1. Investing Money and Earning a Higher Return
1) Ross wants to invest some money that he just inherited. He found that his bank offers a savings account paying a guaranteed 3% rate of return. However, he would like to earn a higher return. Ross should keep in mind that to earn a higher return on his money he:
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Answer- Option C
2) Carrie, a student at Metropolitan Community College, dreams of starting her own business. In an effort to learn as much as she can about small business management, she talked to four friends who each offered their advice. Which of these suggestions is likely to help Carrie the most?
Answer- Option B
3) Which of the following statements would a follower of Adam Smith be most likely to make?
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Answer- Option D
4) A separation between ownership and management is most likely to occur in a:
Answer- Option C
5) According to the invisible hand concept, the best way for a society to encourage the creation of jobs and the production of the products most wanted by consumers would be to:
Answer- Option C
6) Compared to partnerships and sole proprietorship, a major advantage of the C (conventional) corporation as a form of business ownership is that it:
Answer- Option C
7) Which of the following is normally considered a disadvantage of the corporate form of business?
Answer- Option D
8) Which of the following statements about social entrepreneurs (such as Muhammad Yunus who won the Nobel Prize) describes their challenge?
Answer-Option D
9) As a factor of production, the term capital includes:
Answer -Option C
10) Which of the following statements provide the most accurate comparison of socialism and communism?
Answer- Option B
11) Which of the following people would tend to favor a socialist economy?
Answer -Option D
12) Which of the following statements about capitalism is the most accurate?
Answer- Option C
13) One of the greatest concerns associated with capitalism is that:
Answer-Option C
14) Abby left her native land in Eastern Europe to become a nanny for a family in a western suburb of Chicago, Illinois. One of the benefits of her arrangement was that she could attend the community college near her family’s residence. When she arrived at her new job, she experienced some immediate differences. Abby noted that public transportation, in northern Illinois was limited and expensive, making it difficult to get to school. For a negligible fee, the government in her native country provided public transportation to everyone. The economic system in Abby’s native country was more characteristic of ___________
2. Advice for Small Business Management
Answer- Option B
15) The form of business ownership best suited to raising large amounts of money for expansion is the
Answer- Option C
16) One disadvantage of _________ is the initial cost of formation.
Answer-Option A
17) As you consider the factors of production, which of the following did management theorist Peter Drucker believe to be one of the most important contributing factors to increasing our nation’s wealth.
Answer- Option C
18) __________ comprises about 20% of all businesses but account for about 81% of US business receipts.
Answer- Option C
19) The Procter & Gamble Company is a major producer of bar soaps. In fact, Procter & Gamble produces Ivory, Camay, Lava, Safeguard, Zest and Coast bar soaps that all claim a variety of benefits. These products are part of Procter & Gamble’s ________ in bar soaps.
Answer- Option D
20) Fourteen years ago, Sergio noticed that a lot of people who bought personal computers did not know much about how to use them and frequently suffered system crashes and other aggravations. He decided he could earn a nice profit by starting a consulting business to help other people overcome their computer woes. Although the business struggled at first, it has experienced a good deal of success for the past five years. Sergio has many satisfied customers, and the business has grown to the point where he now employs several workers. Sergio’s experience is an example of:
Answer- Option C
21) One of the challenges of running a home-based business is:
Answer- Option D
22) A simple supply curve shows that an increase in the price of a good will cause the quantity supplied to:
Answer- Option B
23) A (n)_____ curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period
Answer-Option A
24) Entice-Mint Breath Mints is a new brand of breath fresheners. The company realizes that product location is very important since consumers desire to buy this type product with a minimum of effort. Entice-Mint mints represent a:
Answer- Option C
25) A __________ is a name, symbol, or design (or combination of these) that identifies the goods or services of one seller or group of sellers and distinguishes them from those of competitors.
