Introduction to Business Final

The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Bolivia, Chile, Colombia, Ecuador, Peru, and Suriname is called -the South American Trade Organization. -the World Trade Organization (WTO). -the Latin Free Trade Zone. -Mercosur.

Mercosur

T/F: A company that loses its status as an S corporation may not reelect this status for at least 5 years.

True

T/F: A trade deficit is the same as an unfavorable balance of trade.

True

T/F: An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.

True

T/F: Anna is a stockbroker for Bank of Bux. A client who works at Game Guys, Ltd., just called to purchase thousands of shares of Game Guys' company's stock. He reveals to her that the company is soon announcing the appointment of a new superstar CEO. Anna asks her client if this information is public knowledge. The reason she asks is to make certain that her client, her company, and she remain in compliance with Regulation FD, the fair disclosure rule.

True

T/F: Bar codes are a form of technology that has enhanced a company's ability to be responsive to consumer needs.

True

T/F: Brain drain is the loss of the best and brightest people from their home countries to other countries.

True

T/F: Departmentalization is the dividing of organizational functions into separate units.

True

T/F: Entrepreneurs take calculated risks.

True

T/F: Global trade is the exchange of goods and services between countries.

True

T/F: Honesty, integrity, and high ethical standards are essential to a capitalist economic system like the one that operates in the United States.

True

T/F: In global markets, there is not a central system of law.

True

T/F: In the long run, a firm's loyalty to their employees can pay off financially.

True

T/F: International trade is not limited to multinational corporations. Small businesses do about 30% of all exporting out of the U.S.

True

T/F: Just about anything that can be sold in the United States can also be sold to buyers in other countries.

True

T/F: Leighton has spent the last two hours going over customer surveys to see how well her company is achieving its goal of improving overall customer satisfaction. Leighton's efforts are an example of the controlling function of management.

True

T/F: Of all nonfarm businesses in the United States, almost 97% are considered small by the Small Business Administration (SBA) standards.

True

T/F: One characteristic of an international joint venture is all parties sharing the risk of a major project.

True

T/F: People who report illegal or unethical behavior are called whistleblowers.

True

T/F: Socialists believe that wealth should be more evenly distributed than what actually occurs in a free-market capitalistic system.

True

T/F: Some investors believe it makes financial as well as moral sense to invest in companies whose practices promote sensitivity toward the environment.

True

T/F: The PowerPlus Utility Company recently built a nuclear power plant in a southern state and started competing against Electricity City Utility Company that has served customers in that region for 65 years. Due to deregulation, consumers now have a choice among utility companies in this area. Although PowerPlus has made a sizeable capital investment, if it successfully grows market share, eventually prices for electricity may stabilize or fall.

True

T/F: The basic idea behind the organization design of Fayol and Weber was that management wanted to control workers.

True

T/F: The green movement has resulted in a positive impact on U.S. jobs.

True

T/F: There is no single leadership style that works best in all situations.

True

T/F: To better serve customers, many firms are restructuring to empower front-line employees.

True

T/F: Venture capitalists provide funds for start-up businesses in exchange for part ownership in the new firm.

True

T/F: Workers in socialist countries often get longer vacations and more social benefits than workers in free-market economies.

True

Tyler Brown recently noticed that he was seeing more Facebook advertisements than he had in the past even though he had not requested any of them. Which of the following best explains why this is happening? -Tyrell was a victim of identity theft. -Tyrell gave his personal information to a business, which then traded it to other companies, and these companies then began targeting their advertisements. -All businesses routinely have all customers' personal information. -Tyrell's accountant gave his information to the marketers.

Tyrell gave his personal information to a business, which then traded it to other companies, and these companies then began targeting their advertisements

The Sandwich Emporium, Inc. sells the rights to use its name and sell its signature sandwiches in a given market area to those willing to pay agreed-upon fees and meet specific contractual terms. The Sandwich Emporium is -offering investors the opportunity to form limited partnerships. -a franchisor. -creating private subsidiary companies. -offering a tax-free investment potential.

a franchisor

__________ exists when the entire supply of a good is controlled by a single seller. -Perfect competition -Oligopoly -Pure capitalism -A monopoly

a monopoly

Line-and-staff organizations work well in organizations with -operations in high-growth industries. -stiff competition. -short product life cycles. -a relatively unchanging environment.

