Intro to Business Final Review
According to the Javelin Strategy and Research 2009 Identity Fraud Survey Report, at least _____ million U.S. adults were victims of identity theft in 2009.
11
Social networks have existed in one form or another for over _______ years.
40
Using the supply and demand curves shown in the graph that follows, what is the equilibrium price for soft drinks?
55 cents
An estimated _____% of illegal software sharing is conducted by businesses.
90
Who ranked people's five basic needs in order of importance?
Abraham Maslow
Why is investment trading less expensive online?
Because investors can buy and sell investments themselves without hiring a trader
Which of the following have not been cited as incidents of unethical business activity recently?
Corporate charitable giving is high
Which of the following is not a difference between digital media and traditional media?
Digital media make communications more confusing
Which of the following statements is false?
Ethical issues are limited to for-profit organizations.
Nonprofit organizations such as Habitat for Humanity do not engage in management, marketing, or finance activities.
False
Owners always manage their businesses.
False
When a nation takes more from taxes than it spends, it has a budget deficit.
False
If Peru wants to purchase machine parts from a German company but does not have any euros, it will probably borrow the euros from which of the following institutions?
International Monetary Fund
Which of the following is not part of the definition of a small business?
It employs more than 500 employees
Businesses differ from nonprofit organizations in that a business's focus is on
Profit
Which of the following is not something that the International Monetary Fund does?
Provides individual home and auto loans
When purchasing, a consumer is actually buying a product's anticipated benefits and
Satisfaction
A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with limited resources.
True
Advertising first made consumers aware of differences in products and prices in the marketing economy.
True
The goal of business is to earn
a profit.
If a boat manufacturer orders 50 units of fiberglass material and secures trade credit, promising to pay the supplier at a later date, the manufacturer will record the amount to be paid as a(n)
account payable
The ability of a business to identify customers before they make a purchase is ________.
addressability
After the product orientation came the sales orientation of the mid-20th century. Supply exceeded demand and businesspeople and __________________ and __________________ became the most important marketing activities.
advertising; selling
A department store's organizational structure defines the relationships between
all the individuals working together to achieve its objectives.
What is owners' equity?
all the money that the firm has that doesn't have to be paid back
Frederick Taylor
analyzed jobs to improve efficiency.
Actual performance of the service provider's product typically occurs
at the point of consumption
A(n) __________________ leadership style is best for stimulating unskilled or unmotivated employees.
autocratic
One of the major reasons people want to own and operate their own business is to
be their own boss
If a company is studying the decision processes and actions of people who purchase and use products, the company is focusing on
buying behavior
Consumers vote against firms they view as socially irresponsible by not
buying the company's products.
The amount of money budgeted for the purchase of long-term assets is called the
capital budget
The following are types of bonds except
commercial
Which stockholders usually have the right to vote and control the board of directors?
common
The last in line for the payment of profits are the
common stockholders
The most common ethical issue identified by employees is _____________________.
conflict of interest
Digital media can reduce the cost of _______ and _________ transactions.
consumer, business
When Madison flies to Italy from the United States on a British airline, stays in Italian hotels, and buys clothing in Milan to bring home after her trip, she
contributes to the negative balance of payments.
Magazines located next to the checkout counter at a grocery store would probably be classified as
convenience products
According to your book, what is the main source of Internet identity theft?
credit card fraud
A company's assets that can be easily converted into cash are called
current assets
Managers at Sprocket Inc. have recognized declining sales on their ABC model product and must make a decision about what to do. Their next step is to
define the situation
All of the following steps are a part of the decision-making process except
delegating the decision
If Juan's manager gives him an assignment without providing Juan with the resources to complete the assignment, Juan's manager is exhibiting improper
delegation of authority
During the Industrial Revolution, new technologies fueled strong __________________ for products and a product orientation held sway.
demand
Unethical behavior in business can be reduced if management does all of the following except
depend totally on employees' personal ethics.
Countries measure the state of their economies to
determine whether they are expanding or contracting.
The major variable of the marketing mix that uses marketing middlemen is
distribution
The balance of payments includes all the following except
domestic investments.
