Intro To Business Exam 1

_____ is a philosophy that focuses on the consequences of an action to determine whether it is right or wrong. This philosophy holds that an action that affects the majority adversely is morally wrong. Distributive justice Preconventional morality Social responsibility Utilitarianism Consumerism

Utilitarianism

Which of the following is an example of a natural trade barrier? Distance Price Product characteristic Exchange controls Custom regulations

distance

partnership advantages

ease of formation flexibility no special taxes availability of capital relative freedom from gov control diversity of management, skills, expertise

Which of the following is an example of a factor of production? economy of scale competition free market labor mass production

labor

Within the music industry, four companies (UMG, Sony-BMG, EMI, and Warner) control 90 percent of the music you hear. The music industry operates in a(n) _____ market structure. perfect competition imperfect competition monopoly monopolistic competition oligopoly

oligopoly

A retailer that allowed its employees to handle a customer complaint without having to ask for permission or direction from management would have: obligated its employees to help customers ignored the rights of its customers empowered its employees to help customers created an ethical dilemma ignored the rights of its employees

empowered its employees to help customers

Who owns a corporation? its employees its board of directors its president its board of directors and major stockholders everyone who owns a share of stock in the corporation

everyone who owns a share of stock in the corporation

All businesses approach ethics the same way. true false

false

When Whole Foods Market, the world's largest natural foods supermarket, acquired Select Fish, a fish processing company, it was an example of a conglomerate merger. true false

false

In 2018, Austria exported $122.5 billion and imported products valued at $118.8 billion. Austria had a(n): favorable balance of trade positive balance of payment negative balance of trade negative trade deficit positive trade deficit

favorable balance of trade

Market equilibrium is: the point at which a nation reaches full employment the time period used to determine the Consumer Price Index (CPI) the point at which quantity supplied equals quantity demanded defined as the moment when profit is created the point at which revenues equal expenses

the point at which quantity supplied equals quantity demanded

3 is a prime number. true false

true

The distributive process by which the burdens and rewards that society has to offer are shared varies from society to society. true false

true

The situation in which the average of all prices of products is rising is called inflation. true false

true

The tax that the United States imposes on imported carbon steel products is called a tariff. true false

true

partnership disadvantages

unlimited liability potential for conflicts between partners complexity of profit sharing difficulty exiting or dissolving partnership

The merger of McKesson, the leading U.S. drug wholesaler, and HBOC, a producer of health-care inventory software, is an example of a(n) _____ merger. acquired combination horizontal functional vertical

vertical

A disadvantage of a partnership is that any partner may have to pay all of the debts of the company regardless of who incurred the debts. true false

true

Corporations face many more government restrictions and regulations than sole proprietorships and partnerships. true false

true

Human rights include an individual's right to life, to freedom, and to the pursuit of happiness. true false

true

Limitations on the quantity of certain types of goods that can be imported over a period of time are called import quotas. true false

true

As a factor of production, capital includes money. true false

False (capital includes: tools, machinery, equipment, buildings)

It takes four consecutive quarters of decline in the GDP for economists to consider the economy to be in a recession true false

False (it takes two consecutive quarters)

Which of the following statements about ethics training is true? Ethics training is formal training to develop awareness of inappropriate behavior and to practice appropriate responses. Ethics training is best done informally to allow employees to feel free to admit their mistakes. One of the purposes of ethics training is to get employees to admit when and where they have acted unethically. The most effective ethics training begins with the development of a personal code of ethics. The most effective ethics training involves new recruits; the ethics of long-time employees cannot be changed.

Ethics training is formal training to develop awareness of inappropriate behavior and to practice appropriate responses

_____ is the money a company earns from providing services or selling goods to customers. Profit Opportunity Gross margin Revenue Amortization

Revenue

Which of the following is an example of an ethical business activity? The employee told several jokes that made fun of blonde women. The employee used the company postage meter to mail letters to her family. The employee reported to his supervisors that a co-worker had misappropriated company funds. The employee went to see a movie one afternoon when she was supposed to be making a sales call. The employee condoned a fellow employee's use of alcohol on the job.

