Business 1310 MIDTERM
Stephen is a very efficient and driven manager who makes all the decisions himself. He comes across as a very assertive person who often directs his employees on what needs to be done. To motivate his employees, he mostly uses monetary bonuses as rewards. In this scenario, Stephen can be regarded as a(n) _____ leader. A. autocratic B. free-rein C. democratic D. participative E. disengaged
A
The country of Maldova levies a tax on goods brought into the country from foreign nations. What is this tax called? A. import tariff B. value added tax C. quota D. voluntary export restraints E. exchange rate
A
Thetasia barters the surplus coffee beans it grows for other agricultural products grown in the neighboring country of Gibria. There is no exchange of currency between these countries. The type of business arrangement between the two countries can be regarded as a(n) A. countertrade arrangement. B. cartel arrangement. C. embargo. D. dumping arrangement. E. franchise.
A
United Nabvia and Fernsland, two neighboring nations, have some political differences. Thus, United Nabvia has banned the import of wine from Fernsland. This is an example of a(n) A. embargo. B. quota. C. subsidy. D. tariff. E. import duty.
A
Marah has taught dance at large dance studios for years, but now, she wants to start her own small dance studio. All of the following are challenges she may face EXCEPT A. being underfunded. B. poor site selection. C. inability to adapt to changing market demands. D. not understanding legal and ethical responsibilities. E. pricing mistakes.
C
People's Planet is a nonprofit organization that helps people in need to find jobs and housing. Which of the following statements is likely to be true of this nonprofit organization? A. This firm is a business because it creates jobs. B. This firm supports businesses through donations from employees. C. This firm may engage in management activities to help reach its goals. D. This firm does not engage in fund raising as its aim is not to generate profits. E. This firm does not have a management structure like that of for-profit organizations.
C
Selling a corporation's stock in public markets for the first time is called A. leveraged buyout. B. vertical integration. C. initial public offering. D. seasoned equity offering. E. stock depletion.
C
The top management of a company is most likely to be involved in A. selling and promoting products and services to the final consumers. B. supervising workers and the daily operations of an organization. C. making decisions about moving into foreign markets. D. implementing the plans established by middle management. E. supervising the work done by front-line managers to assess their performance.
C
Unlike the United States, most countries across the globe rely on the _____ to measure units. A. imperial unit system B. Planck unit system C. metric system D. barter system E. Stoney unit system
C
Walter Snacks, an international fast food chain, is facing tough competition in foreign markets. Any decision such as introducing a new product or service, dropping an existing product line, or changing promotional strategies needs to be approved by the top managers in the company's headquarters. This takes a lot of time to implement decisions, and as a result, the company is unable to effectively respond to changes and problems on a regional scale. Which of the following causes can be attributed to the problems faced by Walter Snacks? A. product departmentalization B. undercapitalization C. overcentralization D. wide span of control E. employee empowerment
C
A _____ is a form of business ownership that can be subjected to double taxation. A. sole proprietorship B. corporation C. partnership D. limited liability company E. cooperative
B
A pattern of relationships and accountability between a superior and his or her subordinates is established by the process of A. job rotation. B. delegation of authority. C. outsourcing. D. centralization. E. product development.
B
A tall organization typically has A. a wide span of management. B. many layers of management. C. a decentralized structure. D. lower administrative costs than a flat organization. E. less managers than a flat organization.
B
According to Adam Smith, competition fosters efficiency because A. the government regulates the prices of goods and services. B. producers have to offer the best products at reasonable prices. C. a decreased supply of goods and services depresses prices. D. buyers will have a limited choice of goods and services. E. businesses can set prices according to their will.
B
Camelia is a capitalist country in which competition, supply, and demand determine which goods and services are produced, how they are produced, and how they are distributed. Which of the following statements is likely true of this capitalist economy? A. Most businesses are owned and operated by the government. B. Individuals are free to keep profits and use them as they wish. C. Consumers have a limited choice of goods and services. D. Individuals have little choice in choosing a career. E. All decisions regarding production are made by the government.
B
Karen's small roofing company aims to fulfill the economic foundation of business. What must her company do to achieve this goal? A. be a good corporate citizen B. earn profits C. do what is right D. obey the law E. save the environment
B
Five dog breeders in Kentucky decided to work together to become more profitable and save money. Together, they can buy dog food, treats, toys, beds, leashes, and collars in bulk at a lower price. They also have a deal with a local veterinarian to charge them lower prices for check-ups and routine treatments. These dog breeders have formed a A. sole proprietorship. B. joint venture. C. corporation. D. cooperative. E. general partnership.
D
Carlos owns a Taco Bell franchise. Over the years, he has become concerned that there may be too many Taco Bell restaurants in his area. What shortcoming of franchising does this explain? A. profit sharing with the franchiser B. limited product line C. restrictions on purchasing D. possible market saturation E. less freedom in business decisions
D
EduTech realizes that it cannot carry out its goals without employees. As a result, it is trying to improve its employee relations. Which of the following is one way it might do this? A. maintaining proper accounting procedures B. providing satisfying, safe products C. providing complete information about its products D. providing a safe workplace E. providing a variety of goods and services at competitive prices
D
EduTech, a small educational technology company, contributes to the community it operates in and toward the quality of life by donating its products to families that can't afford them. This fulfills its A. economic responsibility. B. legal responsibility. C. ethical responsibility. D. voluntary responsibility. E. political responsibility.
