Archive for January 2021

At one time, companies developed products and promotions to please large groups of people, and tried to sell as many products to as many people as possible. This is known as:

At one time, companies developed products and promotions to please large groups of people, and tried to sell as many products to as many people as possible. This is known as:



a) forming a community of buyers.

b) a consumer orientation.

c) mass marketing.

d) relationship marketing.


Answer: C

Intermediaries are:

Intermediaries are:



a) consumers who are in the middle of the consumer decision-making process.

b) social service agencies responsible for evaluating the ethical considerations involved in developing a new product.

c) companies responsible for developing products to sell to businesses.

d) organizations that are in the middle of a series of organizations that distribute goods from producers to consumers.



Answer: d

The idea behind the marketing concept is ___________.

The idea behind the marketing concept is ___________.



a) building satisfying relationships between buyers and sellers, even if some years the seller experiences losses


b) a mutually beneficial exchange between buyers and sellers, where buyers receive quality products and good service, and sellers realize a profit


c) increasing productivity, by creating innovative products and producing as much as possible, in a short amount of time


d) understanding how to sell each and every product available, in a transactional type environment



Answer: B

Marketers constantly require good information if they are to meet or exceed their customers' expectations. When performing marketing research, Mac and Zach's first step is to:

Marketers constantly require good information if they are to meet or exceed their customers' expectations. When performing marketing research, Mac and Zach's first step is to:



a) determine the type of information (the question) they are seeking to solve.

b) collect research data from secondary and primary sources.

c) cross-tabulate the data into quantifiable statements.

d) analyze any data they receive from outside sources.



Answer: A

Business-to-business (B2B) customers _________________.

Business-to-business (B2B) customers _________________.




a) tend to be geographically dispersed, rather than concentrated


b) are more numerous compared to consumer customers


c) never require personal selling, as do consumers


d) tend to be more rational in their decision making than individual consumers



Answer: D

Lauren is heading home from work and realizes she forgot to buy cat food during her lunch hour. As she navigates the traffic, she tries to decide where it will be most convenient to stop. She could go to the large discount store, which would give her the best price, but the lines are usually long after work. There are a couple of convenience stores on her route, but she isn't certain they will have her cat's brand. The grocery store is no better than the discount store after work. She settles on one of the drug store chains that also has just about everything. It is larger than the convenience stores, but never as crowded as the grocery store or discount store. In terms of consumer behavior, _____________ influences have guided Lauren's decision.

Lauren is heading home from work and realizes she forgot to buy cat food during her lunch hour. As she navigates the traffic, she tries to decide where it will be most convenient to stop. She could go to the large discount store, which would give her the best price, but the lines are usually long after work. There are a couple of convenience stores on her route, but she isn't certain they will have her cat's brand. The grocery store is no better than the discount store after work. She settles on one of the drug store chains that also has just about everything. It is larger than the convenience stores, but never as crowded as the grocery store or discount store. In terms of consumer behavior, _____________ influences have guided Lauren's decision.



a) situational

b) cognitive dissonance

c) radical

d) reference group



Answer: A

After one year of operation, Mac and Zach learned that several enthusiastic baseball players were driving to a larger town to receive similar services. In order to learn about the potential customers who were going elsewhere for service, Mac and Zach proceeded to look online to determine how competitors' services differed from theirs. They learned that competitors were open longer hours on weekends, and even had celebrity endorsements. The new information they gathered, and its interpretation was the _______________ part of the marketing research process.

After one year of operation, Mac and Zach learned that several enthusiastic baseball players were driving to a larger town to receive similar services. In order to learn about the potential customers who were going elsewhere for service, Mac and Zach proceeded to look online to determine how competitors' services differed from theirs. They learned that competitors were open longer hours on weekends, and even had celebrity endorsements. The new information they gathered, and its interpretation was the _______________ part of the marketing research process.



a) data gathering

b) analysis

c) creation of the research questions

d) venture finding



Answer: B

Market segmentation is about dividing the total market for a product or service into groups with similar characteristics and needs. Marketers often divide the total market for their products and services demographically, either by age, education, or income level. If they wanted to know if all 18-year-olds in their market had similar TV show and movie interests, their inquiry would also focus on _____________ segmentation.

Market segmentation is about dividing the total market for a product or service into groups with similar characteristics and needs. Marketers often divide the total market for their products and services demographically, either by age, education, or income level. If they wanted to know if all 18-year-olds in their market had similar TV show and movie interests, their inquiry would also focus on _____________ segmentation.



a)psychographic

b) geographic

c) volume

d) benefit



Answer: A

When McDonald's considered adding pizza to their menu, the company made pizza available in some of their more established markets, to determine customer reactions. That process is called:

When McDonald's considered adding pizza to their menu, the company made pizza available in some of their more established markets, to determine customer reactions. That process is called:



a) concept coordination.

b) outsourcing.

c) test marketing.

d) promotion.



Answer: C

Two baseball leagues in the city, where Mac and Zach plan to open their sports academy, agreed to allow them to distribute an e-mail survey to their league players. In order to capture this opportunity, Mac quickly put together a set of 15 questions that inquire about the type of skills (batting, pitching, fielding, running) that league players want to develop. The survey and subsequent information this research would glean is called ________________ data.

Two baseball leagues in the city, where Mac and Zach plan to open their sports academy, agreed to allow them to distribute an e-mail survey to their league players. In order to capture this opportunity, Mac quickly put together a set of 15 questions that inquire about the type of skills (batting, pitching, fielding, running) that league players want to develop. The survey and subsequent information this research would glean is called ________________ data.



a) focus group

b) secondary

c) primary

d) tertiary



Answer: C

When Maritza Toros opened her Mexican restaurant in a fashionable suburb of Kansas City, she believed that the most important element of her success would be promotion. She made sure that a significant portion of her budget was devoted to advertising in local papers, sent out coupons and really focused on the promotional aspects of the restaurant. Which of the four eras of marketing does it seem that Maritza emphasized?

When Maritza Toros opened her Mexican restaurant in a fashionable suburb of Kansas City, she believed that the most important element of her success would be promotion. She made sure that a significant portion of her budget was devoted to advertising in local papers, sent out coupons and really focused on the promotional aspects of the restaurant. Which of the four eras of marketing does it seem that Maritza emphasized?



a) Marketing

b) Production

c) Customer relationship management

d) Selling



Answer: D

Through environmental scanning, marketers can learn new ways to reach prospective customers. As they scan the _____________ environment, Mac and Zach hope to buy the most state-of-the-art mechanical pitching arms for their youth sports academy.

Through environmental scanning, marketers can learn new ways to reach prospective customers. As they scan the _____________ environment, Mac and Zach hope to buy the most state-of-the-art mechanical pitching arms for their youth sports academy.



a) social

b) technological

c) global

d) economic



Answer: B

Up until now, Mac and Zach's Youth Sports Academy has served the ____________ market. Just recently, the local high school contacted them inquiring about practice space for boys' baseball and girls' softball during bad weather. If they negotiate a contract with the high school, they will also be serving the ___________ market.

Up until now, Mac and Zach's Youth Sports Academy has served the ____________ market. Just recently, the local high school contacted them inquiring about practice space for boys' baseball and girls' softball during bad weather. If they negotiate a contract with the high school, they will also be serving the ___________ market.



a) B2B; consumer

b) consumer; B2B

c) female softball; boys' baseball

d) sociocultural; competitive



Answer: B

When Sun-2-Shade needed some information about the potential market for their product, the marketing team looked to the Internet to find industry trends, and at the market for eyewear products, which uses the same technology that is used in their self-darkening windshield. The type of information the marketing team was using is referred to as:

When Sun-2-Shade needed some information about the potential market for their product, the marketing team looked to the Internet to find industry trends, and at the market for eyewear products, which uses the same technology that is used in their self-darkening windshield. The type of information the marketing team was using is referred to as:



a) surveys.

b) secondary data.

c) focus groups.

d) primary data.



