Exam 1 Ch. 1-5 Flashcards
1
Q
What is the money that an organization brings in through the sale of it’s goods and services?
A
Revenue
2
Q
The risk and reward relationship
A
Is fundamental to businesses in every modern economy
3
Q
A ______ is a framework of how business intends to generate revenue
A
Business model
4
Q
_______ is the term used to describe the difference between revenue and expenses
A
Profit
5
Q
_______ refers to some aspect of a product or company that makes it more appealing to target customers
A
Competitive advantage
6
Q
An organization that seeks to operate, efficiently, and effectively to achieve its goals, without focusing on profit, as a motive is a _______
A
Nonprofit organization
7
Q
What key aspect of running a business includes the ability to offer valuable goods and services while contributing to society?
A
Corporate social responsibility
8
Q
Businesses can impact society in both positive and negative ways. Occupying land and displacing existing businesses are examples of _______
A
Disrupting communities
9
Q
________ refers to the resources or capabilities a company must have
before it can start competing in a given market.
A
Barriers to entry
10
Q
Businesses that need very large amounts of money, equipment, or
other material resources in order to get started are ________ businesses.
A
capital-intensive
11
Q
Population trends that change the composition of consumer markets
and the workforce are a part of a company’s ________ environment.
A
social
12
Q
Which one of the following is true regarding the economic environment
of business that shapes the behavior of buyers and sellers?
A) Virtually every decision made is influenced by the economic
environment.
B) Population trends, social values, and relationships of society and
business are dependent on the economic environment.
C) Forces resulting from the practical application of science are affected by
the economic environment.
D) Laws and regulations that restrain, support, and protect businesses
protect the economic environment.
E) Targeted customers and competitors that market similar products will not
affect the economic environment.
A
A) Virtually every decision made is influenced by the economic
environment.
13
Q
All groups affected by a company’s activities are referred to as its
________.
A
stakeholders
14
Q
The term ________ refers to forces resulting from the practical
application of science to innovations, products, and processes.
A
technological environment
15
Q
The conditions that affect the cost and availability of goods, services
and labor, and the behavior of buyers and sellers are BEST described as the
________ environment.
A
economic
16
Q
The policies and practices of government bodies would shape the
________ environment for a business.
A
legal and regulatory
17
Q
Which of the following is a component of the specific market
environment within which each business operates?
A) Technological innovations
B) Competitors
C) Environmental restrictions
D) Ethical restrictions
E) The speed of granting permits and licenses
A
B) Competitors
18
Q
What types of technologies are strong enough to create or destroy
companies?
A
Disruptive
19
Q
Which of the following best describes a purpose-driven business?
A) A company that strives to create high financial return for stakeholders
B) A company that strives to follow all laws and regulations in the
international environment
C) A company that strives to incorporate as much technology as possible
D) A company that strives to do more than just make money
E) A company that strives to limit the demand for goods and services
A
D) A company that strives to do more than just make money
20
Q
20) Which of the following best describes a gig economy?
A) Independent workers who utilize sharing services
B) Workers who use smartphones to produce services
C) Workers who use technology to track offerings of competitors
D) Workers who telecommute at least part of the work week
E) Independent contractors who work on short-term projects
A
E) Independent contractors who work on short-term projects
21
Q
________ activities are intended to identify new ideas and designs that
have the potential to result in new goods and services.
A
Research and development
22
Q
________ is the act of designing new and better ways to run a company’s
operations.
A
Process R&D
23
Q
The ________ function of an organization coordinates the incoming flow
of materials and the outgoing flow of finished products.
A
logistics
24
Q
Creating branding and advertising strategies to communicate with
potential customers would fall under the ________ function of a business.
A
marketing
25
________ verify the financial reports of public companies as required by
law.
External auditors
26
________ can be used to get timely, accurate information to the right
people via computer and communication systems.
Information technology (IT)
27
________ is/are the study of how a society uses scarce resources to
produce and distribute goods.
Economics
28
Which of the following refers to people and their individual talents and
capabilities?
A) Knowledge
B) Natural resources
C) Capital investments
D) Human resources
E) Entrepreneurship
D) Human resources
29
The money, equipment, and buildings that a business needs in order to
produce goods and services are called ________.
capital
30
________ is/are led by innovation, initiative, and the willingness to take
the risks in creating and operating businesses.
Entrepreneurship
31
Which of the following creates competition for finite resources, thereby
forcing trade-offs by participants in the economy?
Scarcity
32
The value given up when a different opportunity was pursued is referred
to as ________.
opportunity cost
33
Which factor of production represents the collective intelligence of an
organization?
Knowledge
34
In the global marketplace, which of the following is often a type of key
asset needed to successfully utilize an advantage?