D
Elvin, a manager at Humble Bee Cereals, is faced with the problem of declining sales. After a thorough examination of the situation, he comes up with two courses of action. He contemplates whether to improve the packaging or offer price discounts to boost the sales of the cereals. What step of decision making does this scenario describe? A. monitoring the consequences B. conducting environmental analysis C. contingency planning D. analyzing options E. implementing the decision
D
Every PowerGrains Cereals box has a toll-free number printed on the side. This allows buyers to contact the manufacturer and make suggestions or register complaints. This is an initiative toward A. abolishing bribery. B. regulating insider trading. C. supporting whistleblowers. D. promoting consumerism. E. eliminating plagiarism.
D
The Organization of Petroleum Exporting Countries (OPEC) consists of 12 member countries across three continents. It aims to increase the price of petroleum throughout the world and to maintain high prices. This organization is an example of a A. customs union. B. trade bloc. C. franchise. D. cartel. E. conglomerate.
D
The Wok has been consistently ranked as the most popular fast food restaurant in the city, thanks to the excellent culinary skills of its well-trained staff and its remarkable customer service. The competitive advantage of The Wok is due to its A. natural resources. B. market resources. C. capital resources. D. human resources. E. financial resources.
D
An engineer employed by a government contractor realizes that her employer is using low-quality materials in most construction projects, as against what was promised. She reports this to the concerned government regulatory agency. This is an example of A. plagiarism. B. insider trading. C. social loafing. D. corporate espionage. E. whistleblowing.
E
At Fitness Factory, the head of the personal training department meets with a lower-level manager from the advertising department to determine the best way to sell the gym's new personal training membership package. All communications between them would be considered _____ communication. A. asynchronous B. grapevine C. lateral D. horizontal E. diagonal
E
Cara owns a small office supply store. In her community, she must compete with Staples and Office Depot. What is one difference between Cara's small store and these larger stores? A. Cara's store requires more money to start and maintain than the larger stores. B. Cara does not need to multitask, while the owners of the larger stores do. C. Decisions can be made and executed more quickly in the larger stores than in Cara's store. D. Unlike Cara's store, the larger stores are not equipped to focus on mass markets or wide market segments. E. Cara's store can develop and introduce a new product in a much shorter time than the larger stores.
E
EduTech wants to expand into international business. The company wants to maintain control of its products and services, and thus, it opts to buy its own overseas facilities. What method for entering international business does this exemplify? A. A strategic alliance B. Outsourcing C. Franchising D. Exporting E. Direct investment
E
Eliza, a manager at True Omega Inc., is faced with the problem of a drastic drop in the performance of employees. She needs to come up with a course of action that will boost employee productivity. She conducts employee surveys and holds discussions with other managers to create a list of possible courses of action for improving employee productivity. In this scenario, Eliza is _____ as a part of the decision-making process. A. monitoring consequences B. recognizing the situation C. making contingency plans D. implementing the best option E. developing options
E
From the perspective of the United States, the process of foreign companies transferring tasks and jobs to U.S. companies is called A. importing. B. factoring. C. benchmarking. D. dumping. E. insourcing.
E
If an organization has to coordinate different projects at the same time, the most effective form of organizational structure to employ would be a _____ structure. A. functional B. line C. line-and-staff D. traditional E. matrix
E
Which of the following statements is true of project teams? A. Their membership is mostly based on organizational position and hierarchy. B. They are permanent. C. They only deal with specific quality, productivity, or service problems. D. They do not run their operation. E. Their membership is likely to be composed of people from different functional areas.
E
_____ are especially popular in situations that call for large investments and can even take place between businesses and governments. A. Sole proprietorships B. Cooperatives C. General partnerships D. Joint ventures E. Private corporations
J
A pharmacist stocks only one particular brand of acetaminophen, a popular pain-relief drug. Even if his customers prefer other popular brands selling the same drug, he insists they buy this brand. This is a violation of consumers' right to A. choose. B. be heard. C. be informed. D. safety. E. be providers.
A
At Alba Inc., subordinates send efficiency and quality reports to their respective managers at the end of each week. Which of the following patterns of formal communication does this best illustrate? A. upward communication B. horizontal communication C. diagonal communication D. parallel communication E. downward communication
A
At Phil's Pharmaceutical, the vice president of marketing wants to plan and coordinate the launch of a new drug with the vice president of research and development. Any related communication between them will be referred to as _____ communication. A. horizontal B. upward C. downward D. diagonal E. asynchronous
A
Camelia has a pure capitalist system, while Ambrosa has a modified capitalist system. How do these systems differ from each other? A. Camelia's government doesn't intervene in its economic decisions, while Ambrosa's government intervenes and regulates business to some extent. B. Ambrosa's government doesn't intervene in its economic decisions, while Camelia's government intervenes and regulates business to some extent. C. Camelia's citizens cannot keep profits, while Ambrosa's citizens can. D. Ambrosa's government limits the available types of goods and services, while Camelia's government offers more variety of goods and services. E. Camelia's government provides loans and takes ownership positions in struggling businesses, while Ambrosa's government leaves its struggling businesses to fend for themselves.
A
Cash It is a check cashing company that charges its customers fees to cash their checks quickly and without needing to have a bank account. This company's sole objective is to maximize profits. As a result A. it is not likely to consider its social responsibility. B. its activities are illegal. C. it is likely to fulfill its voluntary responsibilities. D. it is a good corporate citizen. E. it is likely to have detailed ethics codes.
A
Comparing present performance with standards or objectives of an organization is closely associated with the management function of A. controlling. B. staffing. C. directing. D. planning. E. downsizing.
A
Critics of supply and demand say the system A. does not distribute resources equally. B. does not allow the poor to get rich. C. prevents sellers from selling at lower prices. D. helps inefficient producers to succeed. E. gives the government complete control over production.