When a dollar bill is handled hundreds of times and is still being used, it has which of the following characteristics?
durability
Which of the following is an advantage of a partnership?
ease of organization
Jane learned that, although she and June were both hired as part-time salesclerks at the same time and have similar backgrounds, June is paid $1 more per hour. Jane decided to stop cleaning dressing rooms on her shift because she thinks this is unfair. This is an example of which theory?
equity theory
High-quality items such as musical instruments, sailboats, and airplanes would probably use what distribution coverage?
exclusive
Long-term assets are
expected to last for many years
If the video game marketer Playstation were investigated for allegedly raising prices excessively during the Christmas buying season and thereby manipulating the supply of games available at that time, this was an ethical issue concerned primarily with
fairness and honesty
That businesspeople are expected not to harm customers, clients, and competitors knowingly through deception, misrepresentation, coercion, or discrimination is part of
fairness and honesty
A department manager is a first-line manager.
false
A leveraged buyout is an organization composed of small businesses that have banded together to reap the benefits of belonging to a larger organization.
false
A target market is a group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas.
false
Advertising is direct, two-way communication with buyers and potential buyers.
false
Although customer-generated videos are increasingly available, most companies still prefer to hire professional advertising firms.
false
Commercial paper is issued by large companies and backed by collateral.
false
Conceptual skills are the ability to identify relevant issues and recognize their importance, understand the relationships between them, and perceive their underlying causes.
false
Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their owners.
false
Effective implementation of a major decision does not require any planning.
false
Globalization refers only to products, not promotion or distribution.
false
Herzberg's motivational factors directly correspond to Maslow's physiological and security needs.
false
In organized exchanges, investors buy and sell only for their own accounts.
false
Intrinsic rewards are benefits and recognition you receive from someone else.
false
Large firms avoid entrepreneurship.
false
Managers can run a business with only human and physical resources.
false
Managing finished products and packaging them are activities most closely associated with marketing.
false
Many businesspeople today try to "think locally, act globally."
false
Most new product ideas are rejected during the business analysis phase.
false
Net income is the profit (or sometimes loss) after all expenses, excluding taxes, have been deducted from revenue.
false
Production refers to all the activities involved in producing products, while operations refers to the physical process of transforming resources into goods and services.
false
Profits are negative in the growth stage.
false
Retailers generally buy from producers or from other wholesalers and sell to other retailers but not ultimate consumers.
false
Retailers purchase goods and resell them to consumers and some distributors.
false
Service businesses cannot incorporate quality standards.
false
Technological advances have resulted in fewer opportunities for small businesses abroad.
false
The characteristic of addressability means digital communication allows consumers to find information about competing products, prices, and reviews and become more informed about a firm and the relative value of its products.
false
The degree to which a good or service meets the demands and requirements of customers is called customer satisfaction.
false
The forces in the marketing environment are totally uncontrollable
false
The transformation process occurs only in companies that manufacture tangible goods
false
Trying to determine buyers' needs and wants is easy because marketers fully understand what motivates people to buy things.
false
When a nation imports more than it exports, it has a positive balance of trade.
false
When making a decision, selecting the best option is an objective procedure.
false
Managers need adequate __________________ resources to pay for essential activities.
financial
A person who analyzes a firm's income and expenses over a specified period and selects appropriate ways to invest extra funds is involved in
financial management
A company that manufactures large products, such as houses or bridges, may require that all resources be brought to a central location during production. This type of facility layout is called
fixed-position
When market conditions change rapidly, a small business usually has fewer layers of management to work through in making decisions. This advantage of small business is
flexibility
If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan, the interest rate is said to be
floating
What is upward communication?
flows from lower organizational levels to higher ones
A corporation doing business outside the state in which it is chartered is known as a(n)
foreign corporation
When Karen allows her employees to do their work with little interference, her leadership style is
free-rein
Small businesses commonly employ
functional departmentalization
In a socialist economic system, many people work in _____________________ jobs.
government
_____________________ refers to attaching a positive environmental association on an unsuitable product or service.
greenwashing
Google is challenging established companies in all but one of the following industries:
grocery stores
To facilitate free trade among members, the European Union is working toward all of the following except
he creation of opportunities to trade with countries in South America.
Marketing creates value by
helping people obtain what they need and want
Of minority groups in the United States, __________________ own the most small businesses.
hispanics
Profitability ratios are used to measure
how much income (net or operating) a firm generates relative to its assets, equity, and sales.
A continuing rise in prices over a period of time refers to
inflation
Convenience products such as bread, milk, and gum would probably be marketed
intensively
_______________ allows customers to express their needs and wants directly to the firm in response to its communications.
interactivity
Individuals who take responsibility for the development of innovations of any kind within larger organizations are called
intrapreneurs
A mutual fund allows many small investors to
invest in a diversified stock market portfolio
A private corporation is one that
is owned only by a few people and not traded on the open market
Selling interest in a partnership may be difficult because
it is difficult to place a value on a share of a partnership.
When a group of investors borrows money to buy a company or division, using the company's assets to guarantee the loan, it is called a(n)
leveraged buyout
Coca-Cola allows a Mexican firm to use its name, formula, and brands in return for a royalty. This arrangement is known as
licensing.
