GB101 S07 Practice Exam for Students – Posted April 3rd,

GB101 S07 Practice Exam for Students – Posted April 3rd, 2007

GB101 SPRING 2007 PRACTICE EXAM

The final exam will consist of 100 questions, of which 80% will be drawn from the practice exam. The other 20% will be additional questions. All questions relate to the text book readings and the stated learning objectives in the student study guide.

All questions are either true/false or multiple choice. All Spring 2007 GB101 students will write the exam Saturday May 5th, 2007 at

9am. Room assignments and exam policies will be emailed and posted on the

Blackboard site.

AND YOU MIGHT BE INTERESTED TO KNOW THAT…Students who access the practice exam within the first 24 hours of it being posted seem to score a significantly higher grade on their final exam. Similarly, students who access the practice exam at all seem to score significantly higher than those students who never use the practice exam.

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PRACTICE EXAM QUESTIONS

Origin: Chapter 20 Securities Markets1. Government employees represent institutional investors.

A) TrueB) False

Origin: Chapter 20 Securities Markets2. As interest rates increase, bond prices fall.

A) TrueB) False

Origin: Chapter 1 Managing Within the Dynamic..., 3. John earns the same amount of money this year as he did last year. Thus, his

standard of living must be the same as it was last year. A) TrueB) False

Origin: Chapter 5 Forms of Business Ownership, 4. Ellen wants to start a business. She is leaning toward setting up her company

as a sole proprietorship, but she is also looking at other possibilities. Ellen has two major goals. First, given her limited personal wealth and eagerness to get started, she wants to get her business up and running with the least possible hassle and expense. Second, she wants to minimize her personal risk in the event that her company experiences difficulties. If Ellen chooses a sole proprietorship, she would: A) be able to achieve both goals since this form of ownership is both the

easiest to form and the least risky. B) meet her first goal since sole proprietorships are easy and inexpensive to

form. However, she would expose herself to a high level of personal risk because owners of sole proprietorships have unlimited liability.

C) not achieve either goal since proprietorships are both costly to set up and subject to unlimited liability.

D) achieve her second goal, since the owners of sole proprietorships are legally protected from losing more than the amount they invest in their company. However, she would find that the start-up costs would be higher than if she had incorporated her business.

Origin: Chapter 3 Competing in Global Markets, 5. The European Union is an example of a common market.

A) TrueB) False

Origin: Chapter 13 Marketing6. A key element of customer relationship management is to:

A) keep the price of goods as low as possible.

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B) develop a strategy to achieve the largest possible market share. C) allow customers to participate in the management of the firm. D) learn as much as possible about customers.

Origin: Chapter 14 Developing and Pricing..., 7. Budd's Floral Shoppe is located in a large town that has several other florists.

The owner, Rose Budd, is likely to find that the presence of many larger competitors means that the only way she can survive is to charge rock bottom prices. A) TrueB) False

Origin: Chapter 3 Competing in Global Markets8. All of the following are advantages of free trade except:

A) Free trade helps keep interest rates high. B) The global market consists of over 6 billion potential customers. C) Global competition helps to keep prices down. D) Productivity increases in areas of comparative advantage.

Origin: Chapter 9 Producing World-Class Goods..., 9. A production process characterized by long production runs to turn out finished

goods over time is known as a(n): A) assembly process. B) continuous process. C) extended process. D) unrestricted process.

Origin: Chapter 20 Securities Markets,10. When possible, businesses prefer to meet their long-term funding by:

A) selling common stock. B) issuing preferred stock. C) issuing bonds. D) using retained earnings.

Origin: Chapter 1 Managing Within the Dynamic...,11. If they wish to create more wealth, poor nations should focus on policies that

increase entrepreneurship and the effective use of knowledge. A) TrueB) False

Origin: Chapter 7 Management, Leadership, and...,12. When managers determine that an organization is not making sufficient

progress toward achieving its goals and objectives and develop corrective measures, they are involved in: A) controlling. B) planning. C) directing. D) accounting.

