As a limited partner in a construction business joe

1.A friend of yours has recently received his MBA. He wants to open his own business but feels that it might be too riskyat this point in his career. As an SBA counselor, you are able to advise him and explain more clearly to him some ofthe advantages and disadvantages of starting a small business. Which of the following statements best representssomething you might tell him?
A.Small businesses foster personal relationships and offer flexibility and independence
B.The cost of opening a small business is relatively low, and financing is easily obtained.
C.Although opening a small business is risky, there is practically unlimited potential.
D.Record keeping will be complicated, and public disclosure of most transactions is required.
E.Opening a small business is especially difficult because there is little help available for those desiring to do so.

2.A furniture manufacturer like Thomasville would be concerned with the producer price index because it
A.measures the effect of interest rates on the economy.
B.tracks the cost of housing and transportation.
C.measures prices that manufacturers must pay for lumber and other raw materials used in the manufacturingprocess.
D.is related to the real gross domestic product.
E.is published daily.
3. A limited-liability company is

A.taxed like a partnership

B.always used to organize charitable organizations

C.similar to a cooperative

D.the result of a horizontal merger

E.taxed like a corporation

4.A local retailer calls its customers when it receives merchandise that they may be interested in, provides individual service to each customer, providesforms and phone numbers for complaints and comments, and has a 100 percent satisfaction guarantee. Which objective is this business working hard toaccomplish?

A.Achieving low employee turnover

B.Keeping up with the current technology

C.Making a profit

D.Satisfying the needs of its customers

E.Increasing the owner's wealth

5.Although Frank is not in top management, he is charismatic and well liked by others in his organization. Other employeesoften look to Frank to see how he reacts to new policies implemented by top management, and they follow his lead.Frank has leadership in his organization.

A.informational

B.formal

C.personal

D.informal

E.unofficial
6.An organization of nations formed to promote the free movement of resources and products among its members and tocreate common economic policies is called a(n)

A.free trade association

B.common market

C.none of the above

D.economic community

E.international alliance
7.Angela has been working for a local small business called Personal Wellness for the last three years. It is a retail businessthat sells sporting goods equipment. When she started to work there, she noticed several things that were possibly thecause of the business not doing as well as it hoped. Angela has been thinking of starting her own small business becauseshe feels she has learned much through working for Personal Wellness.

Angela's manager asked her to create a business plan for Personal Wellness. The manager hoped that this planwould put things into perspective to help the company do better. After creating the plan, Angela suggested thatPersonal Wellness contact a group of senior and graduate students to provide management counseling for thecompany. Angela wants to make sure that her leaving does not become the cause of the company going under.

Question: Personal Wellness can be classified as operating in what type of industry?

A.Service

B.Wholesaling

C.Production

D.Distribution

E.Manufacturing

8As a businessperson planning to open a new small business, you know that the business plan should not contain
A.a discussion of the nature and mission of the new business.
B.pages and pages of detailed facts and figures
C.any mention of the businessperson's goals; financial institutions just aren't interested in these.
D.an explanation of why opening a business of this type makes good business sense.
E.information about how much it will cost to open and operate the new business
9.As a limited partner in a construction business, Joe

A.does not receive any portion of the profits

B.contributes only his time and not his money

C.has input only on major company decisions

D.cannot lose his investment in the partnership

E.only risks his initial investment

10.As a manager at Johnson Electric, an armature motor manufacturer, Charles is responsible for quality. As he carries outhis controlling function, Charles sets the standard for the number of defective parts per million, and then he gathersthe data measuring the actual performance. What third step of the control function should Charles take next?

A.Change the standards to match the actual performance

B.Take corrective action

C.Begin planning again

D.Determine the cause of the discrepancy

E.Motivate his employees

11.Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant. Before he took theinitiative to open the franchise, he tried to weigh all the advantages and disadvantages. He decided, based on hisresearch and understanding, that it would be beneficial to open a local fast-food restaurant.

Question: Which of the following would be an advantage for Brian?