A
Dan, Amy, Carlos, and Stefan work at a technology company. Together, they form a team that is responsible for developing all the company's new applications. Their boss gave them the authority to make and implement all decisions related to these programs, so they have the flexibility to change rapidly to meet the competition and respond to customer needs. What kind of team does this scenario describe? A. a self-directed work team B. a quality-assurance team C. a task force D. a committee E. a cross-functional team
A
In an insurance company, Marissa, the senior manager of the life insurance division, casually discusses a new car on the market with her friend Devin, who is the senior manager of the health insurance division. This is an example of _____ communication. A. informal B. upward C. downward D. asynchronous E. diagonal
A
In the context of business, which of the following statements is true of resources? A. Being socially responsible is considered a resource for a firm. B. Good reputation for quality services does not constitute a resource. C. Human resources refer to the products that are made by people. D. The funds used to acquire land can be classified as natural resources. E. Intangible resources are those that do not provide a competitive advantage.
A
Jamal is a lower-level manager at a men's clothing store in a mall. Jamal's boss trusts him to find new ways to attract customers and compete with other clothing stores in the mall. Because Jamal often walks around the store and the mall, he has developed a good understanding of the store's customers and thus, he is able to react quickly to their changing needs. What type of organization is Jamal's store? A. decentralized organization B. centralized organization C. competitive organization D. delegation organization E. specialized organization
A
Jen is a sales manager for a large car dealership. She motivates her salespeople, provides leadership, teaches her sales teams to be responsive to customer needs, manages organizational issues, and evaluates sales results. These responsibilities are part of the _____ function of management. A. directing B. downsizing C. centralizing D. controlling E. planning
A
Jessica teaches business studies in a reputed college. As part of the curriculum, she needs to demonstrate to her students the steps involved in starting a business. She plans to introduce the steps in a sequential order, and it includes asking her students to present their views and provide examples with each step. As the first step of the learning activity, which of the following should Jessica ask the students to do? A. Come up with some kind of general idea for creating a new business. B. Devise a strategy to guide planning and development in a business. C. Decide the form of ownership each student would select for his or her new business. D. Assess the financial resources needed to start a new business. E. Decide whether to acquire an existing business, start a new one, or buy a franchise.
A
Joanna is a marketer for a large sporting goods store. She conducts market research and makes recommendations for new products based on her research. This is an important part of her job because the focus of all marketing activities is to A. satisfy customers. B. ensure operating efficiency. C. facilitate manufacturing. D. enable healthy competition. E. manage the tasks involved in staffing.
A
Jordan is a manager of a clock and watch company. He does not specialize in one particular function but manages the entire business. What type of manager is Jordan? A. administrative manager B. financial manager C. production manager D. marketing manager E. human resources manager
A
Mei owns a successful Thai restaurant. She has heard that a competing Thai restaurant in a neighboring town is going out of business, and she wants to buy it to expand her restaurant business. To do so, she has made an agreement with a financial institution to get $100,000 on demand. What is this type of agreement called? A. a line of credit B. a trade credit C. a mutual fund D. a mortgage E. a dividend
A
Mike and Crystal are salespeople who work for the same jewelry company. They communicate with each other, share a common identity, and have a common goal, but they are individually accountable for their work. Mike and Crystal could be part of a A. work group. B. self-directed work team. C. project team. D. committee. E. cooperative.
A
Pals with Paws enforces its ethical codes and policies by rewarding ethical behavior and punishing misconduct. Each month, the most ethical employee receives a bonus. On the other hand, any employee who is found to be behaving unethically is fired immediately. What effect do these rewards and punishments have on employees? A. They increase the acceptance of ethical standards by employees. B. They decrease the acceptance of ethical standards by employees. C. They challenge employees to find ways to break the rules without getting caught. D. They cause employees to leave the company. E. They encourage employees to tattle on their co-workers.
A
Pam makes homemade jam. She has found that if she sells four jars of jam for $20 and prices each jar at $6, she sells more than if she simply prices each jar at $6. This is because consumers A. don't want to have to break a $20. will buy more of an item as the price falls to save money. B. want to support local business. C. prefer to buy items in packs of four. D. prefer to buy some for themselves and some for their E. family and friends.
A
Shoe Emporium, a large shoe corporation, wants to take over Head over Heels, a small, specialty shoe store that serves a niche market in its community. Head over Heels does not want to be taken over because it wants to protect its employees and customers from the changes Shoe Emporium would make to the company. To head off this hostile takeover attempt, Head over Heels allows its stockholders to buy more shares of stock at prices lower than the current market value. What technique is Head over Heels using to avoid being taken over? A. poison pill B. shark repellant C. white knight D. tender offer E. leveraged buyout
A
When Russell turned 21-years-old, his father gave him a management position at the family's hardware store. He explained to Russell that his family had owned and operated this store for five generations, and that someday, he would be able to pass it on to his children. He made Russell promise that he would never sell the company or any of its stock or hire managers from outside the family. This business is a A. private corporation. B. public corporation. C. sole proprietorship. D. limited partnership. E. cooperative.
A
Which of the following is a reason why a small business may fail? A. managerial inexperience B. inability to adapt to changing market demands C. the need to spend a lot of money on wages and salaries, rent, utilities, and other expenses D. not fitting in the "corporate mold" E. focusing on narrow niches
A
Which of the following is the difference between a foreign corporation and an alien corporation? A. A foreign corporation does business outside the state in which it is chartered, whereas an alien corporation does business outside the nation in which it is incorporated. B. A foreign corporation does business outside the nation in which it is incorporated, whereas an alien corporation does business outside the state in which it is chartered. C. A foreign corporation does business outside the nation in which it is incorporated, whereas an alien corporation does business in the state where it is chartered. D. A foreign corporation does business in the state where it is chartered, whereas an alien corporation does business outside the nation in which it is incorporated. E. All foreign corporations are privately owned, whereas all alien corporations are publicly owned.
