Intro to Business Exam 1

Which of the following is NOT listed in the text as a reason why more and more companies are doing business in the global marketplace?

Companies enter the global marketplace to maintain their balance of trade.

If a country specializes in goods that it can produce most readily and cheaply and trades those goods for the goods that another country can produce most readily and cheaply, then both countries are exercising the principle of:

comparative advantage

A domestic firm may decide to contract for the production of its goods by an established foreign manufacturer. Such private-label manufacturing by a foreign company is called:

contract manufacturing

Imagine you are trying to gather the information needed to calculate the balance of payments for an Eastern European country. To do your calculations, you would need to have information on all of the following EXCEPT:

its corporate tax rates

_____ are all the individuals or groups to whom a business has a responsibility.

Stakeholders

In international licensing, the licensor is the domestic firm that allows the licensee to use its trademark or brand.

True

International trade-dependent jobs have grown at a rate three times the growth of U.S.-dependent jobs.

True

Which of the following statements about utilitarianism is true?

Utilitarianism holds that an action that affects the majority adversely is morally wrong.

Which of the following factors would most likely result in a dramatic change in supply?

a change in the price of raw materials used in the production process

Which of the following is NOT one of the advantages associated with multinational corporations?

a positive exchange rates

A code of ethics:

is accurately described by all of the above

Which of the following is NOT part of a nation's infrastructure?

its mountain ranges

The new employee that Dunn Photographic Services hired is an example of which factor of production?

labor

The _____ is the value of one currency in terms of another.

exchange rate

Peter Drucker, a well-known management scholar, has said that companies should be evaluated on two basic dimensions:

legality and responsibility

The implementation of a contractionary policy by the Federal Reserve would result in:

lower inflation

Which of the following is an example of a trend in ethics and social responsibility?

strategic giving

A(n) _____ is a tax levied by a nation on imported goods.

subsidy

Besides tariffs, a government can use a number of other tools to restrict trade. Which of the following is NOT a tool aimed at restricting trade?

subsidy

Which of the following is NOT an argument for tariffs that protect domestic businesses and workers?

the maintenance of improved quality of products to protect consumers

In 2018, Country A exported $84.9 billion and imported products valued at $74.69 billion. The difference between the dollar value of its exports and imports represents a:

trade surplus

Protectionism:

uses artificial barriers to protect domestic industries

_____ move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.

Multinational corporations

A business is an organization that strives for a profit by providing goods and services desired by its customers.

True

An organization's first responsibility is to provide a job to employees.

True

Businesses engage in environmental protection activities to show their responsibility to their general public stakeholders.

True

It is a firm's responsibility to its customers to deliver what it has promised.

True

One of the advantages multinational corporations have over other companies is their ability to sidestep regulatory difficulties.

True

Social factors influence what, how, where, and when to purchase products or services.

True

Social responsibility is a voluntary obligation.

True

The distributive process by which the burdens and rewards that society has to offer are shared varies from society to society.

True

In terms of economic trends, the complete opposite to communism is:

capitalism

Canada is currently the second largest producer of nickel in the world. The reopening of the world famous Voisey's Bay mine, which has total resources estimated at 124 million tons of nickel-bearing ore, should give Canada a clear:

comparative advantage

Social responsibility should extend beyond the shareholders to include:

consumers employees community suppliers

When the Federal Reserve implements a _____, it tightens the money supply by selling government securities or raising interest rates.

contractionary policy

In a complicated negotiated, Minmetals in China agreed to purchase at least 24,000 tons of copper cathode for $35 million from Pasar in the Philippines. According to the terms of the sale, Pasar will provide at least $12 million worth of coal to a Chinese power company that will provide the electricity needed to operate Minmetals. This is an example of a(n):

countertrade

Pierre Cardin gives technical advice on textile manufacturing to China and in exchange receives silk and cashmere. This is an example of a(n):

countertrade

_____ is the reduction of a currency's value relative to another currency.

Devaluation

_____ contributes to an employee's self-worth, which, in turn increases productivity and reduces absenteeism.

Empowerment

Another factor influencing business ethics is _____, or what is fair according to prevailing standards of society.

justice

Many weight-loss programs advertise that they can help individuals lose a great deal of weight without any changes in the individual's lifestyle. Typically when the person who has lost the weight leaves the program, he or she regains all the lost weight. This yo-yoing is almost as bad for the body as the excess weight. These weight-loss programs are engaged in _____ behavior.

legal but irresponsible

In a large metropolitan market, it is relatively easy to set up a law office. The ease of entry explains why you will find hundreds of lawyers listed in the New York City phone book. Each lawyer is a close substitute for another but with slight differences. Which of the following market structures best describes the one in which lawyers operate?

monopolistic competition

Nations sometimes form free-trade associations and establish areas where there are few, if any, export and import duties or other regulations that would act as barriers to trade among partners. These are called:

free trade zones

One of the keys to ethical business behavior is:

how the company's top management conducts themselves

Utilitarianism:

is difficult to implement because it is hard to tell how one decision will impact a large number of people

Social investing:

is the practice of limiting investments to companies that have ethical policies that match those of the investor

For Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, its employees, suppliers of the paints used to decorate its porcelains, retailers of its products, and people who benefit from its philanthropy are all:

stakeholders

Wal-Mart has announced that it will only sell fresh and frozen fish that come from environmentally sound sources and bear the label of the Marine Stewardship Council. Wal-Mart's size gives it a unique opportunity to improve the fishing industry. This concern for _____ is one of many initiatives Wal-Mart is introducing to improve our environment.

social responsibility

A company can only be concerned about its _____ responsibilities once it has met its economic and legal responsibilities.

ethical

Which of the following is NOT a form of unemployment?

fiscal unemployment

Currency markets operate under a system called _____. This means that prices of currencies vary based upon demand and supply of that currency.

floating exchange rate

A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:

free trade

Strategic giving:

refers to the practice of tying philanthropy closely to the corporation's mission or goals

A country that imports more goods than it exports is said to have a(n):

unfavorable balance of trade

Which of the following statements about ethics training is true?

Ethics training is formal training to develop an awareness of questionable business behavior and to practice appropriate responses. The most effective ethics training begin with the techniques for solving ethical dilemmas. Ethical training does not have to be boring. Fewer than half of all American companies have some type of ethics training programs.

_____ are limitations on the quantity of certain types of goods that can be imported over a period of time.

Import quotas

The _____ created the world's largest free-trade zone.

North American Free Trade Agreement

Which of the following statements about dumping is true?

The U.S has passed laws to make dumping illegal.

The _____ is the total amount of money that flows in and out of a country.

balance of payments

Upward and downward changes in aggregate economic activity, as measured by GDP, are called:

business cycles

Corporate philanthropy:

can be either a cash or a noncash donation

The _____ for the Music Teacher's National Associations establishes a standard of conduct and recommends a set of responsibilities teachers should have toward students, colleagues and the public. These guidelines assist the professional music teacher in gaining the respect of peers and avoiding conflicts and complaints with students and others. It points out to members what are and what are not considered fair, honest and reasonable practice when dealing with students, colleagues and the public, it provides guidance for such aspects as advertising practices, appropriate relationships, and personal and professional integrity.

code of ethics

Free trade:

permits people to buy and sell where they please

A company has achieved the level of _____ responsibilities when it has met its ethical, legal, and economic responsibilities.

philanthropic

Which of the following statements about demand and supply curves is true?

All of the above statements about supply and demand curves are true. The demand curve will shift to the left if the number of buyers decreases. The supply curve will shift to the left if taxes are decreased. The demand curve will shift to the right if buyers' incomes increase. The supply curve will shift to the right if the number of suppliers increases.

_____ is the practice of charitable giving by corporations; includes contributing cash, donating equipment and products, and supporting the volunteers' efforts of company employees.

Corporate philanthropy

Expropriation is a political risk in which a country seizes the assets of a foreign firm and does not compensate the firm.

F

Telecommunications equipment manufacturers in the United States sell their products to people who live in Canada. To Canadians, the telecommunications equipment is an export.

F

When a domestic company allows a foreign firm to use its brand in exchange for royalty fees, it is called a joint venture.

F

All businesses approach ethics the same way.

False

Corporate philanthropy excludes any noncash donations.

False

Having a global vision simply means having a willingness to sell outside one's national borders if, and when, the opportunity arises.

False

To be a useful code of ethics, the code should offer broad policies and procedures rather than detailed rules.

False

Codes of ethics:

Social responsibility B. Business ethics C. Consumerism D. The marketing concept E. Business morality

_____ is the practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates.

Strategic giving

International trade-dependent jobs have grown at a rate three times the growth of U.S.-dependent jobs.

T

A _____ regulation in the United States bans the use of foreign steel in constructing U.S. highways.

buy-national regulation

A homebuilder who disposes of asbestos shingles by burying them on his own property may please the home owner because it is a less expensive means of disposal but will be punished by various legal agencies if any become aware of his crime. At which stage of the social responsibility pyramid is the builder most likely operating?

economic

Inflation and interest rates are most closely associated with _____ within the external business environment.

economic forces

A retailer that allowed its employees to handle a customer complaint without having to ask for permission or direction from management would have:

empowered its employees to help customer

A retailer that allowed its employees to handle a customer complaint without having to ask for permission or direction from management would have:

empowered its employees to help customers

During a two-month period Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, donated ten percent of its retail profits to the Susan G. Komen Breast Cancer Foundation. The action was legal and ethical and allowed the company to still be profitable. According to the pyramid of corporate social responsibility, it was acting at the _____ responsibilities level.

philanthropic

The highest level of the corporate social responsibility pyramid is:

philanthropic responsibilities

Laws passed by the U.S. Congress concerning how U.S. businesses trade with Cuba would be an example of _____ factors that influence the business environment.

political and legal

The _____ measures prices paid by producers and wholesalers for commodities, including raw materials and finished products.

producer price index

When the price of gasoline rises by 40 percent, but your salary remains the same, it is an example of a decline in your:

purchasing power

Enlightened firms are realizing that empowerment puts too much stress on employees and are eliminating empowerment programs.

False

Ethical decision making begins in the marketing department.

False

The need for businesses to expand their markets is one of the most fundamental reasons for the growth in world trade.

True

A preferential tariff:

gives tariff advantages to one country over others