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Origin: Chapter 13 Marketing13. Determining the appropriate price for a good or service is one element of the

marketing mix. A) TrueB) False

Origin: Chapter 18 Understanding Financial...,14. At the time the Jepson Plumbing Supply prepared its financial statements, it had

several customers who had bought goods in the past three months on its “90 days same as cash” credit plan. These customers had not yet paid their bills, but they have good credit ratings and Jepson is confident that they will make their payments on time. The amount these credit customers owe would show up as part of the: A) current assets listed on Jepson's balance sheet. B) current liabilities listed on Jepson's balance sheet. C) a deferred cash flow on Jepson's statement of cash flows. D) unrealized revenue reported on Jepson's an income statement.

Origin: Chapter 11 Human Resource Management15. Which of the following statements identifies a key difference between a job

description and a job specification? A) A job description is concerned with the short run objectives of a job, but a

job specification is concerned with the job's long run objectives. B) A job description is based on a human resource inventory, while a job

specification is the result of a performance appraisal. C) A job description is a statement about the job, while a job specification is

a statement about the person who does the job. D) A job description is a brief summary of what a job involves, while a job

specification is a detailed and technically complete statement of what a job involves.

Origin: Chapter 9 Producing World-Class Goods...,16. There is strong evidence that productivity in the service sector:

A) is rising, though the improvement has not been reflected in the reported figures.

B) declined by more than 2 percent per year. C) was unaffected by the use of computers. D) rose at least twice as fast as productivity in the manufacturing sector.

Origin: Chapter 8 Adapting Organizations to..., 17. Within its production department, Sooner Manufacturing has shift leaders,

supervisors, assistant plant managers, plant managers, product group managers, assistant division managers, division managers, an assistant vice president for production, and a vice president in charge of production. Given their multiple layer management structure, Sooner Manufacturing is an example of a(n) ____________ organization. A) tall

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B) wide C) cross-functional D) decentralized

Origin: Chapter 8 Adapting Organizations to..., 18. ________ refers to the process of dividing organizational functions into separate

units. A) Coordination. B) A chain of command C) Empowerment D) Departmentalization

Origin: Chapter 7 Management, Leadership, and...,19. Which of the following statements about leadership styles is most accurate?

A) A manager should choose one style and use it consistently. B) Managers have no control over the leadership style they use. C) Effective managers often use a variety of leadership styles. D) Managers should always start with an autocratic style, but can gradually

switch to a more democratic approach if workers earn their trust.

Origin: Chapter 19 Financial Management, 20. Inability to attract and retain qualified employees is one of the most common

ways for a firm to fail financially. A) TrueB) False

Origin: Chapter 8 Adapting Organizations to...21. Organizations that utilize departmentalization benefit from improved

communication between their different departments. A) TrueB) False

Origin: Chapter 7 Management, Leadership, and...22. Managers are most effective when they consistently use the same leadership

style with every employee assigned to their work group. A) TrueB) False

Origin: Chapter 4 Demonstrating Ethical...23. Ethical behavior always treats others fairly.

A) TrueB) False

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Origin: Chapter 9 Producing World-Class Goods...24. Sylacon Industries, a leading producer of consumer goods, is looking for a site

for a new production facility. The company is mainly focusing on sites that are close to major highways and rail hubs and are not too far from some major population centers. This suggests that a major location consideration for Sylacon is: A) quality of life. B) access to cheap land. C) reducing time to market. D) access to low cost labor.

Origin: Chapter 1 Managing Within the Dynamic...25. ____________ is the amount a business earns over and above what it spends

for salaries and other expenses. A) Profit B) Revenue C) Interest D) Dividends

Origin: Chapter 16 Today's Promotional...26. Nightbrite's ________ relies heavily on advertising, personal selling, and limited

use of sampling. A) marketing mix. B) promotional mix. C) communication network. D) transfer marketing.

Origin: Chapter 21 Understanding Money and...27. The Fed uses ________ to regulate the money supply.

