Business 101 Midterm

service business

Mandy Bush decides to start a residential landscaping business. How would this business most likely be classified?

import quota

The United States wishes to import no more than 100 million tons of sugar from India in any given year. The type of import restriction it should impose is a(n)

Uruguay Round

The World Trade Organization was created by the

short run profits and survival

The economic model of social responsibility was developed in a period when the primary concern of firms was

What are the goals for the business?

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

corporation

The form of business organization that comprises about 18 percent of all businesses in the United States is the

controlling

The investment decisions of many traders on Wall Street in the early 2000s led to the downfall of several investment companies, demonstrating that employee goals were not aligned with company goals. This indicates a failure of which basic managerial function?

production industries need a large initial investment

The main reason there are fewer production industries than distribution or service industries is that

corporation

The most effective form of business organization for raising capital is the

socialist

The nationalization of key industries in countries such as Sweden and Norway is indicative of a(n) ____ economy.

Personal relationships with employees

What is the main advantage of small business that helps retain effective employees who could earn more at a larger firm?

A general course that surveys eight to ten areas of business management

What is the most popular course offered by the SBA?

A monopoly must consider customer demand and then set prices at the most profitable level

What must a monopoly, such as a public utility, account for when setting its prices?

4

When compared to partnerships and corporations, sole proprietorships account for ____ percent of total annual sales.

unethical communications

When medical research indicated that a high-fiber diet might help reduce one's risk of colon cancer, a few producers of fiber cereals suggested in their advertisements that if you eat fiber cereal, you will not get cancer. This is an example of

embargo

When the U.S. government will not allow meat from another country to be marketed in the United States, it is imposing a(n)

At the end of World War II

When was GATT first established?

Military members pledge a portion of their salary to the United Way

Which of the following examples least represents the definition of social responsibility?

If quality is compromised it may reflect poorly on the company providing the license

Which of the following is a potential drawback of licensing?

limited legal documents

Which of the following is necessary for starting a sole proprietorship?

guaranteed income

Which of the following is not a feature of laissez faire capitalism?

It has unlimited liability

Which of the following is not an advantage of a sole proprietorship?

What products the company will not sell

Which of the following would least likely be stated in the articles of partnership?

Value of McDonald's sales for their Tokyo locations

Which of the following would not be included in the gross domestic product of the United States?

labor

William Welsh, a former Air Force pilot, decides to operate a helicopter tour company to provide customers with breathtaking views of the Rocky Mountains. He obtains a loan and purchases the necessary land, facilities, advertising, and five helicopters for his business. What important factor of production has he overlooked in creating his business?

articles of incorporation

A contract between a business and a state recognizing the business as an artificial person is known as the

small business institute

A group of senior and graduate students in business administration providing management counseling to small businesses is known as a

import quota

A limit on the amount of a particular good that may be brought into a country during a given period of time is called a(n)

crude oil

Capital or capital goods as recognized by economists would include all of the following except

is a Latin phrase meaning let the buyer beware

Caveat emptor

cash flow problem

A new small business, Underwater Wildlife, has opened to sell tours of underwater sites around the country and in South America. However, money has to be paid up front by the Underwater staff to book hotels and other travel arrangements before its clients have paid for the tours. That means Underwater is facing a potential

dominant in its field

A small business is all of the following except

partnership

A voluntary association of two or more people acting as co-owners of a business is known as a

reports illegal or unethical conduct within his or her organization

A whistle-blower is a person who

tactical plan

A(n) ____ is a smaller-scale plan developed to implement a strategy.

30,000

According to Census Bureau and Federal Reserve surveys, about 50 percent of all new businesses begin with less than ____ in total capital.

unlimited liability

All of the following are advantages of the partnership form of organization except

money

All of the following are material resources for Honda Motor Company except

guaranteed return on investment

All of the following are reasons people go into business except the

high-powered drill press

All of the following would typically be considered consumer products except a

cash flow problem

Amy starts a small quilting and embroidery business. She purchases a technologically advanced quilting machine and an embroidery machine for a combined $25,000. Her monthly payments on the equipment are $500, but she has only one client at this time. Amy is facing a potential

economic community

An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies is called a(n)

open

Anyone with the money can purchase shares of PepsiCo's stock. This makes PepsiCo a(n) ____ corporation.

equalizing a nation's balance of payments

Arguments for imposing trade restrictions include

The price is determined by combining the actions of all buyers and all sellers together

As a farmer, Charles Forsythe is familiar with the economics of perfect competition. How is the price at which he sells his corn determined?

