Intro Business Test One

Stockholder

An owner of a corporation is known as a(n):

False

Effectiveness means producing goods and services using the least amount of resources. t/f

Merger

A ____________ is two firms combining to form one company.

True

A favorable balance of trade occurs when the value of a country's exports exceeds the value of its imports. t/f

False

A legal entity with authority to act and have liability separate from its owners is called a partnership.

False

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business. t/f

Emphasis on social equality

A major benefit of socialism is the:

price of a good and the quantity of that good sellers are willing to offer for sale at a specific point in time.

A simple supply curve shows a relationship between the:

Integrity

A(n) _______-based ethics code defines corporate values; creates a supportive environment, and, stresses shared accountability among employees.

Compliance

A(n) _______-based ethics code emphasizes the prevention of unlawful behavior by increasing control and penalizing wrongdoers.

Acquisition

A(n) _________ occurs when one company buys the property and obligations of another company.

Embargo

A(n) __________ refers to a complete ban on importing or exporting of products from a specific country.

False

Absolute advantage is the basis for most global trade today. t/f

True

America's business success is largely due to an economic and social climate that allows businesses to operate freely. t/f

The responsibility of the owner

Any debts or damages incurred by a firm organized as a sole proprietorship are:

true

At the equilibrium price, the quantity consumers desire to buy equals the quantity sellers desire to sell. t/f

True

Businesses and nonprofit organizations often strive to accomplish the same objectives. t/f

True

Compared to sole proprietorships, an advantage of partnerships is their ability to obtain more financial resources. t/f

True

Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a specific time. t/f

True

E-commerce is the buying and selling of goods over the Internet. t/f

True

Entrepreneurship is one of the five factors of production that contribute to the creation of wealth. t/f

Licensing

Granting a foreign company the right to manufacture your product or to use your firm's trademark in return for a fee is called:

Service Industry

Health care, insurance, recreation and other intangible products are provided by the:

False

If a shortage exists in a market for a good, the price of that good will tend to fall. t/f

False

Importing is the selling of products to another country. t/f

Price

In a free-market economic system, the mechanism of __________ is the key determinant used to signal to producers what to produce and how much to produce.

General

In a partnership, a(n) __________ partner (owner) actively manages the company and has unlimited liability for claims against the firm.

Import quotas

In an effort to protect domestic jobs, some countries will place a limit on the number of certain types of products that can be imported. These limits are called:

Profits of $14 million

Last year, Adventure Enterprises reported revenues of $24 million while its total expenses were $10 million. Based on this information, Adventure reported:

False

Money is one of the five factors of production that contribute to the creation of wealth. t/f

True

Most communist countries today are suffering from severe economic problems. t/f

can be taxed either as a corporation or as a partnership, so owners can choose the tax treatment that is most advantageous for their situation.

One reason limited liability companies have become so popular is that they:

Cut spending

One way to lessen the U.S. government budget deficit is to:

False

Outsourcing means selling goods and services to people in other countries. t/f

False

Paid vacations and health care insurance are among the benefits provided by the government to entrepreneurs. t/f

True

Product differentiation is a key to success in monopolistic competition. t/f

True

Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses. t/f

False

Profits of a business include the salaries paid to its employees. t/f

True

Revenue is the total amount of money a business takes in during a given period by selling goods and services. t/f

True

Stakeholders include customers, employees, stockholders, suppliers, dealers, bankers, government officials and environmentalists. t/f

True

Studies about the effects of population growth on the economy are part of macroeconomics. t/f

True

Taxes and government regulations are part of the economic and legal environment in which businesses operate. t/f

True

Technology allows firms to be more responsive to their customers' wants and needs. t/f

True

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all. t/f

Technological

The Internet and the emergence of an information-based economy are important parts of the ___________ environment in which businesses operate.

Is independently owned but not dominant in its industry.

The Small Business Administration defines a small business as a firm that:

True

The United States imports more products and services than any nation in the world. t/f

World Trade Organization

The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes.

True

The business environment refers to the surrounding factors that either help or hinder the development of businesses. t/f

False

The corporation is the most common form of business ownership. t/f

Communism

The economic and political system in which the government owns almost all the major factors of production is called:

information that will capture the attention of bankers and other investors who receive many business plans every day.

The executive summary section of the business plan contains:

The amount they have invested in the company

The limited liability provided to limited partners means that they are not responsible for the debts of the business beyond:

False

The major benefit of socialism is that it creates strong incentives to work hard and take the risks associated with starting and operating a business. t/f

Capitalism

The social and economic goals of __________ include private ownership of land and business.

Comparative Advantage

The theory of _______________ states that a nation should produce and sell goods to other countries that it produces most efficiently, and buy goods from other nations that they produce more efficiently.

Canada, Mexico, and the United States

The three countries participating in NAFTA are:

revenue and protective

The two basic types of tariffs are:

Gross Domestic Product (GDP)

Three important economic indicators of the United States are the unemployment rate, the price indices, and the:

True

Tools, machinery, and buildings are examples of capital resources. t/f

Planning and Financing

Two key management functions that need particular attention when starting a business are:

False

Under capitalism, the government prohibits people and businesses from competing with each other. t/f

a surplus will exist in the market

When the market price of a good is above its equilibrium value, and all other determinants are unchanged:

Small Business Administration

Which of the following government agencies is responsible for encouraging the development of small business?

Double taxation of earnings

Which of the following is normally considered a disadvantage of the corporate form of business?

Exchange rate

Which of the following represents the value of one nation's currency relative to the currencies of another country?

Whistleblower

Which of the following terms describes someone who reports illegal or unethical behavior?

Ethics

________ refers to standards of moral behavior.

Efficiency

___________ means producing items using the least amount of resources.

Productivity

___________ refers to the amount of output generated with a given amount of input, e.g., the number of pizzas produced per worker per hour.

Inflation

_____________ refers to a general rise in the price level of goods and services over time.

The business environment

_______________ is/are the external and internal circumstances that surround the business.

Good business plan will:

describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications.

The U.S. government's Immigration Act of 1990:

encouraged entrepreneurs to come to the U.S. through "investor visas."

Enterprise zones and investor visas

government programs that encourage economic growth through entrepreneurship.

Affiliate marketing is a web-based business strategy that:

rewards individuals who are willing to link a company's website to their blog or social network page.

Enterprise Zones

specific locations across the U.S. where entrepreneurs can set up shop and receive tax breaks for operating in these areas.