Intro to Business Fall Exam

In the context of monitoring ethics and social responsibility, when firms monitor themselves, the process is referred to as ____. a. asset management b. a social audit c. a socio-commercial analysis d. Intrapreneurship

b. a social audit

Capital, one of the factors of production, includes machines, tools, buildings, information, and technology. True False

True

Value is the relationship between the price of a good or a service and the benefits that it offers its customers. True False

True

Jenna left her job as an analyst in a reputed company to start her own event management company at a time when event management was not in vogue. She was bold enough to take this step despite knowing the amount of risk involved. Which entrepreneurial characteristic is highlighted in the given scenario? a. Self-reliance b. Confidence c. Energy d. Conformity

b. Confidence

_____ is the process of funding ventures by raising money from a large number of investors via the Internet. a. Microloan programming b. Crowdfunding c. Activity-based costing d. Backscratching

b. Crowdfunding

Which of the following is an example of a nonprofit organization a. Costincon, a regional retail store that sells goods at discounted prices b. Hollorg, a community museum that is funded by a trust and is free for public use c. Tempim, a local newspaper house that sells newspapers at a price lower than their competitors d. Modashows, a fashion publication house that issues free subscriptions of it weekly magazines to consumers who are yearly members

b. Hollorg, a community museum that is funded by a trust and is free for public use

Who among the following people is most likely to become a necessity entrepreneur? a. A person who has recently graduated from college and has no work experience b. A person who has recently been promoted to a managerial position c. A person who experiences discrimination in the standard workplace d. A person who avoids challenges and financial risks

c. A person who experiences discrimination in the standard workplace

In the context of codes of ethics, the purpose of a written code is to: a. help employees who view ethics as relative to justify their unethical actions. b. guide employers in decision making related to green washing. c. give employees the information they need to make ethical decisions across a range of situations. d. provide employers with strategic plans when they wish to contribute to society in a proactive manner.

c. give employees the information they need to make ethical decisions across a range of situations.

Unlike a sole proprietorship, a corporation: a. avoids the undesirable possibility of double taxation of earnings. b. does not require the articles of incorporation to set up the company. c. is considered to be a legal entity that is separate and distinct from its owners. d. is a voluntary agreement under which two or more people act as co-owners.

c. is considered to be a legal entity that is separate and distinct from its owners.

In the context of the history of American business, during the _____, businesses began to develop distinctive identities and strategies to help customers understand the differences among various products. a. industrial revolution b. entrepreneurship era c. marketing era d. relationship era

c. marketing era

Happta is a corporation with tax-exempt status. It has members but cannot have stockholders. Given this information, Happta is most likely a(n): a. S corporation. b. C corporation. c. not-for-profit corporation. d. statutory close corporation.

c. not-for-profit corporation.

In the context of monetary policy, the _____ is a rule set by the Fed, which specifies the minimum amount of funds a bank must hold, expressed as a percentage of the bank's deposits. a. debt ceiling b. statutory framework c. reserve requirement d. fiscal drag

c. reserve requirement

Economics is a. the relationship between customers and businesses. b. mergers and acquisitions. c. study of the choices made by people, companies, and governments to allocate society's resources d. how money is exchanged between businesses.

c. study of the choices made by people, companies, and governments to allocate society's resources

In the context of factors of production, the things that a business needs to produce goods or services are referred to as a. nonprofits b. the hard sell c. synthetic resources d. Depositoryies

c. synthetic resources

The central banking system in the country of Darmos issues a notice to all its commercial banks stating that they must hold funds that are equal to 48% of the deposits held by their customers. In the given scenario, the central banking system's notice exemplifies _____. a. full-reserve banking b. the statutory framework c. the reserve requirement d. statutory liquidity ratio

c. the reserve requirement

An advantage of franchising is the: a. franchisee's ability to freely expand its territory. b. minimal setup costs involved. c. training and support provided by the franchisor. d. franchisee's ability to take control of the business.

c. training and support provided by the franchisor.

In Fidaro, a North American country, punctuality is considered a sign of integrity. On the other hand, in Gwary, an African country, punctuality is considered a sign of anxiety and is given less importance. This exemplifies a. legal differences. b. political differences. c. economic differences. d. sociocultural differences

d. sociocultural differences

In the context of barriers to international trade, ______ include differences among countries in language, attitudes, and values. a. economic differences b. political differences c. legal differences d. sociocultural differences

d. sociocultural differences

Leading-edge companies have focused on customer satisfaction, with a goal to develop long-term, mutually beneficial relationships with customers. Which of the following dimensions of a business environment does this illustrate? a. The economic environment b. the global environment c. the political environment d. the competitive environment

d. the competitive environment

In the context of your career choice, your own business skills cannot influence the level of your personal financial success. * True False

False

CappaStreet is a company that produces gourmet coffee. The company's employees, the coffee bean growers who supply raw materials to the company, the people who purchase its coffee, and the people who live in the community where the company has its production unit are CappaStreet's a. benefactors. b. stakeholders. c. shop stewards. d. Philanthropists.

b. stakeholders.