A) stock market investments B) the deposit requirement C) the political negotiation process D) the discount rate

Origin: Chapter 19 Financial Management28. Which of the following activities is most likely to be performed by a financial

manager? A) Design of a marketable product that satisfies an unmet need. B) Identification of specific target markets for a firm's goods. C) Preparation of the balance sheet and income statement for the firm. D) Analysis of the tax implications of various managerial decisions.

Origin: Chapter 6 Entrepreneurship and...29. As the owner of a small manufacturing business, Myles has an interest in

exporting. However, he doesn't know how to get started. Fortunately, the government provides an abundance of information to encourage entrepreneurs like Myles. A) True

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B) False

Origin: Chapter 18 Understanding Financial...30. Which of the following is not an area of importance in accounting?

A) recording information about financial transactions. B) summarizing information about financial transactions. C) analyzing financial information. D) setting prices for goods and services sold by the organization.

Origin: Chapter 19 Financial Management31. The importance of financial managers to firms with large inflows is greater than

for firms with smaller cash flows A) TrueB) False

Origin: Chapter 13 Marketing32. Which of the following is not consistent with relationship marketing?

A) Maintaining long-term relationships with customers. B) Working with buyers to determine their individual needs. C) Developing market share through mass media advertising. D) Focusing more on retaining existing customers than on attracting new

customers.

Origin: Chapter 18 Understanding Financial...33. General expenses would include office salaries, rent, and insurance.

A) TrueB) False

Origin: Chapter 7 Management, Leadership, and...34. In most high tech industries, the best way to respond quickly to rapid

technological changes is to keep most authority and responsibility in the hands of a few key managers who provide precise, detailed directions to the workers. A) TrueB) False

Origin: Chapter 9 Producing World-Class Goods...35. The U.S. economy is now dominated by the:

A) service sector. B) manufacturing sector. C) agricultural sector. D) foreign sector.

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Origin: Chapter 5 Forms of Business Ownership36. Sandy Beech is a talented fashion designer who wants to start her own

women's sportswear company. However, she is concerned about some problems she might face. She knows little about actual production methods or the financial aspects of running a business, and has little personal wealth to put into the company. In order to overcome these problems, Sandy should start her business as a sole proprietorship. A) TrueB) False

Origin: Chapter 1 Managing Within the Dynamic...37. Elemints is a company that produces industrial coatings for the steel industry.

Until recently it relied on wholesalers to distribute its products, but now it also sells directly to customers through its website. This is an example of the largest and most important type of e-commerce transaction. A) TrueB) False

Origin: Chapter 19 Financial Management38. A line of credit from a bank guarantees a firm that a specified amount of

financing will be available whenever it is needed. A) TrueB) False

Origin: Chapter 2 How Economics Effects...39. Communism is an economic system in which:

A) the government and private citizens own equal shares of the economic resources.

B) all or most of the productive resources are owned by private businesses. C) the government makes most of the major economic decisions. D) individual consumers make all economic decisions.

Origin: Chapter 1 Managing Within the Dynamic...40. Which of the following entails the greatest amount of risk?

A) Working for the government. B) Working for a large business. C) Working for a small business. D) Starting a business.

Origin: Chapter 18 Understanding Financial...41. The value of what stockholders own in a firm is called stockholders' equity.

A) TrueB) False

Origin: Chapter 4 Demonstrating Ethical...42. When faced with slow sales and low profits, even managers with strong

personal values may feel pressured to compromise those values. A) True

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B) False

Origin: Chapter 1 Managing Within the Dynamic...,43. Countries that provide little or no government involvement provide the best

environment for competitive businesses. A) TrueB) False

Origin: Chapter 14 Developing and Pricing...44. According to the product life cycle model, profits tend to:

A) remain relatively constant until the decline stage, when they begin to drop. B) reach a peak near the end of the maturity stage. C) rise rapidly during the market preference stage. D) peak before sales reach their highest level.

