BA1301 Exam 1
Which of the following is an example of a business?
a business is an organization that strives for a profit by providing goods and services desired by its customers
Which of the following factors would most likely result in a dramatic change in demand?
An expectations about future prices
Which of the following statements about the interaction of demand and supply is true?
At prices below equilibrium. demand exceeds supply.
What type of business organization generates the most total sales?
Corporation
_____ refers to a government's programs for controlling the amount of money in circulation
Monetary policy
Franchisors in foreign countries must be aware of:
language differences, local culture, political risks, and currency exchange
The Royal Government of Bhutan imposes a 10 percent tax on all operating tables, examination tables, and dentist's chairs imported into Bhutan. Another name for this type of tax is a(n):
tariff
Which one characteristic most clearly defines a market structure?
the number of suppliers in a market
not-for-profit
exist to achieve some goal other than the usual business goal of profit. type of business organization that typically uses revenue for charitable or religious purposes
Articles of incorporation usually specify the life of a corporation as a certain number of predetermined years.
false
Dissolving a partnership is easier than dissolving a sole proprietorship.
false
Monetary policy deals with tax revenues and expenditures at the national level
false
Not-for-profit organizations have the same goals as for-profit organizations.
false
The World Trade Organization (WTO):
has emerged as the world's most powerful institution for reducing trade barriers and opening markets
The situation in which the average of all prices of products is rising is called:
inflation
Jamaica has 35 airports, 18,700 kilometers of paved and unpaved road and a total of 272 kilometers of railroad track. This is a partial description of the nation's:
infrastructure
The franchise agreement:
is the contract that details the terms of the franchise
U.S. Steel has established an alcoholic rehabilitation program for the city of Pittsburgh. The company provides the facilities and the personnel to operate the program. U.S. Steel is practicing:
social responsibility
Tonya Thomas is tired of working for other people. She wants to start her own administrative services businesses and control her own work schedule. She wants to have sole responsibility for all business decisions. Thomas should form a(n):
sole propiertirship
Jayson Tully is contemplating the purchase of a Popeye's Chicken franchise. Tully has made a list of the disadvantages that he assumes he will face as a new business owner. Which of the following is actually an advantage?
assistance in building plans
Clarence Danvers is buying a Cinnabon franchise at the airport in Tulsa. Danvers knows that he will get all of the following benefits EXCEPT:
assistance in personal income tax preparation
Peter Drucker, a well-known management scholar, has said that companies should be evaluated on two basic dimensions:
legality and responsibility
In 2018, if the country of Serbia had imports of $10.58 billion and had an unfavorable balance of trade. This means that Serbia had:
less than $10.58 billion in exports
When congress passes a law to raise individual tax rates, it is creating fiscal policy.
true
A country that imports more goods than it exports is said to have a(n):
unfavorable balance of trade
Social responsibility goes beyond obligations provided by law or union contract. Two important aspects of social responsibility are that the obligation is both:
voluntary and broad
When companies in the same industry merge to achieve economies of scale and to expand their product lines, it is called a horizontal merger.
True
Labor, as a factor of production, refers to:
all workers in business
In the 21st century, we define justice as:
an equitable distribution of the burdens and rewards that society has to offer
A _____ merger brings together companies in unrelated businesses to reduce risk
conglomerate
U.S. Lumber Company's purchase of EnviroPlastics, a manufacturer of plastic cutlery, is an example of a _____ merger.
conglomerate
Spanish customers view toothpaste as a cosmetic while consumers in the Netherlands view it as a necessary part of daily hygiene and use three times as much their Spanish counterparts. This example of _____ shows how important it is for marketers to understand.
cultural differences
A total prohibition against importing certain products is called a(n):
embargo
In 1914, the United States prohibited the importation of Mexican avocados even though Mexico is the world's largest producer of the fruit. This prohibition remained in effect until 1996. The ban on importing Mexican avocados is an example of a(n):
embargo
A company can only be concerned about its _____ responsibilities once it has met its economic and legal responsibilities.
