Business 100 Unit 1 test

Which of the following BEST describes the term​ "economic system"?

AA​​ nation's system for allocating resources among its citizens

Carolyn gets a bank loan in order to purchase new tanning beds for her salon. In terms of the factors of​ production, how would this bank loan be​ characterized?

Capital

Which of the following is NOT one of the elements of a private enterprise​ system?

Capital

Which of the following is a factor of​ production?

Capital

Which of the following groups or individuals would NOT be considered an organizational​ stakeholder?

Competitors

Which of the following indices measures inflation by examining changes in the prices of typical products purchased by consumers living in urban​ areas?

Consumer price index (CPI)

Numerous farmers in the Midwest pool their resources to buy​ seed, sell​ grain, store​ grain, and even help with marketing efforts. This is an example of which type of business​ entity?

Cooperative

A company that produces and distributes alcoholic beverages places all legally required warning labels on its products.​ However, in countries where such warning labels are not​ required, it does not do so. What approach to social responsibility does this BEST​ demonstrate?

Defensive stance

Which of the following is deemed as the single MOST effective step an organization can take in order to encourage ethical behavior in the​ workplace?

Demonstrate top management support of ethical standards.

Which of the following is an advantage of a sole​ proprietorship?

Ease of formation

Which of the following represents one of the existing trends for small business​ start-ups?

Emergence of​ e-commerce

The dean takes a visiting delegation from a foreign university on a tour of the campus. Which managerial role does this BEST​ describe?

Figurehead

A manager must decide whether a particular course of action is ethical. What is the FIRST step the manager should take in reaching this​ decision?

Gather the relevant factual information.

Which of the following is an advantage of a partnership over a sole​ proprietorship?

Growth is possible through the addition of new talent and money.

Alejandro owns a small landscaping business. He hires a​ part-time employee to handle the bookkeeping activities. Which factor of production does this employee​ represent?

Human capital

A manager who is examining an action or policy based on the ethical norm of justice would likely ask which of the following​ questions?

Is the action or policy consistent with what is considered fair or equitable?

Which of the following questions would a manager ask if​ s/he were examining an action or policy based upon the ethical norm of​ caring?

Is this action consistent with ​ people's responsibilities to each​ another?

Which of the following is an advantage of corporations over sole proprietorships or general​ partnerships?

Limited liability of owners

Sam and Henry want to open a restaurant. Henry is willing to contribute​ start-up capital to the business but wants to have no role in the​ day-to-day operation of the restaurant. Which form of business ownership would be most appropriate for​ them?

Limited partnership

A company donates a share of its profits to charitable programs and is a corporate sponsor of the philharmonic orchestra. The company is demonstrating social responsibility toward which of the following organizational​ stakeholders?

Local community

Which of the following scenarios BEST describes perfect​ competition?

Many small sellers offer identical products.

Which type of partnership acts much like a corporation in that it sells shares​ (partnership interests) to investors on public​ markets?

Master limited partnership

Which of the following is true of master limited​ partnerships?

Master limited partnerships sell partnership interests to investors on public markets like the New York Stock Exchange.

Which of the following terms refers to two companies combining to form a new​ company?

Merger

Which of the following BEST defines the U.S. economic​ system?

Mixed market economy

Alison owns a coffee shop in a small city in which there are many similar establishments. She advertises that her coffee is the best in town because the coffee beans she roasts are fair trade​ certified, shade​ grown, and organic. Which degree of competition would this BEST​ describe?

Monopolistic competition

Which of the following terms identifies the model explaining why countries engage in international​ trade?

National competitive advantage

An automobile manufacturer learns about an ignition switch defect that may cause serious safety issues but rather than enact an expensive recall of hundreds of thousands of​ vehicles, management covers it up. Which approach to social responsibility would this BEST​ demonstrate?

Obstructionist stance

Which of the following approaches to social responsibility reflects the lowest degree of socially responsible​ practices?

Obstructionist stance

​"First lie, then​ deny" would be consistent with which approach to social​ responsibility?