A
Which of the following is true of the four dimensions of social responsibility? A. Legal and economic concerns have long been acknowledged in business, but voluntary and ethical issues are more recent concerns. B. Organizations can fulfill their legal responsibilities only after they have fulfilled their voluntary responsibilities. C. Political responsibilities of a firm are additional activities that may not be required but which promote human welfare or goodwill. D. Complying with the law is the final step in the four stages of social responsibility. E. Being profitable is not a social responsibility of businesses.
A
Carla is a manager at a public digital publishing company. She determines that in addition to publishing test banks, a learning management system, and other standard instructor materials, her company should also develop content for mobile applications, so students can take their study materials with them everywhere they go. Carla has the authority to add this new line of products, but she must stay accountable to the company's board of directors and stakeholders. What level of management does Carla represent? A. middle management B. top management C. first-line management D. product management E. operations management
B
Common stockholders are usually entitled to _____ per share of common stock of a corporation, and they elect its board of directors. A. five votes B. one vote C. two votes D. three votes E. four votes
B
Craig is trying to strike up business with GloboFlex, a fitness equipment company from another country. While he is presenting his innovative fitness product, he asks the crowd, "wouldn't you like a product like this?" As he asks the question, he points at a few of the people in the crowd. Later that day, Craig's contact at GloboFlex calls to tell him that the company has decided not to purchase his product. Which of the following most likely caused this response? A. GloboFlex considered his question and decided his product doesn't suit the company. B. Craig's audience might have thought his pointing was rude. C. GloboFlex decided to produce the product itself instead of working with Craig. D. GloboFlex's country placed an embargo on Craig. E. GloboFlex's country won't allow the company to import Craig's product.
B
Diego, Martin, Samantha, and Keagan all work together at an accounting firm. They create collective work products and hold themselves mutually accountable. They share their knowledge and skills with each other and work together to accomplish the firm's goals. Thus, they are likely part of a A. work group. B. work team. C. committee. D. task force. E. quality-assurance team.
B
Emily was born in 1992. When she graduated from college, she got a job working for a small publishing company. Although the salary isn't what she expected, she likes that the company favors advancement, recognition, and improved capabilities. She also likes that her company allows her to work remotely two days per week. What generation does Emily belong to? A. baby boomer B. millennial C. Generation X D. Generation Z E. centennial
B
Funds for Families is a national charity that provides grocery vouchers, mortgage assistance, and college sponsorships to needy families in the communities it serves. To fund its programs, it hosts community events to solicit donations from individuals and companies and applies for government grants. Funds for Families is a A. private corporation. B. nonprofit corporation. C. sole proprietorship. D. quasi-public corporation. E. cooperative.
B
How can ethical behavior be improved in business? A. by expecting employees to base decisions solely on how their peers and superiors behave B. by having established ethics policies and standards C. by having overly aggressive financial or business objectives D. by isolating top management from business ethics E. by restricting the participation of lower-level employees in the development of a code of ethics
B
Huechi Inc., a mobile phone manufacturer, purchases its direct competitor, OnePhone Inc., by buying most of its stocks. In this scenario, Huechi is involved in a(n) A. equity swap. B. acquisition. C. vertical merger. D. leveraged buyout. E. franchise.
B
Ideally, managers should consider social responsibility A. on a weekly basis. B. on a daily basis. C. at annual general meetings only. D. only when there is an emergency. E. intermittently.
B
In terms of organizational structure, which of the following statements is true of the multidivisional structure? A. It makes it easy to realize the economies of scale that result from grouping functions together. B. It allows delegation of decision-making authority. C. It curbs innovation and effective decision making within an organization. D. It prevents duplication of work. E. It creates two or more intersecting lines of authority by setting up teams from different departments.
B
In the context of management, which of the following statements is true about the types of leadership? A. Autocratic leaders freely involve their employees in decisions and let them work without any interference. B. The free-rein style of leadership can be a powerful motivator because it demonstrates a great deal of trust and confidence in an employee. C. The free-rein style of leadership is generally best for stimulating unskilled, unmotivated employees. D. Highly skilled, trained, and motivated employees may respond most effectively to an autocratic leadership style. E. Democratic leaders generally use their authority and economic rewards to get employees to comply with their directions.
B
Janet, a manager at HollyOak Systems, is known for her passionate and people-friendly ways. Janet knows all her employees well and trusts them to do the right thing for the company. Any new project starts with an initial briefing from her, after which the teams are given complete freedom to determine the tasks and timeline for that project. From time to time, Janet gives the teams feedback about the progress of their projects. In this scenario, Janet can be regarded as a(n) _____ leader. A. autocratic B. free-rein C. bureaucratic D. authoritarian E. disengaged
B
Jonathan wants to start his own bicycle repair shop using equity financing. Which of the following is a source of equity financing that he can use? A. government loans B. investors who are ready to buy stock in his business C. a line of credit from a bank D. a mortgage from a bank by providing some personal property as collateral E. trade credit from suppliers
B
Karan is a software engineer who starts his own IT consulting firm. His friend, Catalina, is the owner of a store that sells office supplies. Karan designs a new inventory management software for Catalina's store in exchange for the necessary office supplies and equipment. Which of the following sources of business funding does this scenario best illustrate? A. mortgaging B. bartering C. factoring D. liquidating E. equity financing
B
Learning University wants to create its own learning management system, so all its course materials will be available to its students in one place. To set up this new system, the university created project teams with members from different departments. While working on this project, these team members are responsible to both functional and project managers. What type of structure does this scenario describe? A. line structure B. matrix structure C. multidivisional structure D. line-and-staff structure E. dual structure
B
Rachel started a chain of salons using the money accumulated in her life insurance policy. Which of the following sources of capital has Rachel used to start her business? A. debt financing B. equity financing C. venture capital D. crowdsourcing E. initial public offering
B
When Switzerland let the value of the Swiss franc rise by 30 percent against the euro in 2015, what was the result? A. It decreased the cost of travel to Switzerland. B. It increased the cost of exports. C. It increased the cost of imports. D. It decreased the cost of exports. E. It encouraged people to buy Swiss products with other currencies.
