Business Test 1

Which of the following statements is true of nonprofit organizations?

They employ people and take in revenue.

Beyond the sheer value of the goods and services they generate, small businesses make a powerful contribution to the U.S. economy in terms of:

vitalizing inner cities

When Rotomate, a technology solutions company, started producing portable GPS tracking devices in the early 1980s, it faced severe losses because of the lack of a market for its product. Given this information, it can be concluded that Rotomate:

was a bleeding-edge firm.

Lily, a salesperson at a clothing store, observes the department head misbehaving with a customer. She brings the issue to the notice of the store manager, and the offender is immediately dismissed from his job. In this scenario, Lily is a _____.

whistle-blower

Which of the following approaches, which emerged during the marketing era, continues to influence business decisions today as global competition heats up to unprecedented heights?

A consumer focus that permeates successful companies in every department, at every level

In the context of the economic environment of business, which of the following is most likely to reduce the risks of running a business?

A low level of corruption

Which of the following statements is true of ethics?

Actions that are completely legal can still be unethical.

In the context of entrepreneurs, which of the following statements is a difference between an internal locus of control and an external locus of control?

An internal locus of control involves personal responsibility, whereas an external locus of control does not

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

Angel investors are wealthy individuals, whereas venture capital firms are companies.

_____ is a widely accepted social movement that supports a buyer's right to be informed, to be safe, to choose, and to be heard.

Consumerism

Which of the following can be considered a business?

Davent, an online shopping portal that offers discounted prices on clothes

In the context of the history of American business, which of the following occurred during the entrepreneurship era?

Industrial titans created enormous wealth that raised the overall standard of living across the country.

Which of the following is true regarding the factor of production, capital?

It refers to the phsycial resources of a business

As discussed, 'new entrepreneurs' are more likely to be

Middle Age and Latino

Antonsen Inc., an accounting firm in Texas, follows certain guidelines while providing consulting services to a firm. One such guideline is to limit the services it provides to the firms it audits. The CEO of Antonsen Inc. is also required to certify the validity of the company's financial statements. In this scenario, Antonsen Inc. most likely abides by the requirements of the _____.

Sarbanes-Oxley Act

The Small Business Administration (SBA) supports the _____, which provides free, comprehensive counseling for small businesses from qualified volunteers.

Service Corps of Retired Executives

In September 2008, during the fiscal crisis in the United States, the stock market lost more than a third of its value, and 11.1 million Americans were out of work. Neither businesses nor individuals could borrow funds to meet their needs. Which of the following dimensions of the business environment does this illustrate?

The economic environment

Which of the following is a drawback of buying a franchise?

The franchise buyer has minimal creative control

Which of the following dimensions of a business environment embodies the values, attitudes, customs, and beliefs shared by groups of people?

The social environment

Onyi Muro, a boutique restaurant, has dining tables with interactive screens on them. The customers can place their orders, watch their food being prepared, and provide feedback to the chefs using these screens. In this context, which dimension of the business environment is affected the most?

The technological environment

Which of the following statements is true of successful firms?

They deliver unsurpassed value to their customers.

Which of the following is a difference between corporate philanthropy and corporate responsibility?

Unlike corporate philanthropy, corporate responsibility focuses on the actions of the business itself rather than donations.

In the context of ethics and social responsibility in the global arena, which of the following statements is true of a business's responsibility to workers abroad?

When deciding living wages, companies must bring together their own values with the laws of both the United States and their host countries.

Which of the following is an advantage of starting a business from scratch?

You do not have to deal with a prior owner's bad decisions.

Trotin Langdon Corp., a leading car dealer, operates in many countries. The company has a clearly written mandate for all its contractors abroad. According to this, all contractors must ensure that standardized safety measures are implemented in their factories and workers are made to work only for nine hours a day. In this scenario, Trotin Langdon Corp. has set _____ for its vendors.

a code of conduct

In the context of the various strategies that can help a small business owner succeed, a _____ provides an invaluable way to keep an entrepreneur and his or her team focused on success; it is also absolutely crucial for obtaining outside funding.

business plan

A college has contracted a construction company to build a bookstore for its new campus. In the context of factors of production, the heavy machinery and equipment used by the contractor in the construction process are referred to as _____.

capital

Loren LLC is a small bicycle store that competes effectively with much larger companies as its focus lies exclusively on selling bicycles for senior citizens and patients with orthopedic ailments. The company has been successful as it has:

capitalized on a small but profitable market niche

Crayon, a well-established beauty products company, partnered with the Lenora Birdstone Foundation, a nonprofit organization, to raise awareness about breast cancer and collect funds for setting up a cancer unit at a local hospital. The company accumulated a sum of $5 million by selling organic creams to more than 2,000 people. In this scenario, Crayon was most likely involved in _____.

cause-related marketing

Jessica Marshall, the CEO of ABD Oil Drilling Inc., decides to set aside an amount of $10,000 from the company's annual profits to donate to local nonprofit organizations although the company already meets the mandated government requirement of contributing 4 percent of the company's revenue for social benefits. This donation by ABD Oil Drilling Inc. is an example of:

corporate philanthropy.