Obstructionist stance

In which of the following does the seller of a product or service have the LEAST amount of control over the​ price?

Perfect competition

Natural resources and raw​ materials, offices, production​ facilities, parts and​ supplies, and manufacturing equipment would be considered which factor of​ production?

Physical resources

Alysia's cosmetic company was at the forefront of the move to ban testing on animals. Her firm has adopted an aggressive energy conservation approach to​ manufacturing, and it actively participates in programs to reduce poverty and illiteracy in the community. Which of the following would BEST describe the​ company's approach to social​ responsibility?

Proactive stance

The number of people in the United States who are age​ 65+ is increasing​ rapidly, creating opportunities for products and services to meet the demands of an aging population. Which element of the external business environment does this population shift​ reflect?

Sociocultural environment

In a​ corporation, who elects the board of​ directors?

Stockholders

Which of the following is the BEST description of the law of​ demand?

The quantity demanded increases as the price decreases.

According to the laws of demand and​ supply, if the price of beef​ increases, which of the following likely will​ occur?

The quantity demanded will decrease

Due to ideal growing conditions in New Zealand vineyards and an overabundance of​ grapes, the price of Sauvignon Blanc wine decreases dramatically. Which of the following is likely to occur as a​ result?

The quantity demanded will increase.

Employees in the United States are comfortable with​ commission- and​ incentive-based pay​ plans, whereas employees in Italy and Mexico prefer pay plans that are more​ predictable, like seniority pay. Which of​ Hofstede's cultural dimensions would explain this​ difference?

Uncertainty orientation

Pete has started an electronics firm with the potential for high growth. He obtains funding for the business from a group of investors who demand partial ownership of the business and representation on the board of directors. What type of financing has Pete​ procured?

Venture capital

Which of the following BEST describes a conflict of​ interest?

When an activity may benefit an individual to the detriment of his or her employer

Which of the following is the BEST description of​ deflation?

Widespread decreases in the prices of goods and services

​John, a purchasing​ agent, is offered an​ all-expense paid trip to Hawaii by a supplier if he agrees to award a substantial amount of business to the supplier. Accepting this trip would constitute​ _______.

a conflict of interest

In order to enter the market in Eastern​ Europe, DNC Enterprises enters into a contract with a firm in the Ukraine that allows that firm to use its brand​ name, operating​ procedures, and proprietary technology in making its products. This BEST describes​ _______.

a licensing arrangement

Wired​ Beverages, a producer of energy​ drinks, enters into a contract with a firm in South America in which the South American firm can produce and market its energy drinks in South America. Wired Beverages will receive a percentage of the South American​ firm's sales of the energy drinks. This is an example of​ _______.

a licensing arrangement

A rare gem known as Tanzanite is found only in the country of Tanzania. Because no mines have been discovered in other​ countries, Tanzania would be said to have​ a(n) _______ advantage in the production of this gem.

absolute

Absco Enterprises meticulously follows all laws and regulations and attempts to satisfy ethical​ requirements, but it does not go out of its way to address social or environmental issues unless it is persuaded to do so. This would suggest that the company has adopted​ a(n) _______ stance to social responsibility.

accommodative

One of the primary advantages of purchasing a franchise rather than starting a business from scratch is that a franchise offers​ _______.

a​​ ready-made business model

A​ country's _______ is the flow of money into or out of a​ country, including the value of its imports and​ exports, money spent on​ tourism, foreign aid​ programs, and currency trading.

balance of payments

A manager who discriminates against a member of a protected class in an employment decision such as​ hiring, firing,​ training, or promotion demonstrates​ _______ behavior.

both unethical and illegal

Ethical or unethical behaviors by employees and managers in the context of their jobs are referred to as​ _______.

business ethics

​Tyler, Dusty, and Matt own all shares of stock in Abels​ Enterprises, and shares of stock are not offered to the general public. Abels Enterprises is likely a​ _______.

