Business Unit Exam
1. A _____________ economy has characteristics of both planned and market economies.
d. mixed market
2. A(n) ____________ occurs when the quantity supplied exceeds the quantity demanded.
d. demand deficit
3. _____________ exists when an industry has only a handful of sellers, most of which are large.
a. An oligopoly
b. A monopoly
c. Monopolistic competition
d. Perfect competition
4. The _____________ is the pattern of short-term ups and downs in an economy.
a. standard of living
b. business cycle
c. aggregate output
d. balance of payments
5. The _____________ is the amount of money that the government owes to its creditors.
a. aggregate output
b. national debt
c. standard of living
d. business cycle
6. The _____________ is a measure of the prices of typical products purchased by consumers living in urban areas.
a. national debt
b. gross domestic product
c. consumer price index
d. gross national product
7. The law of demand maintains that buyers will purchase more of a product as its price _____________.
a. stays the same
b. fits a person’s personal budget
8. A _____________ is a period during which aggregate output declines.
c. favorable balance of trade
9. A(n) _____________ is a prolonged and deep recession.
b. negative trade balance
10. _____________ are beliefs about what is right and wrong or good or bad.
11. Behavior that conforms to individual beliefs and social norms about what is right and good is referred to as _____________.
b. ethical behavior
d. social reaction
12. Which statement is false?
a. Fewer and fewer companies are adopting codes of ethics.
b. Some ethical responses can be learned through experience.
c. Social responsibility involves providing quality products and pricing products fairly.
d. More and more companies are adopting codes of ethics.
13. Product advertising that some consumers consider morally objectionable would include such products as ____________.
d. All of the above.
14. _____________ is using advertising to project a green image without adopting substantive, environmentally friendly changes.
a. Quality control
d. Green washing
15. When two or more firms agree to collaborate on wrongful acts, it is referred to as ______________.
16. Responding to increased demand with overly steep, and often unwarranted, price increases is called _____________.
a. price matching
b. unit pricing
c. price gouging
d. price fixing
17. The owners of a corporation are the _____________.
a. top managers
c. board of directors
18. Company A purchased Company B. This is an example of a(n) _____________.
19. Which of the following type of store is favored by small-business retailers?
a. specialty shop
c. department store
d. catalog showroom
20. For loans under $35,000, the SBA offers the _____________ program.
b. local development company
21. The _____________ program consolidates information from various disciplines and institutions for use by new and existing businesses.
a. Small Business Development Center
b. Progressive Loan
c. Local Development Company
d. University Network
22. About what percent of all new businesses will not last four years?
a. 16 percent
b. 36 percent
c. 76 percent
d. 56 percent
23. According to authors of your textbook, a new business should have enough capital to operate at least how many months without earning a profit?
24. A _____________ invests all of the funds needed for a business but plays no role in its management.
a. silent partner
b. general partner
c. sole proprietor
25. Which of the following is NOT an advantage of the corporate form of organization?
b. professional management
c. limited liability
d. low startup costs
26. In a(n) _____________ corporation, owners are taxed like partners but have limited liability.
a. limited liability
27. Products created abroad and then transported and sold domestically are called _____________.
d. buy backs
28. Which country dominates the Pacific Asia region economically?
b. South Korea
29. The _____________ is the rate at which the currency of one nation can be exchanged for that of another.
a. trade surplus
b. floating interest rate
c. balance of payments
d. exchange rate
30. With a(n) _____________ exchange rate, the value of a country’s currency remains constant relative to that of another country.
31. Which of the following international organization strategies consists of firms giving individuals or companies in a foreign country exclusive rights to manufacture or market their products in that market?
a. independent agents
b. branch offices
c. strategic alliances
d. licensing arrangements
32. The ABC Paint Company in the United States has joined forces with the 1-2-3 Plastics Company in Italy to create a non-pealing, plastics-based paint. Both companies intend to share the research costs and any profits. This is an example of _____________.
a. a strategic alliance
b. foreign direct investment
c. viral marketing
d. a licensing arrangement
33. Associations of producers that control supply and prices are called _____________.
a. business offices
d. independent agents
34. Which of the following countries is not considered a part of Pacific Asia?
a. Saudi Arabia
d. South Korea
35. A main purpose of tariffs on imports is to _____________.
a. increase imports
b. promote free trade
c. stabilize foreign currencies
d. maintain domestic competitiveness
36. Statements of how organizations will achieve their purposes in the environments in which they conduct their business are called _____________.
a. intermediate goals
b. long-term goals
c. mission statements
d. short-term goals
37. The purpose of _____________ analysis is to better understand a company’s internal strengths and weaknesses.
c. human resource
38. The management function of _____________ involves setting goals, developing a strategy to reach each goal and designing plans to implement each strategy.