B
Which of the following is an advantage of mergers? A. Mergers allow managers to focus on managing effectively and profitably. B. Mergers help companies meet foreign competition. C. Mergers prevent companies from taking on heavy debt burdens. D. Mergers boost employee morale and productivity. E. Mergers improve the quality of the companies' products.
B
Which of the following is true of the North American Free Trade Agreement (NAFTA)? A. It makes it tougher for businesses in the United States to invest in Mexico. B. It provides protection for intellectual property. C. It complicates the country-of-origin rules. D. It has virtually eliminated tariffs on goods traded between the United States and Cuba. E. It enforces trade restrictions on agricultural goods.
B
Which of the following is true of the United States, Great Britain, and Japan? A. They are less-developed countries. B. They are industrialized nations. C. They are third world countries. D. They have relatively low per capita incomes. E. They are members of the European Union.
B
Which of the following organizations was created in 1995 by the Uruguay Round and is based in Geneva, Switzerland? A. The Federal Trade Commission B. The World Trade Organization C. The North American Free Trade Association D. The European Union E. The Asia-Pacific Economic Cooperation
B
Which of the following statements is true of a free-enterprise system? A. Individuals do not have the right to own property. B. Individuals have the right to choose what career to pursue. C. Businesses succeed or fail on the basis of central government planning. D. Businesses are independent of market demand and competition. E. Businesses do not have the right to earn profit.
B
Which of the following statements is true of the levels of management in an organization? A. Lower-level managers spend most of their time planning within an organization. B. Middle managers' responsibility is more narrowly focused than that of top managers. Correct C. First-line managers take care of the overall strategic direction of a company and play a key role in representing the company to stakeholders. D. Most people get their first managerial experience as top managers of a company. E. Foreman, supervisor, and office service manager are some of the common titles for top managers within an organization.
B
Zen Nxt, an innovative tablet and smartphone manufacturer, launches a new line of smartphones with advanced processors, high definition displays, and other added features. The company is willing to sell the smartphones at $150 each, and the consumers are also willing to buy these smartphones at that price. In this scenario, $150 is the _____ of the new smartphones made by Zen Nxt. A. bundled price B. equilibrium price C. discount price D. competitive price E. maximum retail price
B
hen Chloe was younger, she thought about the environment solely in terms of how its resources could improve her life and satisfy her needs for food, shelter, transportation, and recreation. However, as she ages, she sees the costs that come with her higher standard of living. Now, she must make some changes to her company to help sustain the environment. What is one thing she can do? A. She can develop technological advancements to use more environmental resources with more efficiency. B. She can eliminate wasteful practices. C. She can greenwash her products, services, and practices. D. She can use low-cost, readily available gasoline and heating oil. E. She can prevent authorities from building additional waste-disposal facilities on her company's property.
B
o avoid the difficulties involved in starting a business from scratch, Sana decides to obtain the rights to operate an outlet of a popular spa and salon chain. This business arrangement requires Sana to pay an annual fee to the owner of the chain. In this scenario, Sana is a(n) A. trade creditor. B. franchisee. C. category captain. D. intrapreneur. E. venture capitalist.
B
A(n) _____ develops and administers the activities involved in transforming resources into goods, services, and ideas ready for the marketplace. A. human resources manager B. information technology manager C. production and operations manager D. marketing manager E. financial manager
C
Chic Apparel Company sells its products in foreign markets at prices lower than the production cost. This practice is referred to as A. price ceiling. B. price skimming. C. dumping. D. factoring. E. benchmarking.
C
Danielle wants to start her own spin studio using debt financing. Which of the following is a source of debt financing she can use? A. reinvesting a small portion of profits back into her business B. using personal assets like savings in a bank to start her business C. obtaining a mortgage by providing some personal property as collateral Correct D. selling stocks of her company to friends and relatives E. selling ownership interest or stock to people interested in funding her business idea
C
Gian and Greg want to acquire Custom Craft, a wood furniture business. However, they don't have the funds, so they borrow money from the bank, using Custom Craft's assets to guarantee repayment of the loan. What kind of business transaction is this? A. a horizontal merger B. a vertical merger C. a leveraged buyout D. a conglomerate merger E. a poison pill
C
Gina and Celine want to start a business together in the women's apparel and accessories industry. While Gina thinks that they should hire designers and establish their own clothing brand from scratch, Celine believes that it will be easier to start the business by obtaining the franchise rights from an already established designer brand called Nava. Which of the following arguments made by Celine will be valid in convincing Gina to accept the idea of starting a business by obtaining the franchise rights of Nava? A. They will have greater freedom to make business-related decisions if they obtain the franchise. B. They will have greater flexibility to add or delete a product from the existing line if they obtain the franchise. C. They can effectively leverage the national and local advertising programs sponsored by the franchiser. D. They can earn good revenues without having to pay any fee or share profits with the franchiser. E. They can commercialize their creativity and ideas without facing any restrictions from the franchiser.
C
GloboTech wants to establish a code of ethics. What should GloboTech's code of ethics do? A. describe what an employee expects of his or her company B. take every situation into account C. provide guidelines to help employees achieve organizational objectives D. advise employees to base their decisions on how their peers and supervisors behave E. eliminate risks, so employees don't have to address them
C
If 1 euro equals to 1.26 United States dollars, the ratio between these two currencies can be regarded as their A. trade balance. B. import rate. C. exchange rate. D. balance of payments. E. export rate.