Origin: Chapter 9 Producing World-Class Goods...45. Unlike the manufacturing sector, workers who provide services tend to have a

great deal of job security. A) TrueB) False

Origin: Chapter 18 Understanding Financial...46. A loan officer at the Saltwater State Bank is considering a loan application from

Lanwell Mills. He is concerned about the ability of the company to make repayments if it grants the loan. The loan officer is likely to be very interested in Lanwell's statement of cash flows. A) TrueB) False

Origin: Chapter 7 Management, Leadership, and...47. ____________ is the management function that involves determining whether

an organization is progressing toward its goals, rewarding employees for doing a good job, and taking corrective action when they are not. A) Organizing B) Controlling C) Leading D) Officiating

Origin: Chapter 18 Understanding Financial...48. Jeremy operates his own small business, but doesn't want to be bothered with

dealing with accounting information. He tells his friends, "All I need accounting for is to prepare my income tax return for my business. I'll hire someone to do that for me." Jeremy's attitude would be disastrous if he managed a large firm, but is a reasonable view for a small business owner. A) TrueB) False

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Origin: Chapter 18 Understanding Financial...49. The best way for a firm to avoid serious cash flow problems is to sustain a rapid

growth in sales.A) TrueB) False

Origin: Chapter 3 Competing in Global Markets50. Export trading companies help to match buyers and sellers from different

countries. A) TrueB) False

Origin: Chapter 11 Human Resource Management51. Employment tests should focus on general job skills rather than skills that are

related directly to the job. A) TrueB) False

Origin: Chapter 18 Understanding Financial...52. _________ is the systematic write-off of the value of a tangible asset over its

useful life. A) Expense structuring B) Depreciation C) Capital budgeting D) Gross margin allocation

Origin: Chapter 9 Producing World-Class Goods...53. Although experts predict that services will become more interactive in the future,

the technology does not yet exist to make this prediction a reality. A) TrueB) False

Origin: Chapter 2 How Economics Effects...54. At the equilibrium price the quantity consumers desire to buy equals the quantity

sellers desire to sell. A) TrueB) False

Origin: Chapter 20 Securities Markets55. Shannon believes the best investment strategy is to "buy low, and sell high."

Shannon's optimism regarding future stock price increases indicates that she is a: A) bull. B) bear. C) tiger. D) lion.

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Origin: Chapter 3 Competing in Global Markets56. Foreigners sometimes comment on the ethnocentric attitudes of U.S. business

people. This indicates that American business people: A) follow the philosophy of “when in Rome, do as the Romans.” B) quickly accept the suggestions and ideas of others. C) believe our culture is superior to all others. D) take pride in the many ethnic groups that make America a "melting pot."

Origin: Chapter 3 Competing in Global Markets57. The federal government created ___________ to help small and medium sized

businesses get involved in exporting. A) the World Trade Organization B) Federal Export Loan Banks C) Export Assistance Centers D) the Federal Trade Promotion Commission

Origin: Chapter 6 Entrepreneurship and...58. If you have managerial skills and leadership ability, you also posses the

personality to be an entrepreneur. A) TrueB) False

Origin: Chapter 5 Forms of Business Ownership59. Two of Rolanda's friends have approached her to see if she would like to join

them in starting a new business. Rolanda is willing to invest money in the business and share in its profits, but she has no desire to be involved in the day-to-day management of the company. She is also very nervous about the risk of losing her personal assets. Rolanda's preferences suggest that she would like to see the business operated as a general partnership. A) TrueB) False

Origin: Chapter 11 Human Resource Management60. Transfers and promotions are internal sources used by human resource

managers to fill recruiting needs. A) TrueB) False

Origin: Chapter 3 Competing in Global Markets61. To provide better service for their customers, America Online purchased office

space in India for their online customer service representatives. This is an example of: A) dumping. B) foreign direct investment. C) a nontariff trade restriction. D) ethnocentricity.

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Origin: Chapter 6 Entrepreneurship and...62. State and local governments often act as venture capitalists.