Capital
35
What can companies use to protect themselves in long-term purchasing
contracts?
Price-escalation clause
36
The ________ measures the rate of inflation by comparing changes in the
prices of a representative basket of goods and services such as clothing,
food, housing, and utilities.
consumer price index (CPI)
37
The ________ measures price at the producer or wholesaler level,
reflecting what businesses are paying for the products they need.
producer price index (PPI)
38
In a ________, companies can decide what to produce, how to produce,
whom to sell to, and at what price to sell.
free-market system
39
Which of the following is one of the ways the government helps to
stabilize or stimulate the national economy?
Changing monetary policy
40
Governments established ________ in an effort to ensure all competitors
have an equal chance of succeeding.
antitrust legislation
41
________ laws limit what businesses can and cannot do to ensure that all
competitors have an equal chance of succeeding.
Antitrust
42
Which of the following best describes deregulation?
A) Putting rules in place to govern economic activity
B) Increasing the revenues to stimulate spending and limiting inflation
C) Encouraging all stakeholders to put pressure on organizations to save
money
D) Adjusting the amount of "spendable" money in the economy at any given
time
E) Having fewer rules and relying on the market to prevent excesses
E) Having fewer rules and relying on the market to prevent excesses
43
Which of the following refers to the amount of a good or service that
customers will buy at a given time at various prices?
A) Equilibrium B) Want C) Utility D) Necessity E) Demand
E) Demand
44
) ________ refers to the quantities of a good or service that producers will
provide on a particular date at various prices.
Supply
45
A(n) ________ shows the relationship between the amount of product
that buyers will purchase at various prices, all other factors being equal.
demand curve
46
The ________ depicts the relationship between prices and quantities that
sellers will offer for sale, regardless of demand.
supply curve
47
The point at which the demand and supply curves intersect—the point
at which the quantity demanded and supplied are balanced is called the
________.
equilibrium point
48
The term ________ is used to characterize the fluctuations in an
economy's rate of growth over a period of several years.
business cycles
49
________ occurs when no single firm is large enough to influence prices
and distort the workings of the free-market system.
Pure competition
50
When the number of competitors in a market is small, and competitors
influence each other through production and pricing decisions, a situation
known as ________ is created.
oligopoly
51
Which of the following is a characteristic feature of economic
contraction?
Decreased consumer spendin
52
The term ________ indicates two consecutive quarters of decline in the
country's gross domestic product.
recession
53
A deep and prolonged recession is known as ________.
a depression
54
When a downward swing or recession is over, the economy enters into a
period of ________.
recovery
55
When demand for goods and services drops, businesses reduce
production, resulting in economic contraction. The unemployment resulting
because of this phenomenon is known as ________ unemployment.
cyclical
56
Which of the following reflects the percentage of the labor force
currently without work?
Unemployment rate
57
Money serves as a ________ when it is used as a way of accumulating
wealth until it is needed.
temporary store of value
58
Money serves as a(n) ________ to simplify transactions because a buyer
can trade it for a good or service.
medium of exchange
59
________ rate is the rate a bank charges its best loan customers.
prime
60
The ________ is the federal agency responsible for protecting money in
customer accounts and managing the transition of assets whenever a bank
fails.
Federal Deposit Insurance Corporation
61
Which of the following offers investing and advisory services to
organizational customers, including governments?
Investment bank
62
________ offer financial services to businesses, particularly in the area of
international finance.
Merchant banks
63
) ________ use(s) cloud technology to provide services through mobile and
digital channels, thereby reducing the cost of banking services.
Neobanks
64
The classic theory of comparative advantage suggests that each
country should ________.
specialize in those areas where it can produce more efficiently than other
countries
65
A country has a trade surplus when the ________.
) value of its exports exceeds the value of its imports
66
A country has a trade deficit when the ________.
value of its imports exceeds the value of its exports
67
The number of units of one currency that must be given for a unit of the
second currency is known as the ________ between the currencies.
exchange rate
68
When the U.S. dollar is strong, U.S. exports will likely ________.
cost more in other countries
69
Which of the following is the broadest indicator of international trade
and shows how much is spent on international transactions?
Balance of trade
70
Which of the following arguments supports the idea of free trade?
A) Organizations should prefer local workers to home country workers.
B) International trade takes place without any government interference.
C) Governments should subsidize exporters to promote global trade.
D) Dumping rules and tariffs should be stricter in developing countries.
E) Local businesses should obtain help from governments.
C) Governments should subsidize exporters to promote global trade
71
Which of the following is an objective of protectionism?