social

At Park Incorporated, employees are allowed one-hour lunches, but it has become common that most stroll back fifteen minutes late every day. The factor affecting the ethical behavior of Park's employees is

infant industry

Because it has not been around long enough to establish itself, the Russian automobile industry could be classified as a(n)

financial

Belinda is in charge of both accounting and investments and all of the employees involved with these functions at her firm. Belinda is a(n) ____ manager.

competitors

Centrum Springs, Inc. ​ Carol has worked for Centrum Springs, Inc., for many years and has now been given the opportunity to advance in the company. Her manager is retiring and hopes that Carol will take over for him. However, even though Carol is an experienced employee, there are many things that she still needs to learn. Carol has trained many new employees, but she has never held a management position. Carol needs to have a general understanding of what it takes to be a manager. ​ There are many problems in Carol's department. There are no plans to fall back on in case the initial plan fails. Carol also will need to learn how to direct people in such a way that makes them want to do more than they absolutely have to. Carol feels that this is a great opportunity, and she is anxious to learn everything to be a great manager. She knows that if she performs well in this position, she will have the opportunity to move up the corporate ladder. Refer to Centrum Springs, Inc. The different resources available to all managers include all of the following except

dumping

China is selling school supplies in the United States for very low prices, even lower than the prevailing prices in China, and thus making it extremely difficult for American manufacturers to compete. This is referred to as

production business

Daniel's business constructs storage sheds for new housing developments as requested by the builders. Daniel's business would best be classified as a

americans with disabilities act

Early government regulations prior to 1920 that affected American business include all of the following except the

responsibility

Echo Air Company (EAC)Echo Air Co. is a well-known establishment in the airline business. It is currently one of the top firms in the industry. The company prides itself on good customer service and being concerned with the broader societal good. EAC management is not only concerned with doing things right, but also with doing the right things. Many of their decisions reflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethical behavior to the press instead of to EAC management. As a result, the company made sure its employees knew the firm's guidelines on fixing ethical issues. EAC also developed a code of conduct based on standards that continue to be upheld within the company. Since the code of conduct has been put in place, there have been fewer ethical violations.Although employee salaries at EAC are not as high as those at competing firms, the company experiences very low employee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but that also results in higher profits. If EAC can maintain the relationship it has built with its employees and customers, it will have little difficulty keeping up its remarkable success. ​ Refer to Echo Air Company. Since the company created its code of conduct, employees have limited ____, or amount of freedom to perform an unethical act.

social responsibility

Echo Air Company (EAC)Echo Air Co. is a well-known establishment in the airline business. It is currently one of the top firms in the industry. The company prides itself on good customer service and being concerned with the broader societal good. EAC management is not only concerned with doing things right, but also with doing the right things. Many of their decisions reflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethical behavior to the press instead of to EAC management. As a result, the company made sure its employees knew the firm's guidelines on fixing ethical issues. EAC also developed a code of conduct based on standards that continue to be upheld within the company. Since the code of conduct has been put in place, there have been fewer ethical violations.Although employee salaries at EAC are not as high as those at competing firms, the company experiences very low employee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but that also results in higher profits. If EAC can maintain the relationship it has built with its employees and customers, it will have little difficulty keeping up its remarkable success. ​ Refer to Echo Air Company. The principles that EAC choose to pride itself on show that the company has

small

Fatima's cleaning business has several customers but is not dominant in its field. This is an example of a(n) ____ business.

all countries rich or poor

Globalization represents a huge opportunity for

on a daily basis

Harry is a businessperson who works for a successful and admired Fortune 500 company. About how often is Harry likely to encounter ethical issues in the workplace?

peak period

Home InspirationsMary works for her father in a family-owned business called Home Inspirations, a bedding company that has been in operation since the 1800s. When her father retires, Mary plans on taking over the business. Mary is aware of many things about the company that she likes, and a few things that she does not. She has particularly noted that when the economy has low unemployment and high total income, sales are great. However, any other time, sales are not so good.Currently, all of the bedding items are created in one place and everyone works on various tasks every day. Mary is thinking about streamlining the production process so that individuals would be responsible for only one task. She believes that if production would increase, she could sell her products at a lower price and increase revenue. She knows that most bedding products available in the market are very similar in nature and satisfy the same need. However, if she were able to lower prices, this might give her company the competitive advantage that it needs. She would then be able to invest money in differentiating her products by providing unique features, building the brand name, and offering services such as free delivery. She is also considering selling her products on the Internet. Mary knows that her father does not like change very much, but she feels these changes are important for the future of the company. ​ Refer to Home Inspirations. Mary noticed that when sales were up, the economy was in a