Answer: B

Marketing strategies for the business-to-business market:

Marketing strategies for the business-to-business market:



a) are basically similar to the consumer market, because business buyers are also consumers.

b) differ from consumer marketing strategies because the nature of the buyers is different.

c) are not concerned with relationship marketing techniques.

d) are concerned with the same types of purchasing influences as those in the consumer market.



Answer: B

Recently, Mac and Zach's Youth Sports Academy has had several inquiries about girls' softball. While scanning the ____________ environment in their service area, they become aware of the growing importance of girls' sports, and particularly girls' softball. Girls' softball received a boost in their local market when the high school team won the state championship. Mac and Zach are seriously considering expanding their operation to include softball skill lessons for young girls.

Recently, Mac and Zach's Youth Sports Academy has had several inquiries about girls' softball. While scanning the ____________ environment in their service area, they become aware of the growing importance of girls' sports, and particularly girls' softball. Girls' softball received a boost in their local market when the high school team won the state championship. Mac and Zach are seriously considering expanding their operation to include softball skill lessons for young girls.



a) sociocultural

b) competitive

c) economic

d) technological



Answer: A

Mac and Zach want to start their own youth sports academy aiming to teach baseball skills to young boys. Which of the following steps in the marketing process is a good place to begin?

Mac and Zach want to start their own youth sports academy aiming to teach baseball skills to young boys. Which of the following steps in the marketing process is a good place to begin?



a) Find out what young baseball players want to achieve and what's important to them.

b) Create the pricing structure for their new idea.

c) Locate a building that is centrally located.

d) Design the product and service they plan to offer.



Answer: A

The increase in the number of older Americans has created a growing demand for nursing homes, health care, continuing education and more. This is as a result of the changes in the ____________ factors in the environment.

The increase in the number of older Americans has created a growing demand for nursing homes, health care, continuing education and more. This is as a result of the changes in the ____________ factors in the environment.



a) economic

b) technological

c) sociocultural

d) global



Answer: C

As Mac and Zach explore the possibility of starting a youth sports academy, they collect demographic and lifestyle information about the families who would potentially buy their service. This exercise will help to better identify their ________.

As Mac and Zach explore the possibility of starting a youth sports academy, they collect demographic and lifestyle information about the families who would potentially buy their service. This exercise will help to better identify their ________.



a) ability to become good business persons


b) target market


c) affinity for the business world


d) product offering



Answer: B

Ben oversaw the work of six pharmaceutical sales managers in the southeast region of the U.S. Each sales manager managed a team of 8-10 pharmaceutical sales representatives that developed relationships with doctors, clinics, hospital pharmacies and local drug stores. Ben met regularly with four others in his company whose jobs were similar to his position. How would you describe the level of management Ben has achieved?

Ben oversaw the work of six pharmaceutical sales managers in the southeast region of the U.S. Each sales manager managed a team of 8-10 pharmaceutical sales representatives that developed relationships with doctors, clinics, hospital pharmacies and local drug stores. Ben met regularly with four others in his company whose jobs were similar to his position. How would you describe the level of management Ben has achieved?



a) Top management

b) Supervisory management

c) Middle management

d) First-line management



Answer: c

At Schwinn, managers of various new departments in the company were told, "Go out and shape the department the way you feel is best. You have total freedom and support." Schwinn's managers operate under a system of:

At Schwinn, managers of various new departments in the company were told, "Go out and shape the department the way you feel is best. You have total freedom and support." Schwinn's managers operate under a system of:



a) participative leadership.

b) productive delegation techniques.

c) ree-rein leadership.

d) autonomous decision making.



Answer: c

A mobile veterinary business, Preferred Pet Care, Inc., created a mission statement long before it opened its doors for business. The mission statement referred to the unique characteristic of the business: a traveling pet unit whose veterinarians went to the home of the pet owner, rather than the pet owner bringing the pet to the clinic. What other criteria should be considered for the mission statement?

A mobile veterinary business, Preferred Pet Care, Inc., created a mission statement long before it opened its doors for business. The mission statement referred to the unique characteristic of the business: a traveling pet unit whose veterinarians went to the home of the pet owner, rather than the pet owner bringing the pet to the clinic. What other criteria should be considered for the mission statement?



a) A description of the management team and the firm's long-term financial goals.

b) A description of the management team and its global perspective.

c) A description of the customers it serves and a statement about its social responsibility to the area where it operates.

d) A description of the firm's SWOT analysis and its organization chart.



Answer: c

Contemporary managers ___________.

Contemporary managers ___________.


a) become specialists in only one or two functional areas.

b) function solely as intermediaries between workers and labor unions.

c) must closely supervise highly skilled workers who would like to "do their own thing."

d) emphasize teamwork and cooperation, and act as coaches, rather than bosses.



Answer: d

Dave facilitated a hiring committee for his advertising company. Six employees (including two managers) met together to discuss applicants and select the finalists for a copywriter position in the public relations department. Although the head of public relations would have the final nod on the candidate that would ultimately be hired, the evaluative work of the committee was very important because this group would send forward those persons they believed would be good work colleagues. In setting up this type of hiring process, the head of public relations was utilizing a(n) __________ style of leadership.

Dave facilitated a hiring committee for his advertising company. Six employees (including two managers) met together to discuss applicants and select the finalists for a copywriter position in the public relations department. Although the head of public relations would have the final nod on the candidate that would ultimately be hired, the evaluative work of the committee was very important because this group would send forward those persons they believed would be good work colleagues. In setting up this type of hiring process, the head of public relations was utilizing a(n) __________ style of leadership.



a) contingent

b) participative

c) autocratic

d) free-rein



Answer: b

As managers perform all four management functions, we recognize that ________ is required. For example, when making plans, the manager must typically choose between two or three alternatives, that have pros and cons.

As managers perform all four management functions, we recognize that ________ is required. For example, when making plans, the manager must typically choose between two or three alternatives, that have pros and cons.



a) decision making

b) operational planning

c) tactical planning

d) tabulating



Answer: a

All managers do planning. Allison is a general manager for a large toy store. Each day she plans the number of employees she will have in each department, including the number of cashiers. She plans the break schedules and the freight delivery schedules. In the business world, we refer to this type of planning as ___________.

All managers do planning. Allison is a general manager for a large toy store. Each day she plans the number of employees she will have in each department, including the number of cashiers. She plans the break schedules and the freight delivery schedules. In the business world, we refer to this type of planning as ___________.



a) operational planning


b) contingency planning


c) strategic planning


d) tactical planning



Answer: a

Most businesses follow a logical process when performing the planning function. It is important to understand ______________________, before embarking upon creating future long-term goals, objectives, and strategies.

Most businesses follow a logical process when performing the planning function. It is important to understand ______________________, before embarking upon creating future long-term goals, objectives, and strategies.


a) how to evaluate job descriptions and specifications

b) how to measure objectives

c) the current situation

d) the needs of secondary suppliers



Answer: c

Which of the following is a false statement?

Which of the following is a false statement?



a) Companies are organizing so that customers have more influence.

b) General consensus is that larger companies are more responsive to customer needs than smaller companies.

c) Companies are looking at the best way to organize to respond to the needs of customers.

d) Many large firms are being restructured into smaller, customer-focused units.



