The _____ act criminalized securities fraud and toughened penalties for corporate fraud.

Study Guide: Chapter 1

Multiple Choice Questions 1. ____ is the primary goal of business.

A. Charity

B. Profit

C. Bureaucracy

D. Quality

E. Strategy

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit. 2. Which of the following is NOT a product?

A. A Dell personal computer

B. A veterinarian's treatment of a pet's injuries

C. A lawyer's advice in a divorce case

D. A checkup by a doctor

E. A business profit

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

3. Which of the following is an example of an intangible product?

A. A movie DVD

B. A sandwich

C. A sports car

D. A music concert

E. Jewelry

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

4. Which of the following is a similarity between businesses and nonprofit organizations?

A. Both do not have to abide by government regulations.

B. Both are unaffected by political or social change.

C. Both of them engage in management and finance activities.

D. Both of them do not need to adapt to technological changes.

E. Both aim to maximize financial returns for their owners.

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

5. All the groups that have an interest in an organization's success and outcomes are known as the organization's ____.

A. agencies

B. stakeholders

C. owners

D. investors

E. shareholders

Hint: Learning Objective: 01-01 Define basic concepts such as business; product; and profit.

6. Which of the following is a force within an organization's control that has an impact on the business's daily operations?

A. Employees

B. Regulatory environment

C. Competition

D. Political environment

E. Technology

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

7. Which of the following is true of the responsibilities of the people involved in a business?

A. Finance is concerned with acquiring, developing, and using human effectively and efficiently.

B. Marketing refers to all activities concerned with obtaining money for the firm and using it effectively.

C. Nonprofit organizations include all the functions that businesses do, except for the marketing function.

D. Management is not involved in the day-to-day functions of production and manufacturing.

E. It is the primary responsibility of the owners to provide financial resources for the operation of the business.

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

8. The functions of organizing, staffing, planning, and controlling are most closely associated with:

A. managers.

B. assembly line workers.

C. investment advisors.

D. stockbrokers.

E. direct sales executives.

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

9. _________ gather information and conduct research to determine what customers want. They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available. A. Accountants

B. Engineers

C. Marketers

D. Supervisors

E. Stock brokers

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

10. Advertising, personal selling, coupons, and sweepstakes are forms of the _____ aspect of marketing activities. A. finance

B. promotion

C. production

D. fund raising

E. social responsibility

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

11. When a business fails or does not make a profit, _____ have the most to lose in terms of finances. A. consumers

B. media agencies

C. government bodies

D. owners

E. market experts

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

12. ___________ refers to all activities concerned with obtaining and managing money and using it effectively. A. Public relations

B. Marketing

C. Production

D. Advertising

E. Finance

Hint: Learning Objective: 01-02 Identify the main participants and activities of business and explain why studying business is important.

13. All the following are factors of production used to make goods and services, EXCEPT: A. natural resources.

B. human resources.

C. customers.

D. capital.

E. financial resources.

Hint: Learning Objective: 01-03 Define economics and compare the four types of economic systems.

14.

Which of the following statements is true about communism?

A.

It is characterized by the government owning and operating most businesses.

B.

It relies on supply and demand to make decisions about pricing and production of goods.

C.

It encourages private ownership of the means of production.

D.

It encourages free market and competition.

E.

It provides scope for the production of a large variety of goods and services.

Hint: Learning Objective: 01-03 Define economics and compare the four types of economic systems.

15. In a capitalist economic system: A. the government owns and operates all businesses.

B. there is little scope for competition.

C. consumers have a limited choice of goods and services.

D. the majority of people possesses government jobs.

E. prices of goods and services are determined by demand and supply.

Hint: Learning Objective: 01-03 Define economics and compare the four types of economic systems

16. ___________ relates to the number of goods and services that consumers are willing to buy at different prices at a specific time. A. Demand

B. Supply

C. Elasticity

D. Balance of payments

E. Deficit

Hint: Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system.

17. The __________ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time. A. bundled price

B. equilibrium price

C. discount price

D. competitive price

E. maximum retail price

Hint: Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system.

18. The market for corn in Brazil has a large number of sellers, and there is no difference in the products sold by each seller. As there are also a large number of buyers for the corn, the actions of a single seller or buyer cannot affect the price. The market for corn can be described as ____.

A. a monopoly

B. monopolistic competition

C. pure competition

D. an oligopoly

E. modified competition

Hint: Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system.

19. A budget deficit occurs when a nation: A. reduces its expenditures.

B. receives excess taxes.

C. has no national debts.

D. spends more than it takes in from taxes.

E. balances taxes and expenditures.

Hint: Learning Objective: 01-05 Specify why and how the health of the economy is measured.