In the context of key economic considerations when entering a foreign market, which of the following is an example of the transportation infrastructure in a country? a. Airports b. Power plants c. The Internet d. Banking

a. Airports

In the context of international trade, which of the following companies is facing the barrier of legal differences? a. An Asian company that can only import a limited amount of crude oil from an Arab country because of international trade restrictions b. A European company that sells products that cater to specific demographics of foreign countries c. A North American company that takes contracts from overseas manufacturers to produce custom products at a low price d. An African company that introduces a new clothing line in an Asian country that reflects the latter's cultural and traditional values

a. An Asian company that can only import a limited amount of crude oil from an Arab country because of international trade restrictions

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? a. Economic environment b. Competitive environment c. Technological environment d. Social environment

a. Economic environment

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 a. Natural resources b. Man-made resources c. Human resources d. Capital resources

a. Natural resources

Which of the following is an example of a natural monopoly? a. Public utilities b. Agriculture c. Network television d. The automobile industry

a. Public utilities

Felix lost his job at an investment firm because of downsizing during a period of recession. To keep himself financially stable, he opened a food truck that became a huge success. Which of the following advantages of entrepreneurship initially motivated Felix to start the food truck? a. Survival b. Independence c. Flexibility d. Challenge

a. Survival

Which of the following is a characteristic of successful entrepreneurs? a. Tolerance of uncertainty b. Superciliousness c. Apathy d. Intolerance of failure

a. Tolerance of uncertainty

Fabotels is a hotel aggregator that buys budget hotels that succumb to financial losses and then refurbishes them under the company's brand name. Fabotels recently purchased Ravine Comforts, a small lodge that was running into huge debts. The business deal between Fabotels and Ravine Comforts exemplifies a(n) _____. a. acquisition b. horizontal merger c. corporate spin-off d. Divestiture

a. acquisition

The most socially responsible companies establish _____ for their vendors, setting clear policies for human rights, wages, safety, and environmental impact. a. codes of conduct b. universal ethical standards c. greenwashing principles d. human acts and morality basics

a. codes of conduct

A group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations a. common market b. embargo c. strategic alliance d. foreign franchise

a. common market

Companies typically engage in _____ to meet the needs of customers that don't have access to hard currency or credit a. countertrade b. franchising c. a strategic alliance d. product churning

a. countertrade

Similar to a corporation, all owners of a limited liability company (LLC): a. have restricted debts. b. are called stockholders. c. are exempted from federal and state income taxes. d. have the right to establish the company's mission.

a. have restricted debts.

James employs an apprentice in his guitar store who gets firsthand knowledge of craftsmanship and the process involved in becoming a professional luthier. This allows James to have a reliable hand who can assist him in his work without requiring him to hire a professional luthier. It also enables him to use his financial resources on procuring high-quality materials to make the guitars. The opportunity of _____ is highlighted in the given scenario. a. having lower overhead costs b. exploiting market niches c. using technology d. providing personal customer service

a. having lower overhead costs

In the context of small business opportunities, because of their size, many small firms can: a. offer personal customer service. b. have a large span of control. c. evade compliance with federal regulations. d. offer health coverage to their employees at a lower cost than large firms.

a. offer personal customer service.

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: a. received money for his venture through crowdfunding. b. received money for his venture from angel investors. c. was able to fund his project through venture capital. d. was able to fund his project through seed money.

a. received money for his venture through crowdfunding.

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 _____ a. social audit b. continuous audit c. statutory audit d. horizontal audit

a. social audit

Buba Joe's Pizzeria, a fast food chain, wants to expand its customer base. It introduced a new range of vegan pizzas to cater specifically to the vegan market. It also introduced new flavors to cater especially to Hispanic Americans. In this context, which dimension of the business environment is affected the most? a. the social environment b. the ethical environment c. the technological environment d. the political environment

a. the social environment

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: a. was a cutting-edge firm b. used the concept of fast-laning c. had a low speed-to-market d. was a snail firm

a. was a cutting-edge firm

Identify a true statement about the Federal Reserve. a. It is headed by a 15-member Board of Governors. b. It manages the monetary policy of the United States. c. It is restricted from performing banking services for commercial banks. d. It operates under immense political pressure.

b. It manages the monetary policy of the United States.