A) Increasing foreign direct investment
B) Protecting industries and workers through government policies
C) Helping developing nations engage in global trade
D) Reducing the purchasing power of individuals
E) Enhancing trade between nations
Helping developing nations engage in global trade
72
Taxes, surcharges, or duties levied against imported goods are known
as ________.
tariffs
73
________ limit the amount of particular goods that countries allow to be
imported during a given year.
Import quotas
74
Dumping ________.
involves selling a product at a price lower than the cost of production
75
________ are politically motivated embargoes that revoke a country's
normal trade relations status.
Sanctions
76
________ is a permanent forum for negotiating, implementing, and
monitoring international trade procedures and for mediating trade disputes
among member countries.
World Trade Organization
77
If a country needed help in dealing with a natural disaster, where might
they go?
The International Monetary Fund
78
Which of the following has been created to promote trade and ensure
economic growth of member nations?
Trading blocs
79
Where is the world's largest economy?
The United States
80
A(n) ________ is a country that allows companies the opportunity to
shield some of their income from higher tax rates in their own countries.
tax haven
81
Legal systems in Great Britain and the United States are based on
________, in which tradition, custom, and judicial interpretation play
important roles.
common law
82
Which of the following acts outlaws payments that are intended to get
government officials to break the laws of their own countries or to secure
"improper advantage" in gaining or retaining sales?
A) Foreign Direct Investment Act
B) Federal Corrupt Practices Act
C) Theocratic Laws Payment Act
D) Economic Globalization Act
E) Foreign Corrupt Practices Act
E) Foreign Corrupt Practices Act
83
Which of the following strategies is best when attempting to enter a
foreign market slowly and then designing the firm's product offerings for
that market?
A) Business merger
B) Exporting
C) Foreign direct investment
D) Franchising
E) Joint venture
E) Joint venture
84
________ refers to buying goods or services from a supplier in another
country.
Importing
85
________ agreements entitle one company to use some or all of another
firm's intellectual property in exchange for a royalty payment.
Licensing
86
________ allows a firm to sell the rights for the use of a specific business
system, including trade secrets and brand names.
Franchising
87
In a(n) ________, two or more firms work together to create a new
business entity that is legally separate and distinct from either parent
company.
joint venture
88
Multinational corporations are companies that ________.
have formed strategic alliances with companies across the world
89
Which of the following is one of the least risky forms of international
business activity?
Exporting
90
In a ________ strategy, managerial control is highly centralized and
major decisions for the company's international operations are made at the
company's headquarters in the home country.
global
91
The ability to cover all costs of customization while offering competitive
prices in an international market should be considered in which functional
strategy category?
Pricing
92
________ is/are the principles and standards of moral behavior that are
accepted by society as right and wrong.
Ethics
93
________ refers to the degree to which information flows freely within an
organization, among managers and employees, and outward to
stakeholders.
Transparency
94
A(n) ________ refers to a written statement setting forth the principles
that guide an organization's decisions regarding what is right or wrong.
code of ethics
95
A person's disclosure that exposes illegal or unethical behavior by
others within the organization is ________.
whistle-blowing
96
A situation in which you must choose between two conflicting but
arguably valid alternatives would be known as a(n) ________.
ethical dilemma
97
Choosing an unethical course of action, even where choices are clear,
results in ________.
an ethical lapse
98
________ involves donating money, employee time, or other resources
to various causes without regard for any direct business benefits for the
company.
Philanthropy
99
Supporting job-training efforts in the community as a way to develop
the workforce is an example of ________.
strategic CSR
100
Unlike general philanthropy, strategic CSR ________.
is aligned with a company's overall business strategy
101
According to the ________ view, the only social responsibility of
business is to pay taxes and obey the law.
minimalist
102
Nongovernmental organizations are usually ________.
nonprofit groups that provide charitable services or promote causes
103
Companies have a choice in CSR, but at a minimum, all should practice
ethical choices that ________.
do no harm
104
________ is the study of the relationship between organisms and the
natural environment.
Ecology
105
The ________ establishes procedures for creating geologic repositories
of radioactive waste.
Nuclear Waste Policy Act
106
________ is defined as meeting the needs of the present without
compromising the ability of future generations to meet their own needs.
Sustainable development
107
Which of the following federal legislations limits a credit card holder's
liability for unauthorized use?
Truth in Lending Act (Consumer Protection Credit Act) (1968)
108
The Magnuson-Moss Warranty Act (1975) requires complete written
warranties in ordinary language and requires warranties to be ________.
available before purchase
109
Consumers have the right to buy safe products, and to buy them
safely. Who enforces this?
Consumer Product Safety Commission
110
________ is/are where criminals steal personal information and use it to
commit other types of fraud.
