business exam 1
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. What was Souza's profit for her summer job?
$125
Aaron Medford has invested $600 in the corporate stock of a manufacturer of offshore oil drilling equipment. If the company goes bankrupt, the most Medford could lose would be:
$600
Why would a company choose to engage in a conglomerate merger instead of a vertical or horizontal merger?
A conglomerate merger is done to reduce risk.
What is the primary difference between a good and a service
A good is tangible and a service is intangible
Which of the following statements about limited liability companies (LLCs) is true?
All of the above statements about LLCs are true.
Which of the following statements about ethics training is true?
All of the above statements about ethics training are true.
Which of the following statements about the interaction of demand and supply is true
At prices below equilibrium, demand exceeds supply
An S corporation is generally set up to:
reduce tax burdens
Strategic giving:
refers to the practice of tying philanthropy closely to the corporation's mission or goals
Of all forms of business ownership, corporations account for the largest share of both:
sales and profits
The first step to incorporating a company is to:
select the company's name
Which of the following is probably the Most difficult environment factor for owners and managers to forecast, influence, or integrate into business plans
social change
Wal-Mart has announced that it will only sell fresh and frozen fish that come from environmentally sound sources and bear the label of the Marine Stewardship Council. Wal-Mart's size gives it a unique opportunity to improve the fishing industry. This concern for _____ is one of many initiatives Wal-Mart is introducing to improve our environment.
social responsibility
The form of business ownership that is easiest to dissolve is the:
sole proprietorship
For Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, its employees, suppliers of the paints used to decorate its porcelains, retailers of its products, and people who benefit from its philanthropy are all:
stakeholders
_____ are all the individuals or groups to whom a business has a responsibility.
stakeholders
Archer Daniels Midland Co. (ADM) has joined with Baron Spices and Seasonings to market spices, seasonings and herbs to the foodservice industry. ADM will provide the raw materials, and Baron will act as the distributor and use its already existing relationships with participants in the food service industry to make a success of this:
strategic alliance
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
Which of the following is an example of a trend in ethics and social responsibility?
strategic giving
_____ is the practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates.
strategic giving
Besides tariffs, a government can use a number of other tools to restrict trade. Which of the following is NOT a tool aimed at restricting trade?
subsidy
China imposes a 45 percent tax on the market value of all chickens that are imported from the U.S. into China. Another name for this type of tax is a(n):
tariff
A(n) _____ is a tax levied by a nation on imported goods.
tariffs
Fiscal policy is concerned with:
taxation and spending
Which of the following countries has a high standard of living
the United States
Which of the following is the best example of a good
the birthday candles you purchased to go on your sister's birthday cake
The most fundamental reason for the growth in world trade is probably due to:
the need for businesses to expand their markets
Market equilibrium
the point at which quantity supplied equals quantity demanded
Why do most large companies have outside directors on their boards?
to bring a fresh view to all of the corporation's activities
A country that imports more goods than it exports is said to have a(n):
unfavorable balance of trade
The slope of the supply curve is
upward and to the right
Multinational oil companies such as ExxonMobil, Royal Dutch Shell, or BP are active all the way along the supply chain from locating crude oil deposits, drilling and extracting crude, transporting it around the world, refining it into petrochemicals such as gasoline, to distributing the fuel to company-owned retail stations, where it is sold to consumers. To gain this complete control of the various resources needed to product oil and gas, the companies had to have engaged in _____ mergers.
vertical
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
_____ are organizations formed by individuals or businesses with similar interests to achieve greater economies of scale and economic power through collective ownership.
Cooperatives
_________ inflation is inflation that occurs when the demand for goods and services is greater than the supply
Demand-pull
Which of the following is a disadvantage of sole proprietor ownership?
Difficulty in raising capital
_____ are goods and services that are made in one country and sold to other countries.
Exports
_____ are corporate takeovers financed by large amounts of borrowed money.
Leveraged buyouts
_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.
Multinational corporations
_____ refers to sending work functions to another country resulting in domestic workers losing their jobs.
Outsourcing
Which of the following statements about the taxation of partnerships is true?
Partnerships file tax returns but pass profits and losses on to partners who report them on their tax returns.
__________ is the amount of money remaining from a firm's sales revenue after it deducts production costs, and taxes
Profit
Before selling stock to the public, a corporation must register with the:
Securities and Exchange Commission
Codes of ethics:
Social responsibility B. Business ethics C. Consumerism D. The marketing concept E. Business morality
How does the current boom in mergers and acquisitions differ from ones in earlier years?
There is a greater number of U.S. and foreign companies making cross-border acquisitions.
The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.