Which is the part of economics concerned with single factors and the effects of individual decisions a. Banking b. Microeconomics c. Macroeconomics d. Environment

b. Microeconomics

Which of the following categories of people is most likely to step into entrepreneurship? a. People who have minimal knowledge about the use of technology b. People who have trouble being subordinates because of their personalities c. People who are skeptical about taking financial risks d. People who lack the characteristic of self-reliance

b. People who have trouble being subordinates because of their personalities

Which of the following statements is true of buying an established business? a. There is more creative freedom than when starting a business from scratch. b. Relationships with customers are already established. c. Its less responsibility d. The chance of first-year failure is zero.

b. Relationships with customers are already established.

A sole proprietorship is a form of business ownership in which: a. the company is considered a legal entity that is separate from its owners. b. a single owner actively manages the company. c. two or more people act as co-owners of the company. d. the owners of the business are offered limited liability and flexible tax treatment.

b. a single owner actively manages the company.

A textile corporation has two hundred odd stockholders. As it is inconvenient for so many stockholders to manage the company, the stockholders elect a group of individuals to oversee the company's operation and to represent their interests. In this scenario, the stockholders elect a _____. a. board of valuers b. board of directors c. board of corporators d. board of regents

b. board of directors

Conall is appointed by a nine-member board of directors of a real estate company to manage the company on a daily basis. The board ensures that Conall acts in a manner that is consistent with the interests of the stockholders. Given this information, Conall is most likely a _____. a. non-executive director b. chief executive officer c. chief business officer d. human resource manager

b. chief executive officer

In the context of global trade, the _____ is a measurement of the value of one nation's currency relative to the currency of other nations. a. liquidity ratio b. exchange rate c. countertrade ratio d. discount rate

b. exchange rate

Richard, an employee in an investment firm, was dissatisfied with the way his superiors handled business dealings. For that reason, he quit his job and started his own business so that he is able to make all management decisions without interference from anyone. Which advantage of entrepreneurship is highlighted in the given scenario? a. Greater financial success b. Independence c. Uniformity d. Greater challenge

b. independence

To achieve its basic mission of promoting international economic cooperation and stable growth, the International Monetary Fund (IMF) a. increases jobs from foreign companies. b. lends money to member nations. c. monitors provisions of the GATT agreements. d. protects domestic jobs in key industries.

b. lends money to member nations.

A(n) _____ is a voluntary agreement under which two or more people act as co-owners of a business for profit. a. vertical merger b. partnership c. S corporation d. Acquisition

b. partnership

Peter, the CEO of a multinational company, has a deep understanding of other people's needs and behaviors. He easily relates to another's situation, feelings, and motives—all qualities that strongly predict a high level of ethical leadership. Given this information, Peter most likely possesses _____. a. interpersonal reflex b. personal empathy c. alexithymia d. Mind-blindness

b. personal empathy

In a business cycle, the _____ is the transition period between contraction and expansion. a. recession b. recovery c. disinflation d. Deflation

b. recovery

Universal ethical standards can solve the problem of too many people viewing ethics as _____. a. evasive b. relative c. in-explicit d. Ambiguous

b. relative

With an increasing number of workers facing challenges such as raising kids and caring for elderly parents, responsible companies are stepping in with programs such as on-site day care, company-sponsored day camp, and referral services for elder care. These actions show that these companies are fulfilling their ____ a. stakeholder criterion b. social responsibility c. legal obligation d. fiduciary duty

b. social responsibility

Gregory was a typist at a corporate firm. When the company adopted a special voice recognition software for the purpose of documentation, Gregory's job became redundant. Therefore, he was laid off. The increased use of technology in most companies has made Gregory's skills inessential, and he remained unemployed for a long time. In the given scenario, Gregory is facing _____. a. seasonal unemployment b. structural unemployment c. frictional unemployment d. cyclical unemployment

b. structural unemployment

Priscilla is a trader of silver and diamond jewelry. Due to a recessionary trend in the industry, her business has not been making any profits for a few months. As the end of this economic trend cannot be easily ascertained, she decides to get her house mortgaged so that she can add a new line of business of trading in semi-precious stones. This financial risk appetite of Priscilla illustrates her _____ as an entrepreneur. a. high energy levels b. tolerance of uncertainty c. tolerance of failure d. deep visionary sense

b. tolerance of uncertainty

When the total value of a nation's exports is higher than the total value of its imports, that country has a(n) a. absolute advantage b. trade surplus c. trade deficit d. comparative advantage

b. trade surplus

Which of the following countries most likely has a comparative advantage? a. A South American country that produces more coffee compared to an Asian country despite having equal resources b. An Asian country that manufactures more textile products than most countries by decreasing its production of tea c. An Asian country that produces quality automobiles with little opportunity cost compared to other countries d. A North American country that expands its trade relations to a neighboring country to share resources

c. An Asian country that produces quality automobiles with little opportunity cost compared to other countries