product differentiation

Home InspirationsMary works for her father in a family-owned business called Home Inspirations, a bedding company that has been in operation since the 1800s. When her father retires, Mary plans on taking over the business. Mary is aware of many things about the company that she likes, and a few things that she does not. She has particularly noted that when the economy has low unemployment and high total income, sales are great. However, any other time, sales are not so good.Currently, all of the bedding items are created in one place and everyone works on various tasks every day. Mary is thinking about streamlining the production process so that individuals would be responsible for only one task. She believes that if production would increase, she could sell her products at a lower price and increase revenue. She knows that most bedding products available in the market are very similar in nature and satisfy the same need. However, if she were able to lower prices, this might give her company the competitive advantage that it needs. She would then be able to invest money in differentiating her products by providing unique features, building the brand name, and offering services such as free delivery. She is also considering selling her products on the Internet. Mary knows that her father does not like change very much, but she feels these changes are important for the future of the company. ​ Refer to Home Inspirations. Mary's goal of offering products with unique features and special services is called

It does not pay special state and federal taxes that corporations pay

How might a sole proprietorship have a possible tax advantage?

operational

If Kmart states that it is going to spend $100 million in advertising in the upcoming year to help increase its market share, it is explaining part of its ____ plan.

goal

If on January 1, 2020, Microsoft stated that by 2030 it wants to have a 85 percent share of the U.S. software market, it is stating a(n)

WTO

If the United States and Japan can't settle their trade disputes on their own, they probably should settle them through the

food production

In a socialist economy, key industries owned by the government include all except

high inflation rates

In the early 1980s, Craig Anderson, a corporate finance manager, was faced with which of the following problems?

competition and interaction in the marketplace

In the first three decades of the twentieth century, working conditions were horrible and dangerous, and abuses were common. Most people of the time believed these abuses would be rectified by

lost sight of consumers' needs

In the mid-1970s, American auto manufacturers produced big gas-guzzling cars and tried to sell them to consumers who needed fuel-efficient transportation. This happened because manufacturers

describe what to do in every ethical situation

Intel expects its code of ethics and shared values to provide all of the following benefits except

He was elected by the company's stockholders

Jonathan serves on Foot Locker's board of directors. How did Jonathan get this position?

Call Krystal to inform her of the problem and recommend a reputable repair shop

Kai promised to repair Krystal's car on Thursday. After picking up the necessary part at a junkyard, he discovered he could not do the job after all and that the junkyard would not buy back the part. Krystal does not know about these developments. However, she thinks Kai will be finished with her car sometime today. What should Kai do?

it is less expensive than making their own

Large firms generally buy parts and assemblies from smaller firms because

easy difficult

Lucas has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college. Lucas hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

SCORE

Luis Fisher, a recently retired corporate executive, is becoming restless in his new role and would like to make this transition smoother by participating in the business community in some limited manner. Since Luis is financially secure and primarily interested in some sort of volunteer work, he should consider becoming involved with which of the following SBA programs?

reverse discrimination

Manna's Coffee ​ Eun-Sang is a highly respected person within her community. She is Asian in a largely Caucasian-populated area. Since Eun-Sang was looking for a new job, she went to a new company in the area called Manna's Coffee, where she applied for a position. After the interview, Eun-Sang felt confident that she would be hired because of her qualifications. However, she did not get a call back. Initially, Eun did not think twice about it, but she felt differently when she visited the same coffee store later to purchase something for a friend. The company had hired an inexperienced Caucasian male with a history of unemployment. At this point, Eun-Sang was quite aggravated, but she left the issue alone.She ended up asking an associate for an espresso machine. The employee informed Eun-Sang where the machine was located and retrieved it for her. Eun-Sang asked if there were any other espresso machines of higher quality. When the associate said no, Eun-Sang purchased the item and left. After she gave the gift to her friend, she noticed a much better quality espresso machine that someone else had given her. Eun-Sang asked where they had purchased it, and they responded, "Manna's Coffee." ​ Refer to Manna's Coffee. If Eun-Sang were Caucasian and the company employees were mostly Asian, the way she was treated would be referred to as

social responsibility

Mark Zuckerberg's Internet.org program that helps bring Internet access to underserved communities in various parts of the world is an example of

closed corporation

Mars, Inc., maker of M&Ms and other candy, is 100 percent owned by the Mars family and is therefore referred to as a(n)