Answer- Option B
26) Attracting attention, describing contents, explaining benefits and identifying the uses of a product are all functions of:
3. Statements of Adam Smith’s Followers
Answer- Option C
27) When prices are free to adjust over time, in the long run, the market place of a good tends to:
Answer-Option B
28) _________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product
Answer- Option A
29) _________ exists when the entire supply of a good is controlled by a single seller:
Answer- Option D
30) An oligopoly is a market that is characterized by:
Answer -Option C
31) The market place of apples is currently rising. In a free-market economy, the most likely explanation of this price change is that:
Answer- Option A
32) Which of the following statements about factors of production is the most accurate?
Answer- Option D
33) Taxes and government regulations are part of the _______ environment of business.
Answer- Option A
34) On its website, Papa John’s pizza compares itself to the competition with the following message: “better ingredients, better pizza”. The company wants to achieve:
Answer- Option A
35) Which of the following government policies would be least likely to encourage entrepreneurship?
Answer-Option C
36) When businesses sell to other businesses over the Internet, these transactions are known as:
Answer-Option C
37) A major premise of a socialist system is:
Answer- Option B
38) A major benefit of socialism is the:
Answer -Option C
39) ,Under the _______ system there is a very little incentive to work hard or to produce quality goods or services.
Answer -Option C
40) ,Under the ________ system the number of choices in the market is directly related to government involvement in markets.
Answer -Option B
41) The capitalist system relies heavily on:
Answer- Option D
42) When corruption is present in the business environment:
Answer Option A
43) Communism is an economic system in which:
Answer-Option C
44) In recent years, countries with communist economic and political systems have:
Answer -Option B
45) To many businesspeople, one of the major attractions of a sole proprietorship is:
Answer -Option D
46) One of the major disadvantages of a sole proprietorship is the:
Answer -Option B
47) With respect to taxes, the sole proprietorship:
Answer -Option B
48) Unlimited liability means:
Answer-Option A
49) Nick wants to start his own business. Nick should consider a sole proprietorship if he:
Answer -Option C
50) A partner (owner) who invests money in a business, does not take an active role in managing the operation, and is only subject to losing the funds he/she invested.
4. Separation between Ownership and Management
Answer -Option B
51) The reason a professional such as lawyer or doctor would incorporate his/her business is:
Answer Option C
52) A successful web-based strategy that helps a business spread the word about its web site and products is called _________
Answer -Option D
53) Which of the following are products consumers buy after comparing quality, price, and style from a variety of sellers?
Answer -Option A
54) Under capitalism:
Answer -Option A
55) The freedom of people to buy, sell and use land, buildings, machinery and inventions are basic capitalist rights under:
Answer- Option A
56) The quantity of a good or service that producers are willing to sell at different prices during a specific time period is known as the:
Answer -Option A
57) Compared to a sole proprietorship, which of the following is considered an advantage of a general partnership?
Answer -Option A
58) Which of the following is an advantage of a partnership?
Answer -Option C
59) When entering into a new partnership, a good strategy is to:
Answer -Option B
60) _________ is the chance a business owner will lose the time and money invested in a business that proves to be unprofitable.
Answer- Option B
61) The total amount of money that businesses take in by selling goods and services is called _____
Answer -Option B
62) _______ is a measure of the general well-being and satisfaction derived from a variety of factors including political freedom, safety, education and a clean environment.
Answer -Option B
63) The amount of goods and services people can buy with the money they have is called their:
Answer – Option B
64) In order to make an intelligent investment decision, entrepreneurs should:
Answer- Option D
65) One difference between partnerships and sole proprietorships is that partnerships:
Answer -Option D
66) A good reason why partners should spell out the details of their partnership arrangements in writing is:
Answer-Option B
67) One way to eliminate some of the risk of your partners making costly mistakes that could jeopardize your personal assets is to set up a:
Answer- Option D
68) Randy and Mandy, plan to pool their money and musical talents to form a geberal partnership and begin booking weekend gigs. One of the first things Randy and Mandy should do is:
Answer -Option B
69) A (n) ___________ is a state-chartered legal entity with authority to act and to have liability separate from its owners.