Which of the following countries is involved in countertrade? a. An Asian country that imports cotton from an African country and resells it to other countries b. A North American country that experiences more cash outflow than inflow c. An Asian country that provides sugarcane to an African country in exchange for jute d. A European country whose total value of exports is higher than its imports

c. An Asian country that provides sugarcane to an African country in exchange for jute

Which of the following is an issue associated with general partnerships? a. Complexities related to the formation of the company b. Double taxation of the partners c. Difficulty faced by a partner when withdrawing from the company d. Weaker financial base when compared to that of a sole proprietorship

c. Difficulty faced by a partner when withdrawing from the company

Consumerism is a widely accepted social movement. Which of the following can be considered a consumer's right? a. Attaining any desired product at its lowest price b. Availing extended warranties on purchased products c. Expressing legitimate complaints easily d. Returning a product with a partial refund

c. Expressing legitimate complaints easily

_______ refers to the unrestricted movement of goods and services across international borders a. Protectionism b. Countertrade c. Free trade d. Direct investment

c. Free trade

"I am in charge of what happens to me and the things I accomplish." This statement would be said by someone with a. too much confidence b. External locus of Control c. Internal locus of Control d. Too much money

c. Internal locus of Control

In the context of mixed economies, which of the following statements is true of the U.S. federal government? a. It directly operates firms in the financial sector. b. It does not own major enterprises. c. It is part owner in a number of financial institutions. d. It does not employ a significant number of people.

c. It is part owner in a number of financial institutions.

Which of the following is a key dimension of the business environment? a. The Communal Environment b. The Physiological Environment c. The Technological Environment d. The Political Environment

c. The Technological Environment

Which of the following statements is true of sole proprietors? a. They mostly pay high salaries and substantial perks to their employees. b. Their death or retirement does not legally cease the company from existing. c. They often must perform tasks in areas where they lack expertise. d. Their earnings are taxed only as income of the company.

c. They often must perform tasks in areas where they lack expertise.

In the context of small business opportunities, which of the following statements is true of market niches? a. They tend to have many competitors. b. They fail to offer enough potential for small, specialized companies. c. They tend to be quite attractive to small firms. d. They are high-profile enough for large firms.

c. They tend to be quite attractive to small firms.

Brian had started a new business venture using majority of his savings. However, his divorce affected him monetarily because of which he had to shut down his business. Which of the following threats is highlighted in the given scenario? a. Bigger regulatory burden b. High risk of failure c. Too little money d. Lack of knowledge

c. Too little money

In the context of business ethics, _____ refers to a decision that involves a conflict of values a. an ethical lapse b. ethical hacking c. an ethical dilemma d. ethical consumerism

c. an ethical dilemma

One of the ways by which companies can show their responsibility toward the environment is by reducing their _____. a. anaerobic digestion b. leapfrogging c. carbon footprint d. green procurement

c. carbon footprint

In a sole proprietorship, any debts the company incurs are: a. taxed only if the owner has not taken a loan. b. treated as the owner's personal income. c. considered to be the owner's personal liabilities. d. used to purchase preferred stocks of the company.

c. considered to be the owner's personal liabilities.

In the context of international trade restrictions, a(n) ______ is a total ban on the international trade of a certain item. a. voluntary export restraint b. tariff c. embargo d. Quota

c. embargo

Rubicon Inc., an American guitar manufacturing company, signed a contract with a supplier in Umreia, an Asian country, to manufacture guitars. Rubicon then imported these products and sold them in its markets under its own brand name. Rubicon did this because of the availability of cheap labor in Umreia that substantially cut down Rubicon's cost of production. In this scenario, Rubicon is most likely involved in a. foreign direct investment b. foreign franchising c. foreign outsourcing d. foreign licensing

c. foreign outsourcing

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 _____ a. social auditor b. corporate philanthropist c. whistle-blower d. Grandstander

c. whistle-blower

Grettzee, a musical instruments manufacturing company, imports high-quality maple wood from Resumbro, a South Asian country where maple is found in abundance. Which of the following is most likely to have influenced Grettzee's decision to import raw materials from Resumbro? a. Reduced risk b. Inflow of innovation c. Establishment of new industries d. Access to factors of production

d. Access to factors of production

Which of the following statements is true of ethics? a. All ethical standards are codified in the law. b. Ethics and social responsibility are independent of each other. c. Establishing broad agreement on ethical standards is easier when society is diverse. d. Actions that are completely legal can still be unethical.

d. Actions that are completely legal can still be unethical.