a relatively unchanging environment

The Federal Reserve Bank operates -as a semi-private organization not under the direct control of the government. -under the direct control of the executive branch of the government. -under the direction of the Banking Oversight Committee of Congress. -as a special agency of the U.S. Treasury.

as a special agency of the U.S. Treasury

If a nation's currency is weak, people may have to fall back on -exporting. -bartering. -importing. -factoring.

bartering

Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have dropped for four consecutive years and accountants have reported net losses in each of the last two years. Employees appear discouraged and frustrated. Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems. The managers unanimously agreed that the main problem was a lack of communication among the several functional areas of the business. Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication. Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm. One employee from the production department observed, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses. Specifically, one employee said, "My boss never pays attention to my ideas. He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from managers and employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization. She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability. Employee complaints that there are too many layers of management and too many rules and regulations suggest that Mucho Dinero is a(n) -flat organization. -bureaucratic organization. -inverted organization. -wide organization.

bureaucratic organization

An entity that seeks to earn a profit by providing a good or service is known as a(n) -industry. -corporation. -business. -service.

business

Both socialism and communism are variations of -command economies. -competitive economies. -free-market economies. -plutocratic systems.

command economies

EBL Industries _________________ its products in foreign countries, where labor is less expensive and production sites are owned by other companies. This strategy allows EBL Industries to experiment in new markets without incurring the large start-up costs involved with building its own production facilities. -contract franchises -pays governments to market -globally licenses -contract manufactures

contract manufacturers

An electronic storage file where firms keep customer information is known as a(n) ________. -MP3 file -management information system -database -e-mail server

database

To understand legal and regulatory conditions and be successful in global markets it's often useful to contact -the local Better Business Bureau. -local businesspeople in the host countries. -the Regional Economic Development Trading Desk (REDTD). -the Organization for Economic Cooperation and Development (OECD).

local businesspeople in the host countries

According to SBA guidelines, a manufacturing firm with 1,000 employees -would be classified as a large firm in the industrial sector. -may be classified as a small business depending upon the size of others in the same industry. -is too small to achieve the efficiencies of large-scale production. -is classified as an S corporation.

may be classified as a small business depending upon the size of others in the same industry

General and divisional managers, plant managers, and deans and department heads at colleges are classified as -middle management. -supervisory management. -top management. -nominal management.

middle management

The outlook for growth in global trade appears to be -less optimistic than in the past. -more interesting yet more challenging every day. -unclear and lacking focus. -nonexistent.

more interesting yet more challenging every day

The two basic types of tariffs are -goods and services. -general and limited. -comparative and absolute. -revenue and protective.

revenue and protective

HealthLink Hospital is looking into introducing a flextime program for its employees. A group of workers who would probably benefit from flextime is -workers who do not have access to computers at home. -workers who have little self-motivation to work eight-hour days. -frontline workers who frequently go out to meet with home furnishing designers. -single-parent families.

single-parent families

One of the greatest concerns associated with capitalism is that -it rarely creates wealth. -some people may let greed guide their behavior. -there is very little economic freedom for consumers. -producers are unlikely to supply the goods and services that consumers value the most.

some people may let greed guide their behavior

The amount of goods and services people can buy with the money they have is called their: -nominal income. -consumer price index. -profit margin. -standard of living.

standard of living

Supervisory managers spend most of their time on -conceptual and financial skills. -technical and human relations skills. -strategic planning. -external efforts such as meeting with stockholders and other stakeholders.

technical and human relations skills

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called: -the Small Business Council of Volunteers (SBCV). -Partners in Service and Economic Progress (PSEP). -Small Business Counselors Incorporated (SBCI). -the Service Corps of Retired Executives (SCORE).

the Service Corps of Retired Executives (SCORE)

The largest importer in the global market today is -Japan. -Russia. -Germany. -the United States.

the United States

A chief operating officer (COO) would be classified as part of a firm's -primary management. -middle management. -top management. -first-line management.

top management

Three types of corporate mergers are -economic, geographic, and financial. -vertical, horizontal, and conglomerate. -flexible, differentiated, and conditional. -explicit, implicit, and intrinsic.

vertical, horizontal, and conglomerate

The threat of terrorism... -benefits most businesses because just about all companies contribute toward averting these threats. -will certainly affect companies that participate in global trade, but most large U.S. companies do their business domestically. -has increased the quality of life of most people because companies employ more workers when the threat is high, and workers help companies increase profits. -is costly to most firms because it is costly to governments who increase taxes to pay for added protection.

will certainly affect companies that participate in global trade, but most large U.S. companies do their business domestically

T/F: Most businesses adopt a bureaucratic organization in order to speed up their decision-making process.

