Business 001 - Introduction to Business » Fall 2020 » Midterm I

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Question #1
An entrepreneur:
A.   does not tolerate ambiguity
B.   avoids risk at all cost
C.   is a middle manager
D.   is a risk taker in the private enterprise system
Question #2
Entrepreneurs enjoy guaranteed job security because no one can fire them
A.   FALSE
B.   TRUE
Question #3
The financial resources needed to operate a business may also be known as capital.
A.   FALSE
B.   TRUE
Question #4
Buying a franchise offers a less risky way to begin a business than starting an entirely new firm.
A.   TRUE
B.   FALSE
Question #5
There is very little the government can do to encourage entrepreneurship.
A.   FALSE
B.   TRUE
Question #6
Which of the following statements is true of management?
A.   Management is solely the process of reporting organizational successes and failures to investors and others.
B.   Management happens only at the top management levels.
C.   Management is the process of achieving organizational objectives through people and other resources.
D.   Management principles do not apply to not-for-profit organizations.
Question #7
  
A.   It allows an organization to resume operations as quickly and as smoothly as possible after a crisis while openly communicating with the public.
B.   It is the process of determining the primary objectives of an organization and then acting and allocating resources to achieve those objectives.
C.   It crates the detailed standards that guide implementation of tactical plans.
D.   It involves implementing the activities specified by operational plans.
Question #8
Which of the following planning activities involves business continuation and public communication?
A.   Strategic planning
B.   Operational planning
C.   Tactical planning
D.   Contingency planning
Question #9
A CEO is developing a written explanation of her organization's business intentions and aims. She is in the process of developing a(n):
A.   operational plan.
B.   contingency plan.
C.   mission statement.
D.   benchmarking process.
Question #10
A frequently used tool that helps assess a firm's current position in the marketplace is called a(n):
A.   SWOT analysis.
B.   GANTT chart.
C.   organizational chart.
D.   benchmark analysis.
Question #11
Programmed decisions include simple things that occur regularly, such as reordering office supplies.
A.   FALSE
B.   TRUE
Question #12
A manager must demonstrate leadership, which is the ability to direct or inspire people to attain certain goals.
A.   FALSE
B.   TRUE
Question #13
Autocratic leaders make decisions after consulting their employees.
A.   TRUE
B.   FALSE
Question #14
A market economy relies on centralized government to control all or most of the factors of production.
A.   FALSE
B.   TRUE
Question #15
Which of the following management functions is most likely to be responsible for planning for staffing needs, recruiting and hiring workers, determining compensation and benefits, and overseeing employee separation?
A.   Change management
B.   Human asset accounting
C.   Research and Development (R&D)
D.   Human resource management
Question #16
The total volume of the world trade is immense -- more than:
A.   $19.3 million in merchandise is traded each year.
B.   $10.3 trillion in merchandise is traded each year.
C.   $18.3 billion in merchandise is traded each year.
D.   $19.3 trillion in merchandise is traded each year.
Question #17
In a partially planned system such as ___________________________, the government owns and operates selected major industries.
A.   capitalism
B.   fascism
C.   socialism
D.   communism
Question #18
When the quantity demanded is greater than the quantity supplied a surplus may occur.
A.   TRUE
B.   FALSE
Question #19
Which of the following industries is a good example of perfect competition:
A.   Automobile industries
B.   Airline industry
C.   Steel industries
D.   U.S. agriculture
Question #20
Also known as the "Big Mac" test, _________________________________ gives us an idea of what people can actually buy with the financial resources allocated to them by their respective economic systems.
A.   Balance of Trade
B.   Aggregate Output
C.   GDP
D.   Purchasing Power Parity
Question #21
Collusion may be defined as using confidential information to gain from the purchase or sale of stocks.
A.   TRUE
B.   FALSE
Question #22
If a firm is taking the highest degree of social responsibility, it is taking a ___________________________ stance.
A.   proactive
B.   defensive
C.   accommodative
D.   obstructionist
Question #23
If one partner dies or leaves, the original partnership remains intact. Like corporations, partnerships have continuity.
A.   FALSE
B.   TRUE
Question #24