Answer: b

After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture into his own business. As he prepared his SWOT analysis, he evaluated where he stood at this time. He was fortunate to have $100,000 financing to get the business under way. He knew of three skilled installers who were willing and interested to work for him, and he was aware that new construction was at an all-time low, with several residential properties being foreclosed. In reviewing his list, you would categorize these events as __________.

After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture into his own business. As he prepared his SWOT analysis, he evaluated where he stood at this time. He was fortunate to have $100,000 financing to get the business under way. He knew of three skilled installers who were willing and interested to work for him, and he was aware that new construction was at an all-time low, with several residential properties being foreclosed. In reviewing his list, you would categorize these events as __________.



a) two strengths and one opportunity


b) two strengths and one threat


c) three opportunities and one threat


d) three opportunities and one weakness



Answer: b

The controlling function closes the loop for managers. It answers the question: "Did we succeed in what we set out to do?" Which of the following business departments has a very important role in the controlling function?

The controlling function closes the loop for managers. It answers the question: "Did we succeed in what we set out to do?" Which of the following business departments has a very important role in the controlling function?


a) Retail sales clerks

b) Accounting department

c) Preliminary design engineers

d) Shipping department


Answer: b

Which of the following is not characteristic of a leader?

Which of the following is not characteristic of a leader?



a) A leader will always attempt to keep operations from changing.

b) A leader will establish corporate values.

c) A leader will emphasize corporate ethics.

d) A leader has a vision and rallies others around the vision.



Answer: a

Cara started a small business a little less than 10 years ago. The business employed several social workers and nurses that visited and cared for persons who had left hospital care, but were not quite ready to be on their own at home. As the CEO of the firm, Cara decided it was time to hire a business operations manager and a marketing manager to handle the details of the business. Which of the following functions of management was Cara primarily performing?

Cara started a small business a little less than 10 years ago. The business employed several social workers and nurses that visited and cared for persons who had left hospital care, but were not quite ready to be on their own at home. As the CEO of the firm, Cara decided it was time to hire a business operations manager and a marketing manager to handle the details of the business. Which of the following functions of management was Cara primarily performing?



a) Leading

b) Controlling

c) Organizing

d) Planning



Answer: c

Which of the following control standards is stated most effectively?

Which of the following control standards is stated most effectively?



a) Praise employees more often this month.

b) Cut the number of finished product rejects.

c0 Increase sales of our top-end product from 2000 in the first quarter to 3000 during the same period by 2017.

d) Empower employees to make more decisions next year.



Answer: c

A traditional tool that serves as a way of evaluating a company's current business situation is called the SWOT Analysis. This is an acronym for ___________.

A traditional tool that serves as a way of evaluating a company's current business situation is called the SWOT Analysis. This is an acronym for ___________.



a) Strengths, Weaknesses, Opportunities, Threats

b) Strategize it, Write it, Obtain it, Trust it

c) Strategic, Willingness, Oneness, Tactics

d) Say it, Weigh it, Own it, Try it



Answer: a

The recent financial crisis created problems for companies because:

The recent financial crisis created problems for companies because:



a) companies had to cut managers and lay off many workers.

b) it was difficult to find available workers to fill jobs in basic manufacturing.

c) management moved away from the team concept to an emphasis on discipline and order giving as more workers refused to leave jobs.

d) managers found many options for financing as banks looked for more customers.



Answer: a

The first step in developing a knowledge management system is:

The first step in developing a knowledge management system is:



a) setting goals and developing action plans.

b) finding answers to questions from the SWOT analysis.

c) establishing high performance standards.

d) determining what knowledge is most important.



Answer: d

Sergey Brin and Larry Page are the founders of Google. Most would agree that they have a superb product, but in order to grow, the company needed more structure. Together, they agreed to hire Eric Schmidt to join the executive team as the executive chairman. Schmidt quickly began performing the ________ function, where he created well-structured departments and hired skilled people to perform the various functions of the business.

Sergey Brin and Larry Page are the founders of Google. Most would agree that they have a superb product, but in order to grow, the company needed more structure. Together, they agreed to hire Eric Schmidt to join the executive team as the executive chairman. Schmidt quickly began performing the ________ function, where he created well-structured departments and hired skilled people to perform the various functions of the business.



a) planning

b) organizing

c) contingency planning

d) controlling



Answer: b

Select the statement that best substantiates why we say, "The role of management is changing."

Select the statement that best substantiates why we say, "The role of management is changing."


a) Future managers must have their ear and eye toward domestic issues because the goal is to bring jobs back to the U.S. by eliminating outsourcing.


b) Managers will evolve toward measuring and evaluating individual employee performance and eliminate employees who prefer not to work independently.


c) Contemporary managers will focus on global issues and green issues, and continue to emphasize the team approach to work.


d) Contemporary managers will emphasize structure and less creative thinking, particularly during recessionary times.



Answer: c

"We believe in creating loyal customers by providing a superior experience at a great value. We are committed to direct relationships, providing the best products and services based on standards-based technology, and outperforming the competition with value and a superior customer experience." This statement is a part of Dell's:

"We believe in creating loyal customers by providing a superior experience at a great value. We are committed to direct relationships, providing the best products and services based on standards-based technology, and outperforming the competition with value and a superior customer experience." This statement is a part of Dell's:



a) functional objectives.


b) mission statement.


c) short-term strategy.


d) near-term goals.



Answer: b

Harry is a supervisor in a small automotive shop. He spends a lot of his time training some workers, while helping others solve some of the problems they have in doing their jobs. He also runs the diagnostic machine. Harry spends time on:

Harry is a supervisor in a small automotive shop. He spends a lot of his time training some workers, while helping others solve some of the problems they have in doing their jobs. He also runs the diagnostic machine. Harry spends time on:



a)staffing skills.

b) human relations skills.

c) conceptual skills.

d) technical skills.



Answer: d

Proponents of corporate social responsibility strongly believe in benevolence; however, they still want their businesses to be profitable. In the long run, they believe ______________.

Proponents of corporate social responsibility strongly believe in benevolence; however, they still want their businesses to be profitable. In the long run, they believe ______________.



a) benevolence can lead to a vote of no confidence by company stakeholders


b) CSR can lead to even more profits


c) the fastest way to demoralize your stakeholders is to spend too much money supporting social issues, such as having employees assist in community efforts


d) firms should take added caution not to support government programs that protect the environment



Answer: b

A legal provision known as the _______________ now provides an award for whistleblowers whose actions result in a legal conviction. The monetary award may total as high as 30% of the amount collected for violations, above the first $1 million.

A legal provision known as the _______________ now provides an award for whistleblowers whose actions result in a legal conviction. The monetary award may total as high as 30% of the amount collected for violations, above the first $1 million.



a) Sarbanes-Oxley Ruling

b) Internal Audit Company Protection Act

c) Dodd-Frank Wall Street Reform and Consumer Protection Act

d) Sherman Act



Answer: c

The first day on the job waiting tables at a popular restaurant, Ashley noticed that when one member of the wait staff was serving a very large party, the other waiters would help with carrying food to the tables and even checking to make sure water glasses were filled. Although these actions were not part of the mandatory wait staff training, Ashley perceived that wait staff members who were not attentive in helping out were not viewed as team players by the majority of employees. Ashley was observing an example of the ___________ followed at this organization.

The first day on the job waiting tables at a popular restaurant, Ashley noticed that when one member of the wait staff was serving a very large party, the other waiters would help with carrying food to the tables and even checking to make sure water glasses were filled. Although these actions were not part of the mandatory wait staff training, Ashley perceived that wait staff members who were not attentive in helping out were not viewed as team players by the majority of employees. Ashley was observing an example of the ___________ followed at this organization.



a)social order ethics

b) integrity-based ethics

c) compliance-based ethics

d) actual ethics



Answer: b

Which of the following is the best reason for a business to be managed ethically?