ethical
Who owns a corporation?
everyone who owns a share of stock in the corporation
Some global corporations are large enough to create major changes in the external environment.
false
The sole proprietorship is considered a legal entity; therefore, it is taxed separately from the owner.
false
Laws have curtailed smoking, and as a result, the sale of cigarettes is down. Rather than fighting the law, the cigarette industry is looking for ways to take their business beyond cigarettes. Many experts believe that the cigarette producers have found a way around the law with the promotion and distribution of smokeless tobacco, which has shown consistent sales gains over the last decade. In terms of the social responsibility pyramid, at which level is the cigarette industry operating?
legal
Which of the following is NOT a component of the consumer price index?
lumber used in the construction industry
In perfect competition, there is:
many buyers and sellers, identical products, informed buyers and sellers, and free market entry and exit.
Changing demographics drive the franchise industry growth.
true
Full employment means 94-96 percent of the working force is employed
true
Full employment means 94-96 percent of the working force is employed.
true
In 2004, Albertson's Inc. purchased Southern California's premier fresh, gourmet, and specialty food retailer, Bristol Farms. This was an example of an acquisition.
true
_____ is the practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates.
Strategic giving
Which of the following is the best example of a service?
The pleasure you derive from seeing a good play. the medical examination Jonathon had yesterday
The _____ of any country is measured by the output of goods and services people can buy with the money they have.
The standard of living
The philosophy of utilitarianism is used to explain why restaurants, theaters, and hotels should make themselves handicapped accessible.
true
The situation in which the average of all prices of products is rising is called inflation.
true
When Addison Wilcox buys H&R Block franchises, he becomes a franchisee.
true
Iris Souza started the summer with $30. She took $10 and made signs for her dog walking service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. Calculate Souza's costs for her summer job?
80
Which of the following statements about limited liability companies (LLCs) is true?
ANSWER ALL OF THE ABOVE: LLCs are not corporations LLCs are like S corporations in that they appeal to small businesses LLCs offer their owners the option of being taxed as either a partnership or a corporation LLCs are legal in all states in the US
Rebecca Siddoway own and operate Country Candies. Siddoway specializes in making rich, creamy toffees that she packages in attractive gift boxes and sells through the mail. What would be the advantage to Siddoway if she decides to incorporate her business?
Corporations have an enhanced ability to attract financing.
_____ combine the input in the production of goods and services for what are intended to be profitable ventures.
Entrepreneurs
_____ are goods and services that are made in one country and sold to other countries.
Exports
A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship.
False
Demography is the study of how people use their free time, how people integrate their hobbies and their vocations, and how people make their purchase decisions.
False
Canadian logging companies sell timber in the United States. To the U.S., the timber is a(n)_____, and for Canadians, the timber is a(n) _____.
Import; Export
There are a large number of small firms that provide entertainment for children's birthday parties. There is little difference between one company's inflatable slide and another company's. Clowns and magicians do similar tricks. Both the sellers and the parents buying the entertainment are well informed as to price and sources although sometimes it is difficult to hire the same entertainer two years in a row because the business is so easy to open and close. What type of market structure do local party entertainers depict?
Perfect competition
_____ is the money a company earns from providing services or selling goods to customers.
Revenue
Which of the following demographic groups is having the greatest impact on the growth of the franchising industry?
baby boomers
Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men were the ones who sailed, and women were their crew. She finally did convince someone to teach her to sail, and after mastering sailing, she started an all-woman sailing school called Womanship as a sole proprietorship. When she dies, the:
business dies with her
for-profit business
businesses who have a responsibility to stakeholders to earn profit
Inflation and interest rates are most closely associated with _____ within the external business environment.
economic factors
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:
export
The Northwest Cherry Growers (headquartered in the state of Washington) sells much of its locally grown produce to Taiwan. _____ was the easiest and least expensive way for the growers' association to sell to global markets.