A) TrueB) False

Origin: Chapter 9 Producing World-Class Goods...63. Frolichstein Fabrics promotes itself as a specialty manufacturer that will produce

according to customer specifications. This firm will probably be best served by using an intermittent process in production. A) TrueB) False

Origin: Chapter 1 Managing Within the Dynamic...64. All of the following can increase labor's productivity except:

A) increased education and training. B) higher wages. C) better technology. D) increased amount of machinery and equipment.

Origin: Chapter 11 Human Resource Management65. Randy Waller is in his early sixties. A few years ago he had planned to retire by

the time he was sixty, but when the time came, he decided to continue working. In fact, not only is Randy still working, he has put any plans to retire on hold for at least several years. Randy's decision to keep working into his late sixties is unusual in today's labor market. A) TrueB) False

Origin: Chapter 13 Marketing66. In an effort to increase customer loyalty, management at Phat International has

worked to create a personal dialogue with their customers. This dialogue will enable Phat to offer products that exactly meet their customers' needs and provide personalized service before and after the sale. Phat International's new strategy illustrates: A) a production orientation. B) relationship marketing. C) personalized promotion. D) niche marketing.

Origin: Chapter 7 Management, Leadership, and...67. Planning is the function of management that involves anticipating future trends

and determining the best strategies and tactics to achieve an organization's goals and objectives. A) TrueB) False

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Origin: Chapter 19 Financial Management68. Which of the following statements is most accurate?

A) Accounting and finance are not related. B) Financial managers keep the books for a firm. C) Financial managers need to understand accounting. D) Nonprofit organizations must choose between accounting and finance.

Origin: Chapter 13 Marketing69. Given today's marketing environment, marketing managers must constantly

adjust the marketing mix. A) TrueB) False

Origin: Chapter 2 How Economics Effects...70. Permany is a nation with an economic system that closely approximates pure

capitalism. While Permany's economy is likely to generate a great deal of wealth, it may do a poor job of providing an acceptable level of income for the elderly or disabled. A) TrueB) False

Origin: Chapter 6 Entrepreneurship and...71. Small businesses account for over 40% of the gross domestic product (GDP) in

the United States. A) TrueB) False

Origin: Chapter 19 Financial Management72. One activity of the accounting function is to collect payments from overdue

customer accounts. A) TrueB) False

Origin: Chapter 13 Marketing73. Which of the following describes a word, letter, or group of words or letters that

differentiate the goods and services of a seller from those of competitors? A) Brand name B) Product designation C) Prototype name D) Generic name.

Origin: Chapter 4 Demonstrating Ethical...74. A social audit attempts to measure a firm's progress in the area of worker-

management relations. A) TrueB) False

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Origin: Chapter 19 Financial Management75. Nicole is a financial manager. Her responsibilities include all of the following

except preparing: A) a cash flow analysis. B) financial statements. C) for the acquisition of funds. D) for the expenditure of funds.

Origin: Chapter 4 Demonstrating Ethical...76. ________ refers to the standards of moral behavior.

A) Legality B) Responsibility C) Integrity D) Ethics

Origin: Chapter 7 Management, Leadership, and...,77. Today's workers require a different managerial style than workers of previous

eras. A) TrueB) False

Origin: Chapter 13 Marketing78. As a marketing manager for a retailer of lighting products, Lucinda will likely to

be involved in all of the following except: A) setting a price for the light fixtures her firm produces. B) deciding the best way to distribute the firm's products. C) developing ideas for new types of light fixtures. D) determining the best way to finance the purchase of new production

equipment.

Origin: Chapter 11 Human Resource Management79. A job specification identifies the minimum qualifications a person must have to

fill a particular job. A) TrueB) False

Origin: Chapter 19 Financial Management80. The most difficult kind of loan to obtain from a bank is a secured loan.

A) TrueB) False

Origin: Chapter 20 Securities Markets81. Al prefers corporate bonds as an investment option because bonds guarantee

that investors receive the face value of the bond whenever it is sold. A) TrueB) False

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Origin: Chapter 20 Securities Markets82. Most businesses prefer to meet their long-term financial needs through:

A) debt financing. B) capital from the sale of stock. C) retained earnings. D) capital from the sale of bonds.