A.Franchise holders paying for their security

B.Contract disputes

C.Disagreements increasing

D.The franchisor maintaining a great deal of control

E.Guidance from the franchisor

12.By age 26, Tom was a plant manager in the snack-foods division. By 33, he headed the division, one of the mostprofitable in the corporation. Eventually, however, the company decided to move its corporate offices. Although heloved the job and thought the work was great, Tom's lifestyle was awful. He was on the road so often that he wasgiving up much of his family life. Tom had also become disenchanted with corporate life. He saw that the closer onegot to the top, the more vulnerable one's position became. Thus, Tom left the corporation to start his own
snack-foods company. His thoughts and actions most clearly reveal his

A.need for independence

B.lack of self-confidence

C.desire to determine his own destiny

D.entrepreneurial spirit.

E.willingness to find and accept a challenge
Centrum Springs, Inc.

13.Riley has worked for Centrum Springs, Inc., for many years and has now been given the opportunity to advance in thecompany. His manager is retiring and hopes that Riley will take over for him. However, even though Riley is anexperienced employee, there are many things that he still needs to learn. Riley has trained many new employees, buthe has never held a management position. Riley needs to have a general understanding of what it takes to be amanager.

There are many problems in Riley's department. There are no plans to fall back on in case the initial plan fails. Rileyalso will need to learn how to direct people in such a way that makes them want to do more than they absolutelyhave to. Riley feels that this is a great opportunity, and he is anxious to learn everything to be a great manager. Heknows that if he performs well in this position, he will have the opportunity to move up the corporate ladder.
Question: Riley's usual duties represent which of these areas?

A.Human resources management

B.Financial management

C.Operations management

D.Administrative management

E.Marketing management
14.Clarke Tools, concerned about its loss of market share in previous years, has recently implemented several programs toencourage prompt and courteous customer service, employee self-management, and better coordination withsuppliers. Clarke Tools is making an effort to achieve

A.a quality concern focus

B.total quality development

C.quality improvement planning

D.total quality management

E.total quality commitment
Dazzle Magazine

15.Rosalea recently switched careers. Previously, she was a college professor, but she felt she needed more real- worldexperience to help her business students more fully. She became a manager at Dazzle Magazine, where she was incharge of the layout. Always open to new ways of doing things, Rosalea let her staff implement their ideas
at times. Rosalea learned firsthand the different roles she had to play as a manager.

It always got stressful when the publication deadline neared. At one point, there was a major mix-up in the layoutsfor the front cover. Rosalea was not sure of the correct layout because she had allowed one of her employees,Joseph, to modify and run with his idea on this matter. However, she could not ask for Joseph's help with the coversbecause he happened to be out of town at the time. Rosalea quickly looked over the layouts but felt that they stillneeded some work.

She decided to ask the design manager for her help. The design manager did not feel comfortable making a decisionon the issue, so she did not give Rosalea an answer. Rosalea then went to an employee within her department foradvice. That employee suggested some ideas, but Rosalea was still not satisfied. Finally, Rosalea called one of her topgraduate students with whom she had kept in contact and asked her if she could offer some ideas. The graduatestudent quickly came to the magazine's office and helped Rosalea decide on the alternative that should beimplemented. Rosalea greatly appreciated the assistance and the suggestion. The final cover design went to press,and that issue of the magazine was successful. This helped Rosalea realize that considering the big picture was good,but equally important were the little details.

Question: The graduate student's assistance represents which step of the decision-making process?

A.Select alternative

B.Evaluate solution

C.Generate many alternatives

D.Identify problem and opportunity

E.Implement solution
16.
Excellent Air Inc. is a well-known establishment in the airline business. It is currently one of the top firms in theindustry. The company prides itself on good customer service and being concerned with the broader societal good. EAImanagement is not only concerned with doing things right, but also with doing the right things. Many of their decisionsreflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethicalbehavior to the press instead of to EAI management. As a result, the company made sure its employees knew thefirm's guidelines on fixing ethical issues. EAI also developed a code of conduct based on standards that continue to beupheld within the company. Since the code of conduct has been put in place, there have been fewer ethical violations.

Although employee salaries at EAI are not as high as those at competing firms, the company experiences very lowemployee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but thatalso results in higher profits. If EAI can maintain the relationship it has built with its employees and customers, it willhave little difficulty keeping up its remarkable success.