exporting
Three Sisters Specialty Foods, owned by Judith Coker, Millie Humphreys, and Jade Watson, sells eggless cake mixes for people on a restricted diet. Coker recently purchased an industrial grade mixer without conferring with her sisters who were upset when they learned that they were all three liable for the payments on the mixer. Three Sisters is an example of a:
general partnership
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.
horizontal (vans are horizontal)
factors of production
natural (land, water) labor (people, technology), capital (machinery, building), entrepreneurship (people who combine inputs) **knowledge (combine talents and skill of the work force)
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.
oligopoly
Japan bans importation of rice to protect its domestic rice industry. This ban is an example of:
protectionism
Jules Sylvester had always loved reptiles. When he was asked by a movie producer if he could locate some anaconda snakes for a movie, a business was born. Sylvester is the proud owner and operator of Reptile Rentals. The California-based business, which he started with no financial help from anyone, is often called on to provide "creepy, crawly" moments in the movies. Jules Sylvester is an example of a:
sole partnership
A business is an organization that strives for a profit by providing goods and services desired by its customers.
true
Businesses engage in environmental protection activities to show their responsibility to their general public stakeholders.
true
During a two-month period Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, donated ten percent of its retail profits to the Susan G. Komen Breast Cancer Foundation. The action was legal and ethical and allowed the company to still be profitable. According to the pyramid of corporate social responsibility, it was acting at the _____ responsibilities level.
philanthropic
When the price of gasoline rises by 40 percent, but your salary remains the same, it is an example of a decline in your:
purchasing power
_____ is the quantity of a good or service that people are willing to buy at various prices.
quantity demand
Quality of life
refers to the general level of human happiness based on such things as life expectancy, educational standards, health, sanitation, and leisure time
The inflation rate in Algeria in 2017 was 1.9 percent. This means that Algerians in 2017:
saw their purchasing power decrease slightly from what it was in 2016
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:
strategic giving
_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.
Multinational corporations
The _____ created the world's largest free-trade zone.
North American Free Trade Agreement
The _____ of Algeria includes 3,973 km of railroads, 104,000 km of roads, and 54 paved airports. it also has only five telephones for every 100 citizens and only two internet service providers.
infrastructure
When Linda McAnem began Stirya, a New York-based computer services company, she ran it as a sole proprietorship. As a sole proprietor, McAnem:
found the business to be easy and inexpensive to form
Croutakie seemed like a great idea. Chef Leo Nyami and Sara Rice decided to take advantage of the popularity of shitake mushrooms and create some shitake mushrooms products that could be sold to restaurant patrons and other gourmets through their new company. The mushrooms unexpected financial problems, so Nyami and Rice asked Bill NG to become a limited partner. This means Ng:
agrees not to participate in day-to-day management of the firm
When Wachovia Bank, acquired First Union Bank Dim S.A., it was an example of a conglomerate merger.
false
Jack Smith and four other people own Persimmon Hill Farm, an agric-entertainment farm which provides corn mazes, bonfires, hay rides visitors. All of the owners have limited financial risk. Persimmon Hill Farm is a(n):
corporation
The corporation's board of directors elects the corporate officers.
false (answer shareholders)
A country that exports more goods than it imports is said to have a(n):
favorable balance of trade
The key element in socialism is:
governmental control
Why do most large companies have outside directors on their boards?
individuals on the board who are not employed by the board's corporation. Research reveals that the likelihood of a firm engaging in illegal behavior or being sued declines
Karl Metzger plans to invest $5,000 in a partnership with his brother to produce and sell handcrafted violins, zithers, and other string instruments. Metzger does not plan to work in the business and wants no more liability than his investment. He should be a:
limited partner
Codes of ethics:
may be influential in determining a person's decision-making behavior
The combination of two companies that join to form one company is called a:
merger
Ease of formation, flexibility, and diversity of management are advantages of the _____ form of business ownership.
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
The higher the price of a good or service, the greater the amount a producer is willing to supply.
true
The national debt is the accumulation of deficits that have occurred in the past as a result of expenditures exceeding tax revenues.
true