft stalls selling handmade soaps and scented oils, and many stalls selling yard ornaments. All of the sellers within a sales category (vegetables, flowers, artisan crafts, and ornaments) sell their goods for essentially the same price, with little variation. Carrie comments to William that the vegetable stands enjoy perfect competition. What factors did she take into consideration when making this comment?

a. She is considering that there are many buyers and sellers of a product and no single buyer or seller is powerful enough to affect the price of that product.

When it built production lines in the United States, BMW engaged in what type of international expansion?

a. Totally owned facilities

Investors expect management to do all of the following except _______.

a. consult them on ethical decisions

capital or capital goods are recognized by economists would include all of the following except.....

a. crude oil

Which of the following is a potential drawback of licensing?

a. if quality is compromised, it may reflect poorly on the company providing the license.

Arguments for imposing trade restrictions include _______

b. equalizing a nation's balance of payments.

If the demand for a product declines, what happens to the price of the product?

b. The price decreases.

A credit card company is offering an annual percentage rate of 3.9 percent. However, the company fails to mention that this is an introductory rate, and when consumers receive their bills after six months the rate increases to 21.9 percent. The consumers feel their right to ___ has been abused.

b. be informed

Which of the following is the most important legislation in improving the condition of US waters?

b. clean water act

Totally owned facilities overseas are an example of ____.

b. direct investment

Refer to Home Inspirations. Mary noticed that when sales were up, the economy was in a _____

b. peak period.

A social audit is ______

b. report of what a business has done and is doing about social issues.

Drew is in charge of writing a report for his company that talks about the quality and safety of his company's products, business practices, involvement in the community, human resources, and efforts to reduce pollution. This is called a(n) _______

b. social audit.

Which of the following economic terms describes the total value of a nation's goods or services that have been adjusted for inflation?

c. Real gross domestic product

Refer to Landfall Services. What type of tax has the Brazilian gov. imposed on the company?

c. Revenue Tariff

Mandy Bush decides to start a residential landscaping business. How would this business most likely be classified?

c. Service business

Amanda decides to try out her new iron on the pesky wrinkles she has on her legs. She suffers rather severe burns and is infuriated with the manufacturer because she feels her right to safety has been violated. Is Amanda correct?

c. She is considering that the vegetables are in perfect condition so the competition should also be perfect.

____ is a loose, subjective measure of how well off an individual or society is in terms of obtaining want-satisfying goods and services.

c. Standard of living

Lauren is the assistant manager of a midsized logistics firm. She believes her manager, Roger, has become carried away with supporting nonprofit organizations and encouraging employees to do community service. What argument would Lauren most likely use to turn Roger to her point of view?

c. The company's time and money should be spent maximizing the owner's wealth, not solving society's problems.

Bill had a problem with a coffee maker he purchased recently. He has been trying for days to speak with the company by calling its toll-free number, but it rings forever or sends him through a long menu with no opportunity to speak to an individual or to leave a message. Steve feels his basic consumer right to ____ has been violated.

c. be heard

The motion picture industry uses a rating system to describe the content of its movies. Movies are accompanied by ratings such as PG (parental guidance suggested) or R (not suitable for those under 17). This rating system satisfies consumers' right to _____

c. be informed.

After consulting her company's code of ethic's , Vera is still unsure of whether or not the decision she is about to make is ethical. Which of the following actions would be most appropriate?

c. determine whether coworkers, suppliers, and costumers would approve of the actions

Suppose Brazil, Argentina, Columbia, Peru, and Chile decide to form the South American Union to increase trade among these nations. This would be an example of a(n) _____

c. economic community.

William Welsh, a former Air Force pilot, decides to operate a helicopter tour company to provide customers with breathtaking views of the Rocky Mountains. He obtains a loan and purchases the necessary land, facilities, advertising, and five helicopters for his business. What important factor of production has he overlooked in creating his business?

c. labor

Which economist has been called the father of communism?

d. Karl Marx

Although changes have occurred over the years, ____ is historically considered to have a communist economy.

d. North Korea

What led most directly to increased gov. involvement with regulating business and its dealing with society?

d. The great depression

Product labels on detergent that indicate ingredients and laundering methods are examples of which provision of Kennedy's Consumer Bill of Rights?

d. The right to be informed

Whirlpool fails to provide an instruction manual with a certain type of new washing machine. Which basic consumer right does Whirlpool's action violate?

d. The right to safety

Boeing, Airbus, Bombardier Aerospace, and Cessna are among the ten manufacturers and sellers of business jets. Because the production of jets requires a sizeable investment, it is difficult to enter this market and the sellers are quite large. Which of the following best describes the market or industry situation in which these companies operate?

d. These businesses operate in an oligopoly.

XYZ Association, a carpenters' trade union, adopts guidelines intended to curtail questionable and pervasive activity by its members. Which of the following statements is true about the relationship between XYZ and its members?

d. XYZ may make codes of ethics and rules to govern their members but it must also make sure that these codes and rules do not breach antitrust laws.

MasterCard sends a customer a memo that discloses the true cost of borrowing with each billing statement. It does this because it realizes that the customer has the right to ______

d. be informed.

Helen Troy walked into her office and found a large, extravagant bouquet on her desk. Before she had time to read the card, her secretary said it was from Mr. Paris at Priam Corporation. The secretary knew Mr. Paris was trying to negotiate a sales deal with the company. Thus, she remarked that the beautiful flowers should help Ms. Troy make her decision. Although Ms. Troy did not know how to respond to Mr. Paris' gift, she thought an answer might be in her company's ___

d. code of ethics.