closely held corporation

The two basic forms of planned economies are​ _______ and​ _______

communism; socialism

The​ climate, altitude, and terrain in India are particularly suitable for growing bananas. Although bananas are grown in other​ countries, India's production far exceeds the production of other countries. This would suggest that India has​ a(n) _______ advantage in the production of bananas.

comparative

Many electronics sold in the United States are imported from Taiwan because Taiwan can produce such products more efficiently than companies in the U.S. This is an example of​ a(n) _______.

comparative advantage

A nation is extremely efficient in the production of electronics.​ However, its climate and terrain make it difficult to grow grain. Economists suggest that the country should​ _______.

concentrate on production of electronics and import grain from another nation

Organized efforts by​ individuals, groups, and the government to help protect consumers from unfair business practices are referred to as​ _______.

consumerism

​A(n) _______is an organization comprised of sole proprietorships​ and/or partnerships who work together for common​ benefits, such as enhanced financial​ power, greater production​ power, and/or superior marketing power.

cooperative

A​ _______has state-chartered legal status as a separate​ entity, along with property rights and obligations and an indefinite life span.

corporation

One disadvantage of​ ________ is double taxation.

corporations

n order to allow the company to focus on more lucrative​ products, Johnson​ & Johnson sold its Ortho Clinical Diagnostics Division. This is an example of​ a(n) _______.

divestiture

A group of American firms accused Japanese manufacturers of selling flat screens used in laptop computers at prices as much as​ 70% less than manufacturing cost. This is an example of​ _______.

dumping

A manufacturer of microwave ovens exports its products to another country at a price lower than the cost of production in the home country in order to quickly gain market share. This practice is known as​ _______.

dumping

A complete ban on the importing or exporting of products from a specific country is​ a(n) _______.

embargo

People who are collectivist in their values​ _______.

emphasize the needs of the group over the needs of the individual

Last​ year, a Pacific Island nation imported over​ $3.2 billion of goods and reported a trade surplus. This would suggest that the nation had​ _______.

exported more than ​ $3.2 billion worth of goods

In order to encourage people to spend more money and stimulate the​ economy, the government slashes the individual income tax​ rate, effectively putting more money in​ people's pockets. This is an example of the government exercising​ _______ policies.

fiscal

Samsung Electronics​ Co., headquartered in​ Seoul, Korea, has announced plans to build a new smartphone factory in Vietnam. Samsung is engaged in​ _______.

foreign direct investment

In a​ partnership, a(n)​ _______ partner actively manages the business and has unlimited liability for the debts of the business

general

​Regina's Rug Emporium offers the widest variety of Persian and Oriental rugs in the area. Regina regularly travels worldwide to find and buy the most exquisite and unusual rugs that foreign producers have to offer. Regina is​ a(n) _______.

importer

The general price level of goods and services in a nation is steadily increasing. This is known as​ _______

inflation

A senior level manager in a corporation learns that the Chief Financial Officer is going to be indicted the following day on charges of accounting fraud. He quickly sells his shares of stock in the​ corporation, fearing that the stock will fall after news of the indictment. This is an example of​ _______.

insider trading

Albertson Corp. is headquartered in the United States and has manufacturing facilities in South Carolina and​ Arkansas, as well as numerous sales offices in the U.S. The company recently opened a manufacturing facility in Ireland in order to capitalize on the European market. The company would be considered​ a(n) _______.

international firm

Amanda owns a small floral shop and operates the business as a sole proprietorship. If Amanda passes​ away, her business​ _______.

legally dissolves

One of the biggest advantages of corporations is that investors cannot be held personally responsible for the debts of the business. This is the concept of​ _______.

limited liability

The National Association of Realtors hires a consulting group to meet with members of Congress and the Senate and​ develop, advance, and influence legislation concerning the ownership and operation of real estate. This is an example of​ _______.

lobbying

Atlantis Electronics used to produce its products in a manufacturing facility in North​ Carolina, but has moved manufacturing to a contract manufacturing plant in​ Pakistan, where labor is significantly cheaper. This is an example of​ _______.