Initially, employees were not willing to go to EAI management with ethical issues but would instead report them to the press. This is an example of

A.a social audit

B.poor employees

C.opportunity emptor

D.whistle-blowing

E.a narc
17
Excellent Air Inc. is a well-known establishment in the airline business. It is currently one of the top firms in theindustry. The company prides itself on good customer service and being concerned with the broader societal good. EAImanagement is not only concerned with doing things right, but also with doing the right things. Many of their decisionsreflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethicalbehavior to the press instead of to EAI management. As a result, the company made sure its employees knew thefirm's guidelines on fixing ethical issues. EAI also developed a code of conduct based on standards that continue to beupheld within the company. Since the code of conduct has been put in place, there have been fewer ethical violations.

Although employee salaries at EAI are not as high as those at competing firms, the company experiences very lowemployee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but thatalso results in higher profits. If EAI can maintain the relationship it has built with its employees and customers, it willhave little difficulty keeping up its remarkable success.

EAI's creation of its code of conduct demonstrated its application of moral standards to business situations, which isalso known as

A.business ethics

B.moral consciousness

C.social consciousness

D.social responsibility

E.moral responsibility
18
For firms like Target and Walmart, competition
A.is not a factor that must be considered in a free-market economy.
B.is a rivalry among businesses for sales to potential customers.
C.affects smaller businesses but not large chain operations.
D.affects larger chain operations but not smaller businesses.
E.is a problem that has been eliminated in the twenty-first century.
19Frank Roberts recently has been named to head a major manufacturing plant at Dow Chemical. The plant has hadsignificant increases in inventory and declines in net income over the past two years. Frank's task is to eliminate theexcess inventory and return the plant to its previous level of profitability. To begin solving this problem, Frank invitessuggestions from line workers, gathers managers from various levels of the plant to brainstorm, and talks with experts in the field of operations management. This step in the managerial decision-making process is known as

A.implementing a solution

B.identifying the problem

C.performance measurement

D.generating alternatives

E.selecting an alternative

20If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80 worth of bows andarrows, it has a(n)

A.trade deficit

B.trade surplus

C.negative cash flow

D.unfavorable balance of trade

E.export slide
21
In the last stage of the decision-making process, managers may decide to

A.hand the monitoring task to another manager

B.ensure customer satisfaction

C.start the problem identification process all over again

D.strengthen supplier relationships

E.continue quality improvement
22
Joe decides to start his own business designing websites for other businesses. Joe's business would be classified as a

A.production business

B.distribution business.

C.service business

D.wholesaling business

E.retailer
23
Megan Miller is an ethics officer at a large financial institution. She likely performs all of the following duties except

A.encouraging all employees to be whistle-blowers

B.giving top management advice about their decisions

C.providing advice to employees when they are uncertain

D.coordinating ethical conduct

E.determining the punishment for ethical violations

24

Mike Nettles approached Nathan Lang about becoming a partner in a firm that destroys environmental waste.
While Mike would like to become a partner in the firm, he is concerned about his liability because he has recentlyinherited a lot of money. In this situation, Mike should become a

A.joint venturist

B.sole proprietor

C.limited partner

D.general partner with a majority ownership interest in the business

E.general partner with a minority ownership interest in the business
25

Natalie owns a highly successful bakery and coffee shop, Mocha & Muffins. Others have expressed interest in startingnearly identical shops at various locations. Natalie decides to sell franchises of Mocha & Muffins. Why is this option aless expensive way to increase the distribution of her treats?

A.The franchisees will be highly motivated to succeed

B.She will not incur the high costs of constructing and operating more shops

C.She will be able to obtain low-interest loans for the new locations

D.She will be able to offer the franchisees free advice about their shops

E.She will only have to build as many shops as there are available franchisees

26

Nathan's business constructs storage sheds for new housing developments as requested by the builders. Nathan'sbusiness would best be classified as a

A.distribution business

B.retailer

C.production business

D.service business

E.wholesaler
27
Noise pollution can be reduced by

A.banning strip-mining of coal

B.modifying machinery and equipment

C.nonselective cutting of forests

D.the development of agricultural land for housing and industry

E.cleaning up land polluted with chemicals and industrial waste

28
Prudential and several other large insurance companies have joined together to underwrite an extremely largeinsurance policy. This sort of association is referred to as a(n)