C
In New Hampshire, most general stores sell maple syrup and other maple products. Since no one business sells enough maple products to influence the price, this is an example of A. monopolistic competition. B. an oligopoly. C. pure competition. D. a monopoly. E. modified competition.
C
In Thelisia, the government owns and operates the postal service, utilities, transportation, and health care systems. While individuals and small businesses provide other goods and services, Thelisia's citizens are dependent on the government for many goods and services that are essential to their daily lives. Thelisia is an example of a ______ country. A. capitalist B. communist C. socialist D. free enterprise E. mixed economy
C
In international business, an advantage of trading through an export agent instead of directly is that the company does not have to deal with A. a middleman. B. rising labor prices. C. foreign currencies. D. the problem of providing discounts. E. the procurement of resources.
C
Julia bought a Dunkin' Donuts franchise. She has made a financial commitment and agreed to conduct business in accordance with Dunkin' Donuts's standard of operations. In exchange, she can expect to receive all of the following from Dunkin' Donuts EXCEPT A. building specifications and designs. B. site recommendations. C. free equipment and training. D. management and accounting support. E. immediate name recognition.
C
Maldova is trying to protect its automobile industry by limiting the number of cars that can be imported. What should its government establish to achieve this goal? A. a subsidy B. an embargo C. a quota D. a price ceiling E. a trade surplus
C
Malyia's major textile factory just closed because it wasn't making enough money to sustain itself. As a result, hundreds of workers lost their jobs. In addition to impacting the people who are now unemployed, what impact does this factory closure have on other businesses in the area? A. They will have more sales because unemployed people have more time to shop. B. They will have people knocking down their doors looking for employment. C. They will have fewer sales because unemployed people can't afford their products and services. Correct D. They will go out of business too because the factory supplied them with the materials for their products. E. They will struggle because the newly unemployed people will move to other areas looking for jobs.
C
Manyland is a socialist country that professes egalitarianism. What does this mean, in practice? A. Its government strictly regulates prices. B. It distributes social services to the poor only. C. It equally distributes income and social services. D. It distributes social services based on economic status. E. It produces goods based on competition, supply, and demand.
C
Which of the following is an example of a global strategy? A. McDonald's in Vietnam offering McPork sandwiches specifically for Vietnam consumers B. Consumer electronics companies developing different marketing strategies for different foreign markets C. Starbucks standardizing its products across the United States and other countries D. General Motors creating electric vehicles specifically for the Chinese market E. International fast food chains refraining from using pork or beef only in the Indian market
C
Which of the following is an implication of employee-owner separation in a corporation? A. Employees are not answerable to the owners of a business. B. Employees are not remunerated by the owners of a business. C. Employees are not stockholders of the company for which they work. D. Employees are exempted from paying taxes for working in a corporation. E. Employees cannot make decisions on behalf of the owners of a business.
C
Which of the following is an implication of employee-owner separation in a corporation? A. Employees are not answerable to the owners of a business. B. Employees are not remunerated by the owners of a business. C. Employees are not stockholders of the company for which they work. D. Employees are exempted from paying taxes for working in a corporation. E. Employees cannot make decisions on behalf of the owners of a business.
C
Which of the following is true of analytical skills? A. Analytical skills are required in situations where the solution is often clear. B. Questions that require analytical skills are best avoided in job interviews. C. Resolving ethical issues often requires analytical skills. D. Analytical skills are more important for first-line managers than top-level managers. E. Weighing different options before taking action shows a person's lack of analytical skills.
C
Which of the following statements is true about employee empowerment? A. It completely eliminates the role of managers in an organization. B. It promotes an autocratic style of leadership. C. It involves supporting an employee's ability to provide input and feedback on company decisions. D. It fails to foster decision-making skills among employees. E. It develops a sense of isolation among employees when it comes to the performance of the firm.
C
Which of the following statements is true of communist economies? A. In practice, they have a high standard of living. B. In practice, they seldom face shortages in consumer goods. C. On paper, they appear to be efficient and equitable. D. In theory, they produce a huge gap between rich and poor. E. In practice, they regulate prices of goods based on supply and demand.
C
_____ are responsible for implementing the plans established by middle management and directing workers' daily performance on the job. A. Top managers B. Board of directors C. First-line managers D. Preferred stockholders E. Trade creditors
C
__________ are best described as goods or services with both tangible and intangible characteristics that provide satisfaction and benefits. A. Capital reserves B. Liabilities C. Products D.Stakeholders E. Natural resources
C
GL Inc., a firm facing the threat of bankruptcy, did not want to be acquired by Red Phoenix Inc. because it would make drastic changes to the business, laying off employees and changing the nature of its products and processes. Thus, the management of GL Inc. approached Fortium Inc., which was willing to acquire GL Inc. and maintain the company as is. In this scenario, Fortium Inc. is referred to as a A. poison pill. B. shark repellant. C. proxy investor. D. white knight. E. preemptive investor.
D
In an organization, the vice president of marketing directly assigns a task to a production manager. The pattern of formal communication illustrated in this scenario is _____ communication. A. horizontal B. peer C. lateral D. diagonal E. upward
D
Karen quit her job as a marketing executive in a multinational company to start her own small business. She now runs a catering business with less than 25 employees. Which of the following statements is true of Karen's experience as the owner of a new small business? A. Karen experiences lower stress levels compared to her previous job because she doesn't need to worry about changing market demands, competition, and so forth. B. Karen has lesser autonomy and authority in the business compared to her previous job. C. Karen does not have much use for her decision-making skills, which she was required to exhibit quite often in her previous job. D. Karen has to multitask to manage the new business, which involves playing the role of an owner, manager, sales force, clerk, and bookkeeper.