Which of the following is the best reason for a business to be managed ethically?



a) So that government regulators will not be able to complain about the ethical behavior of the company.

b) If the company is engaged in a lawsuit, the ethics code can be used as a legal defense.

c) An ethically managed business helps to reduce employee turnover.

d) Business leaders don't want to get caught behaving unethically.



Answer: c

U.S. companies that operate abroad, particularly those who contract with foreign companies, are now ________ human rights and environmental standards followed by U.S. law.

U.S. companies that operate abroad, particularly those who contract with foreign companies, are now ________ human rights and environmental standards followed by U.S. law.



a) separating themselves from suppliers who violate

b) asking suppliers to lower their standards to be in compliance with

c) free from the concern of

d) requiring suppliers to be evaluated monthly concerning



Answer: a

The Pak-It-Your-Way Company makes custom packaging of all kinds. The firm has evolved into a big business due to quality and innovative work. Recently, top management asked company departments to list and evaluate the kinds of socially responsible efforts conducted internally and externally in the business and also to list negative occurrences that supervisors observed. Top management is essentially conducting a(n)_____________.

The Pak-It-Your-Way Company makes custom packaging of all kinds. The firm has evolved into a big business due to quality and innovative work. Recently, top management asked company departments to list and evaluate the kinds of socially responsible efforts conducted internally and externally in the business and also to list negative occurrences that supervisors observed. Top management is essentially conducting a(n)_____________.



a) social audit


b) aggregate independent appraisal


c) 360-review


d) internal investigation



Answer: a

Government and business leaders are being held to:

Government and business leaders are being held to:



a) lower ethical standards than in the past.

b) ethical standards in the U.S., but unfortunately foreign leaders are not being subjected to ethical scrutiny.

c) ethical standards are often unreasonable and cannot be met by most leaders.

d) higher ethical standards than in the past.



Answer: d

Which of these actions is least likely to restore the trust of the American public in the free-market system?

Which of these actions is least likely to restore the trust of the American public in the free-market system?



a) Passing stricter accounting and financial reporting laws.

b) Punishing those who have broken the law.

c) Define the concept of ethics more narrowly, and make the definition closer to the definition of legality.

d) Passing new laws making business, religious and government leaders more accountable for their actions.



Answer: c

Organizational ethics begins:

Organizational ethics begins:



a) at the top levels of management.

b) only with full-time employees.

c) with the labor unions and employee groups.

d) with mid-level and supervisory managers.



Answer: a

According to the text, ethical behavior begins with:

According to the text, ethical behavior begins with:



a) religious and community leaders.

b) government regulations and laws.

c) top corporate leaders.

d) ourselves.



Answer: d

Jake served on a committee of employees who were charged with selecting three co-workers to honor at the holiday banquet. One employee whose name was at the top of everybody's list was instrumental in helping another employee who failed to wear his protective headgear to avoid suffering a serious head injury. Although this was a noble act, Jake knew that the hero was frequently negligent about wearing his own headgear. Jake knew that several other employees followed strict company policy every day and always wore their headgear; yet, they were not being acknowledged for their compliance. According to Norman Vincent Peale, which of the following questions should Jake refer to as he proceeds to make an ethical decision?

Jake served on a committee of employees who were charged with selecting three co-workers to honor at the holiday banquet. One employee whose name was at the top of everybody's list was instrumental in helping another employee who failed to wear his protective headgear to avoid suffering a serious head injury. Although this was a noble act, Jake knew that the hero was frequently negligent about wearing his own headgear. Jake knew that several other employees followed strict company policy every day and always wore their headgear; yet, they were not being acknowledged for their compliance. According to Norman Vincent Peale, which of the following questions should Jake refer to as he proceeds to make an ethical decision?



a) Is the action I am proposing to take something the boss would like to promote among workers?

b) How does the action I am proposing to take make me feel about myself?

c) Does the action I am about to take follow universal business practices?

d) How can my decision help elevate my own status within the firm?



Answer: c

The last recession changed the way many companies offer support to people and communities in need. Many companies ______________.

The last recession changed the way many companies offer support to people and communities in need. Many companies ______________.



a) increased financial donations to local areas but pulled away from national and global contributions


b) decreased financial donations and eliminated support in almost every way


c) decreased financial donations but encouraged their employees to volunteer their time to corporate social initiatives and projects


d) increased their financial donations because they understood how badly society needed a helping hand



Answer: c

American businesses are:

American businesses are:



a) demanding socially responsible behavior from international suppliers, particularly in the areas of environmental standards and human rights issues.

b) holding international suppliers to different standards than American companies must adhere to in the United States.

c) demanding that international suppliers adhere to higher, more costly standards than their American counterparts.

d) not concerned with the ethical or socially responsible behavior of their international suppliers.



Answer: a

If your supervisor directed you to enter false information into a sales order book and told you if you refused that you would lose your opportunity for promotion, you would probably consider this situation to be a(n) ________.

If your supervisor directed you to enter false information into a sales order book and told you if you refused that you would lose your opportunity for promotion, you would probably consider this situation to be a(n) ________.



a) win-win situation


b) corporate accountability issue


c) ethical dilemma


d) important act of self-interest



Answer: c

Besides environmental groups, unions, and investors, a relatively new type of watchdog organization that reports on corporate social responsibility efforts is _____________.

Besides environmental groups, unions, and investors, a relatively new type of watchdog organization that reports on corporate social responsibility efforts is _____________.




a) corporate raider divisions


b) secondary market companies


c) internal search and occupy organizations


d) socially conscious research organizations



Answer: d

Which of the following statements reflects upon the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms?

Which of the following statements reflects upon the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms?



a) It's the age-old reality: "Out-of-sight, out-of-mind." U.S. companies tend to overlook and forget human rights abuses abroad.

b) Multinational corporations are committed to operating within the legal limits of U.S. law. U.S. law does not require U.S. firms to comply because of competitive advantage concerns.

c) U.S. companies follow the lead of consumers, and at this time, there is no evidence of a trend toward concern for better human rights and environmental standards.

d) Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms.



Answer: d

Ethics are the standards of right and wrong set for us by society, whereas the law is __________.

Ethics are the standards of right and wrong set for us by society, whereas the law is __________.



a) a higher calling where society acknowledges that we must take a higher level of action against what may be perceived as a wrongful act


b) the specific and certain way of solving right and wrong that goes beyond what we consider good ethical behavior


c) the minimum protection a society enacts toward behavior that is harmful to many


d) obeyed strictly out of compliance, whereas ethical behavior is in complianc



Answer: c

When an F5 (category 5) tornado hit a town in southern Missouri, the people that lived there needed the basics: food, water, and shelter. The owners of Boccardi's Ristorante in St. Louis drove several hours with a van of employees, equipment, and food to donate what they could to help the storm victims. The business term we use to describe this philanthropic action is ___________________, where a company donates what it does best to help make a situation better.

When an F5 (category 5) tornado hit a town in southern Missouri, the people that lived there needed the basics: food, water, and shelter. The owners of Boccardi's Ristorante in St. Louis drove several hours with a van of employees, equipment, and food to donate what they could to help the storm victims. The business term we use to describe this philanthropic action is ___________________, where a company donates what it does best to help make a situation better.



a) social impact program

b) corporate beneficial management

c) corporate social initiative

d) corporate inclusion policy



Answer: c

When it comes to ethical behavior:

When it comes to ethical behavior:



a) many Americans decide what's ethical based upon the situation in which they find themselves.

b) most Americans have an absolute sense of what is moral.

c) most Americans give a considerable amount of time to helping their communities.

d) employees rarely violate safety standards or "goof off" at work.