Origin: Chapter 21 Understanding Money and...83. When the Fed increases the reserve requirement, banks:

A) must increase the dollar volume of loans they make to customers. B) must pay more to borrow from the Fed. C) have fewer funds available for lending. D) will find their balance sheets temporarily out of balance.

Origin: Chapter 3 Competing in Global Markets84. When trading in global markets, most countries prefer to import more than they

export. A) TrueB) False

Origin: Chapter 16 Today's Promotional...,85. The traditional promotion mix for a firm consists of the:

A) strategic mix of price, product, place and advertising. B) various types of advertising media the firm selects to reach each specific

target market. C) marketing intermediaries employed by the firm to create a supply value

chain. D) advertising, personal selling, public relations, and sales promotion used to

reach a target market.

Origin: Chapter 21 Understanding Money and...86. When the Fed increases the reserve requirement, banks make fewer loans.

A) TrueB) False

Origin: Chapter 3 Competing in Global Markets87. Kodak contracts with a firm in Taiwan to manufacture Kodak digital cameras.

This is an example a joint venture. A) TrueB) False

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Origin: Chapter 2 How Economics Effects...,88. In an effort to promote rapid growth, the government of Goldinia has kept taxes

low, done little to regulate business activities, and implemented only modest social programs. The government is now facing political pressure to do more to clean up the environment and reduce the inequalities of income and wealth. Which of the following statements is most accurate? Goldinia's government is currently taking: A) a purely capitalist approach to achieve its economic goals, and is likely to

continue doing so in the future. B) a purely socialist approach to achieve its economics goals, and is likely to

continue doing so in the future. C) a predominately socialist approach to achieving economic goals, but the

current pressures it faces suggest it is likely to adopt a more capitalist approach in the future.

D) a predominately capitalist approach toward achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future.

Origin: Chapter 7 Management, Leadership, and...89. Which of the following statements comparing today's workers with those from

earlier eras is most accurate? Compared to earlier workers, today's employees are: A) more loyal to the firm. B) less educated and less self-directed. C) more willing to leave the firm to seek better opportunities. D) more likely to need direct guidance and direction from their managers.

Origin: Chapter 3 Competing in Global Markets90. Countries with a high standard of living are referred to as developing countries.

A) TrueB) False

Origin: Chapter 20 Securities Markets91. If investor Jones buys a share of stock in the ABC Corporation from investor

Smith, the ABC Corporation automatically receives a fixed percentage of the selling price. A) TrueB) False

Origin: Chapter 9 Producing World-Class Goods...92. A key element of the statistical quality control process is the reliance on quality

control experts to inspect at the end of the production line to make sure that no defective products are shipped to final customers. A) TrueB) False

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Origin: Chapter 11 Human Resource Management93. Employees at the Kempton Company have been complaining that the

company's fringe benefits package forces all employees to take the same benefits regardless of differences in their needs. Kempton could reduce this criticism by establishing a cafeteria-style fringe benefits plan. A) TrueB) False

Origin: Chapter 11 Human Resource Management,94. All of the following are external recruitment sources except:

A) college placement bureaus. B) public and private employment agencies. C) applicants who show up at the office and apply. D) recommendations of employees.

Origin: Chapter 5 Forms of Business Ownership95. The debts of a business operated as a sole proprietorship are considered to be

the personal debts of the owner of the business. A) TrueB) False

Origin: Chapter 18 Understanding Financial...96. Accounting provides financial information that can be useful to the owners,

creditors, suppliers, employees, and competitors of an organization. A) TrueB) False

Origin: Chapter 7 Management, Leadership, and...97. Pam is a sales manager for Paradise Beauty Products. She has told her sales

people that she expects each of them to increase their customer contacts by at least 5 percent in the next month. Pam has set a(n): A) procedural policy. B) functional objective. C) policy guide. D) performance standard.