The management of a steel manufacturing company decides to set up a new plant in a rural area. However, this would create waste management issues for the company. On the other hand, the company would incur higher costs if it sets up the plant in another area. The management thus finds itself in a situation where both the actions will have a negative consequence. This scenario exemplifies a(n) _____.

ethical dilemma

When companies measure their success of implementing social responsibility efforts they can use a triple bottom line approach to assess their success regarding

financial, social responsibility, and environmental efforts

Robert wants to start an independent recording studio. In order to finance his start-up, Robert seeks help from Esther, a successful business magnate. Esther agrees to fund Robert's venture as long as she receives a 20% share of the profits made by Robert. In the given scenario, Robert receives the financial resources to start his business:

from an angel investor.

Broche Technologies, a brand of electronic appliances, develops a new range of refrigerators that do not release chlorofluorocarbons. The company promotes these products as the most eco-friendly refrigerators in the market. In this scenario, Broche Technologies is engaging in _____.

green marketing

Children's Campground is a summer program for school children. It advertises that there is one counselor for every four children and that several other highly-trained professionals are part of its staff. Children's Campground advertisements indicate that the program relies heavily on its _____ factor to provide its services.

human resources

In the context of the history of American business, during the _____, businesses began to develop distinctive identities to help customers understand the differences among various products.

marketing era

Tornio, a steel company, imports iron ore from Marquette iron range in Michigan. In this scenario, the iron ore obtained by Tornio can be classified as _____.

natural resources

Michael is a middle-aged man who immigrated to the U.S. last year. He has actively been looking for work ever since but has not been able to find a job that utilizes his abilities or offers an income similar to his previous position in his home country. He is beginning to realize that the only way for him to survive is to start his own business. In this scenario, Michael will most likely become a(n) _____.

necessity entrepreneur

Ruben owns an astronomy-themed restaurant. The entire restaurant resembles a planetarium. He has also installed a projector that transforms the ceiling into a night sky. Ruben used most of his savings to fund this venture and also borrowed funds from his friends and family. In the given scenario, Ruben used _____ to fund his business.

personal resources

Aragon, a brand of inverters, provides products that work well in the first year of their use. The performance of the products, however, starts declining after the first year, and the products eventually become unusable within a short period of time. The pattern of breakdown is similar for all Aragon inverters. Reports suggest that Aragon intentionally creates inferior products to increase repurchases. In the given scenario, Aragon is guilty of _____.

planned obsolescence

Herbert gained most of the capital for his new start-up project by posting a small demonstration of his product on a website that he created especially for the project. Many people showed genuine interest in his product and donated money to help him launch it. In the given scenario, Herbert:

received money for his venture through crowdfunding.

In the _____, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term ties.

relationship era

Janet reasons, "It is wrong to lie. However, it is okay to overstate my expense account on my recent business trip because I need the money, and my company has not given me a raise in the past year." In this scenario, Janet is an employee who views ethics as _____.

relative

Andrew, an employee in a corporate company, is asked to conduct a systematic evaluation of how well the company is meeting its ethics and corporate responsibility goals. In the given scenario, Andrew is most likely asked to do a _____.

social audit

In the context of social responsibility, _____ include employees and investors who have a personal interest in the performance and actions of an organization.

stakeholders

David is the chief executive officer of Grand Rocks Mining Company. He has convinced the company's board of directors to implement a change in the mining procedure. According to the new procedure suggested by David, less resources will be exhausted. This will ensure that the ability of future generations to meet their needs is not harmed because of shortage of natural resources. By agreeing to David's suggestion, Grand Rocks has embraced the idea of _____.

sustainable development

According to the U.S. Small Business Administration (SBA), to officially count as "small," _____.

the number of employees of a business should be less than 500

Buying an established business is a better plan than starting your business from scratch because:

the organizational structure is in place.

Charles owns a restaurant that is thematically modeled into representing the pop culture of the 1980s. While setting up the restaurant, Charles took care of everything himself, from interior decoration to menu and music. He even got the permit for the restaurant himself. Which entrepreneurial characteristic is highlighted in the given scenario?

Self-reliance

In the context of the history of American business, which of the following statements is true of the production era?

The assembly line became standard across major manufacturing industries.