Identity theft
111
According to the ________, consumers have the right to know what they
are buying, how to use the product, and potential risks.
right to be informed
112
Social media has given consumers numerous ways to ask questions,
voice concerns, and otherwise demand attention, supporting which
consumer right?
The right to be heard
113
Which of the following regulatory agencies is responsible for
monitoring the hiring practices of companies and can require them to
compensate individuals who have been victimized by unfair hiring
practices?
A) Employee Protection Commission (EPC)
B) Equal Employment Opportunity Commission (EEOC)
C) Civil Rights Commission (CRC)
D) Employment Regulatory Commission (ERC)
E) Federal Employment Commission (FEC)
Equal Employment Opportunity Commission (EEOC)
114
Activities undertaken by businesses to recruit and promote members
of groups whose economic progress had been hindered through either legal
barriers or established practices are known as ________ programs.
affirmative action
115
Which of the following Acts guarantees equal opportunities in
education and employment for those with health issues and who may
require reasonable accommodation to perform certain job tasks?
A) Occupational Safety and Health (OSHA)
B) The Civil Rights Act of 1991 (CRA)
C) Equal Employment Opportunity (EEO)
D) Affirmative Action
E) Americans with Disabilities Act (ADA)
E) Americans with Disabilities Act (ADA)
116
Two areas of concern with artificial intelligence from an ethical
perspective are embedded biases and ________.
a lack of transparency and accountability
117
Which of the following can create bias in AI systems?
Algorithms and data built with human bias
118
A sole proprietorship ________.
B) is owned by only one person
119
Profits of sole proprietorships ________.
flow directly to the owners
120
Which of the following is a key difference between a corporation and a
sole proprietorship?
A) Establishing a sole proprietorship has complex legal requirements unlike
a corporation.
B) Unlike a sole proprietorship, a corporation has limited financial liability.
C) Regulatory requirements are less severe for corporations than sole
proprietorships.
D) Compared to establishing a proprietorship, establishing a corporation is
easier.
E) Unlike a corporation, a proprietorship is subject to double taxation.
B) Unlike a sole proprietorship, a corporation has limited financial liability.
121
Which of the following is a disadvantage of a sole proprietorship?
A) They usually have fewer financial resources and fewer ways to get funds
from lenders or investors.
B) There is a smaller limit on personal liability.
C) There are no support groups specifically designed for sole proprietors to
seek council on key decisions.
D) Paid vacation time is limited to two weeks per year.
E) Social media sites can be hard to manage.
A) They usually have fewer financial resources and fewer ways to get funds
from lenders or investors.
122
A(n) ________ is an unincorporated company owned by two or more
people.
partnership
123
In a general partnership, ________.
all partners have joint authority to make decisions
124
Which of the following is a key difference between private corporations
and public corporations?
A) Public corporations cannot own property, whereas private corporations
can own property.
B) Private corporations are legally a group of people, whereas public
corporations are distinct from any individual persons.
C) Private corporations cannot own property, whereas public corporations
can own property.
D) Private corporations do not have the power to run a business of its own,
whereas public corporations can run a business of its own.
E) Private corporations are owned by a few people, whereas public
corporations can be owned by anyone who has the means to buy stake.
E) Private corporations are owned by a few people, whereas public
corporations can be owned by anyone who has the means to buy stake.
125
An S corporation ________.
combines limited liability of a corporation with the federal taxation
advantages of a partnership
126
A company that is incorporated in one state but does business in
several other states where it is registered is called a(n) ________.
foreign corporation
127
An S corporation is allowed to have ________.
fewer than 100 investors
128
In a publicly held corporation, the board of directors is ________.
representatives of the shareholder
129
Corporate officers are the ________.
top executives who run a corporation
130
Which is the highest-ranked officer of a corporation?
A) Chief financial officer
B) Chief information officer
C) Chief technology officer
D) Chief executive officer
E) Chief operating officer
D) Chief executive officer
131
Who is responsible for reviewing the long-term plans and major
strategic decisions of an organization?
Board of directors
132
In a ________, two companies join to form a single entity either by
pooling their resources or by one company purchasing the assets of the
other.
merger
133
In a(n) ________, one company buys a controlling interest in the voting
stock of another company.
acquisition
134
A ________ merger occurs when a parent company buys one or more
companies in unrelated industries.
conglomerate
135
With a ________, a targeted company invokes some move that makes it
less valuable to the potential raider, with the hope of discouraging the
takeover.
poison pill defense
136
With the ________ tactic, a third company is invited to acquire a
company that is in danger of being swallowed up in a hostile takeover.
white knight
137
________ is/are the massive data sets that companies collect and
analyze to find trends and insights.
Big data
138
Which type of analytics finds patterns in numerical data?
Data mining
