Exam 1: Taking Risks and Making Profits Within the Dynamic Business Environment

Brett runs a lawn care service.Although he and his employees could service eight households in one day,he averages six yards per crewmember,per day.Brett recently restructured his work crew and provided each cutter with an incentive to acquire two new customers each month through customer referrals.As a recent business graduate,you tell him he's probably on the right track.

Which of the following statements about the competitive environment is most accurate?

The advice provided by a marriage counselor is an example of the service industry.

Bruno and Gino are worthy competitors in the bakery business in a small upscale resort town.Gino recently negotiated a contract with a supplier for really cheap cooking oil.He knows that bakery customers want cheap products.In this competitive environment,keeping the price down is all that matters.

An increase in global trade will:

Although employment in the service sector has increased rapidly in recent years,the vast majority of workers are still employed in the goods producing sector.

People living in San Jose,CA on average earn more money than people living in St.Louis,MO.The citizens of San Jose enjoy a higher standard of living than the citizens of St.Louis.

In countries where businesses cannot enter into binding contracts,business owners assume additional risk.

Employers provide tools and technology for their employees in order to:

One advantage of a database is:

Business consultant Peter Drucker said that the most important factor of production is knowledge.

Which of the following best describes recent job growth in the service sector?

The goal of empowerment in the work environment is to prevent mistakes.Mistakes can be prevented by giving management more control over the actions of lower-level workers.

Tyrell recently noticed that he was receiving several catalogs and direct mail advertisements than he had in the past even though he had not requested any of them.Which of the following best explains why this is happening?

It's no secret that Blockbuster™ stores are closing,while Netflix™ is growing like gangbusters! Both companies participate in the video rental business.Netflix evaluated the lifestyle needs of video customers,understanding that time,family,and work obligations called for more convenient methods to receive video entertainment.Netflix embraced the opportunity to utilize the Internet,and TVs with special modems,to stream videos directly to customers.The company also managed to keep customer costs down,by passing along the savings it realized in labor.Blockbuster did not keep its eye on competitor movements,permitting Netflix to quickly capture video market share.In sizing up the situation,which external environments)probably had the least effect on Netflix's success?

The databases of a business often include a great deal of information about the firm's customers.

The evidence for climate change is questionable.Well-known U.S.companies are taking a wait-and-see approach toward addressing climate change.

Jane's income has remained stable over the past few years while the prices of things she buys have gone up.Nevertheless,Jane feels better off because the environment is cleaner,the crime rate has declined,she has more leisure time,and the quality of medical care has improved.If Jane's experience is typical,we can conclude that the standard of living has:

If they wish to create more wealth,poor nations should focus on policies that increase entrepreneurship and the effective use of knowledge.

A recent New York Times article about Bernard Madoff and his illegal Ponzi scheme stated,"When money goes global,fraud does too." Although the goal of investors who trusted Madoff's investment company was to earn the highest return possible on their investments,they turned a blind-eye toward the fact that some of those returns were too good to be true.Individual investors,companies,and even charities lost large sums of money by investing with Madoff's company.Which of the following statements relates to this story?