False

T/F: One drawback of franchises is that they have a higher failure rate than other types of business ventures.

False

T/F: Promoting social justice is a responsibility of society, but not business.

False

Which of the following people would tend to favor a socialist economy? -Fred prefers to live in a country with low marginal tax rates. -Lizzie prefers to live in a country that encourages rapid economic growth. -Kara prefers to live in a country with limited government regulation. -Bryan prefers to live in a country that promotes social equality.

Bryan prefers to live in a country that promotes social equality

T/F: "Do what I say, not what I do" can be an effective code of conduct to instill corporate values.

False

T/F: A basic right under capitalism is the right of businesses to receive government funding.

False

T/F: A favorable balance of trade occurs when the value of a country's imports exceeds the value of its exports.

False

T/F: A firm's informal organization refers to the structure that identifies the authority, responsibility, and position of people within the organization.

False

T/F: A general partner has unlimited liability for the debts of the partnership only if he or she personally approved the decisions that resulted in those debts.

False

T/F: Adam Smith believed that since businesspeople are motivated to improve their own prosperity, their actions are unlikely to benefit society as a whole.

False

T/F: Although corporate managers often exhibit the skills required of successful entrepreneurs, they seldom have the desire to give up the perks and fringe benefits of corporate life and start their own business.

False

T/F: As a form of franchising, sovereign wealth funds are getting very little attention as a strategy for doing business in foreign markets.

False

T/F: Double taxation means that a corporation pays twice the amount of taxes as a sole proprietorship or partnership.

False

T/F: Effective human resource management styles are transferable from one culture to another.

False

T/F: Fayol's principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager.

False

T/F: Free-rein leaders tend to carefully monitor their subordinates to make sure they are doing the job in the correct way.

False

T/F: From a competitive standpoint, small businesses cannot expect to successfully compete with large corporations in international markets.

False

T/F: Given the level of diversity within the United States, agreement on common standards of ethical behavior is unachievable.

False

T/F: Limited partnerships are just like general partnerships, except that they are partners for a limited time period.

False

T/F: Marcos wants to become a manager but he is reserved and avoids conversation with strangers. However, he is very comfortable with information technology and has great technical skills in the area. Marco's personal traits make him a good candidate for a top management position.

False

T/F: Money is one of the five factors of production that contribute to the creation of wealth.

False

T/F: Quinn owns a local salon. She wants to update her shop with new customer massage chairs and work stations for her nail technicians. If the Fed were to lower interest rates by 1.5 percentage points, at the same time that the government increased the tax rate by 1.5%, she could immediately conclude that updating her shop would not increase or decrease her financial position.

False

T/F: Rafael is a limited partner in an online clothing company. As a limited partner, Rafael can be involved with the company for a maximum of five years.

False

T/F: Recent evidence suggests that the small business failure rate is significantly higher than previously reported.

False

T/F: Researchers have determined that all effective leaders have similar traits.

False

T/F: Small business organizations lack the size required to reap the benefits of labor specialization.

False

T/F: Studies show that consumers are not concerned about the socially conscious behavior of the firms with which they do business.

False

T/F: The U.S. government is reducing Export Assistance Centers due to businesses' lack of interest in their support.

False

T/F: The goal of empowerment in the workplace is to prevent mistakes. Therefore, giving management more control over the actions of lower-level workers will prevent mistakes.

False

T/F: The introduction of standardized international laws regulating business organizations has greatly simplified global trade.

False

T/F: The national deficit is the difference between our nation's exports and its imports.

False

T/F: There is general agreement in the United States on the degree to which the government should be involved in the economy.

False

T/F: Trying to make decisions that will benefit all parties involved is consistent with the question "How will it make me feel about myself?"

False

T/F: Under a system of floating exchange rates, the value of a country's currency is determined by government regulation.