The employee reported to his supervisors that a co-worker had misappropriated company funds.

In 1993, Purdue Pharmaceuticals of Stamford, Conn. applied for the first in a series of patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin. Purdue's patents acted as a(n) _____ and prevented Endo from entering the market. inflationary tool purchasing power equalizer oligopolistic tool market contractionary tool barrier to entry

barrier to entry

Corporate philanthropy: is the practice of limiting investments to companies that behave in accordance with the investors' code of ethics is defined as the corporation's responsibility to satisfy the needs of its investors can be either a cash or a noncash donation is not a way that many companies today express their social responsibilities is defined by none of the above

can be either a cash or a noncash donation

A "mixed economy" is an economic system that: combines socialism and communism combines private and government ownership of the factors of production is owned collectively by the people emphasizes government-controlled monopolies relies on a combination of oligopoly and monopoly

combines private and government ownership of the factors of production

North American Van Lines and Allied Van Lines combined in a _____ merger that will create the world's largest moving company. Prior to the merger, North American was the leading company in moving high-end merchandise such as computer and hospital equipment, while Allied specialized in households. conglomerate combination horizontal vertical functional

horizontal

_____ are products that are bought from one country for use in another just as the U.S. buys wood pulp and timber from Canada. Imports Tangibles Tariffs Exports Countertrades

imports

Thom Georges wants to open a store where he sells nothing but antique architectural features that he can salvage from old houses being torn down to make way for progress. He has an eye for the kind of doors, windows, mantels, and so forth that decorators want, but he does not have all the funding he needs to get started. He has invited his parents to invest $40,000 in the enterprise. He has told them that if they do invest, they would have liabilities in the firm equal to but no greater than their investment. Georges is trying to get them to form a _____ with him. closely-held corporation cooperative general partnership joint venture limited partnership

limited partnership

In 2018, the country of Brazil, had imports of $78.02 billion and had a favorable balance of trade. This means that Brazil had: less than $78.02 billion in exports exactly $78.02 billion in exports more than $78.02 billion in exports low inflation an unfavorable exchange rate

more than $78.02 billion in exports

Pete Yankin and Ken Lowery consider themselves to be experts on hunting in the mountains in North Carolina. As a result, the two men established a company that markets hunting expeditions. Yankin and Lowery share responsibilities for booking the trips, gathering supplies, and guiding groups of five to seven hunters into locations where they can hunt for deer and bear. Since the two will share any profit equally, this would be an example of a(n): S corporation cooperative sole proprietorship partnership double proprietorship

partnership

For most agricultural products, farmers produce homogeneous products, sell them to a common market, and generally cannot affect prices greatly. This is an example of which kind of market structure? perfect competition monopolistic competition imperfect competition a pure monopoly an oligopoly

perfect competition

Free trade: allows companies to conduct business without licenses permits people to buy and sell where they please establishes artificial barriers to trade is also called protectionism relies on bartering as its primary means of exchange

permits people to buy and sell where they please

The European Union (EU) bans the importation of hormone-fed U.S. beef and bioengineered corn and soybeans on safety grounds although Americans eat this food every day. This ban is so consumers in the EU will buy domestic beef and products made from domestically produced corn and soybeans. This ban is an example of: free trade ethnocentricity dumping countertrading protectionism

protectionism

When the price of gasoline rises by 40 percent, but your salary remains the same, it is an example of a decline in your: standard of living purchasing power GDP index cost of living index gross economic income

purchasing power

Kraft Foods Inc. joined with the National Latino Children's Institute to announce Salsa, Sabor y Salud - a first-of-its-kind healthy lifestyles educational program designed by Latinos for Latinos. The program was created by NLCI in partnership with Kraft to support Hispanic families, a population particularly at risk for obesity and accompanying health problems. Kraft donated $2 million to the program's startup. This donation is an example of: social philanthropy social investing strategic giving strategic paternalism consumer-based donating