D
Ken wants to buy stock in Chef Master, a large kitchen appliance corporation. He doesn't have time to attend any meetings, and he doesn't have any interest in having a say in how the company is run. However, he does want to receive dividend payments before anyone else. What type of stock should he buy? A. common stock B. limited stock C. independent stock D. preferred stock E. proxy stock
D
Magnesia is a communist country in which the central government determines what goods and services satisfy its citizens' needs, how the goods and services are produced, and how they are distributed. Which of the following statements is likely to be true about Magnesia's economy? A. Magnesia has a high standard of living. B. Magnesia's economic system satisfies Marx's ideal. C. Magnesia has low prices for its goods and services. D. Magnesia has high levels of corruption and little freedom. E. Magnesia gives its consumers a wide choice of goods and services.
D
Mark wanted to start a business along with his friend. He prepared a document, which contained an explanation of the business, an analysis of the competition, and a projection of the business's income and expenses. When he presented this document to a panel of venture capitalists, they were impressed and agreed to fund his project. Which of the following documents did Mark prepare? A. a fund flow statement B. a promissory bill C. a conduct certificate D. a business plan E. a journal ledger
D
Michael is a manager of a landscaping business. During a particularly dry season, he realized that he had the opportunity to increase his sales if he could find a way to ensure that his plants would stay in bloom despite the dry conditions. He brainstormed with his employees and the best two ideas they had were to develop an innovative irrigation system to water the plants from underground and to focus on selling dry-weather plants. He determined that the underground irrigation system would be too expensive for his customers, so he decided to focus on selling dry-weather plants. He found a new supplier of dry-weather plants and had his employees focus on selling them to existing and new customers. What must Michael do to determine if his decision accomplished the desired result? A. recognize and define the decision situation B. develop options to resolve this complicated situation C. analyze the options available to resolve this situation D. monitor the consequences of this decision E. implement this decision
D
Nancy works for a major equine outfitter. As an avid equestrian, she has struggled to find a tall riding boot that can transition from summer to winter. As a result, she developed a riding boot that comes with two removable liners. The winter liner features wool for warmth, while the summer liner features cooling gel to keep the rider's leg cool and dry. Nancy is a(n) A. entrepreneur. B. category captain. C. micropreneur. D. intrapreneur. E. franchisee.
D
Orchid Health Inc. believes that its objectives should not be limited to earning profits only. The company supplies drugs and vaccines to underdeveloped countries at a very low profit margin or sometimes below the cost price. According to the four stages of social responsibility, which of the following is the highest level of responsibility that Orchid Health Inc. is fulfilling? A. economic responsibility B. legal responsibility C. ethical responsibility D. voluntary responsibility E. political responsibility
D
Public corporations must file reports related to stocks and bonds with the A. Financial Accounting Standards Board. B. Federal Trade Commission. C. National Advisory Committee on Accounting Standards. D. Securities and Exchange Commission. Correct E. Warren Commission.
D
Sarah is a manager at a lighting store. She is responsible for planning, pricing, and promoting the store's lamps, lanterns, and lighting fixtures and making them available to customers through distribution. What type of manager is Sarah? A. production manager B. financial manager C. information technology manager D. marketing manager E. human resources manager
D
Steven, an economist, analyzes the quantity of goods or services that businesses are willing to sell at different prices at specific times. In this analysis, he is focusing on A. competition. B. pure competition. C. demand. D. supply. E. equilibrium.
D
The Ethisphere Institute selects an annual list of the world's most ethical companies. All of the following are criteria it uses EXCEPT A. internal systems and ethics/compliance program. B. reputation track record. C. corporate governance. D. innovation that contributes to the company's profitability. E. industry leadership.
D
The developing countries of Thetasia and Malyia have copyright and patent laws that are less strict than those of the United States. As a result, these countries are flooded with counterfeit products. What effect do these counterfeit products have on the companies that produce the products that are being imitated? A. They have no effect. B. They have a negative effect on their reputations, but a positive effect on their sales. C. They have a negative effect on their sales, but a positive effect on their reputations. D. They have a negative effect on their sales and reputations. E. They have a positive effect on their sales and reputations.
D
The owners of MegaMart, a large grocery store chain, are frustrated by the high level of unemployment in the communities they serve. They decide to take a stand and do what they can to help reduce unemployment. What can they do achieve this goal? A. They can create enough jobs to hire all the hardcore unemployed people in their communities. B. They can eliminate unfilled positions for which applicants are not qualified. C. They can train their current employees to make sure they never become unemployed. D. They can donate to programs that provide funding for community businesses. E. They can pressure other companies in their communities to create more jobs.
D
Traders Inc. buys goods in Maldova and sells them to buyers in Thetasia, handling all the consulting, marketing research, advertising, and warehousing activities required to move the products between the two countries. Traders Inc. is a(n) A. export agent. B. import agent. C. countertrader. D. trading company. E. franchise.
D
Which of the following is a difference between quasi-public corporations and nonprofit corporations? A. Quasi-public corporations focus on earning a profit, while nonprofit corporations focus on providing a service. B. Quasi-public corporations are not owned by a government entity, while nonprofit corporations are owned and operated by the federal, state, or local government. C. Quasi-public corporations are funded by donations from individuals and companies, while nonprofit corporations are funded by the government. D. Quasi-public corporations are owned and operated by the federal, state, or local government, while nonprofit corporations are not owned by a government entity. E. Most quasi-public corporations are organized as 501(c)(3) organizations, while nonprofit corporations are not.