Answer: a

A few months ago, Pedro's Pizza House, a large nationwide chain of restaurants, purchased one of its competitors, Italian Stallion Pizza Stations, for $800 million. Italian Stallion stockholders got a very fair deal for their stock they owned in the company. However, the purchase was not without its problems. An issue arose when it was disclosed that somehow a member of Pedro's management team mentioned the deal to a person he sat next to on a flight from LA to Seattle. That person called five of his relatives and several friends. They quickly bought shares of Italian Stallion and purchased the stock before the acquisition became public. These actions are called _________.

A few months ago, Pedro's Pizza House, a large nationwide chain of restaurants, purchased one of its competitors, Italian Stallion Pizza Stations, for $800 million. Italian Stallion stockholders got a very fair deal for their stock they owned in the company. However, the purchase was not without its problems. An issue arose when it was disclosed that somehow a member of Pedro's management team mentioned the deal to a person he sat next to on a flight from LA to Seattle. That person called five of his relatives and several friends. They quickly bought shares of Italian Stallion and purchased the stock before the acquisition became public. These actions are called _________.



a) acquisition stalking


b) pro-current procurement


c) insider trading


d) moral impropriety



Answer: c

Which of the following is not a part of an integrity-based ethics code?

Which of the following is not a part of an integrity-based ethics code?




a) Defines an organization's guiding principles


b) Supports ethically sound behavior


c) Emphasizes strong penalties for wrong-doers


d) Stresses shared accountability



Answer: c

Progressive companies today use __________ to communicate their CSR efforts with the public. Toyota, for example, ran a contest where it donated 100 cars to nonprofit organizations, voted on by Facebook™ and Twitter™ participants.

Progressive companies today use __________ to communicate their CSR efforts with the public. Toyota, for example, ran a contest where it donated 100 cars to nonprofit organizations, voted on by Facebook™ and Twitter™ participants.



a) free magazine, newspaper, and TV ads

b) government-supported direct mail campaigns

c) social media

d) employees and internal public relations



Answer: c

Even though the nation faces political instability, the island of Frollik with its wide, expansive beaches is a destination hub for cruise lines. Recently, a large theme park company showed strong interest in buying land in Frollik with the intent of building a park targeted toward families. The company wants to make a commitment to Frollik, including the hiring of several hundred local employees. They're using a global marketing strategy called ____________.

Even though the nation faces political instability, the island of Frollik with its wide, expansive beaches is a destination hub for cruise lines. Recently, a large theme park company showed strong interest in buying land in Frollik with the intent of building a park targeted toward families. The company wants to make a commitment to Frollik, including the hiring of several hundred local employees. They're using a global marketing strategy called ____________.




a) strategic alliance


b) licensing agreement


c) joint venture


d) foreign direct investment



Answer: d

The EU is an example of a trading bloc, or a______________, which has a common external tariff, no internal tariffs and the coordination of laws to facilitate trade between member countries.

The EU is an example of a trading bloc, or a______________, which has a common external tariff, no internal tariffs and the coordination of laws to facilitate trade between member countries.



a) common market

b) multinational export assistance center

c) strategic alliance

d) joint venture



Answer: a

During the past five years, the nation of Andolvia began a massive undertaking: teaching farmers how to successfully grow and harvest peanuts. The government subsidized the building of peanut processing plants, where private businesses are now producing peanut butter and other products of nutritional value. Although the Andolvia government has not completely banned the importation of peanuts, it has placed ________________ on the number of peanut products that the nation can import each year, in order to protect Andolvia's young peanut industry.

During the past five years, the nation of Andolvia began a massive undertaking: teaching farmers how to successfully grow and harvest peanuts. The government subsidized the building of peanut processing plants, where private businesses are now producing peanut butter and other products of nutritional value. Although the Andolvia government has not completely banned the importation of peanuts, it has placed ________________ on the number of peanut products that the nation can import each year, in order to protect Andolvia's young peanut industry.



a) counter measures

b) subsidiaries

c) import quotas

d) embargoes



Answer: c

The strategic alliance between Coca-Cola and Nestlé has spanned a period of over 20 years due to the fact that both companies benefit from this arrangement. As a global marketing strategy, an important characteristic of a strategic alliance is _____________.

The strategic alliance between Coca-Cola and Nestlé has spanned a period of over 20 years due to the fact that both companies benefit from this arrangement. As a global marketing strategy, an important characteristic of a strategic alliance is _____________.



a) the complete immersion of employees assigned to the alliance, eventually forming a separate company


b) separation of company policies, procedures, and production, but unified financial accountability


c) it must be a long-term venture of 10 or more years


d) participant companies do not share costs or profits



Answer: d

The makers of Whirlpool washers and other electrical appliance manufacturers need to be concerned about the kind and availability of electricity in the global marketplace. If there were a compatibility problem, it would be the result of a _____________difference.

The makers of Whirlpool washers and other electrical appliance manufacturers need to be concerned about the kind and availability of electricity in the global marketplace. If there were a compatibility problem, it would be the result of a _____________difference.



a) societal


b) technological


c) economic


d) cultural



Answer: b

___________ is a cost-effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. The domestic firm contracts with a foreign company to produce and private-label the goods, because the price is much cheaper than the domestic firm could produce in its' home market.

___________ is a cost-effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. The domestic firm contracts with a foreign company to produce and private-label the goods, because the price is much cheaper than the domestic firm could produce in its' home market.


a) Contract manufacturing

b) Franchising

c) Exporting

d) Foreign direct investment


Answer: a

We refer to the BRIC nations as four global economic powers that will likely be important forces in world trade by 2030. It is predicted that the two nations that will supply the world with most of the world's raw materials are ___________.

We refer to the BRIC nations as four global economic powers that will likely be important forces in world trade by 2030. It is predicted that the two nations that will supply the world with most of the world's raw materials are ___________.



a) Brazil and Russia


b) Ireland and China


c) Bolivia and Romania


d) Russia and Bosnia



Answer: a

According to Geert Hofstede, who has spent a lifetime studying differences in cultures, the Chinese have a long-term orientation, meaning they are patient savers and are willing to forgo things today, for a better future. Americans typically have a short-term orientation. They prefer more instant gratification and are not as willing to save for the future. This difference in values between the Chinese and Americans is a _____________ attribute that may represent a challenge in future global trade.

According to Geert Hofstede, who has spent a lifetime studying differences in cultures, the Chinese have a long-term orientation, meaning they are patient savers and are willing to forgo things today, for a better future. Americans typically have a short-term orientation. They prefer more instant gratification and are not as willing to save for the future. This difference in values between the Chinese and Americans is a _____________ attribute that may represent a challenge in future global trade.



a) legal and regulatory

b) sociocultural

c) physical

d) economic



Answer: b

Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________.

Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________.



a) inadequate supply of labor for the number of products that need to be produced


b) lack of low-cost technical talent to produce products


c) inadequate supply of natural resources close to factories


d) questionable safety and quality issues with finished products



Answer: d

Americans are often accused of ethnocentricity. This means that:

Americans are often accused of ethnocentricity. This means that:



a) U.S. businesses are pursuing a policy of multiculturalism.

b) Americans feel their culture is superior to others.

c) Americans welcome diversity in their workforce.

d) U.S. firms are actively seeking international markets.



Answer: b

All of the following are reasons for countries to participate in foreign trade except:

All of the following are reasons for countries to participate in foreign trade except:



a) no nation can produce all of the products its people want and need.

b) some nations have resources, but not technological know-how; while others have know-how, but lack resources.

c) even if a country were self-sufficient, other nations would seek to trade with that country in order to meet the needs of its own people.

d) it is just as easy to start a business overseas as it is in the U.S.



