Exploring the World of Business - Midterm Review

Cost-push inflation is

Inflation that occurs when increases in production costs push up the prices of final goods and services

Demand-pull inflation is

Inflation that occurs when the demand for goods and services is greater than the supply

Which of the following is NOT one of the five key types of power?

Influential

Which of the following is true about creative destruction?

It can lead to business failure

Why is creative destruction a good thing?

It is the source of new products and services.

"In deciding how to pay workers, the firm must be concerned with the salaries paid by competitors." True or false

True

"The higher the price of a good or service, the greater the amount a producer is willing to supply?" True or false

True

"The majority of people in the United States work at firms with 1,000 or more employees." True or false

True

Arranging a firm's human and material resources to carry out plans is called organizing; True or false

True

Effectiveness is the ability to produce the desired result. True or False

True

Efficiency is using the fewest possible resources to get work done. True or False

True

Efficiency is using the fewest possible resources to get work done; True or false

True

Productivity is the number of goods and services one worker can produce. True or False

True

Productivity is the number of goods and services one worker can produce. True or false

True

Social responsibility is a voluntary obligation. True or false

True

The majority of firms in the United States have one to four employees. True or False

True

Trade is a source of creative destruction; True or False

True

Business cycles?

Upward and downward changes in the level of economic activity

Which of the following statements about utilitarianism is true?

Utilitarianism holds that an action that affects the majority adversely is morally wrong.

Deontology is

a philosophy in which a person will follow his or her obligations to an individual or society because upholding one's duty is what is ethically correct

"In a mixed economy, markets are controlled by"

a price system determined by supply and demand with government regulation

"In a Capitalist economy, markets are controlled by"

a price system determined by the free flows of supply and demand

The first step in starting your own business is:

a self-assessment

Intrapreneurs

apply their creative vision within a large corporation

The difference between the small business owner and the entrepreneur is the entrepreneur:

assumes the risk of the business

Free trade policies

bring small benefits to many and high costs to a few

Trade restrictions lead to

less competition for producers and higher prices for consumers

The Taft-Hartley Act

obligates the union to bargain in good faith and prohibits union unfair labor practices

"Jobs appear, disappear, and evolve due to competition from"

people close by and far away robots software *all the above*

A common use of business plans is to:

persuade lenders and investors to finance the venture

Which of the following is a reason why small business thrives in the United States?

rapidly changing technology

"In a Socialist or Communist economy, markets are controlled by"

the decisions of a government entity

Contingency planning is

the process that identifies alternative courses of action for very unusual or crisis situations

Justice is

what is fair according to accepted standards

When the economy is growing

"Unemployment declines, inflation increases, and GDP increases"

When the economy is contracting

"Unemployment increases, inflation decreases, and GDP decreases"

Profit is the

"amount of money remaining from a firm s sales revenue after it deducts production costs, interest costs, and taxes"

The four traditional factors of production are

"natural resources, labor, capital, and entrepreneurship"

The Fair Labor Standards Act

"sets minimum wage, restricts child labor, sets overtime pay"

Strategic planning is

"the process of creating long-range, broad goals for the organization."

Operational planning is

"the process of creating specific standards, methods, policies, and procedures."

A well-written business plan should contain:

-a marketing plan -a vision and mission statement -a management plan -*all the above*

Intrapreneurs:

-have a high degree of autonomy despite the fact they -work for a large corporation -"have the characteristics of creativity, vision, and risk-taking." -receive regular salaries and employee benefits -*are accurately described by all the above*

The nature of jobs and the workplace is changing

-increasing the need for better education and training programs -increasing the number of career transitions for the average worker -increasing the importance of learning how to learn -*all the above*

A business plan:

-starts with a self-assessment -describes in detail the idea for the business -helps obtain financing -*all of the above*

"The practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteers' efforts of company employees."

Corporate philanthropy

A form of business financing consisting of borrowed funds that must be repaid with interest over a stated period.

Debt

"Textron Corporation is establishing a legal division. The newly-appointed head of the division is organizing, hiring people, and operating the division. This division head is performing a(n) _____ management role."