39. Hewlett Packard’s decision to move towards a more centralized structure is an example of _____________.
40. Which of the following are directly responsible for getting products from producers to consumers?
a. information managers
b. marketing managers
c. operations managers
d. production managers
41. Which of the following design and implement systems to gather, organize and distribute information?
a. marketing managers
b. production managers
c. information managers
d. human resource managers
42. Centralized firms tend to be _____________.
c. very responsive to change
43. The duty to perform an assigned task is called _____________.
44. _____________ is the obligation employees have to their manager for the successful completion of an assigned task.
d. Span of control
45. Authority that flows up and down the chain of command is called _____________ authority.
46. Authority given to a special group of employees that play central roles in the firm’s daily operations is called _____________.
a. risk aversion
b. line authority
c. matrix organization
d. committee and team authority
47. Sears can calculate the profits it generates from appliances, home furnishings and every other department in the store if it treats each department as a _____________.
a. profit center
b. centralized unit
c. cost center
d. economic unit
48. In a _____________ organization, decision-making authority is delegated to levels of management at various points below the top.
49. Departments that resemble separate businesses in that they produce and market their own products are called _____________.
b. function centers
c. cost centers
50. Most service operations provide combinations of _____________ and ______________.
a. goods; services
b. high; low quality levels
c. make-to-stock; make-to-order operations
d. low; high-contact systems
51. Which of the following is NOT a component of materials management?
c. supplier selection
52. _____________ is the evaluation of all work activities, materials flows and paperwork to determine the value that they add for customers.
a. Quality management
c. Value-added analysis
d. Bench marking
53. The _____________ is the flow of information, materials and services from raw-materials suppliers through stages in the operations process until the product reaches the end customer.
a. supply chain
b. distribution chain
c. service channel
d. distribution channel
54. In a _____________ production system, all the needed materials and parts arrive at the precise moment they are required for each production stage.
a. quality control
b. process control
55. Which of the following best describes business process re engineering?
a. a program certifying that a factory, laboratory or office has developed pollution-control standards
b. the redesigning of business processes to improve performance, quality and productivity
c. a program certifying that a factory, laboratory or office has met the quality management standards of the International Organization for Standardization
d. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system
56. _____________ is the positive behaviors that do not directly contribute to the bottom line.
a. Counterproductive behavior
b. Organizational citizenship
c. Performance behavior
d. Employee behavior
57. _____________ refers to one’s ability to get along with others.
a. Managing emotions
58. Managers who subscribe to _____________ believe that people are naturally energetic, growth-oriented, self-motivated and interested in being productive.
a. scientific management
b. two-factor theory
c. Theory X
d. Theory Y
59. Christine Choi is a programmer for BMC Software in Houston. In terms of a psychological contract, her _____________ include her education, skills, effort, time and energy.
60. Status and job titles can meet the _____________ needs level in the hierarchy of needs model.
61. _____________ is designed to change behavior by presenting people with unpleasant consequences if they fail to change in desirable ways.
b. Piecework rewards
c. Organizational goal setting
d. Positive reinforcement
62. Who does MBO involve in the organization?
a. subordinates only
b. managers and subordinates
c. managers only
d. everyone working as a team
63. According to Kotter, when developing a human network for achieving the agenda, managers focus on _____________.
a. organizing and staffing
b. motivating and inspiring
c. aligning people
d. controlling and problem solving
64. In referring to cross-cultural leadership, culture refers to _____________.
a. international differences
b. neither international differences nor diversity-based differences within one culture
c. international differences and diversity-based differences within one culture
d. diversity-based differences within one culture
65. To be an effective strategic leader, a manager needs to have an understanding of the organization’s _____________.
c. strengths and weaknesses
d. All of the above.
66. _____________ lead for stability; _____________ lead for change.
a. Organizers; managers
b. Leaders; managers
c. Leaders; predictors
d. Managers; leaders
67. According to the situational approach to leadership, the extent to which a leader or subordinate is involved in decision making depends on characteristics of _____________.
a. the subordinate(s)
b. the leader
c. the situation
d. Any of the above.