World Bank
Articles of incorporation do NOT include:
a list of stockholders names
IBM purchased MRO Software Inc. for $740 million. MRO was a niche provider of software and services to help customers including nuclear power plants and oil companies. IBM, plans to fold MRO into its software unit. This is an example of a(n):
acquisition
The unemployment rate is the percentage of the total work force that is not working but is
actively looking for work
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 are expensive, and there were other unexpected financial problems, so Nyami and Rice asked Bill Ng to become a limited partner. This means that Ng:
agrees not to participate in day-to-day management of the firm
Social responsibility should extend beyond the shareholders to include:
all of the above
Which of the following is an example of a business
all of the above
Labor, as a factor of production, refers to
all workers in business
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
The _____ is the total amount of money that flows in and out of a country.
balance of payments
The _____ is defined as the difference in value of a country's exports and imports over a period of time.
balance of trade
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
A German law that prohibited the use of hops grown outside of the country in the production of German-made beer was overturned in the late 1980s. This law was an example of a(n):
buy-national regulation
The two types of cooperatives are:
buyer and seller
Which of the following provides the legal and managerial guidelines for operating the firm?
bylaws
Corporate philanthropy:
can be either a cash or a noncash donation
At economic system based on competition in the marketplace and private ownership of the factors of production is known as
capitalism
A "mixed economy" is an economic system that:
combines private and government ownership of the factors of production
In a _______, the factors of production are owned collectively rather than individually, an no incentives to work harder or to produce quality products are provided
communist econmic system
Canada is currently the second largest producer of nickel in the world. The reopening of the world famous Voisey's Bay mine, which has total resources estimated at 124 million tons of nickel-bearing ore, should give Canada a clear:
comparative advantage
Venezuela can grow and sell cut flowers for floral bouquets more easily and more cheaply than most other countries can produce the same flowers. When it comes to flowers, Venezuela has a(n):
comparative advantage
There are over 1,100 Corner Stores that market candy. When Valero Energy Corp. purchased the chain of retail stores, it was an example of a _____ merger.
conglomerate
A domestic firm may decide to contract for the production of its goods by an established foreign manufacturer. Such private-label manufacturing by a foreign company is called:
contract manufacturing
The Chubb Group, an insurance company, regularly supplies funds for programming on the public television network. Its donations are an example of:
corporate philanthropy
The Department of Natural Resources spent money to promote the use of national parks as perfect sites for summer vacation causing motels, campgrounds and other tourist attractions in the private sector to become less attractive to consumers. consequently consumers spent more money on trips to the national parks and less money in the private sectors for their vacations resulting in:
crowing out
Bribery translates to kuroi kiri (black mist) in Japan, schmiergeld (grease money), and baksheesh (tip or gratuity) in the Middle East. This differing way of looking at bribes is descriptive of differences in:
culture
Laws relating to the alcoholic content of beer have required many imported brands of beer to be labeled malt liquor when it is sold in the United States. In addition, all beer sold in the U.S. must contain an expiration date or a "best-buy" date. These laws have made it difficult for small foreign breweries to enter the U.S. market. These laws are an example of:
custom regulations
Active ownership of a foreign company, with direct investors having either a controlling or a large minority interest in the firm, is called a(n):
direct foreign investment
An S corporation:
does not make the owners of the corporation personally liable for its debts
In 1997, Russia and Ukraine exported carbon steel plate into the U.S. at a price much lower than the countries were found guilty of charging the identical steel in their home markets. Russia and Ukraine were engaged in:
dumping
Double taxation in a corporation means:
earnings of the corporation and dividends of the shareholders both are taxed
A homebuilder who disposes of asbestos shingles by burying them on his own property may please the home owner because it is a less expensive means of disposal but will be punished by various legal agencies if any become aware of his crime. At which stage of the social responsibility pyramid is the builder most likely operating?
economic
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
_____ contributes to an employee's self-worth, which, in turn increases productivity and reduces absenteeism.
empowerment
A company can only be concerned about its _____ responsibilities once it has met its economic and legal responsibilities.
ethical
In the chocolate market, Green & Black is acting at the _____ responsibilities level of the pyramid of corporate social responsibility when it makes a profit, does so by abiding by the laws, and helps cocoa farmers by agreeing to pay above-market prices for cocoa.
ethical
_____ are laws that require a company earning foreign currency from its exports to sell the foreign currency to a control agency, usually a central bank.
exchange controls
The _____ is the value of one currency in terms of another.
exchange rate
When Ted Giovanni was preparing for his trip to Brazil, he found that he could go to his bank and trade his 10 U.S. dollars for 37.11 Brazilian real (the nation's currency). In this instance, the _____ was one U.S. dollar to 3.711 Brazilian real.