Refer to Satellite Communications. Now that Steven plans to open his own business, he needs to look at the factors of production. Which of the following is not a factor of production?

d. demand

All of the following are factors that affect the level of ethical behavior in an organization except ____

d. demographic factors.

Which of the following is the most effective way to encourage ethical business behavior?

d. establish and enforce a corporate code of ethics

The best method of learning from experiences in international business is to ____.

d. invest directly in a foreign country

An executive at a U.S. steel company uses growth in gross domestic product as one way to develop trends in industry steel use, so he records GDP change for each year on a graph. However, the executive's figures are considerably higher than those of the staff economist, who also has drawn a graph. This difference is most likely the result of ______

d. the economist adjusting the figures for the inflation rate.

When a country imports more than it exports, it has a(n) ___

d. unfavorable balance of trade.

You are the executive vice president for Netherland Tires. You have the responsibility to locate land for a new distribution center in Mississippi, and you own over 1,000 acres of land near one site in Tupelo. This could create for you _____

e. a conflict of interest.

A newly formed country in the Caribbean has no high tariffs, yet other countries find it difficult to trade with the new country because of its requirements for labeling, product testing, and certifications. These restrictions can best be classified as ____.

e. bureaucratic red tape

Refer to Echo Air Company. EAC's creation of its code of conduct demonstrated its application of moral standards to business situations, which is also known as ________

e. business ethics.

Eleven republics of the former Soviet Union are members of the _____.

e. commonwealth of independent states

Supporters of increased social responsibility would most likely say that the goal of a firm is to ____.

e. create value and benefits for owners, employees, and society

China is selling school supplies in the United States for very low prices, even lower than the prevailing prices in China, and thus making it extremely difficult for American manufacturers to compete. This is referred to as ___.

e. dumping

Social Responsibility ____.

e. is costly but provides tremendous benefits to society and the business.

In 1915, Gracie Philips, mother of seven, lost her husband in a horrible industrial accident that could have easily been prevented. Soon after, Gracie decided to take legal actions against the company. What obstacle did she most likely face?

e. she will find out that court is very expensive, and her chances of winning are extremely slim

Examples of command economies include ____

e. socialism and communism.

Brice stormed into the office, exclaiming , "that's the last straw! I've experienced unethical behavior at this company one time too many. I'll be calling the press immediately" It appears that Brice is about to engage in ___.

e. whistle-blowing

Which of the following statements is the best advice you could give Hermes in light of the situation?

a. "Hermes, you have fallen victim to social factors that affect ethical behavior. In your country, it was cultural norm to offer a gratuity to a recording agent, in this country, that is not the case."

If the Philippines needed to borrow money to promote its economic and social progress, it would most likely go to the ___.

a. Asian Development Bank.

When Honda experienced declining sales as a result of quality and safety issues, it began offering buyer incentives to new-car buyers. Nearly immediately, Ford and General Motors began similar promotions. These businesses .........

a. represent an oligopoly in which there are few sellers, and each seller has considerable control over price.

Historically a discrepancy exists between the pay for women and men of equal qualifications. What statement mos t accurately describes this inequality?

b. Despite threats of legal action, women still make significantly less than men of equal background.

Which of the following is not a feature of laissez faire capitalism?

b. Guaranteed income

Gerrick has an international business but is having difficulty with currency exchanges and fluctuations in the currency exchange rates. At times the problems are so severe he has considered closing down his international operations and doing business exclusively in the United States. Where can he go for assistance with currency exchange problems?

b. His bank, if it is a large international bank

How has international trade changed since the end of World War II?

b. International trade has increased steadily since this period of time.

When an Indian importing firm wants to import U.S.-made products, it must first secure permission and dollars from the Reserve Bank of India. This type of restriction is known as a ______

b. foreign-exchange control.

Jackie has been reading about international trade and that one nation has the ability to produce a specific product more efficiently than any other nation. She and her friend, Allie, are required to create a PowerPoint presentation for their business class about international trade. Jackie can create animated PowerPoint presentations that clearly and precisely convey the message they need to make, but in a light and entertaining fashion. She is not good at public speaking. Allie is an excellent public speaker and can create equally excellent PowerPoints. Both girls have homework for other classes to do and agree to divide the work—Jackie will create the PowerPoint and Allie will do the verbal and written part of the presentation. What advantage does Allie have over Jackie in making presentations?

c. Comparative advantage

Which of the following is an argument against social responsibility?

c. Corporate time, money, and talent should be used to maximize profits.

Public utilities are often referred to as _____

c. monopolies.

The government uses tax dollars to _______

c. purchase resources and products needed to provide services.

When consumers spend their money to purchase Samsung android phones or computers with an Intel processor, or when they discontinue buying such items as compact discs, they are telling resources owners ____.

c. what to produce

Terrance operates a very successful cold storage business in the United States and would like to establish a similar business in a foreign country so he is able to offer shipping between the United States and the other country with storage for the goods once shipped. He has studied several countries and has a few possibilities, but would like to work in one that will most likely result in the success of his business there. Which country has the most efficient, integrated, and dynamic economic relationship with the United States?

d. Canada

Which of the following represents the biggest customer of American business?

d. Consumers

Refer to Echo Air Company. To fix the ethical issue problems, EAC management should have implemented all of the following guidelines for making ethical decisions except which one?

d. Create an industry benchmark.

A government agency with the power to investigate complaints of discrimination and to sue firms practicing employment discrimination is known as the _____

d. Equal Employment Opportunity Commission.