An important advantage of a corporation is its
limited liability
All of the following are approaches to departmentalization except
line
Which of the following is an advantage of small-business ownership?
lower cost of formation
The term standardization means
making identical, interchangeable components or products.
All of the following are outsiders who rely on information from an organization's financial statements except
managers
In the history of the American economy, the period or stage following the Industrial Revolution was known for its emphasis on
manufacturing
Which of the following requires organizations to gather information about customer needs, share that information throughout the entire firm, and use that information to help build long-term relationships with customers?
market orientation
Because having idle cash on hand is undesirable, a manager may choose to invest in
marketable securities
If ABC Computer Company is determining demand for its future products and how much consumers are willing to pay, the company will likely rely on
marketing research
The American economic system is best described as _____________________ because the government regulates business to preserve competition and protect consumers and employees.
modified capitalism
Flextime is associated with a number of unexpected consequences. One of the major ones is
more physical activity and better sleeping habits
According to McGregor's Theory X,
most workers must be coerced to work
When Lever Brothers changes the formula of its bar soap to match different countries' water conditions and washing habits, this is an example of a
multinational strategy.
A corporation that operates in several countries but without significant ties to any of them is a(n)
multinational.
If a person invests in the stock market through a vehicle that pools funds from a large number of people and buys and professionally manages stock from a number of diversified companies, that person is investing in a(n)
mutual fund
Allie wants to be warm, but she is not; she has a _____________________ and may be motivated to satisfy it.
need
The Federal Reserve provides all of the following services except
offer certificates of deposits for interested individuals
A CPA has the right to
officially express an unbiased opinion about the accuracy of a firm's financial statements.
If an employee is involved with transforming resources into goods and services, then he is in
operations management
Dividing work into small units and assigning it to individuals are tasks related to
organizing
When seeking out information on a new product, consumers tend to trust _________ over _________.
other consumers, corporations
Which form of business organization is the least used in the U.S.?
partnership
When a computer company initially charged a low price for a new computer and then raised the price after gaining a large market share, it was using which pricing strategy?
penetration
Which of the promotion mix variables is best for promoting expensive products with specialized uses, such as houses?
personal selling
One of the things to consider when determining the appropriate span of management is
physical distances between subordinate and supervisor, and subordinate competence
Inventory handling, transportation, and warehousing are all examples of activities of
physical distribution
When a stock quote includes the stock symbol followed by the letters "pf," it indicates
preferred stock
If a company's goal is to develop an image of having very high-quality luxury products, it should employ a
prestige pricing strategy
A marketing research representative who interviews shoppers in a mall is collecting the following type of information:
primary data
Return on assets and return on equity are examples of which type of ratio?
profitability
Studies have found a direct link between social responsibility and _____________________ in business.
profitability
Upward communication conveys
progress reports and complaints
A written authorization assigning a stockholder's voting privilege to another is a
proxy
If a company markets to a segment of people who have a certain lifestyle, the type of segmentation being used is
psychographic
When a company uses advertising and sales promotion to inform consumers about a product so they will ask retailers to stock it, which strategy is being used?
pull strategy
Which of the following is formed to solve specific quality, service or productivity problems?
quality-assurance team
To reduce dollars flowing out of the country, the United States can take measures like limit the number of foreign cars from Japan that are imported by imposing a(n)
quota.
Common stockholders do not have the right to
receive dividends before preferred stockholders
Which of the following is not a reason why small businesses choose to become retailers?
retailing requires a large capital investment
An income statement shows
revenues, expenses, and net income over a period of time.
It is desirable to test only a sample of the product in all of the following circumstances except when
sampling is the cheapest option and does not destroy the product
A marketing strategy consists of
selecting a target market and developing a marketing mix to satisfy it.
Richard has acquired a supply of canned fruits and vegetables. He does not yet have a buyer for them but he's using promotion and other activities to find a buyer. He is performing the marketing function of
selling
Which of the following is not a point of difference between service providers and manufacturers?
services do not undergo a transformation process
The marketing concept states that an organization
should try to satisfy customer needs while also achieving its own goals.
Innovations in digital media have changed how marketers do their jobs in all of the following ways except
slowed down the speed at which they can work.