offshoring

​Phyllis's company donates​ $1 million to the local humane shelter so that it can build a new facility in the area. This is an example of​ _______.

philanthropic giving

The National Weather Service is predicting that a major hurricane will impact the area within the next 48 hours. A local hardware store quickly doubles its prices on portable​ generators, plywood, and batteries in response to this weather forecast. This is an example of​ _______.

price gouging

A Midwestern city negotiates a deal with a company to operate its parking meter system. The city will receive a lump sum payment of several million​ dollars, and the company will have the rights to​ operate, maintain, and collect the revenue from the parking meters. This is an example of​ _______

privatization

The measure of economic performance that compares how much a system produces versus the resources required to produce​ it, is known as​ _______.

productivity

Shares of stock in a​ _______ corporation are available for sale to the public and are widely held.

publicly held

Direct influence to shape social responsibility practices by the government is most often accomplished through​ _______.

regulation

Under​ _______, the government owns and operates selected major industries such as​ transportation, communications, and​ banking, but smaller businesses are privately owned.

socialism

Misty wants to earn extra money and decides to open a cleaning service for dormitory rooms at her college campus. She posts fliers on the bulletin boards in each dormitory and buys some cleaning supplies. She plans to operate this business alone and keep all of the profits. Based on this​ information, it would appear that​ Misty's business is a​ _______.

sole proprietorship

​A(n) _______ is the collaborative effort of two or more independent organizations on a project for mutual gain.

strategic alliance

Farmers receive payments from the government if prices for​ wheat, corn,​ soybeans, and certain other crops fall below a certain level in order to protect farmers from cheaper prices charged by foreign competitors. This is an example of​ a(n) _______.

subsidy

A​ nation's economy experiences periodic increases in economic​ activity, often followed by periods of economic slowdown or decline. This is known as​ _______.

the business cycle

The country of Belize exported​ $395 million of goods in 2009 and imported goods worth​ $616 million during the same year. This would suggest that Belize has​ a(n) _______.

trade deficit

The value of goods imported into Mexico exceeds the value of goods exported by that country. This suggests that Mexico has a​ _______

trade deficit

The cultural dimension that describes the degree to which people in a culture tolerate or feel threatened by ambiguity is known as​ _______ orientation

uncertainty

Employees from a culture that is characterized by power respect​ _______.

would expect their superiors to make decisions with little input from employees

When a firm wants to enter the international​ market, which of the following represents the lowest level of international​ involvement, and hence the LEAST​ risk?

​​Importing/exporting

Which of the following facets of the external environment of business reflects the relationship between government and​ business?

​​Political-legal environment

​_______ involves public​ disclosure, often by an​ employee, of​ corruption, a​ wrongdoing, or illegal or unethical conduct on the part of others within an organization.

​​Whistle-blowing

A Subchapter S corporation​ (S corporation) is a hybrid between a​ _______ and a​ _______, in that owners enjoy the benefits of limited liability but profits are not subject to double taxation.

​​corporation; partnership

Deanna wants to open a sandwich shop near campus. Rather than start the business from​ scratch, she considers purchasing a franchise from Subway. If she decides to purchase the​ franchise, Deanna would be the​ _______, and Subway would be the​ _______.

​​franchisee; franchiser

Angelina has a small business in the U.S. in which she produces​ one-of-a-kind jewelry using​ semi-precious gemstone beads. She purchases a supply of gemstone beads from a company in​ Belgium, and sells several necklaces to a buyer in Canada. The beads are​ _______; the necklaces are​ _______.

​​imports; exports

A business earns profits when its​ _______ exceed(s) its​ ______

​​revenues; expenses

Jack discovers that his employer is dumping dangerous chemicals into the river rather than disposing of them correctly. When management refuses to listen to his​ concerns, he contacts the Environmental Protection Agency to report the​ firm's conduct. This is an example of​ _______.

​​whistle-blowing