exchange rate
When the Federal Reserve implements a__________, it increases the growth of the money supply
expansionary policy
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 least costly and least risky method for selling a product on the global market is:
exporting
When sales of cheese in the United States began to stagnate, the U.S. dairy industry looked for a quick and easy method to reach global markets. From your understanding of how companies participate in the global marketplace, you should know that the dairy industry selected:
exporting
A country that exports more goods than it imports is said to have a(n):
favorable balance of trade
a ______ occurs if a country's total expenditures are higher than the revenues received from the taxes it gathers.
federal budget deficit
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
The headquarters, seller, and supplier of the service or method of operation of a franchise is called the:
franchisor
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. Nyami and Rice have recently abandoned their business because they could not pay its outstanding business debts. Since Nyami and Rice are both liable for the debts, their business was a(n):
general partnership
The growing popularity of bread machines has become a new business opportunity for Shelly Clemins and Jan Schoenbarr. The women make and sell bread machine covers and fabric gift bags to hold the bread loaves made in the machines. The women share the responsibilities of running the business (called Bread & Butter) as well as its profits equally. Bread & Butter would be an example of a(n):
general partnership
The World Trade Organization (WTO):
has emerged as the world's most powerful institution for reducing trade barriers and opening markets
Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means:
he is fully liable for all business debts
The franchisor generally does NOT provide the franchisee with:
help in employee selection
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
One of the keys to ethical business behavior is:
how the company's top management conducts themselves
The Blue Bird Bus Company in Georgia sells buses to the South African government. To South Africa, these buses are an example of:
imports
When Linda McAnem began Stirya, a New York-based computer services company, she ran it as a sole proprietorship. As the business grew, she realized that she did not want to be personally liable for the business's debts and wanted her business accounts to be separate from her personal accounts. Therefore, she should have:
incorporated Stirya
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
A code of ethics:
is accurately described by all of the above
A corporation:
is accurately described by all of the above
Social investing:
is the practice of limiting investments to companies that have ethical policies that match those of the investor
A _____ is when two or more companies form a special entity to undertake a specific project, usually for a specific period of time.
joint venture
An enterprise in which two or more firms or investors (including governments) share ownership of a business and its property rights is called a(n):
joint venture
Hard Rock Cafe International and Sol Melia Hotels and Resorts have allied to develop a multimillion-dollar hotel. This relationship is a _____ because their alliance will end as soon as the hotel is completed.
joint venture
Another factor influencing business ethics is _____, or what is fair according to prevailing standards of society.
justice
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
Many weight-loss programs advertise that they can help individuals lose a great deal of weight without any changes in the individual's lifestyle. Typically when the person who has lost the weight leaves the program, he or she regains all the lost weight. This yo-yoing is almost as bad for the body as the excess weight. These weight-loss programs are engaged in _____ behavior.
legal but irresponsible
Peter Drucker, a well-known management scholar, has said that companies should be evaluated on two basic dimensions:
legality and responsibility
Fred Pittman has invested $10,000 in his son's motorcycle repair shop, but he takes no part in its management. Pittman is a(n):
limited partner
U.S. plane manufacturer McDonnell-Douglas has authorized Mitsubishi Heavy Industries, a Japanese company, to use its trademarks, patents, and other proprietary knowledge to manufacture F-15 fighter planes. Mitsubishi Heavy Industries pays McDonnell-Douglas. This is an example of:
liscensing
The combination of two companies that join to form one company is called a:
merger
An industry in which a few firms produce most or all of the outputs of a product and in which large amounts of capital are needed is called
oligopoly
Stewed Tomatoes was an "all-girl power-pop trio." Its three members realized that many musicians feel stifled when making music in a sterile studio environment while the clock ticked away expensive hours, so the three girl band members created Materville Studios, a multimedia production house and recording studio in downtown Chicago. They share work responsibilities and profits equally. Materville Studios is a(n):
partnership
The highest level of the corporate social responsibility pyramid is:
philanthropic responsibilities
Singapore has granted a(n) _____ on the importation of beer and stout made in the Philippines. This means that beer and stout made in the Philippines can sell for less in Singapore than beer and stout made by New Zealand or the United States.
preferential tariff
Japan bans importation of rice to protect its domestic rice industry. This ban is an example of:
protectionism
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:
protectionism
A decline in real GDP that lasts for two consecutive quarters is called a(n):
recession
A company that has a global vision:
recognizes and reacts to international business opportunities
The government does not consider full employment to mean 100 percent of its citizens are employed because
all of the above conditions can and do exist RATIONALE: The unemployment rate is the percentage of the total labor force that is actually looking for work but is not actually working
The Sara Lee Company sells the Hanes brand of hosiery in the United States. The manufacturer of this hosiery brand in Great Britain sells it under the brand name of Pretty Polly. The Sara Lee Company is using _____ to broaden its global marketing base without investing in overseas plants and equipment.
contract manufacturing
Since the balance of payments is the summary of a country's financial transactions with another country, a discussion of a nation's balance of payments will need to include a discussion of:
all of the above
Because the government owns the factors of production in public lands, postal service, and some water resources, Great Britain is considered a(n):
mixed economy
Which of the following is an example of an unethical business activity?