A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners. a. sole proprietorship b. partnership c. cooperative d. Corporation

d. Corporation

Sam quits his nine-to-five job at a multinational company and starts his own event management company. In his new company, he does not practice a nine-to-five work regime. Instead, he organizes meetings with clients by making appointments that favor his schedule. Which of the following advantages of entrepreneurship is highlighted in the given scenario? a. Greater challenge b. Survival c. Greater financial success d. Flexibility

d. Flexibility

John and Lena sign a contract with the owner of Little Fairy, a well-known preschool chain, to start a preschool in their city. They take permission from the owner to use the name and products of Little Fairy. They also furnish their preschool in Little Fairy's trademark style. In this scenario, John and Lena are starting a _____. a. corporation b. sole proprietorship company c. limited liability company d. Franchise

d. Franchise

Which of the following is a difference between inflation and deflation? a. The Federal Reserve buys government securities when inflation is a concern, whereas the Federal Reserve sells government securities when deflation is a concern. b. Inflation increases the unemployment rate, whereas deflation decreases the unemployment rate. c. A high level of inflation is bad for the economy, whereas a high level of deflation signifies a healthy economy. d. Inflation is a period of rising average prices across an economy, whereas deflation is a period of falling average prices across the economy.

d. Inflation is a period of rising average prices across an economy, whereas deflation is a period of falling average prices across the economy.

Prost was the first automobile company in the world to introduce child safety locks in its vehicles. This feature soon became a major selling point for consumers all over the world. As a result, other automobile companies began providing a similar feature in their vehicles. In this scenario, which of the following is most likely to have influenced other companies to install child safety locks? a. Reduced risk b. Establishment of new industries c. Access to factors of production d. Inflow of innovation

d. Inflow of innovation

Mark is very passionate about music and opens a recording studio of his own. However, he does not know much about running a business and within a short period, starts running into losses. Therefore, he shuts down the business. Which of the following threats is highlighted in the given scenario? a. Too little money b. Higher health insurance costs c. Bigger regulatory burden d. Lack of knowledge

d. Lack of knowledge

Prior to formulating its annual budget, the government of the Asian country of Florenesia employs a number of individuals to look into the overall productivity of the country. These individuals are also responsible for studying and revising some of the taxation policies and gauging the employment rate. Given this information, these individuals are studying _____. a. heterodox economics b. managerial economics c. microeconomics d. Macroeconomics

d. Macroeconomics

Which of the following is an advantage of a C corporation? a. Its formation is simple and inexpensive. b. The members are entitled to choose the mode of tax treatment. c. It is free from double taxation. d. Shareholders have limited liability in the firm.

d. Shareholders have limited liability in the firm.

In the context of the U.S. economy, which of the following statements is true of small businesses? a. They are less likely to develop revolutionary new ideas. b. They have a wider span of control than large businesses. c. They are often the last to contract when times are tough. d. They often display a refreshing lack of bureaucracy.

d. They often display a refreshing lack of bureaucracy.

A _____ refers to the overage that occurs when more money flows into a nation than out of that nation a. balance of trade surplus b. balance of trade deficit c. balance of payments deficit d. balance of payments surplus

d. balance of payments surplus

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. a. business warrant b. business resource c. business directory d. business plan

d. business plan

In the context of the legal and ethical dimensions of business conduct, it is illegal but ethical to: a. produce products that you know will break before their time. b. reward integrity and lead by example. c. encourage fraudulent accounting. d. collaborate with other medical clinics to guarantee low prices in low-income counties.

d. collaborate with other medical clinics to guarantee low prices in low-income counties.

People with an external locus of control a. are extremely self-reliant. b. are more likely to take responsibility for their own failures. c. feel that they have complete control over their lives. d. feel controlled by forces such as random luck.

d. feel controlled by forces such as random luck.

Ethics refer to: a. the obligation of a business to contribute to society. b. legal codes written in the constitution. c. social movements that focus on key consumer rights. d. sets of beliefs about right and wrong.

d. sets of beliefs about right and wrong.

The obligation of a business to contribute to society is referred to as _____. a. planned obsolescence b. growthism c. societal consumerism d. social responsibility

d. social responsibility