False

T/F: You read the Electricity City Utility Company has problems. Its headquarters had an expansive retaining wall collapse during a flood last week. This led to toxic coal ash flows that buried homes and even caused a few fatalities. An editorial claims that the company will not be held accountable to the same standards as the asbestos companies that paid severe fines and even went out of business due to their lack of attention to environmental clean-up. You agree with the writer because you recently studied about the various competitive markets and utility companies clearly fall under monopolistic competition.

False

___________ are broad, long-term accomplishments an organization wants to achieve. -Goals -Objectives -Directives -Agendas

Goals

There are innovations involving new ways to produce and conserve energy. If we can turn this new technology into marketable products and services that produce energy to run our businesses and homes, the U.S. could see a surge in output of goods and services. What would be measured to document this surge? -Gross domestic product -Consumer price index -Consumer marginal index -Number of workers who are frictionally employed

Gross domestic product

Qiang is ready to become a franchise owner and open one of the 50 Southwest Diners, a very successful fast food chain specializing in dishes from the American Southwest. Which of the following problems is Qiang most likely to encounter if she agrees to become a franchisee? -High initial costs and fees -Poor name recognition and visibility -Lack of financing -Lack of managerial assistance

High initial costs and fees

Which of the following would be a topic emphasized in a macroeconomics course? -The factors that determine how fast a nation's economy is growing -How a company decides the amount it will charge for one of its products -How a consumer chooses which goods to buy -The factors that determine the wages for labor in the mining industry

The factors that determine how fast a nation's economy is growing

Pepe Pieman believes that pizza is a much more versatile meal than most people realize. As the national marketing manager for Pizza Pals, he has watched how consumers ate up barbecue pizza, Hawaiian pizza, Mexican pizza, and other new and unique combinations. His superiors, however, met his suggestions for other unusual pizzas with a negative response. Even some of his teammates laughed at his ideas. Pepe's confidence in his ability to understand the market has led him to focus on planning a business of his own. Pepe realizes that he will take a risk when he leaves his job with Pizza Pals and sets off on a new endeavor: Pepe's Pizzazzeria. Pepe is excited about the potential of profitably catering to the unmet desires of pizza consumers. Pepe is confident that Pepe's Pizzazzeria will be a success, but only if he has enough money to do things right. Since Pepe has very little personal wealth, he knows he must find financial assistance. In order prepare for meetings with bankers and potential investors, Pepe should -hire a public relations firm to develop promotional materials. -develop a business plan. -read a book on entrepreneurship. -create a partnership contract.

develop a business plan

Fayol's ____________ principle says that tasks should be divided into areas of specialization. -departmentalization -comparative advantage -division of labor -centralization

division of labor

Global financial markets operate under a system of ___________, where the supply and demand for various currencies will determine their value at any moment in time. -living rates -foreign good rates -floating exchange rates -live trading rates

floating exchange rates

A(n) _____________ is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory. -intrapreneur -franchisee -limited partner -franchisor

franchisor

At PharmaPros, the highly regarded research team relies on top management to provide its strategic direction. After that, researchers work on their own to develop new medications to satisfy customer needs and company profit objectives. Middle management at PharmaPros practice _____________. -free-rein leadership -consultative leadership -projectory leadership -autocratic leadership

free-rein leadership

A simple supply curve shows that an increase in the price of a good will cause the quantity supplied to -decrease. -increase. -remain constant. -fluctuate randomly around its equilibrium value.

increase

Colby is a new college graduate who just started a job as an engineering trainee for a sizeable defense company. Now that he is earning good money, he hopes to start saving for his first house and also make contributions to his retirement plan. As he looks over his monthly bills, Colby is concerned that he'll never get ahead of the game. His grocery bill, car payment, and mounting gas payments keep him in the "just making ends meet" group. As his mind wonders back to his college days, he reflects on a time when gas and food seemed a lot more reasonable. Chase is experiencing the effects of -inflation. -conditions of low demand. -involuntary CPI. -cyclical unemployment.

inflation

The executive summary section of the business plan contains -computerized information that readers can access interactively. information that will capture the attention of bankers and other -investors who receive many business plans every day. -qualifications, experience, and education of the entrepreneur and prospective employees. -a financial summary prepared by the business's accountant.

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