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

For-profit businesses and nonprofit organizations are similar in that they both:

Women currently own less than ten percent of all businesses.

An effort to please one group of stakeholders eventually pleases all stakeholders.

Revenue is the amount a business earns above and beyond what it spends for expenses and costs.

Productivity is the amount of output you generate given the amount of input such as hours worked.

Starting a business always involves .

The customers, employees, stockholders, suppliers, creditors, and others who stand to gain or lose by the policies and activities of a business represent the firm's:

The federal government requires companies to take diversity very seriously, even recommending establishing a chief diversity officer in the executive suite.

Adam Ripley sells custom bicycles. Adam buys several bike parts including wheels and tires from the Good Treads Company. Although several government-supported regulations help Adam in his business, regulations that make it easy for Adam's business to enjoy good vendor relationships are:

Jill is looking into the possibility of opening up a day care center in her community, because she is aware of many single-parent families that need a place for their children to stay while the parents work. She is concerned about the long-term prospects for such a business. Jill believes the future of her center will depend on whether birth rates and the number of single-parent families remain high. These concerns illustrate how businesses can be affected by:

Mini-Case Sergio Gonzales is employed by Bigbux National Bank, one of the largest banks in the Midwest. He is a loan officer, specializing in home equity loans. Tio Raul, Sergio's favorite (and wealthiest) uncle, passed away last month and left Sergio a sizable amount of money. Sergio is looking at the best way to invest his newly acquired wealth. He is considering many options, ranging from simply putting the money into a savings account to the possibility of starting his own business. Although his bank job pays well and offers pleasant working conditions, Sergio is frustrated because he has little freedom or flexibility to deal with customers since every decision he makes must be approved by his supervisor. Besides, he's a bit bored and looking for a challenge. He thinks he might get a lot of satisfaction from owning his own business. Sergio has not made a definite decision yet, but has talked to a lot of people searching for a good idea for a new business. If he can come up with an idea he likes, he might just quit his current job and use his inheritance to go into business for himself! -As he explores his options, Sergio notices that some opportunities appear to be riskier than others. When considering various opportunities, Sergio should keep in mind that:

Which of the following is a factor of production?

Which of the following industries will benefit from an aging population?

Although the Internet is exciting, very few people have access to it outside the U.S.

Niki has joined with several other investors to form a new company that sells foot care products to consumers over the Internet. Niki has invested in a B2C e-commerce company.

John earned 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.

As a factor of production, the term capital includes:

Planet Earth Developers is a large nation-wide construction company with home offices in Lansing, MI. The local media often remarks about the pristine landscaping that surrounds the home office that sits on a 30-acre complex. At the back end of the complex are several large warehouses and garages that hold large equipment. The grounds surrounding these warehouses look like a well- maintained park. Across the street from the garages are several shops and businesses. The CEO, "Planet Paul" (as his employees call him), often talks about how thankful he is that the town permits him to store the company equipment at that site, and vows to always maintain the premises for his neighbors (the other businesses that thrive in that area), not to mention that he asks 100 employees to come to work there everyday. Which of the following statements describes Planet Paul's business philosophy?

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?

By balancing the demands of customers and stockholders, businesses satisfy the demands of all stakeholders.