Answer: d

Sovereign wealth funds (SWFs) are a fast-growing form of foreign direct investment. The size of these funds and the fact that they are investments from government coffers of other nations might be a cause for concern. More specifically, some fear __________.

Sovereign wealth funds (SWFs) are a fast-growing form of foreign direct investment. The size of these funds and the fact that they are investments from government coffers of other nations might be a cause for concern. More specifically, some fear __________.



a) the governments who offer these funds may obtain sensitive technologies or gain control of strategic resources


b) these investments are strictly a trend that can be pulled away from large corporations without any repercussion at any time


c) these funds will go bankrupt if spread too thin


d) SWFs that did not get to invest in multinational corporations will retaliate with embargoes



Answer: a

The Republic of South Africa exports edible fruits and nuts into the common market known as the European Union, and imports from the European Union other products which South Africa could produce but at a higher cost than what it costs the Europeans to produce. This practice follows the premise of _________________.

The Republic of South Africa exports edible fruits and nuts into the common market known as the European Union, and imports from the European Union other products which South Africa could produce but at a higher cost than what it costs the Europeans to produce. This practice follows the premise of _________________.



a) The Theory of Malthus

b) The Theory of Competitive Positioning

c) The Theory of Comparative Advantage

d) The Theory of Absolute Advantage



Answer: c

The law that specifically prohibits "questionable" or "dubious" payments to foreign officials in an effort to secure business contracts is called the:

The law that specifically prohibits "questionable" or "dubious" payments to foreign officials in an effort to secure business contracts is called the:



a) Foreign Corrupt Practices Act.

b) General Agreement on Tariffs and Trade.

c) Securities and Exchange Act.

d) North American Free Trade Agreement.



Answer: a

In global trade, the term "dumping" refers to:

In global trade, the term "dumping" refers to:



a) a foreign company's production of private-label goods to which a domestic company attaches its own brand name.

b) the buying of permanent property and businesses in foreign nations.

c) the practice of selling products in a foreign country at lower prices than those charged in the producing country.

d) a situation that exists when a country exports more than it imports.



Answer: c

Recently, two nations experienced a trade dispute over copyright issues. Country "A" accused Country "B" of violating international copyright laws. Since both were members of ______________, they appealed to this organization to mediate the dispute.

Recently, two nations experienced a trade dispute over copyright issues. Country "A" accused Country "B" of violating international copyright laws. Since both were members of ______________, they appealed to this organization to mediate the dispute.



a) the WTO (World Trade Organization)

b) IMF (International Monetary Fund)

c) GACT (General Agreement on Copyrights and Trademark)

d) a common market



Answer: a

Because of the high volume of bicycles as a common form of transportation in Beijing and Shanghai, Charles wants to sell his bicycle horns to these markets. In this case, the exchange rate is $1 U.S. dollar = 6.42 Chinese yuan. Economically speaking, how are his prospects?

Because of the high volume of bicycles as a common form of transportation in Beijing and Shanghai, Charles wants to sell his bicycle horns to these markets. In this case, the exchange rate is $1 U.S. dollar = 6.42 Chinese yuan. Economically speaking, how are his prospects?



a) Not good. The Chinese would not see value in a horn because they are accustomed to just yell at each other in traffic.

b) Good because the yuan has strength against the dollar. The Chinese have 6.42 yuan to spend compared to $1 U.S. dollar.

c) It depends on the value of the Chinese yuan in relation to the dollar.

d) Pretty good because the U.S. dollar is down against the Chinese yuan.



Answer: c

As a strategy for reaching global markets, licensing provides the licensor with several advantages. One advantage is _____________.

As a strategy for reaching global markets, licensing provides the licensor with several advantages. One advantage is _____________.



a) licensing helps avoid patent infringement.

b) the cost of producing and marketing the product in a foreign market is significantly reduced.

c) once the licensing agreement is signed, the licensor has no obligation to customers for the quality of the product they receive.

d) there are very few contractual agreements between the two parties, so the licensee is free to sell proprietary technologies originally owned by the licensor at its discretion.



Answer: b

The new era of business will:

The new era of business will:



a) be dominated by an increase in the manufacturing sector as global markets grow.

b) see a rise in the agricultural sector.

c) be an information-based global revolution that will impact all sectors of the economy.

d) probably see a major decline in productivity.



Answer: c

Profits equal _______.

Profits equal _______.



a) revenues plus expenses, less taxes


b) the sales dollars that a business acquires, over time


c) the owner's annual salary


d) the funds available for business growth, after expenses and salaries are paid



Answer: d

The impact of war and terrorism on U.S. business is that:

The impact of war and terrorism on U.S. business is that:



a) there is less global trade.

b) fewer jobs will be created in the United States.

c) there are lower organizational costs for security personnel and equipment as firms are depending upon the government to provide those items.

d) companies have grown more slowly as money has been diverted to the war effort.



Answer: d

Blake wanted to offer high-quality meals in his restaurant. His motto was "the best darn meat and potatoes for miles around." The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake's motto stated the business's competitive advantage, your accurate advice to Blake would be _______.

Blake wanted to offer high-quality meals in his restaurant. His motto was "the best darn meat and potatoes for miles around." The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake's motto stated the business's competitive advantage, your accurate advice to Blake would be _______.



a) the challenge now must be to tackle the social entrepreneurial aspect of running a business


b) the winning competitive advantage is one that addresses quality and service


c) service has become the number one consideration of customers; the restaurant must focus a little less on quality and a little more on service


d) the rule of thumb is to always stick to what you do best—if you're good at it, your customers will respond with loyalty



Answer: b

To encourage entrepreneurial growth, governments might _______.

To encourage entrepreneurial growth, governments might _______.



a) reduce the value of their currency to encourage foreign investment


b) pass laws that enable businesspeople to write contracts that are enforceable in court


c) establish a high tax rate to support loans for small businesses


d) take over ownership of small businesses when they are first getting started


Answer: b

Among the changes resulting from increased global trade are:

Among the changes resulting from increased global trade are:



a) improved living standards around the world.

b) less need for employees to update skills as workers conform to U.S. standards.

c) less global competition as companies set up manufacturing systems in foreign countries.

d) less need for efficient distribution systems.



Answer: a

At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many copies of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.

At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many copies of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.



a) changing demographics


b) maintaining a low inventory turnover because it will keep costs down


c) staying ahead of the competition by routinely secret shopping the competition's shelves


d) using technology to stay responsive to customer needs



Answer: d

One of the results of the increase in the older population of the United States is:

One of the results of the increase in the older population of the United States is:



a) a decline in the economy, as this segment of the population tends to be poorer.

b) a future problem for the Social Security system.

c) fewer opportunities for new businesses as the population declines.

d) less focus on technology as the older population will be less interested in technology-related products.



Answer: b

Efficiency means _______.

Efficiency means _______.




a) producing items using the least amount of resources


b) producing as much as you can as fast as you can, regardless of cost


c) using high-tech equipment to do a job


d) the amount of output you generate in a given amount of time



Answer: a

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 _______.

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) an aversion to technological advancement leading to a slower and less productive life


d) a desire to pay less sales tax on foods and other staple products at the larger stores



Answer: a

Which of the following circumstances is most likely to reduce one's standard of living?