strategic giving

Seeds of Change manufactures and markets certified organic entrees. Its mission reads, "At Seeds of Change, we're committed to making delicious foods that are healthy for you as well as the planet." In support of this mission, the company donates money to support environmental protection activities. In other words, Seeds of Change engages in: consumerism social investing strategic giving strategic paternalism consumer-based donating

strategic giving

The Home Depot supplies all the materials and the labor expertise for Habitat Homes in various regions of the country where the retail giant has a store. Its top management believes that this type of philanthropy better reflects the company's commitment to the community than simple donations to the American Cancer Society and similar national charities. The Home Depot is using the practice of: social philanthropy social investing strategic giving strategic paternalism consumer-based donating

strategic giving

Which of the following is NOT an example of a good that would be sold in a department store? wedding dress white linen table clothes the advice of a wedding planner silk flower bouquets book on wedding etiquette

the advice of a wedding planner

People who combine natural resources, labor, and capital in a profitable venture are called entrepreneurs true false

true

Social responsibility is a voluntary obligation. true false

true

The difference in value between a country's imports and exports is called its balance of trade. true false

true

Which of the following is an example of a disadvantage associated with a partnership? unlimited liability possibility of more available credit diversity of management flexibility ease of formation

unlimited liability

A corporation has: limited liability ease of transferring ownership continuity of life ability to attract financing all of the above

all of the above

Franchisors in foreign countries must be aware of: currency exchange local culture language differences political risks all of the above

all of the above

A well-designed product transcends cultural barriers. It does not need to be changed to suit different countries or cultures. true false

false

In a limited partnership, all of the partners have limited liability. true false

false

The only social responsibility that a company has to its investors is an economic responsibility--it must make a profit. true false

false

The corporation's board of directors elects the corporate officers. true false

false (board of directors HIRE corporate officers)

A country that exports more goods than it imports is said to have a(n): favorable balance of payment negative trade deficit favorable balance of trade unfavorable balance of trade positive trade deficit

favorable balance of trade

The most basic measure of economic growth is the: consumer price index gross domestic product producer price index total of all goods and services produced combined producer and consumer price indices

gross domestic product

The World Trade Organization (WTO): includes all of the same countries that signed the Uruguay Round has emerged as the world's most powerful institution for reducing trade barriers and opening markets does not yet have an effective dispute settlement procedure but will before the year 2005 is controlled by the United States includes China and Russia among its members

has emerged as the world's most powerful institution for reducing trade barriers and opening markets

Botswana produces diamonds, copper, nickel, soda ash, meat, and textiles, which it sells to the members of the European Union. To Botswana, the diamonds, copper, nickel, soda ash, meat, and textiles it produces are examples of: embargo tariff import export countertrade

import

A recent regulation enacted by the Commission for Protective Trade Measures in Russia limits the amount of poultry meat that can be brought into the country and sold in the country each year to 1.05 billion tons. Russia is using a(n) _____ to protect its domestic poultry industry. embargo boycott tariff restrictive limit import quota

import quota

A code of ethics: provides employees with the knowledge of what their firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers can offer a lengthy and detailed set of guidelines to employees is a summary statement of the firm's goals, policies, and priorities is considered by some to be public relations gimmicks is accurately described by all of the above

is accurately described by all of the above

Utilitarianism: states that any act that jeopardizes the individual's rights is wrong creates win-win situation is difficult to implement because it is hard to tell how one decision will impact a large number of people supports the belief that life should be fair is easy to implement because of its childlike simplicity

is difficult to implement because it is hard to tell how one decision will impact a large number of people

Ease of formation, flexibility, and diversity of management are advantages of the _____ form of business ownership. partnership joint venture cooperative conglomerate corporation

partnership

The U.S. has one of the very few areas in the world where kaolin can be mined. Kaolin is a necessary ingredient in many products ranging from stomach medication to paper. The U.S.-produced kaolin is sold all over the world. Kaolin is a(n) _____ for the countries that purchase it. embargo tariff import export countertrade

import

The implementation of a contractionary policy by the Federal Reserve would result in: lower interest rates increased economic growth lower unemployment increased spending lower inflation

lower inflation Expansionary (increase inflation)