In which stage of the product life cycle do competitors enter the field with the same or similar products?
A.   Growth stage
B.   Introductory stage
C.   Decline stage
D.   Maturity stage
Question #25
The _______________________ was created to promote trade through financial cooperation and in the process eliminate barriers.
A.   Global Assistance Fund
B.   International Bank
C.   World Bank
D.   International Monetary Fund
Question #26
The right to ____________________ is the most basic freedom under the private entererprise system.
A.   freedom of choice
B.   competition
C.   private property
D.   profits
Question #27
The foundation of an ethical environment is ethical awareness, and a Code of Conduct provides a good step in this direction.
A.   FALSE
B.   TRUE
Question #28
Core inflation rate is the inflation rate of an economy after _______________ and _______________prices are removed.
A.   entertainment; clothing
B.   health care; education
C.   transportation; housing
D.   energy; food
Question #29
Boeing sells jetliners in Asia. The jets would be considered a(n) ____________________ in the United States.
A.   export
B.   resource
C.   import
D.   exchange
Question #30
Taxes, surcharges or duties on foreign products are referred to as:
A.   tariffs
B.   dumping
C.   seeding
D.   quotas
Question #31
Which of the following shapes a company's business ethics?
A.   The company's code of ethics
B.   All of these
C.   The company's upper management
D.   The company's ethical climate
Question #32
Macroeconomics is the study of small economic units such as households and individual businesses.
A.   FALSE
B.   TRUE
Question #33
Which of the following imposes a total ban on importing a specified product?
A.   quota
B.   embargo
C.   tariff
D.   exchange control
Question #34
____________________________typically slope downward, meaning that lower prices for a good or service attract larger purchases.
A.   Demand curves
B.   Normal distribution curves
C.   Production possibility curves
D.   Supply curves
Question #35
What is business?
A.   Business consists of marketing products that people want.
B.   Business is defined as activities that produce the most good for society.
C.   The term business only describes firms that are profitable and excludes government or private organizations
D.   Business consists of all profit-seeking activities that provide goods and services to an economic system.
Question #36
Business responsibilities to the general public include:
A.   dealing with public health issues.
B.   all of these.
C.   protecting the environment.
D.   developing a quality workforce.
Question #37
_____________________ is described as an economic situation characterized by soaring prices.
A.   Hyperinflation
B.   Budget surplus
C.   Stock liquidation
D.   Trade surplus
Question #38
Which of the following traits are needed by today's business managers?
A.   Visionary skills
B.   All of these
C.   Creativity and critical thinking
D.   Ability to lead change
Question #39
Why are the four factors of production important?
A.   Managing only human resources is enough for the successful operation of a business.
B.   Natural resources will always be the least important factor of production.
C.   The factors of production are regulated by the government.
D.   Firms need to understand how to reduce the cost of production if they are going to be successful.
Question #40
Which of the following is true of inflation?
A.   While deflation weakens the economy, inflation strengthens the economy.
B.   When inflation is high, businesses should invest in research and development.
C.   Inflation is good news for people who live on fixed incomes.
D.   Inflation devalues money.
Question #41
The _____________________. signed after WWII, substantially reduced worldwide tariffs and other trade barriers.
A.   World Bank
B.   General Agreement on Tariffs and Trade (GATT)
C.   World Trade Organization (WTO)
D.   International Monetary Fund (IMF)
Question #42
A country has a(n)__________________________in making a product for which it can maintain a monopoly or that it can produce at a lower cost than any competitor.
A.   trade surplus
B.   absolute advantage
C.   comparative advantage
D.   trade deficit
Question #43
Why is fair competition important in the private enterprise system?
A.   Fair competition allows firms to compete, knowing they won't be subjected to excessively aggressive practices that are designed to eliminate them.
B.   Fair competition allows employees to choose their own employment.
C.   Fair competition supports the goal of private property ownership.
D.   Fair competition requires firms to inform their competitors when prices will be reduced.
Question #44
During which era was consumer orientation developed?
A.   Marketing era
B.   Colonial era
C.   Relative era
D.   Production era
Question #45
  
