Business: Chapter 1-5 True and False
False
A policy of considering only nonminority applicants for job openings is called reverse discrimination
False
A small business is one that is dependent, operated as a not-for-profit organization, and is not dominant in its field
False
A vertical merger takes place between firms in completely different industries
True
Adam Smith argued that a society's interests are best served when individuals are allowed to pursue their own self-interest
True
Am monopoly is a market (or industry) with only one seller
False
An absolute advantage is the ability to produce a specific product more efficiently than other products
True
An advantage for the franchisee is the opportunity to start a business with limited capital
True
An advantage to the franchisor is that he or she gains fast and selective distribution of the product
True
An argument against trade restrictions is that they limit consumers' choices
False
An argument for increased social responsibility is the fact that, because business managers are primarily responsible to business owners, they must be concerned with providing a return on the owners investments
True
An argument for trade restrictions is that it protects national security
False
Approximately one-third of our nations total production consists of consumer products
False
Because of their small size, small businesses affect the U.S. economy very little
False
Before a corporation can receive articles of incorporation, it must submit charter information to the county clerk where the business is located
True
Business is the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society's needs
True
The General Agreement on Tariffs and Trade is an international organization whose goal is to reduce or eliminate tariffs and other barriers to world trade
False
The SBA is more likely to help non-minority small businesses
False
The ability to produce a specific product more efficiently than other nations is called comparative advantage
False
The balance of payments is the total value of a country's exports less the total value of its imports
True
The balance of trade is the total value of a country's exports less the total value of its imports over some period of time
False
The business cycle consists of two or more consecutive three-month periods of decline in a country's GDP
False
The corporate officers of a corporation are elected by the stockholders
False
The economic model of social responsibility places emphasis not only on profits but also on the impact of business decision on society
False
The majority of small businesses are found in the production industry
True
The people who start a corporation are called incorporators
True
The primary reason for small-business failure is mismanagement resulting from lack of business know-how
False
The term limited partnership is used to describe a business where all partners have general partnership status
True
The type of person likely to start a small business is independent, has a desire to determine his or her own destiny, and is willing to find and accept a challenge
True
There are more sole propritorships in the United States than there are partnerships or corporations
False
Today the terms business and e-business mean the same thing
True
Today, few firms are either purely economic or purely socioeconomic in their outlook
False
Today, there are more corporations than there are sole proprietorships and partnerships in the United States
True
Wal-Mart and Target are often referred to as marketing intermediaries
False
Whistle-blowing is an attempt by business to stop employees from exposing their unethical business behavior
False
Working conditions in the early twentieth century were not much different from those that exist today, except for more advanced technology involved
True
For a sole proprietorship and partnership, unlimited liability is a legal concept that holds a business owner personally responsible for all the debts of the business
True
Franchising is the actual granting of a franchise
True
Free Enterprise is a system of business in which individuals decide what to produce and how to produce it.
True
Government intervention into business increased after the Great Depression of the 1930s
True
International business consists of all business activities that involve exchanges across national boundaries
False
Less than 50 percent of small businesses fail within the first five years
True
Limited partners in a limited partnership can lose no more than the money they invest in the business
True
Planning is one vital element in the success of a small business
True
Preferred stockholders are paid dividends before common stockholders
True
Profit is the payment that business owners receive for assuming the considerable risks of ownership
True
Six basic rights of consumers are the right to safety, the right to be informed, the right to choose, the right to be heard, the right to consumer education, and the right to service
True
Social responsibility is the recognition that business activities have an impact on society and the consideration of that impact in business decisions
True
Licensing is a contractual agreement in which one firm permits another to produce and market its product and to use its brand name in return for a royalty or other compensation
False
Exporting is purchasing raw materials or products in other nations and bring them into ones own country
True
Consumerism consists of all those activities that are undertaken to protect the rights of consumers in their dealings with business