A.cooperative

B.alliance

C.vertical merger

D.syndicate

E.conglomerate
29

Samantha graduated from college and needed to decide where she wanted to work. She had several options. Heraunt Julie owned and operated a small business that she started about twenty years ago. Julie, an individual ownerof her business, informed Samantha that she could work for her. On one hand, Samantha thought it would be a greatopportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retires. Onthe other hand, she also felt that she wanted something a little more challenging; a job where she could really useher education. Her other option would be to work for a company that a friend and her husband had
started and jointly owned. It was a rapidly growing company with plenty of opportunity for advancement. However,Samantha had some reservations about this choice because she was not sure she wanted to work for friends. Herlast option was to work for a large retail company, headquartered in Maryland, which had stores across the UnitedStates.

After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hardworking she was. Once she weighed all the advantages anddisadvantages of her different options, she decided to work for the large retail company so that she could gain themost experience for herself.

Question - What type of company does Samantha's friend operate?

A.Franchise

B.Sole proprietorship

C.Incorporation

D.Partnership

E.Corporation

30
Samantha graduated from college and needed to decide where she wanted to work. She had several options. Heraunt Julie owned and operated a small business that she started about twenty years ago. Julie, an individual ownerof her business, informed Samantha that she could work for her. On one hand, Samantha thought it would be a greatopportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retires. Onthe other hand, she also felt that she wanted something a little more challenging; a job where she could really useher education. Her other option would be to work for a company that a friend and her husband had
started and jointly owned. It was a rapidly growing company with plenty of opportunity for advancement. However,Samantha had some reservations about this choice because she was not sure she wanted to work for friends. Herlast option was to work for a large retail company, headquartered in Maryland, which had stores across the UnitedStates.

After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hardworking she was. Once she weighed all the advantages anddisadvantages of her different options, she decided to work for the large retail company so that she could gain themost experience for herself.

Question - If Samantha worked for the large retail company in Philadelphia, what type of corporation would that be?

A.International

B.Domestic

C.Global

D.Foreign

E.Alien
31

Samantha's Dilemma

Samantha graduated from college and needed to decide where she wanted to work. She had several options. Heraunt Julie owned and operated a small business that she started about twenty years ago. Julie, an individual ownerof her business, informed Samantha that she could work for her. On one hand, Samantha thought it would be a greatopportunity to be able to work for her aunt, learn the business, and then run the business when her aunt retires. Onthe other hand, she also felt that she wanted something a little more challenging; a job where she could really useher education. Her other option would be to work for a company that a friend and her husband had
started and jointly owned. It was a rapidly growing company with plenty of opportunity for advancement. However,Samantha had some reservations about this choice because she was not sure she wanted to work for friends. Herlast option was to work for a large retail company, headquartered in Maryland, which had stores across the UnitedStates.

After much consideration, Samantha decided she didn't want an opportunity and a job because someone knew her.She wanted to prove how motivated and hardworking she was. Once she weighed all the advantages anddisadvantages of her different options, she decided to work for the large retail company so that she could gain themost experience for herself.

Question - Refer to Samantha's Dilemma. Based on the information provided, what type of business does Samantha'saunt operate?

A.Partnership

B.Sole proprietorship

C.Franchise

D.Corporation

E.Incorporation
32
Strategic alliances and are very similar.

A.most-favored-nation status

B.joint ventures

C.corporate mergers

D.licensing agreements

E.trading companies

33
Ted's partnership agreement with two other men was a bit unsound. One of the problems the men were encountering was uneven productivity among thepartners. The agreement required each partner to contribute to every aspect of the business to receive an equal portion of the profits. This agreement didnot reflect the idea that
A.limited partners are required to be active in day-to-day business operations
B.each partner must agree to contracts entered into on behalf of all the others
C.customers and creditors of a limited partnership need not be protected
D.all partners need not be equal; that is, there are different types of partners. Some may be fully active in
running the business, whereas others may have a more limited role.
E.the Uniform Partnership Act requires every general partnership to have at least one limited partner

34
The major forces in consumerism are

A.consumer education programs

B.all of the above

C.individual consumer advocates

D.consumer laws

E.consumer organizations

35
The United States wishes to import no more than 100 million tons of sugar from India in any given year. The type of import restriction it should impose isa(n)