5. The Invisible Hand Concept
Answer -Option B
70) A separation between ownership and management is most likely to occur in a:
Answer -Option C
71) One disadvantage of ________ is the initial cost of formation.
Answer-Option C
72) The form of business ownership that usually requires the most detailed record keeping is the:
Answer- Option A
73), One reason limited liability companies have become so popular is that they:
Answer -Option A
74) The purpose of _______ is to create real or perceived product differences.
Answer -Option B
75) Location is very important in the marketing of ________ because consumers desire to purchase these goods with a minimum of shopping effort.
Answer -Option D
76) The ________ is the most common form of business ownership.
Answer -Option D
77) Historically entrepreneurs in the U.S
Answer -Option B
78) Which of the following statements explain one of the reasons that people in the U.S take the entrepreneurial challenge?
Answer -Option B
79) Which of the following statements is a characteristic of entrepreneurs?
Answer -Option C
80) Intrapreneurs make use of _______ to develop and launch new products and generate new profits.
Answer -Option A
81) Kenya recently quit a job with a large corporation to start her own business. While she realizes that her decision comes with risk, she is excited for the chance to be independent and by the challenges of running her own firm. Kenya is an example of a(n):
Answer -Option B
82) The purpose of ________ is to create real or perceived product differences
Answer- Option B
83) Location is very important in the marketing of _______ because consumers desire to purchase these goods with a minimum of shopping effort.
Answer -Option D
84) Small businesses create about ________ percent of the new jobs in the United States.
Answer -Option C
85) When comparing small businesses to their larger competitors, it is clear that:
Answer- Option C
86) Which of the following will not help your small business succeed?
Answer -Option A
87) When consumers decide to purchase a particular product, they:
Answer- Option B
88) Compared to partnerships and sole proprietorships, a major advantage of the C (Conventional) corporation as a form of business ownership is that it:
Answer- Option C
89) As a result of corporate downsizing, Alex lost his job as an information systems manager for a large telecommunications company. A bonafide computer geek in his own right, Alex knew that several of his past company contacts often outsourced their computer problems. He decided it was a good time to test the waters and see if he could secure enough computer clients to be in business for himself. His success demonstrated that:
Answer -Option D
90), One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on:
Answer- Option D
91) Conversations with people who start their own business often reveal that:
Answer -Option A
92) Which of the following suggestions would an experienced business owner offer to help someone who is thinking about starting a business venture?
Answer- Option B
93) Which of the following refers to a group of products offered by a firm that are physically similar or are intended for a similar market?
Answer- Option B
94) Sweet Dream Confectioners uses the same ingredients as most other producers of chocolate candies. In fact, taste tests suggest that the candy itself, while quite good, is not much better than other well-known brands of chocolate. However, the company wraps its candies in expensive-looking foil and places them in very attractive boxes. It promotes its products in advertisements as “the ultimate in chocolate experience.” Sweet Dream charges a much higher price than most competitors do, but sales continue to grow. This success indicates that:
Answer -Option B
95) The Procter & Gamble Company is a major producer of bar soaps. In fact, Procter & Gamble produces Ivory, Camay, Lava, Safeguard, Zest, and Coast bar soaps that all claim a variety of benefits. These products are part of Proctor & Gamble’s __________ in bar soaps
Answer -Option D
96) Which of the following are products consumers buy after comparing quality, price and style from a variety of sellers?
Answer- Option B
97) ________ goods and services represent those products that consumers are unaware of or have not thought of buying.
Answer -Option D
98) Successful product differentiation:
Answer -Option B
99) Which of the following would a firm most likely use to differentiate its product?
Answer- Option C
100) The evaluation of packaging as a marketing function indicates that:
Answer -Option B
101) “Double taxation” means:
Answer- Option C
102) A creative person working within a corporation to launch new products and generate new profit is known as a (n):
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