All of the above are examples of unethical business activities.
How the diversity impacted the marketing and customization of products
Along with their numbers, the buying power of minorities is growing
___________ refers to a government programs for controlling the amount of money in circulation
Monetary policy
Which of the following statements about utilitarianism is true?
Utilitarianism is designed to create both winners and losers.
When a single firm accounts for 100 percent of industry sales, it is an example of:
a pure monopoly
When the government raises taxes on consumers and businesses, it is dealing with _____ policy.
fiscal
_____ is the practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteers' efforts of company employees.
Corporate philanthropy
_____ inflation is triggered by increases in production costs which increase the costs of final goods and services.
Cost-push
_____ is the set of moral standards for judging whether something is right or wrong.
Ethics
Which of the following is an example of an ethical business activity?
The employee reported to his supervisors that a co-worker had misappropriated company funds.
Upward and downward changes in aggregate economic activity, as measured by GDP, are called
business cycle
The _____ for the Music Teacher's National Associations establishes a standard of conduct and recommends a set of responsibilities teachers should have toward students, colleagues and the public. These guidelines assist the professional music teacher in gaining the respect of peers and avoiding conflicts and complaints with students and others. It points out to members what are and what are not considered fair, honest and reasonable practice when dealing with students, colleagues and the public, it provides guidance for such aspects as advertising practices, appropriate relationships, and personal and professional integrity.
code of ethics
The_______ represents the prices of a market basket of goods and services as measured monthly by the Department of Labor
consumer price index(CPI)
When the Federal Reserve implements a _________, it tightens the money supply by selling the government securities or raising interest rates
contractionary policy
It has been alleged that a Coca-Cola water bottling plant in India has caused illegal water shortages in fifty villages that surround the bottler. If this accusation is true, than Coke was operating at which stage of the social responsibility pyramid?
economic
Summer Dean was walking through the mall and found a gym bag lying on the ground. The decision Dean must make as to whether to keep the gym bag and its contents for herself or turn it into the mall's lost and found department involves:
ethics
The implementation of an expansionary policy by the Federal Reserve would result in:
lower interest rates
Alonzo Dwork will not buy stock in a company that sells bottled water because more than 1.5 million barrels of oil are used annually to make the plastic bottles used for water, and nearly 90 percent of these bottles are disposed of after one use. Dwork is a strong believer in environmental protectionism, and this _____ is his way of expressing that belief.
social investing
The economic system under which basic industries are operated by the government or owned by the private sector under strong government control is called:
socialism
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:
strategic giving
The laborers displaced due to assembly line automation at the textile plant may not have the skills needed to operate the computerized machines that replaced them. This is an example of _____ unemployment.
structural
Which of the following statements about social responsibility is true?
The obligation that a business has to act socially responsible extends beyond the investors in the company to include workers, suppliers, consumers, and communities.
Which of the following would be stakeholders for a manufacturer of agricultural pesticides?
all of the above
Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners. These are called:
free trade zones
Jarvis Washington recently quit his job as a veterinarian's assistant and is now trying to find a job with another veterinarian. This is an example of _____ unemployment.
frictional RATIONALE: Structural unemployment is caused by a mismatch between the available jobs and the skills of the available workers
Think about all the resturants that are located near your campus. You have probably noted some new ones appearing, and others closing because of lack of business. What type of competition exists in the restaurant business?
monopolistic competition
Today companies are focusing on__________ which involves building maintaining, and enhancing interactions with customers and other parties so as to develop long-term satisfaction through mutually beneficial partnerships.
relationship management
Hudson Kling mows yards during the summer. Which of the following is an example of revenue for Kling?
the $10 tip Mrs. Pierce gave him for doing such a fine job of mowing her yard
Criticism of South Africa's post-apartheid government contends that the new government has not extended liberties to its black majority population, but has instead concentrated on proving to a white minority that a black-run administration can govern a reasonably sophisticated economy and society. The belief that the new South African government is behaving unethically is an expression of the philosophy associated with:
utilitarianism
_____ 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.
Utilitarianism
Mamma's Diner was a small restaurant that was a popular hangout for many Bedford College students, but because of the owner's inability to make the bathroom stalls handicapped accessible for the one wheel-chair student on campus, it was forced to close down. The belief that this it was morally wrong to deprive the majority of the people of this experience is an expression of the philosophy associated with:
utilitarianism