A.   individual employees
B.   policies
C.   customer complaints
D.   legislation
Question #46
A planned economy relies on central government to control most factors of production.
A.   FALSE
B.   TRUE
Question #47
A market economy does not allow individual producers to control production.
A.   FALSE
B.   TRUE
Question #48
Demand is the willingness and ability of buyers to purchase a product, a good, or a service, and supply is the willingness and ability of producers to offer a good or service for sale.
A.   TRUE
B.   FALSE
Question #49
Gross national product (GDP) can be defined as the total value of all goods and services produced within a given period by a national economy.
A.   TRUE
B.   FALSE
Question #50
Small businesses are an important source of new jobs.
A.   FALSE
B.   TRUE
Question #51
In construction, small businesses usually can't compete because of the expense of specialized equipment needed to handle local jobs.
A.   FALSE
B.   TRUE
Question #52
All of the following may be considered advantages of sole proprietorships, except:
A.   Double taxation
B.   Little or no recording by the State
C.   Taxes paid on personal tax return
D.   Ease of setup
Question #53
A corporation may be defined as an artificial being, invisible, intangible, and existing only in the contemplation of the law
A.   TRUE
B.   FALSE
Question #54
All of the following may be considered advantages of corporations, except:
A.   it is considered a separate legal entity
B.   liability is limited to corporate assets only
C.   there is ease of transfer
D.   all of the above may be considered advantages of corporations
Question #55
A sole proprietor has unlimited liability which means he or she is not personally liable for all debts incurred by the business.
A.   FALSE
B.   TRUE
Question #56
The person who is considered the father of modern capitalism and wrote, "The Wealth of Nations" is:
A.   Adam Smith
B.   John Adams
C.   Karl Marx
D.   Machiavelli
Question #57
The natural tendency for all thing to go toward disorganization is know as:
A.   entropy
B.   fusion
C.   dynamics
D.   gravity
Question #58
_________________________ is the difference between a business’s revenues and its expenses.
A.   Depreciation
B.   Profit
C.   Cost of goods sold
D.   Marketing
Question #59
A _______________________ market economy has characteristics of both planned and market economies.
A.   private
B.   public
C.   mixed
D.   communist
Question #60
The price set by the intersection of the supply and demand curve is the _________________ price.
A.   credit
B.   equilibrium
C.   surplus
D.   discount
Question #61
A prolonged and deep recession is also known as a depression.
A.   FALSE
B.   TRUE
Question #62
  
A.   David Ricardo
B.   Justin Turner
C.   Milton Friedman
D.   Adam Smith
Question #63
In a general partnership, all of the partners have the ability to actively manage or control the business, and they don't have any limit on their personal responsibility for the debts or negligence of the business. In a limited partnership, a partner does not have the authority to run the business and the most a limited partner can lose is their investment in the business.
A.   TRUE
B.   FALSE
Question #64
The shift toward a more integrated and interdependent world economy describes:
A.   globalization
B.   Marxism
C.   isolationism
D.   protectionism
Question #65
The __________________________________ plans and executes sales and marketing plans, monitors all sales activity, and is responsible for the company’s growth.
A.   chief financial officer
B.   chief executive officer
C.   chief sales officer
D.   chief operations officer
Question #66
A __________________ manager makes decisions on his/her own without consulting employees. They are “boss centered.”
A.   autocratic
B.   democratic
C.   charismatic
D.   laissez-fair
Question #67
The managerial function of guiding and motivating employees, for example training, scheduling, delegating, and monitoring may be termed:
A.   staffing
B.   directing
C.   planning
D.   organizing
Question #68
When shares of a corporation are publicly issued, the firm becomes publicly held or a public corporation.
A.   TRUE
B.   FALSE
Question #69
Endowments refer to the extent to which a country is gifted with such resources as land, labor, and capital.
A.   TRUE
B.   FALSE
Question #70
Employees in a business often take their cues concerning ethical decisions from upper management.
A.   FALSE
B.   TRUE
Question #71
Let's say I'm from the United States and I'm visiting China. The exchange rate is 1 Chinese Yuan = 0.14 US dollars. If I want to buy a shirt that costs 1000 Chinese yuan. How many US dollars will I have to exchange?
A.   $1,445.54
B.   $14,454.00
C.   $14.45
D.   $144.54
Question #72
A __________________________ occurs when two firms combine to form a new company.
A.   strategic alliance
B.   acquisition
C.   merger
D.   divestiture
Question #73
__________________________ is a system in which the government owns and operates all factors of production.
A.   Communism
B.   Federalism
C.   Capitalism
D.   Socialism

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