Decisional

The second level (from the bottom) of the corporate social responsibility pyramid is:

legal responsibilities

The quantity of a good or service that people are willing to buy at various prices is

Demand

Economic growth is

An increase in a nation's output of goods and services An increase in a nation's production An increase in GDP *All the above*

Which of the following is true about creative destruction? (#2)

Both in the short term and the long term it is extremely beneficial.

A formal written statement that describes in detail the idea for new business and how it will be carried out is a

Business Plan

Gross Domestic Product is

GDP is the total market value of all final goods and services produced within a nations borders each year

The set of moral standards for judging whether something is right or wrong.

Ethics

Businesses close for many reasons. Which of the following is NOT a typical reason for business failure?

Expenses were lower than the owner expected

"Technology can cause creative destruction, but trade cannot." True or false

False

"The higher the price of a good or service, the greater the amount a consumer will demand?" True or False

False

"The majority of firms in the United State have 1,000 or more employees." True or false

False

"The short-range, detailed planning that focuses on current operations is called functional planning." True or false

False

"Unlike large corporations, sole proprietorships do not need a business plan." True or false

False

A positive aspect of opening a small business is that it takes very little management skill because it is small. True or false

False

All businesses approach ethics in the same way. True or False

False

Effectiveness is using the fewest possible resource to get work done. True or False

False

The lowest level of management is engaged in the strategic planning process. True or False

False

The lowest level of management is engaged in the strategic planning process. True or false

False

The two sources for debt financing are angel investors and venture capitalists. True or False

False

There is a clearly defined way to determine if a business is small. True or False

False

Unemployment compensation pays employees for lost work time caused by work-related injuries. True or false

False

Which two different leadership styles use empowerment?

Laissez-faire and participative

The process of guiding and motivating others toward the achievement of organizational goals.

Leadership

"A global vision includes all of the following, except?"

Negotiating international trade agreements

Why is creative destruction a bad thing?

People lose jobs when industries go extinct.

"In a Capitalist economy, businesses are"

Privately owned

The money a company earns from providing services or selling goods to customers

Revenue

"In a Capitalist economy, workers have a strong incentive to innovate." True or False

True

The concern of businesses for the welfare of society.

Social Responsibility

A form of financing consisting of funds raised through the sale of stock in a business.

Stock

"Kraft Foods Inc. joined with the National Latino Children's Institute to announce Salsa, Sabor y Salud - a first-of-its-kind healthy lifestyle 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:"

Strategic giving

The practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates is

Strategic giving

The quantity of a product or service businesses will make available at various prices is called

Supply

What does the number of American farmers reveal about creative destruction?

That creative destruction can free up labor for new pursuits.

What does the American rose industry reveal about creative destruction?

That even trade can cause creative destruction.

"At your place of work, allowing a false impression to remain uncorrected could be an unethical act." True or False

True

"At your place of work, violating a rule you do not agree with could be an unethical act." True or False

True

"Entrepreneurs should work on the business, not in it." True or false

True

"Examples of transformative technologies include all the following, tractor, digital camera, smartphone" True or False

True

Middle managers usually:

carry out plans and policies of top management

Mutually advantageous trades are determined based on

comparative advantage

Which of the following is NOT one of the main activities for a human resource manager?

coordinating marketing and production activities

The two forms of business financing are _____ (borrowed funds) and _____ (ownership funds).

debt; equity

Top management usually performs all the following tasks EXCEPT:

direct workers on the assembly line

At the base of the corporate social responsibility pyramid is:

economic responsibilities

The third level (from the bottom) of the corporate social responsibility pyramid is:

ethical responsibilities

Utilitarianism is

focused on the consequences of an action taken by a person or organization

"According to the Index of Economic Freedom, since 1995 global trade restrictions have"

generally decreased

The Wagner Act

gives workers the right to unionize and prohibits employers' unfair labor practices

"In a Socialist or Communist economy, businesses are"

government-owned or nationalized

One of the keys to ethical business behavior is:

how the company's top management conducts itself

Market structure

is defined by the number of suppliers in a market