20. Which of the following is a change that occurred in the U.S. during the Industrial Revolution? A. Farm production decreased as industrial production increased.

B. As work became more localized, productivity decreased.

C. Trade within the country decreased as regions became self-sufficient.

D. Farmers began to move to cities to find jobs in factories.

E. Fewer goods were available, and prices of goods increased.

Hint: Learning Objective: 01-06 Trace the evolution of the American economy and discuss the role of the entrepreneur in the economy.

Chapter 2

21. Obeying the law is a business's ____. A. right

B. choice

C. economic responsibility

D. legal responsibility

E. ethical responsibility

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

22. The principles and standards that determine acceptable conduct in business organizations are referred to as: A. social responsibility.

B. business strategies.

C. business ethics.

D. business stances.

E. corporate citizenship.

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

23. The term social ___________ refers to a business's obligation to maximize its positive impact and minimize its negative impact on society. A. citizenship

B. strategy

C. ethics

D. responsibility

E. rule

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

24. The ________ Act criminalized securities fraud and toughened penalties for corporate fraud. A. Dodd-Frank

B. Federal Trade Commission

C. Foreign Corrupt Practices

D. Sarbanes-Oxley

E. Sherman Antitrust

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

25. The Sarbanes-Oxley Act was passed to: A. punish those who committed accounting fraud in the late 1990s.

B. improve corporate profits.

C. help laid-off employees get their jobs back.

D. help investors recoup their losses.

E. help restore confidence in corporate America.

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

26. One of the most difficult things for a business to restore after an ethics scandal is: A. regulations.

B. ethics training programs.

C. trust.

D. codes of conduct.

E. morale.

Hint: Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.

27. According to the National Business Ethics Survey, _____ is the number one area of misconduct observed in the workplace. A. plagiarism

B. discrimination

C. abusive behavior

D. misuse of company time

E. stealing

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

28. If Laura, a manager, chooses to act so that she benefits financially at the expense of her firm, then she: A. is bullying.

B. is engaging in bribery.

C. has a conflict of interest.

D. is cheating.

E. has broken the law.

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

29. Managers use the _____ of their position to influence employees' decisions and actions. A. responsibility

B. standards

C. principles

D. authority

E. acceptance

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

30. _____ involves taking someone else's work and presenting it as your own. A. Conflict of interest

B. Bullying

C. Inspiration

D. Bribery

E. Plagiarism

Hint: Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.

31. Which of the following is true of ethics? A. Ethical conflict increases when employees feel that their company is exerting pressure on them to engage in unethical conduct.

B. Professional codes of ethics are informal rules and standards that describe what the company expects of its employees.

C. Codes of ethics need to be very detailed so that they take into account every situation.

D. The development of a code of ethics should include only a firm's executives and board of directors.

E. Employees always utilize the same ethical standards at work as they do at home.

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

32. A set of formalized rules and standards that describes what a company expects of its employees is called a(n) ____. A. contractual capacity

B. consumerist code

C. moral philosophy

D. social responsibility

E. code of ethics

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

33. A code of ethics represents _____ rules and standards of what a company expects of its employees. A. unceremonious

B. short-term

C. comprehensive

D. formalized

E. situational

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

34. _________ is the act of an employee exposing an employer's wrongdoing to outsiders. A. Fraud

B. Whistleblowing

C. Plagiarism

D. Bullying

E. A criminal lawsuit

Hint: Learning Objective: 02-03 Specify how businesses can promote ethical behavior.

35. Being profitable relates to the dimension of _____ responsibility. A. corporate citizenship

B. voluntary

C. ethical

D. legal

E. economic

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

36. Avoiding misconduct and doing what is right, just, and fair relates to a business's: A. economic responsibility.

B. corporate citizenship.

C. legal responsibility.

D. ethical responsibility.

E. government's responsibility.

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

37. Being a "good corporate citizen" is an example of the _____ social responsibility dimension. A. puritanical

B. economic

C. legal

D. ethical

E. voluntary

Hint: Learning Objective: 02-04 Explain the four dimensions of social responsibility.

38. Studies have found a direct link between social responsibility and _____ in business. A. profitability

B. ethics

C. declining stock prices

D. happiness of stakeholders

E. global warming

Hint: Learning Objective: 02-05 Debate an organization's social responsibilities to owners; employees; consumers; the environment; and the community.

39. Laws regarding workplace safety are enforced by the ____. A. Federal Trade Commission

B. Occupational Safety and Health Administration

C. Environmental Protection Agency

D. Consumer Bill of Rights

E. Corrupt Practices Act