D
Which of the following is highlighted in John F. Kennedy's 1962 Consumer Bill Of Rights? A. the right to own property B. the right to sell assets C. the right to minimum prices D. the right to safety E. the right to vote
D
Which of the following statements is true of centralized organizations? A. They seldom make risky decisions. B. They are more likely to have highly skilled low-level managers who are good decision makers. C. They usually require little time to implement their decisions. D. They delegate very little decision-making authority to lower levels. E. They operate in complex, unpredictable environments.
D
_____ are informal channels of communication, separate from management's formal, official communication channels. A. Mission statements B. Policies C. Job descriptions D. Grapevines E. Team meetings
D
_____ will be responsible for maintaining and controlling computer networks within an organization. A. Financial managers B. Human resource managers C. Production managers D. Information technology managers E. Marketing managers
D
Justin and Laura have a business idea that they plan to commercialize. They have approached an independent investor to raise funds for their business. If they can impress the investor with their business idea, the investor will agree to provide the necessary amount of money in return for some ownership share in the company. The independent investor that Justin and Laura are banking on is referred to as a A. debt financier. B. contract manufacturer. C. category captain. D. trade creditor. E. venture capitalist.
E
Kevin is a first-line manager at a day spa. He interacts daily with his employees who run the front desk; perform massages, skin treatments, manicures and pedicures, facials, and waxing services; and keep the spa clean and stocked with snacks and beverages. Kevin spends most of his time A. making strategic decisions. B. creating tactical and operational plans. C. planning and organizing. D. implementing the general guidelines established by top management. E. directing and controlling.
E
Malyia, a small, developing country, struggles to fulfill its citizens' unlimited demand for goods and services with its limited supply of resources. All of the following are issues it must address EXCEPT A. what goods and services are needed. B. how goods and services will be produced. C. how much of each good and service is needed. D. how the goods and services will be distributed. E. how its citizens will use the goods and services it produces.
E
MedSource wants to contribute to the general welfare of the community in which it operates. The best way to exercise its community responsibility is to A. be a profitable business. B. produce items the community needs. C. bring qualified specialists to the community. D. sell shares of the business to community members. E. donate to local and national charities.
E
Nathan leased a small building in his neighborhood and converted it into a hotel. He had assumed that he could run a successful business if he had enough money to get started. However, his business faces seasonal variations in sales. He now finds it difficult to meet the day-to-day expenses of the business. Which of the following problems is Nathan's business facing? A. competition B. lack of startup capital C. bureaucracy D. inability to cope with growth E. undercapitalization
E
Stephanie is a flight attendant on a major airline. She presents the safety guidelines to all the passengers and speaks directly to the passengers seated in the exit row to make sure they understand what to do in the case of an emergency landing. She also brings snacks, drinks, blankets, and pillows to the passengers to ensure that they have a comfortable flight. What skills is Stephanie exhibiting? A. psychomotor skills B. technical skills C. analytical skills D. cognitive skills E. human relations skills
E
The difference between a horizontal merger and a vertical merger is that A. companies operating at different but related levels of an industry merge in a horizontal merger, whereas firms that make and sell similar products to the same customers merge in a vertical merger. B. two firms in unrelated industries merge in a horizontal merger, whereas firms that make and sell similar products to the same customers merge in a vertical merger. C. companies operating at different but related levels of an industry merge in a horizontal merger, whereas two firms in unrelated industries merge in a vertical merger. D. one corporation merges with one of its customers or suppliers in a horizontal merger, whereas a firm merges with its direct competitor in a vertical merger. E. firms that make and sell similar products to the same customers merge in a horizontal merger, whereas companies operating at different but related levels of an industry merge in a vertical merger.
E
To efficiently manage its working capital, DV Pharma Inc. has a business arrangement with the suppliers of its raw materials, packaging material, and machinery. These suppliers allow DV Pharma Inc. to take possession of the required goods and services and pay for them at a later date or in installments. In this scenario, DV Pharma Inc. has obtained funding in the form of A. equity financing. B. initial public offering. C. a mortgage. D. venture capital. E. a trade credit.
E
When BlueGiant Electronics Inc. faced the problem of frequent customer complaints and declining sales, a temporary, cross-functional team was created to look into the matter. At the end of three years, the team had to make suggestions and initiate necessary changes within the company to improve brand image and regain customer loyalty. Such a team is referred to as a A. cooperative. B. committee. C. specialized department. D. product-development team. E. task force.
E
When Hardware Headquarters and National Hardware joined forces, it reduced the number of corporations competing in the hardware industry. As a result, federal regulators carefully reviewed the merger before it was allowed to proceed. What type of merger is this? A. a vertical merger B. an equity carve-out C. a conglomerate merger D. a divestment E. a horizontal merger
E
When companies mislead consumers about the benefits of their products, they infringe on A. owners' right to safety. B. suppliers' right to choose. C. competitors' right to sell. D. traders' rights to be heard. E. consumers' rights to be informed.
E
Which of the following statements is true of the people and activities involved in business? A. The president of a company, who is not the owner, has to put up resources—money or credit—to start a business. B. People and forces beyond an organization's control do not have an impact on the daily operations of businesses. C. A nonprofit organization does not use promotional strategies as it is not concerned with profits. D. Employees have the most to lose if a business fails to make a profit. E. Managers control the tasks required to carry out the work of a company or nonprofit organization.
E
Which of the following statements is true of work groups in an organization? A. They have shared leadership roles. B. They create collective work products. C. They measure performance directly by assessing collective work products. D. They have both individual and group accountability. E. They have the same purpose as the broader organizational mission.
E
Which of the following trade alliances is likely to promote economic cooperation between Australia, Canada, and Singapore? A. The Association of Southeast Asian Nations (ASEAN) B. The European Economic Community (EEC) C. The North American Free Trade Agreement (NAFTA) D. The European Union (EU) E. The Asia-Pacific Economic Cooperation (APEC)
E