Which of the following circumstances is most likely to reduce one's standard of living?



a) Stable prices and an increase in employee wages


b) An increase in the cost of some goods such as escalating gasoline prices


c) Losing your job, but gaining a sizeable inheritance


d) A decrease in the cost of some goods such as a decrease in housing prices



Answer: b

When corruption is evident in governments:

When corruption is evident in governments:



a) factories are more difficult to build without obtaining a permit through bribery of public officials.

b) minimum wages are lower.

c) it's easier to open a store without a permit.

d) the news media attempts to keep it quiet in order to minimize bad publicity.



Answer: a

When referring to risk, which of the following statements is reasonable?

When referring to risk, which of the following statements is reasonable?



a) Good business strategy encourages less risk, because the least risky ventures usually make more profit.

b) Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities.

c) Although risk means taking a chance, a start-up will usually manage to get off the ground faster if the stakes are high.

d) Although risk means taking a chance at losing, your business is likely to always turn a profit.



Answer: b

Increased diversity of the population of the United States has:

Increased diversity of the population of the United States has:



a) led to companies with more diverse workforces.

b) fewer conflicts between groups at work as they learn to work with one another.

c) much narrower definition of the meaning of diversity.

d) declining need for dual language signs and brochures as the immigrant population learns English.



Answer: a

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 two other factors of production does he need to succeed?

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 two other factors of production does he need to succeed?


a) Labor and knowledge


b) Entrepreneurship and knowledge


c) Entrepreneurship and capital


d) Capital and land



Answer: b

Judy started a business called Music and Memories™. She recognized that music, socialization, and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time. Though she strives for a financial gain, she uses the excess funds for enriching her programs instead of a personal profit. Her organization is classified as:

Judy started a business called Music and Memories™. She recognized that music, socialization, and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time. Though she strives for a financial gain, she uses the excess funds for enriching her programs instead of a personal profit. Her organization is classified as:



a) insourced


b) nonprofit


c) profit-seeking


d) outsourced



Answer: b

When developing and maintaining good stakeholder relationships, companies find that _______.

When developing and maintaining good stakeholder relationships, companies find that _______.



a) caring for the environment comes before caring for the well-being of employees


b) insourcing is always a good trade-off to outsourcing


c) most often, they must balance the needs of the stakeholders with the need to make profits


d) it's almost always best to continue to keep costs low, even if it means outsourcing most of the production



Answer: c

Juan has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. In this case, challenges in the _________________ environment increase the risk of Juan starting a business.

Juan has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. In this case, challenges in the _________________ environment increase the risk of Juan starting a business.



a) competitive

b) social

c) technological

d) economic and legal



Answer: d

What must companies do to be competitive in today's market?

What must companies do to be competitive in today's market?



a) Focus on activities that will reduce taxes.

b) Create low-cost advertising campaigns.

c) Offer high-quality products and outstanding service at competitive prices.

d) Create alliances with competitors.



Answer: c

At a young age, Eliza's coaches were confident she had the potential to be a world-class swimmer. They encouraged her parents to do as much as they could to further develop her skills, because a future in Olympic swimming could set her up for life, including promotional endorsements and coaching positions when her competitive days were over. After four years on an athletic scholarship and Olympic experience under her belt, she chose a different path. With her savings and personal connections, she rented a corner building in a bustling San Francisco neighborhood and pursued her dream: a surf shop business. After several successful years, Eliza was certain that Adam Smith would smile because ______________.

At a young age, Eliza's coaches were confident she had the potential to be a world-class swimmer. They encouraged her parents to do as much as they could to further develop her skills, because a future in Olympic swimming could set her up for life, including promotional endorsements and coaching positions when her competitive days were over. After four years on an athletic scholarship and Olympic experience under her belt, she chose a different path. With her savings and personal connections, she rented a corner building in a bustling San Francisco neighborhood and pursued her dream: a surf shop business. After several successful years, Eliza was certain that Adam Smith would smile because ______________.



a) he laid the foundation for her success: she had freedom of choice

b) Eliza chose a career where there was very little competition

c) unlike most business owners, owning private property was not her concern

d) Eliza deliberately set out to help others



Answer: a

What's going on here? As soon as Dewey Cheatum and Howe Motors increase the prices on their SUVs, then so does their only competitor, You Betcha Motors! Their prices are basically the same for similar vehicles, although their advertising says their products are really very different. What kind competition exists here?

What's going on here? As soon as Dewey Cheatum and Howe Motors increase the prices on their SUVs, then so does their only competitor, You Betcha Motors! Their prices are basically the same for similar vehicles, although their advertising says their products are really very different. What kind competition exists here?



a) Monopolistic competition

b) Perfect competition

c) Oligopolistic competition

d) Limited competition



Answer: c

When President Obama was elected, the U.S. economy was in trouble, and had slid into a recession. Consumer spending was low and getting worse. In an effort to stop the decline, President Obama proposed an economic stimulus package which included government spending on roads, bridges, and schools, among other things, and a tax cut that each U.S. worker would see in her or his paycheck. Apparently, President Obama was a proponent of:

When President Obama was elected, the U.S. economy was in trouble, and had slid into a recession. Consumer spending was low and getting worse. In an effort to stop the decline, President Obama proposed an economic stimulus package which included government spending on roads, bridges, and schools, among other things, and a tax cut that each U.S. worker would see in her or his paycheck. Apparently, President Obama was a proponent of:



a) communist economic theory


b) Malthusian economics


c) Keynesian economic theory


d) monetary policy



Answer: c

In a free-market economic system, if consumers perceive the price for a state-of-the-art smartphone as too high for the value received, they are likely to avoid buying it. In the same light, if the __________.

In a free-market economic system, if consumers perceive the price for a state-of-the-art smartphone as too high for the value received, they are likely to avoid buying it. In the same light, if the __________.



a) consumer's desired price is too low, producers will want to produce an abundance of the product


b) seller's price is too low, consumers will definitely consider it of poor quality


c) consumer's desired price is too low, producers will refuse to make a substitute


d) consumer's desired price is too low, producers may limit the amount produced



Answer: d

The American Society of Civil Engineers published a report card for America's interstates. It was reported that road repairs cost the American taxpayers $67 billion per year. Through the enactment of ___________, the U.S. government collects tax dollars and then spends some of these funds to maintain the infrastructure of the nation. Increasing taxes has the effect of drawing money away from the private sector.

The American Society of Civil Engineers published a report card for America's interstates. It was reported that road repairs cost the American taxpayers $67 billion per year. Through the enactment of ___________, the U.S. government collects tax dollars and then spends some of these funds to maintain the infrastructure of the nation. Increasing taxes has the effect of drawing money away from the private sector.



a) monetary policy

b) congressional policy

c) fiscal policy

d) deficit policy



Answer: c

At Six City Wellness Center, Greg operates a new state-of-the-art MRI scanner that serves approximately 10 patients during his 8-hour shift. Patients are scheduled for various lengths of time, depending on which part(s) of their body requires scanning. The image quality is significantly superior to what it was on previous scanners, but the number of patients served per day remains the same. This situation attests to the fact that ____________.

At Six City Wellness Center, Greg operates a new state-of-the-art MRI scanner that serves approximately 10 patients during his 8-hour shift. Patients are scheduled for various lengths of time, depending on which part(s) of their body requires scanning. The image quality is significantly superior to what it was on previous scanners, but the number of patients served per day remains the same. This situation attests to the fact that ____________.



a) the service sector has seen improvement in quality of service, but productivity remains about the same


b) hospitals and health clinics are part of the service sector. Productivity is not a concern in this sector


c) technological advancements have increased productivity in the service sector


d) productivity has increased because it is calculated by combining quantity produced plus quality produced



Answer: a

In order for the value of goods and services to be counted as part of a nation's gross domestic product, the goods and services must be ___________.

