1.) Since the mid-1980s, the __________ sector has generated the most amount of increases in employment in the United
D) goods producing
2) When referring to risk, which of the following statements is reasonable?
A) Although risk means taking a chance at losing, the less risk you take, the more you are likely to profit.
B) Good business strategy encourages less risk, because the least risky ventures usually make more profit.
C) Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good
D) Although risk means taking a chance, a start-up will usually manage to get off the ground faster if the
stakes are high.
3) Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that
he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which
of the following factors of production should he focus on?
A) Capital and land
B) Labor and knowledge
C) Entrepreneurship and capital
D) Entrepreneurship and knowledge
4) Lance and Laurie live on three acres of land in North Carolina, with two llamas, five goats, six chickens, and two
dogs. The goats provide milk, cheese, yogurt, and even fiber that is woven into yarn; the chickens provide free-range
eggs; and the llamas serve as protection for the other animals. Although Lance and Laurie have other professional jobs,
their home lifestyle represents _______.
A) a growing trend in the social environment to have more control of the food they eat and where it comes From
B) a need to challenge the competitive environments of big businesses that sell the same products
C) a desire to pay less sales tax on foods and other staple products at the larger stores
D) an aversion to technological advancement leading to a slower and less productive life
5) Since the mid-1980s, the __________ sector has generated the MOST amount of increases in employment in the United
D) goods producing
6) During the 2010 Gulf Oil Spill, former BP CEO, Tony Hayward, was quoted as saying: “I want my life back!” Although heapologized for this remark in a later statement, the original message remained in the thoughts of many, particularlyunder the circumstances that 11 persons lost their lives; several communities experienced extreme devastation; many fishing industry businesses lost their livelihood; and dead sea life washed up on the shores of several southern states
and Mexico. In terms of corporate social responsibility, which of the following statements would you like to share with
A) We should repeat well-known economist Milton Friedman’s statement that the only social responsibility of business is to make money for stockholders.
B) The company’s CSR (corporate social responsibility) approach lacked whistleblowers that would expose exactly who was responsible for the crisis, most likely, the company that made the oil rig.
C) Ethical standards begin with a company’s management and the messages they send. CSR takes into account investors, employees, and society and the environment.
D) The best CSR approach to deter bad publicity would be to quickly list all the good things this company has
done for society over the past five years.
7) Today, human resource management has become so important that in many firms it has become:
A) a function performed by managers in all areas of the organization.
B) the sole responsibility of the firm’s legal staff.
C) a function handled only by specialists in the human resource department.
D) a function handled only by the firm’s top management.
8) If you aspire to become a sous chef (the second in command in a large restaurant kitchen), you will pursue several types of training and development. Your __________ will include learning how to perform as a line chef, as you work your way through pastry, grill, pantry, and sauté. The only way you will learn the variations in the line jobs is to experience them! As a(n) ________, you will work alongside another sous chef for a few years in order to learn how to
juggle all the middle management type of activities expected of this professional. Your ____________ training will be
extensive, as you go to Culinary School, attend a community college, and/or take management classes to help you learn
to minimize conflict in the kitchen as well as improve the productivity of those you manage.
A) apprenticeship; journeyman; online
B) apprenticeship; simulator; off-the-job
C) job rotation; apprentice; off-the-job
D) on-the-job training; journeyman; vestibule
9) The union movement in the United States was an outgrowth of the economic transition caused by the:
A) Revolutionary War.
B) Great Depression.
C) Industrial Revolution.
D) passage of antitrust legislation by the federal government.
10) The Industrial Revolution was characterized by a(n):
A) increased emphasis on production, resulting in longer hours and less job security for most workers.
B) migration of manufacturing jobs from the Midwest and Northeast to the South as firms began locating in areas where labor costs were lower.
C) rapid improvement in the wages and working conditions of most workers, resulting in a decline in the need
for labor unions.
D) movement away from scientific management, and a greater acceptance of the ideas of Herzberg and Maslow.
11) _____________ is the process by which representatives of a union meet with representatives of management to negotiate a contract for workers.
C) Mutual Conciliation
D) Collective bargaining
12) The first federal minimum wage was established by the:
A) Fair Labor Standards Act.
B) Wagner Act.
C) Minimum Compensation Act.
D) Pay Equity Act.
13) The ability of unions to achieve key goals in the future will depend on their ability to:
A) reestablish their base of strength in the manufacturing sector.