Origin: Chapter 19 Financial Management98. The budget that estimates a firm's projected cash inflows and outflows, as well

as cash shortages or surpluses during a given time period is called the ________ budget. A) capital B) operating C) cash D) monetary

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Origin: Chapter 18 Understanding Financial...99. Many business decisions are made in hopes of improving a firm's "bottom line".

Which of the following financial statements will reflect a firm's "bottom line"? A) income statement B) balance sheet C) statement of cash flows D) trial balance

Origin: Chapter 16 Today's Promotional...100. The combination of advertising, personal selling, public relations, and sales

promotion activities used by an organization represents its: A) marketing communications system. B) marketing mix. C) public relations package. D) promotional mix.

Origin: Chapter 6 Entrepreneurship and...101. Traditionally small business statistics classified the retirement of an owner of a

sole proprietorship as a business failure. A) TrueB) False

Origin: Chapter 19 Financial Management102. Carolina Financial Services is considering the purchase and installation of an

expensive computer network. This is the type of expenditure that would be included in a(n): A) capital budget. B) cash budget. C) operating budget. D) asset budget.

Origin: Chapter 11 Human Resource Management103. A fringe benefit plan that allows employees to choose the package of benefits

they want up to a certain dollar amount is called a __________ plan. A) cafeteria-style B) variable lifestyle C) 401K D) flexible spending

Origin: Chapter 19 Financial Management104. ___________ offer short-term secured loans to high-risk borrowers.

A) Commercial finance companies B) Reserve banks C) Credit brokers D) Investment bankers

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Origin: Chapter 16 Today's Promotional...105. All of the following are advantages of magazine advertising except:

A) Targeting of specific market segments. B) Ability to quickly change message. C) Superior color. D) Relatively long life.

Origin: Chapter 6 Entrepreneurship and...106. Which of the following would not be helpful in explaining why individuals accept

the risks of business ownership? A) The potential for profit and wealth. B) The sense of self-satisfaction and independence. C) The challenge of taking calculated risks. D) The desire to work fewer hours.

Origin: Chapter 19 Financial Management107. All of the following are primary areas of concern for financial managers except:

A) under-capitalization. B) inability to recruit qualified workers. C) poor control over cash flow. D) inadequate expense control.

Origin: Chapter 13 Marketing108. Because the marketing concept emphasizes a profit orientation, marketing has

not been used successfully by nonprofit organizations. A) TrueB) False

Origin: Chapter 2 How Economics Effects...109. When the supply curve and demand curve for a particular good are on a single

graph, the point at which the two curves intersect identifies the: A) total profit earned by producers. B) total amount of labor that will be employed in that market. C) amount of time it takes to bring together the buyers and sellers of the

good. D) equilibrium price of the good.

Origin: Chapter 6 Entrepreneurship and...110. The United States government views entrepreneurship as a result of an

individual's self-motivation. The government, therefore, can do very little to encourage an individual to become an entrepreneur. A) TrueB) False

Origin: Chapter 19 Financial Management111. When using ________ financing, the company incurs a legal obligation to repay

the amount borrowed. A) debt

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B) equity C) retained earnings D) commitment

Origin: Chapter 18 Understanding Financial...112. The “bottom line” of an income statement shows the firm's:

A) retained earnings. B) gross margin. C) net income or net loss. D) owners' equity.

Origin: Chapter 4 Demonstrating Ethical...113. Organizational ethics are learned by:

A) attending corporate responsibility seminars. B) tracking the failures of those who are caught in business scandals. C) attending business classes and regularly taking notes. D) observing the actions of others.

Origin: Chapter 1 Managing Within the Dynamic...114. All of the following policies would tend to foster entrepreneurship except:

A) establishing a currency that is tradable on world markets. B) establishing more regulations to protect the environment. C) developing policies to reduce corruption in business and government. D) allowing private ownership of businesses.