68. Which of the following best defines decision making?
a. reducing risk
b. choosing one alternative from among several
c. avoiding escalation of commitment
d. analyzing the environment
69. _____________ refers to the set of organizational activities directed at attracting, developing and maintaining an effective workforce.
a. Human resource management
b. Production management
c. Development of a mission statement
d. Operations management
70. Which of the following describes the skills, abilities and qualifications required for a job?
a. staffing survey
b. employee analysis
c. job specification
d. advertising budget
71. Which of the following links salary increases to performance levels in non sales jobs?
a. cafeteria benefit plans
b. merit salary systems
d. workers’ compensation insurance
72. Some incentive programs apply to all employees in a firm. Paying workers to learn new skills and to become proficient at different jobs is called a ____________ plan.
c. gain sharing
d. None of the above.
73. Which of the following types of training occurs while the employee is at his or her place of work?
a. off-the-job training
b. incentive training
c. vestibule training
d. on-the-job training
74. The total package that a firm offers employees in return for their labor is called a ______________.
c. benefits package
d. compensation system
75. An executive who is paid $2.5 million to achieve results, even if that means working 5 hours one day and 15 the next, is typically paid a(n) _____________.
a. fringe benefits
76. Which of the following emphasizes lasting relationships with customers and suppliers?
b. relationship marketing
c. industrial marketing
d. personal selling
77. Which of the following matches the products of domestic marketers against those of foreign competitors?
a. substitute competition
b. international competition
c. brand competition
78. _____________ are the qualities, tangible and intangible, that a company builds into its products.
a. Safety devices
79. Brand _____________ refers to the extent to which a brand name comes to mind when the consumer considers a particular product category.
80. The marketing mix element of communicating information about products is referred to as ______________.
81. Which of the following types of variables describe populations and identify traits such as age, income, gender and marital status?
82. During the _____________ stage of the product life cycle, sales begin to slow down but profit levels are at their highest. Competition becomes more active and toward the end of this stage sales start to fall.
83. A distribution channel with no intermediaries is _____________.
a. a quick channel
b. not possible
c. very rare
d. a direct channel
84. A salesperson communicates one-to-one with potential customers to identify their needs and to line them up with the seller’s product through _____________.
b. personal selling
c. personal endorsement advertising
d. sales promotion
85. Which of the following is NOT a type of sales promotion?
a. free samples
b. personal selling
c. point-of-sale displays
86. Convenience stores/gas stations are examples of which kind of distribution?
a. a combined channel
b. retail distribution
c. direct channel
d. wholesale distribution
87. _____________ are the slowest and the cheapest modes of transportation.
d. Water carriers
88. _____________ is crucial for high-priced consumer products such as homes and cars.
a. Interactive marketing
b. Missionary selling
c. Order processing
d. Creative selling
89. _____________ allows participants to see one another on video screens while the conference is in progress.
a. Data conferencing
b. Digital information service
c. Voice mail
90. A firewall provides _____________.
a. protection from electrical surges
b. the connection of stations in a LAN
c. privacy protection
d. Internet access
91. The protocol used to send e-mail is called _____________.
a. extranet transfer protocol (SMTP)
b. post office protocol (POP)
c. hypertext transfer protocol (HTTP)
d. All of the above.
92. A(n) _____________ system is an interactive system that creates virtual business models and tests them with different data to see how they respond.
a. decision support
d. management information
93. _____________ are costs, other than the cost of goods sold, incurred in producing a good or service.
a. Operating incomes
b. Inventory expenses
c. Operating expenses
94. The formula for the _____________ is current assets divided by current liabilities.
a. current ratio
b. acid test ratio
c. profit margin
d. return on equity
95. _____________ is the ability of a firm to finance an investment through borrowed funds.
96. The management of the nation’s economic growth by managing money supply and interest rates is called a _____________ policy.
97. Which of the following is an advantage of ETFs over mutual funds?
a. ETFs have low operating expenses.
b. ETFs do not require high initial investments.
c. ETFs can be traded throughout the day like a stock.
d. All of the above.
98. New stocks and bonds are sold in the _____________.
a. secondary market
b. primary securities market
c. tertiary market
d. private placement market
99. _____________ receive and execute buy-and-sell orders for other people in return for commissions.
a. Stock exchanges
b. Investment banks
c. Stock brokers
d. Stock agents
100. _____________ is a financial institution that specializes in issuing and reselling new securities.
a. The New York Stock Exchange
b. The secondary securities market
c. A commercial bank
d. An investment bank
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