Success will cause another outlet to be opened nearby

Mc-Queen Chicken ​ Lenny decided to open a local franchise of the well-known Mc-Queen Chicken, a fast-food restaurant. Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages. He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant. Refer to Mc-Queen Chicken. Which of the following would not be an advantage of a franchise?

sole proprietorship

Michelle wants to start a business, but she is unsure of the legal form best for her. Short of cash, she has decided to take the form that is the least expensive and most flexible in terms of decision making and implementation. Which would you recommend?

licensing

MillerCoors allows a Canadian firm to use its name, formula, and brands in return for a royalty. This is known as

similar but not identical products are available

Monopolistic competition is a market situation in which

increases in productivity for the past two hundred years

New ways to do a job with less effort and at lower cost is the basic principle characterizing the

sole proprietorship

Sandy is tired of her boss as well as corporate America in general. She decides she would like to start a business where no one tells her what to do, and she can always make the decisions. The best form of business for Sandy is a(n)

ethical

The Johnson Spring Coal Mine recently discovered that the mine was contaminating the local drinking water. Cleaning up the mine and the surrounding areas would probably bankrupt the mine, causing the loss of hundreds of local jobs, but doing nothing would endanger the health of the community. The mine faces a serious ____ decision.

European union

One example of an economic community is the organization started by France, Germany, Belgium, Italy, the Netherlands, and Luxembourg. This organization is known as the

four basic functions in the management process

Planning, organizing, leading and motivating, and controlling make up the

service distribution

Price Waterhouse, a large accounting firm, would be most properly classified in the ____ industry, whereas a grocery store such as Kroger would be included in the ____ industry.

financial

Revenues, proceeds from stock sales, and loans from banks are ____ resources for Macy's.

ethical this is just a part of doing business because credit history is an important indicator of future payments

Robert Mullins is applying for a mortgage to purchase his first home. His credit rating is mediocre due to several late payments on his credit cards and car loan. He is upset because his friend Mark was offered an interest rate 3 percent less than what Robert was offered by the same mortgage company. This mortgage company's actions were

market economy

Satellite CommunicationsSteven worked for Satellite Communications for twenty years. In the time that he worked there, he learned a lot about the company and how it operated. The company met its sales and revenue goals every year. However, most of the employees had similar educational and cultural backgrounds. He believed that the company could do much better if it cultivated an environment that promoted many different ideas. Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year. Steven felt that the most important goal should be to satisfy customers. He believed financial success would result from focusing on customers.After a lot of consideration, Steven decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base. He was happy to have this opportunity because it was a dream that he had always had. He had always wanted to make his own decisions about what his company would produce and how. The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success. ​ Refer to Satellite Communications. Steven is operating in a ____ because he has the opportunity to decide what to produce.

the European Union

Several European countries have banded together to reduce the trade barriers between them and encourage trading among themselves. This is known as

protective tariff

Suppose France imposes a tax on agricultural products from the United States to help its own farmers. This describes a(n)

make the corporate culture encourage more ethical behavior

Suppose a manager at the Post-it Brand has recently become aware that employees are taking office supplies home and taking longer coffee and lunch breaks than the personnel policy allows. The manager finds these are widespread practices and wants to solve the problem. The best way to do this would be to

makes the china more attractive to foreign purchasers

Suppose a set of English bone china costing £1,000 costs $3,000 in the United States. After devaluation, the set of china costs $1,000. This change

Most favored nation status

Suppose the country of Peru wanted to join GATT and thus be treated the same as other GATT members. What GATT principle is Peru interested in receiving?

organizational relationships

Taking credit for others' ideas or work or not meeting one's commitments in a mutual agreement are ethical issues concerning

command

Tim Hughes works at an institutional bakery and is paid a wage dictated by the government. He does not like his job but is not allowed other options. Tim must purchase necessities for his family at fixed prices. The country Tim lives in can be described as a ____ economy.

500

To qualify as a small business, a manufacturing plant can employ no more than ____ people.

domestic

Walmart is incorporated in Arkansas, the state of its origins and headquarters. Within Arkansas, Walmart is classified as a(n) ____ corporation.

Opportunity individual factors social factors

What are the three sets of factors that influence the standards of behavior in an organization?

She should consider alternative sources of financing because banks provide only about one fourth of the total capital to small businesses

Your friend, Linda, started a graphic design firm about a year ago. The business has done well, but it needs a lot more equipment, computers, and employees to continue expanding. Linda does not see any problem because she thinks she can easily get all the money she will need from her local bank. What advice might you give her?