A.import duty

B.foreign exchange control

C.export duty

D.embargo

E.import quota

36

The World Trade Organization was created by the

A.Tokyo Round

B.United Nations

C.Uruguay Round

D.Kennedy Round

E.League of Nations

37

When Herbert took a new position at Galbrook Manufacturing Company, the firm was near insolvency. One of Herbert's first acts was to establishspecific goals for sales growth and a strategy for achieving them. He also changed the organizational structure and developed an elaborate controlsystem for keeping the company on track. Herbert is functioning in a(n) position at Galbrook Manufacturing.

A.technical

B.operative

C.managerial

D.clerical

E.sales
38
When Johnson & Johnson Vision Care, Inc., located in Jacksonville, Florida, sells its ACUVUE contact lenses to people inLondon, England, the company

A.is importing the lenses

B.has an absolute advantage

C.is exporting the lenses

D.is increasing the balance-of-trade deficit

E.is making a big mistake

39

Which of the following best defines balance of trade?
A.Purchasing products in other countries and bringing them into one's own country
B.The ability to produce a certain product more efficiently than any other nation
C.The total value of a nation's exports minus the total value of its imports over some period of time.
D.The ability to specialize in the production of a specific product and trade it for other needed products
E.The total flow of money into the country minus the total flow of money out of the country over some period of time
40
Which of the following functions is not performed by a trading company?

A.Linking buyers and sellers in different countries

B.Manufacturing products for foreign trading

C.Performing activities necessary to move goods to the foreign country

D.Taking title to products

E.Buying products at the lowest price consistent with quality
41
Which of the following is a potential drawback of licensing?
A.If quality is compromised, it may reflect poorly on the company providing the license.
B.Licensing will provide the original producer with much foreign marketing experience.
C.It is a relatively inexpensive way to market your product internationally.
D.It provides no compensation for the original company.
E.It is an extremely expensive and highly involved method of international expansion.

42

Which of the following is an example of a vertical merger?
A.The purchase of Gulf Oil by Standard Oil Company of California
B.The purchase of Kentucky Fried Chicken by PepsiCo
C.The purchase of Marathon Oil Company by U.S. Steel
D.The purchase of TWA by American Airlines
E.The purchase of Malone's Cost-Plus Supermarkets by the Kroger supermarket chain
43

Which of the following is uncharacteristic of a socialist economy?

A.What to produce and how to produce it are based on national goals.

B.Distribution of goods and services is controlled by the state.

C.Land and raw materials may be the property of the state.

D.The government owns and controls key industries.

E.All capital and capital goods are privately owned.
44
Which of the following organizations would be considered a small business?

A.Producer of semiconductors with 2,000 employees

B.Wholesaler with 50 employees

C.Construction company with average annual receipts of $32 million

D.Farmer with annual receipts of $10 million

E.Retail clothing store chain with annual sales of $26 million

45
Which of the following statements is true?
A.Takeovers always increase a firm's productivity
B.Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking toacquire businesses that will enhance their position in the marketplace.
C.Mergers in the first part of the twenty-first century will see an increase in debt financing.
D.Economists and financial analysts agree that mergers are good for the economy
E.There will be fewer mergers that involve investors from other countr

46
Which of the following statements reflects the socioeconomic model of social responsibility?
A."It's an absolutely preposterous proposal. The idea that any corporation has the right to reach beyondcompany gates to what you could even describe as the bedroom of the employee is ridiculous." —a
spokesperson for the Tobacco Institute
B."We will not allow our motion pictures to be shown in any movie house in South Africa unless it is fully integrated." —the president of UnitedInternational Pictures Corporation
C."It's easier and better to ban smoking than to risk multimillion-dollar lawsuits." —a university professor
D."I did it my way!" —Frank Sinatra
E."In the private sector, employers can get away with quite a bit." —an attorney
47

With regard to taxation of partnerships, which of the following statements is correct?
A.Each partner is taxed in the same way as a sole proprietor
B.Taxes are paid on a partnership's profits, after which each partner pays taxes on his or her share of the profits.
C.The partnership is taxed as a separate entity
D.A partnership is exempt from taxes
E.Profits are taxed twice