Origin: Chapter 13 Marketing115. __________ recognizes the need to create mutually beneficial exchange

relationships over time with all of an organization's stakeholders. A) Relationship management B) Stakeholder marketing C) The fundamental law of consumptionD) The silver rule

Origin: Chapter 6 Entrepreneurship and...116. Small business owners often struggle in attracting qualified workers. Which of

the following does not contribute to this problem? Small firms offer: A) less attractive fringe benefits than offered by larger firms. B) lower wages than paid by large corporations. C) limited room for advancement. D) a lack of challenging jobs.

Origin: Chapter 3 Competing in Global Markets117. The comparative advantage theory states that all nations should strive to

become self-sufficient in order to enjoy the highest standard of living. A) TrueB) False

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Origin: Chapter 3 Competing in Global Markets118. A devaluation of the U.S. dollar would make American goods cheaper to foreign

buyers. A) TrueB) False

Origin: Chapter 19 Financial Management119. One of the primary factors that influences the interest rate a firm pays on long-

term loans is the: A) intensity of competition the firm faces. B) current level government regulations. C) general level of market interest rates. D) exchange rate of the Euro to the U.S. dollar.

Origin: Chapter 8 Adapting Organizations to...120. Huggin Motels, a national chain of motels, utilizes a centralized authority

structure. Which of the following provides the most likely explanation for why management at Huggin would favor centralized authority? A) Top management at Huggin Motels intends to empower its first-line

employees. B) Top management at Huggin wants to improve customer service response

time. C) Top management desires to maintain a uniform image and high quality

service. D) Huggin Motels wants to utilize a cross-functional organization.

Origin: Chapter 4 Demonstrating Ethical..121. When it comes to social responsibility, some people feel that “before you can do

good, you must do well.” This reflects a firm's primary responsibility is to their: A) customers. B) investors. C) employees. D) community.

Origin: Chapter 14 Developing and Pricing...122. Some goods have a product life cycle that is completed in a shorter amount of

time than other goods. A) TrueB) False

Origin: Chapter 16 Today's Promotional...123. The last step in creating a promotional campaign is to evaluate the

effectiveness of each element of the promotional mix. A) TrueB) False

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Origin: Chapter 6 Entrepreneurship and...124. Historically entrepreneurs in the U.S. have:

A) often created wealth for themselves, but have had a minor impact on the economy as a whole.

B) started many small firms that later became major corporations employing thousands of workers.

C) been successful only when they worked in partnership with the federal government.

D) played an important role, but are less important now in creating jobs and wealth.

Origin: Chapter 18 Understanding Financial...125. As an accountant, Joe Billings would be most likely to be involved in:

A) developing plans to help his company establish a supply chain. B) setting prices for specific goods. C) summarizing and interpreting financial information needed by his firm's

managers. D) developing a fringe benefit program that improves employee morale.

Origin: Chapter 6 Entrepreneurship and...126. Luis is a partner in a firm that specializes in producing vitamins and health food

products. While the business is considered small by U.S. standards, he is attempting to persuade his partner to expand internationally. Luis would list all of the following as advantages of going international except: A) exporting can help sell excess inventory. B) marketing programs benefit from the cultural similarities in prospective

markets. C) expanding internationally can reduce a firm's dependence on their

domestic market. D) selling your products in other markets can extend their life cycle.

Origin: Chapter 5 Forms of Business Ownership127. The ___________ is the most common form of business ownership.

A) partnership. B) corporation. C) joint venture. D) sole proprietorship.

Origin: Chapter 13 Marketing128. Keith has been hired as a marketing manager for a textbook publishing

company. His primary responsibilities are likely to be concerned with: A) establishing inventory control methods. B) making certain production schedules are met. C) planning and executing the conception, pricing, promotion and distribution

of his firm's products. D) preparing job descriptions and job specifications for sales representatives.

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Origin: Chapter 6 Entrepreneurship and...129. About 80% of all Americans find their first jobs in:

A) government agencies. B) large corporations. C) the manufacturing sector. D) small businesses.

Origin: Chapter 18 Understanding Financial..130. The balance sheet reports revenues and selling costs for a period of time.

A) TrueB) False

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