B) ind ways to cooperate with management in training workers and redesigning jobs.
C) repeal the Wagner Act and the Norris-LaGuardia Act in order to eliminate restrictions on union tactics.
D) return to the confrontational tactics used successfully in the 1930s when unions grew rapidly.
14) _________ sexual harassment refers to situations in which an employee’s submission to unwanted conduct is made
either explicitly or implicitly a term or condition of employment or is used to influence employment decisions affecting the
worker’s job status.
A) Quid pro quo
B) Post hoc
C) Ceteris paribus
15) ________ is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.
D) Mixing markets
16) A firm’s marketing mix refers to the combination of:
A) goods the firm offers to different market segments.
B) advertising media the firm utilizes to promote its products.
C) strategies regarding product, price, place, and promotion.
D) people directly involved in making marketing decisions.
17) After years of using a mass marketing strategy, Digital Print Shops has responded to new competition from national
chain stores by focusing on small market segments that have been ignored by their larger competitors. Digital believes
that by offering these market segments personalized customer services it can attract a loyal group of customers willing
to pay premium prices. Digital’s strategy to improve profits is known as:
A) environmental scanning.
B) niche marketing.
D) respondent change.
18) Hideki has just been transferred from a position in his firm where he dealt with the consumer market to a new job
dealing with buyers in the B2B market. Which of the following correctly identifies a key difference Hideki is likely to
observe between consumer markets and business-to-business markets?
A) Businesses focus on developing wants and needs in consumer markets, while firms work to satisfy the existing needs of the B2B market.
B) Relationship marketing tends to be much more important in consumer markets than in the businessto-business
C) Buyers in the business-to-business markets tend to be more rational than buyers in consumer markets.
D) Business-to-business markets make greater use of marketing intermediaries such as wholesalers and
retailers than do consumer markets.
19) The combination of all the factors that consumers evaluate when deciding whether or not to buy a good or service is
A) total product offer.
B) product mix.
C) product differentiation.
D) product package.
20) Comet Computer Company is creating a new splash with psychedelic laptop cover designs scheduled for release next
year. The computers do not reveal any other feature differences from what Comet currently offers. This effort is an
example of using __________________ to differentiate a product as new.
B) incremental coloring
C) incremental channeling
D) brand extension
21) Kathy works as a manager at Fantastic Fabricators. The innovative staff at the company is regularly encouraged to
suggest ideas for new products. Since Cathy works in product screening, she:
A) gives the final approval for the commercialization of new products.
B) reduces the number of new products being worked on at any one time.
C) market tests the product ideas that originate with the staff.
D) develops the concept testing to establish the personnel required for each new project.
22) According to the product life cycle model, sales are expected to peak in the _________ stage.
23) Mark A. Teer believes he has found a surefire way to save money. He advises his friends, “Buy direct from the
manufacturer. Any time intermediaries get involved, you’ll pay a higher price. After all, every intermediary involved in the
marketing process must charge enough to earn a profit.” Mark’s advice:
A) is entirely correct. Intermediaries must charge a high enough price for the activities they perform to earn a profit, so using intermediaries must result in a higher price.
B) is impractical, because in most markets the distribution process is so complex that it is impossible to determine who the actual producer really is.
C) is not valid in many cases. Intermediaries do add costs to products, but they also create value by
performing marketing functions efficiently. In many cases the value they create more than offset the costs
D) is never true. Markets that make use of intermediaries can always provide goods at lower cost than those
that rely on direct distribution.
24) Discount stores, supermarkets, and department stores are all common types of:
A) multilevel marketers.
B) full-service wholesalers.
C) retail stores.
D) category killers.
25) Logistics is concerned:
A) with flows of materials, finished products, and information.
B) only with the flow of information, not the flow of materials and products.
C) with the flow of materials to the manufacturer and with the flow of finished products to the consumer, but not with the flow of information.
D) only with the flow of finished goods from the producer to the final consumer.
26) The traditional promotion mix for a firm consists of the:
A) strategic mix of price, product, place and advertising.
B) Various types of advertising media the firm selects to reach each specific target market.
C) marketing intermediaries employed by the firm to create a supply value chain.
D) advertising, personal selling, public relations, and sales promotion used to reach a target market.
27) A review of the personal selling process indicates that selling is:
A) a matter of establishing relationships.