In order for the value of goods and services to be counted as part of a nation's gross domestic product, the goods and services must be ___________.



a) produced within the physical boundaries of a particular nation


b) produced by a company that was first established in that particular nation


c) those that are purchased with disposable income


d) purchased by the government or citizens of that particular nation, as opposed to other governments and people of other nations



Answer: a

Charlie Hayes owns his own landscaping business, including all the land on which they grow their plants, and all the equipment. Charlie's son Josh has just graduated from college with an architectural landscaping degree. Charlie hopes to retire in a few years and turn the business over to Josh, and Josh will inherit the business when Charlie dies. This is an example of the ______________ in a capitalist system.

Charlie Hayes owns his own landscaping business, including all the land on which they grow their plants, and all the equipment. Charlie's son Josh has just graduated from college with an architectural landscaping degree. Charlie hopes to retire in a few years and turn the business over to Josh, and Josh will inherit the business when Charlie dies. This is an example of the ______________ in a capitalist system.



a) right to private property

b) right to compete

c) right to freedom of choice

d) right to have a job



Answer: a

For the last several years, the country of Amerensia has been moving from a communist country to a more mixed economic system. Which of the following most likely would not occur in Amerensia?

For the last several years, the country of Amerensia has been moving from a communist country to a more mixed economic system. Which of the following most likely would not occur in Amerensia?



a) An increase in the level of government involvement in trade.

b) Private ownership of business.

c) An increase in the rate at which jobs are created.

d) More incentives for workers to work harder.



Answer: a

Imagine the following: New sources of energy have become marketable and the industries involved have hired thousands to operate the emergence of new businesses. Construction companies cannot build homes fast enough for workers in the energy industry. Due to increasing salaries in several other industries that partner with energy companies, the demand for everything from food to entertainment to travel has increased. High demand has brought about shortages in some product categories. To help manage the situation in the short term, ___________.

Imagine the following: New sources of energy have become marketable and the industries involved have hired thousands to operate the emergence of new businesses. Construction companies cannot build homes fast enough for workers in the energy industry. Due to increasing salaries in several other industries that partner with energy companies, the demand for everything from food to entertainment to travel has increased. High demand has brought about shortages in some product categories. To help manage the situation in the short term, ___________.



a) the Fed will likely decrease interest rates

b) the Fed will likely increase interest rates

c) Congress will likely decrease taxes

d) Congress will likely enact monetary policy



Answer: b

Which of the following best describes a capitalistic nation?

Which of the following best describes a capitalistic nation?



a) Most or all of the factors of production and distribution are privately owned and operated for a profit.

b) The nation-state practices state capitalism. It prefers to maintain ownership of certain industries.

c) The nation-state owns most of the factors of production and distribution, and makes central decisions with respect to the distribution of resources.

d) The political system endorses several hundred entitlement programs. Business taxes support these programs that are restricted to the unemployed.



Answer: a

Jason's mom specifically asked for a CIP cast iron pan for her birthday. As Jason scanned the stock in two department stores, he found ten different brands, none of which were CIP. When he found CIP in a kitchen specialty shop, he was challenged to tell the difference between his mom's choice and the others. In his business class, he learned about ______________, where many sellers may be offering very similar products. Through various means, each seller differentiates his product from the competition.

Jason's mom specifically asked for a CIP cast iron pan for her birthday. As Jason scanned the stock in two department stores, he found ten different brands, none of which were CIP. When he found CIP in a kitchen specialty shop, he was challenged to tell the difference between his mom's choice and the others. In his business class, he learned about ______________, where many sellers may be offering very similar products. Through various means, each seller differentiates his product from the competition.



a) oligopolistic competition

b) limited competition

c) perfect competition

d) monopolistic competition



Answer: d

You studied for two hours each day, for an entire week, before your first marketing exam. When you turned in the test, you felt confident that your effort would pay off. At the next class meeting, your instructor said she was considering curving the grades because the class average was lower than she had anticipated. All of a sudden, your 98% score did not have the same impact that it did when you first saw it! Now the guy next to you that got an 84% is likely to have an "A" grade too. As you analyze this situation, you realize that it parallels an economic system such as ________________, where even if you work harder than another person, you are likely to realize the same benefit.

You studied for two hours each day, for an entire week, before your first marketing exam. When you turned in the test, you felt confident that your effort would pay off. At the next class meeting, your instructor said she was considering curving the grades because the class average was lower than she had anticipated. All of a sudden, your 98% score did not have the same impact that it did when you first saw it! Now the guy next to you that got an 84% is likely to have an "A" grade too. As you analyze this situation, you realize that it parallels an economic system such as ________________, where even if you work harder than another person, you are likely to realize the same benefit.



a) monopolism

b) capitalism

c) oligopolism

d) socialism



Answer: d

The CPI (consumer price index) measures ________________ and ________________.

The CPI (consumer price index) measures ________________ and ________________.



a) rising and falling prices of goods, but not services; provides a 10-year comparison

b) inflation; excludes apparel, health care, and education

c) inflation and deflation; includes energy and food as part of the market basket of goods and services that it measures

d) inflation and deflation; excludes energy and food as part of the market basket of goods and services that it measures



Answer: c

Robert Redford created The Sundance Film Festival, where talented, young directors and producers can submit their films for review and possible screening. The festival attracts thousands of tourists each year, employs many others at various capacities, and provides important exposure to up-and-coming artists who may otherwise not be able to get their works noticed. Ultimately, the festival provides social and economic benefit for many. Adam Smith believed that one's self-directed gain would eventually create prosperity for many, and called the process the ___________.

Robert Redford created The Sundance Film Festival, where talented, young directors and producers can submit their films for review and possible screening. The festival attracts thousands of tourists each year, employs many others at various capacities, and provides important exposure to up-and-coming artists who may otherwise not be able to get their works noticed. Ultimately, the festival provides social and economic benefit for many. Adam Smith believed that one's self-directed gain would eventually create prosperity for many, and called the process the ___________.



a) opportunistic behavior


b) invisible hand


c) deliberate intervention


d) amateur opportunity



Answer: b

The U.S. unemployment rate is a key economic indicator because most of us need jobs to maintain our standard of living. A criterion used to calculate the unemployment rate is _________.

The U.S. unemployment rate is a key economic indicator because most of us need jobs to maintain our standard of living. A criterion used to calculate the unemployment rate is _________.



a) anyone under the age of 60 who does not have a job and lives within the physical borders of the U.S.

b) persons who were dismissed from their last job, and subsequently have been out of work for over a year

c) unemployed persons age 16 and over, who have been looking for work during the past four weeks

d) all persons claiming not to have a job, except students; full-time and part-time students are excluded from the calculation



Answer: c

The way in which a country's resources are utilized to produce goods and services and the way those goods and services are distributed among those who desire to have them depends upon the ______________.

The way in which a country's resources are utilized to produce goods and services and the way those goods and services are distributed among those who desire to have them depends upon the ______________.



a) economic system under which the country operates

b) stage of development of those resources

c) number of documented economically disadvantaged persons in the nation

d) availability of tangible versus intangible resources



Answer: a

Socialist systems tend to:

Socialist systems tend to:



a) have relatively low tax rates.

b) discourage the best from working as hard as they can.

c) keep up with countries like the U.S. in the areas of job and wealth creation.

d) encourage innovation.



Answer: b

In terms of economic systems, the trend has been for:

In terms of economic systems, the trend has been for:



a) countries to remain primarily within the economic system the country has in place.

b) countries that are mostly socialist to move toward communist systems.

c) countries that are mostly capitalist to move toward more socialism.

d) countries that are capitalist to move toward communism.



Answer: c

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