Maria and Harold have just finished interviewing four candidates who want to work for Jackson Office Supply, Inc. They are involved in which of the following management functions?
staffing
When used to accumulate wealth, money functions as a
store of wealth
When a grocery store maintains refrigerators to hold ice cream until customers buy it, the store is engaged in the marketing function of
storing
After analyzing its own resources and unique abilities, a company is now trying to determine what group of customers it can satisfy with a good or service. It is in the process of choosing a
target market
Which of the following is a temporary group of employees, usually chosen for their expertise, responsible for bringing out a specific change?
task force
If a nationwide sandwich shop company introduces a new sandwich in the Midwest to try out its marketing strategy before offering the product across the country, it is using
test marketing
The transformation process is
the conversion of human, financial, and physical resources into goods, services, and ideas.
In a capitalist system, individuals own and operate _____________________ businesses.
the majority of
The financial value placed on an object involved in an exchange is
the price
Corporations usually employ an investment banking firm to help sell their securities in _____________________, which is where firms raise their financial capital.
the primary market
Good money managers strive to keep just enough cash on hand to pay bills. This cash is called _____________________.
transaction balances
The type of transportation specifically noted for its flexibility in transporting products is
trucking
A checking account is also called a demand deposit account.
true
A company with many layers of managers is considered tall.
true
Advantages of direct deposits of paychecks and other income to consumers include convenience, safety, and potential interest earnings.
true
All business transactions can be classified as assets, liabilities, or owner's equity.
true
An absolute advantage exists when a country has a monopoly on a natural resource. Correct!
true
An advantage of functional departmentalization is that managers need only the skills that apply to their department's function.
true
An estimated 90% of illegal software sharing is done by businesses.
true
An investment banker sells securities for corporations.
true
Assets are a firm's economic resources.
true
Bookkeeping is only one aspect of accounting and involves the recording of routine, day-to-day business transactions.
true
Digital marketing can enhance the value of products.
true
Establishing and enforcing ethical standards and policies within business can help reduce unethical behavior by prescribing which activities are acceptable and which are not and by removing the opportunity to act unethically.
true
Franchisees pay the franchiser a monthly or annual fee based on a percentage of sales or profits.
true
If an exchange is to occur, each participant must be willing to give up something of value to receive something the other has.
true
In a nonprofit organization like Habitat for Humanity, inputs such as money, materials, information, and volunteer time and labor are used to transform raw materials into homes for needy families.
true
In most states, corporations must have "corporation," "incorporated," or "limited" in their names to show that their owners have limited liability.
true
In the US, men are twice as likely as women to start their own business.
true
Liquidity is judged by how easily an asset can be turned into cash.
true
Maximizing profits and sales, boosting market share, maintaining the status quo, and survival are common pricing objectives.
true
Most business failures are the result of poor long-term financial planning.
true
Nations trade with other nations to obtain resources that would otherwise be unavailable to them.
true
One aspect of financial management involves managing cash flow for a business on a daily, weekly, monthly, and yearly basis.
true
Positive rewards for acceptable behavior tend to be more effective in the long run than negative punishments for unacceptable behavior.
true
Product departmentalization allows the coordination of all activities related to a product or product group and simplifies decision-making.
true
Quality assurance teams are groups of employees brought together to solve specific quality, productivity, or service problems.
true
Retained earnings may be used to finance long-term assets.
true
The Federal Reserve Board is responsible for supervising the insurance funds that protect deposits in member institutions, such as FDIC insured banks.
true
The Webb-Pomerene Export Trade Act allows selected American firms desiring international trade to form monopolies to compete with foreign cartels.
true
The financing function expedites purchases through making credit available.
true
The government usually will scrutinize high-profile mergers and acquisitions to ensure that they are not creating monopolies.
true
The most important characteristic of money is its acceptability for purchase of goods and services.
true
The size of the transaction, the history of personal relationships within the particular company, and many other factors may determine whether a customer gift will be judged as ethical.
true
Theory Z is more participative and encourages lifelong employee commitment more than traditional management approaches.
true
Trade credit is the most widely used source of short-term financing.
true
Under the Trouble Asset Relief Program (TARP), most of the big banks in the U.S. either needed to take a cash infusion from the U.S. Treasury or were forced to sell preferred stock to the Treasury in order to stay in business.
true
Voluntary responsibilities are optional activities that promote human welfare or goodwill.
true
When laid off, a person's attention probably shifts from fulfilling esteem needs to fulfilling physiological and security needs.
true
Ethical violations destroy
trust
Finance companies
typically function as the lender of last resort for individuals and businesses with poor credit ratings or whose other lines of credit have been exhausted.
The lack of funds to operate a business normally is called
undercapitalization
Although some businesses are less risky than others, overall the financial risks of running a small business are
very high
Maslow's hierarchy is important to managers because
workers won't be motivated to contribute to the organization's goals until their basic needs are met.
For most organizations, the ultimate objective is for produced outputs to be
worth more than the costs of input