B) getting a name on a sales contract.
C) about 90 percent luck and 10 percent skill.
D) giving way to computers in responding to consumer needs.
28) The activity that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and information to earn public understanding and acceptance is called:
A) public research.
B) public relations.
C) public communication.
D) public advocacy.
29) Although accounting has several specific uses, the overall purpose of accounting can be summarized as:
A) To provide financial information that is useful to decision makers.
B) To meet the legal requirements of the Financial Accounting Standards Board (FASB).
C) To allow the government to track business activity levels.
D) To compute the profit or loss and declared dividend of a business firm.
30) The area of accounting that provides managers inside the organization with information they need to make decisions is
A) Tax accounting.
B) Managerial accounting.
C) Informational accounting.
D) Financial accounting.
31) The three important financial statements prepared by accountants are:
A) Ledger, journal, and trial balance.
B) Cash budget, capital budget, and master budget.
C) Revenue summary, expense summary, and consolidation statement.
D) Balance sheet, income statement, and statement of cash flows.
32) ________ examine the data prepared by ________ and then make recommendations to top management regarding
strategies for improving the firm.
A) Accountants; financial managers
B) Accountants; bankers
C) Financial managers; accountants
D) Financial managers; bankers
33) Which of the following shows a firm’s spending plans on fixed assets such as large equipment?
A) Capital budget
B) Operating budget
C) Cash budget
D) Surplus budget
34) Which of the following represents a capital expenditure?
A) issuing paychecks to workers
B) paying for advertising on a local radio station
C) purchasing raw materials to be used in the production of a firm’s product
D) purchasing a building to be used for office space
35) ________ is a form of short-term financing. Businesses buy merchandise from their suppliers, but are not required to
pay for their purchases until some future date.
A) Secured credit
B) Trade credit
C) Revolving credit
36) Which of these is a common source of long-term financing for a corporation?
A) a revolving credit agreement
B) commercial paper
C) a bond issue
D) trade credit
37) Corporations benefit from securities markets primarily by:
A) creating an efficient mechanism to invest in stocks and bonds.
B) obtaining the capital they need to finance their operations.
C) securing memberships on various stock exchanges.
D) participating in the mutual funds of investment bankers.
38) Using information not available to the public to unfairly benefit in the stock market represents:
A) security fraud.
B) an unethical, but a legal activity.
C) blue-sky violations.
D) insider trading.
39) ___________ are the firm’s after tax profits that are distributed to stockholders.
A) Equity capital
B) Interest payments
D) Retained earnings
40) Which of the following represents a disadvantage of issuing bonds?
A) Bonds are permanent debt on the firm’s balance sheet.
B) Dividends are legally required.
C) Bonds increase the firm’s debt.
D) Bondholders receive voting rights.
41) Diversification means:
A) Allocating all your investment funds into one type of investment.
B) buying investments on margin.
C) being knowledgeable about the various types of investment opportunities.
D) allocating your investment funds to several types of investments.
42) The term ________ refers to investors who anticipate increases in stock prices.
43 ) Which of the following offers low risk, guaranteed income, backed by the full faith and credit of the federal government?
B) U.S. government preferred stocks
C) Common stock in the U.S. postal service
D) U.S. government bonds
44) Which of the following describes a benefit enjoyed by investors in mutual funds?
A) Guaranteed dividend payments are received annually.
B) Investment risk is eliminated.
C) Investors buy an ownership interest in many different companies.
D) Investors exercise managerial authority in many different companies.
45) Buying several different investment alternatives to spread the risk helps an investor achieve:
A) lower rates of return.
B) lower commission fees.
46) Which of the following is not a favorable characteristic of money?
47) __________ represents the most commonly used definition of the money supply.
48) The Fed Chairman is in control of:
A) the world’s money supply.
B) the U.S. money supply.
C) fiscal policy.
D) the IMF.
49)__________ are nonprofit, member-owned financial cooperatives that offer a full variety of banking services such as accepting deposits and making loans.
A) Mutual thrift associations
B) Credit unions
C) Commercial banks
D) Mutual fund companies
50) The purpose of creating the FDIC was to:
A) restore confidence in banking institutions.
B) serve as clearinghouses for transactions involving commercial banks and savings and loans.
C) provide federally guaranteed insurance to small businesses at low cost.
D) help the Federal Reserve enforce reserve requirements.