Deck 1: Developing a Business Mindset

Question 1

In a free-market economy,companies generally have limited autonomy in deciding which customers they want to focus on and how they want to compete.

Answer 1

False
Explanation: In a free-market economy, companies generally have considerable freedom in deciding which customers they want to focus on and how they want to compete.

Question 2

A firm sets up a paper-manufacturing factory in a country which has very strict regulations regarding disposal of industrial waste.This increases the cost of production of the firm.This is an example of the social environment of the firm.

Answer 2

False
Explanation: Every business operates within the broad social environment. Social environment refers to the trends and forces in society at large.

Question 3

Difficulty in obtaining business permits or licenses to do a particular business would be an example of a barrier to entry for a firm.

Answer 3

True
Explanation: Barrier to entry refers to any resource or capability a company must have before it can start competing in a given market.

Question 4

Companies that sell shares of stock to the public are required to have their financial records audited by an outside accounting firm.

Question 5

Businesses add value by transforming lower-value inputs (like paper and ink)into higher-value outputs (like textbooks).

Question 6

In the USA,the service sector now accounts for roughly 45 percent of the nation's economic output and 50 percent of all jobs in the country.

Question 7

A business mindset is a view of business that considers the various decisions a business has to make as well as the challenges that it must overcome in order to be successful.

Question 8

The service sector now dominates the U.S.economy.

Question 9

Mark,who works for a toy-manufacturing firm,is responsible for creating a branding and marketing strategy.He is most likely to be a part of the firm's operations management team.

Question 10

R&D fuels new ideas and designs for the company's products and services that allow it to meet customer needs in competitive markets.

Question 11

The term stakeholders refers only to those people who have invested money in the company's stock.

Question 12

Profit refers to the money the company brings in through the sale of goods and services.

Question 13

Assets refer to the tangible economic resources owned by a firm.

Question 14

Intangible products have a physical presence.

Question 15

A firm uses strategic sourcing techniques to reduce its costs.This is an example of barrier to entry.

Question 16

Business is any profit-seeking organization that provides goods and services designed to satisfy customers' needs.

Question 17

A company has competitive advantage when its products are more appealing to its chosen customers.

Question 18

Forces resulting from the practical application of science to a company's products and processes would best describe its social environment.

Question 19

Businesses can have both positive and negative effects on society.

Question 20

In general,accounting managers are responsible for planning,while financial managers are responsible for monitoring and reporting.

Question 21

________ is money that an organization brings in through the sale of its goods and services.

A) Profit
B) Revenue
C) Sales
D) Capital investment
E) Finance

Question 22

A business that relies on human resources more than on buildings,machinery,material resources,and land would be a ________ business.

A) capital-intensive
B) labor-intensive
C) not-for-profit
D) competitively disadvantaged
E) manufacturing

Question 23

If individuals and companies believe they can pursue rewards without facing the risks that should be attached to those pursuits,they are more likely to engage in irresponsible and even unethical behavior.This situation is known as a(n)________.

A) ethical dilemma
B) professionalism
C) barrier to entry
D) technological environment
E) moral hazard

Question 24

________ refers to some aspect of a product or company that makes it more appealing to target customers.

A) Competitive advantage
B) Economies of scale benefit
C) Horizontal integration
D) Vertical integration
E) Barrier to entry advantage

Question 25

________ is the term used to describe the difference between revenue and expenses.

A) Revenue
B) Interest
C) Sales
D) Owner's equity
E) Profit

Question 26

Businesses that need very large amounts of money,equipment,land and other material resources in order to get started and continue to operate are ________ businesses.

A) service sector
B) labor-intensive
C) competitively-advantaged
D) not-for-profit
E) capital-intensive

Question 27

Island Woodworking is a small business owned by Robert M.Carrasco,who makes handcrafted tables and rocking chairs from exotic woods.Robert employs three other woodworkers to help him in creating custom-crafted furniture.Island Woodworking would be described as what type of business?

A) goods-producing business
B) labor-intensive business
C) service business
D) merchandising business
E) not-for-profit organization

Question 28

Claire holds the position of chief information officer (CIO)position at Celera Inc.,a real estate company.Her position indicates that she is responsible for the preparation of income statements and balance sheets.

Question 29

________ create value by performing activities that deliver some benefit to the customer,such as automotive repair,banking,health care and massage therapy.

A) Goods-producing businesses
B) Manufacturing businesses
C) Service businesses
D) Merchandising businesses
E) Not-for-profit organizations

Question 30

Internal auditors verify the work of the company's accounting effort and look for opportunities to improve efficiency and cost effectiveness.

Question 31

Lisa has a small language training business.She provides French and Spanish lessons to several customers in the neighborhood.What type of business does Lisa have?

A) goods-producing business
B) manufacturing business
C) service business
D) merchandising business
E) not-for-profit organization

Question 32

An organization that seeks to operate efficiently and effectively to achieve its goals without focusing on financial gains is a ________.

A) business intermediary
B) nonprofit organization
C) service business
D) government-owned corporation
E) goods-producing business

Question 33

Unlike accounting tasks,for which there is a long tradition of outsourcing,the work of financial managers is generally kept "in house," particularly in midsize and large companies.

Question 34

Just Bakes,a bakery outlet in Cincinnati,is famous for the uniqueness of its bakery items,such as the baguette supreme,made from mixed-flour dough.The outlet also has an online ordering system that offers original gift baskets.Most of its target customers find it to be more appealing.In this example,Just Bakes has a(n)________.

A) economies of scale benefit
B) barrier to entry advantage
C) horizontal integration
D) competitive advantage
E) vertical integration

Question 35

A/an ________ is a framework of how a business intends to generate revenue.

A) business model
B) strategic management tool
C) profitability analysis
D) competitive advantage
E) entrepreneurial mindset

Question 36

Chicago Cinema Museum houses a unique collection of artifacts,memorabilia,and equipment that preserves the history and grandeur of cinema.It is funded by the government of the United States.The museum administrators apply many of the business-management principles to operate efficiently and effectively.The museum is most likely to be a ________.

A) business intermediary
B) nonprofit organization
C) service business
D) government-owned corporation
E) goods-producing business

Question 37

Dependability includes meeting your commitments,such as staying on schedule and within budgets.

Question 38

The risk and reward relationship is ________.

A) unimportant to capital-intensive businesses
B) of little interest to service-intensive businesses
C) essential to the counter-cyclical business model
D) fundamental to businesses in every modern economy
E) an outdated concept that's been replaced by corporate sustainability

Question 39

Etiquette is the quality of performing your job to the best of your ability and conducting yourself with purpose and pride.

Question 40

True professionals avoid committing ethical lapses.

Question 41

________ refer to a resource or capability a company must have before it can start competing in a given market.

A) Assets
B) Economies of scale
C) Barriers to entry
D) Technological requirements
E) Fixed costs

Question 42

________ activities are intended to identify new ideas that have the potential to result in new goods and services.

A) Capital-intensive
B) Regulatory
C) Research and development
D) Demographic
E) Economic

Question 43

Which of the following enables companies to design new and better ways to run their operations?

A) process R&D
B) legal and regulatory environment
C) barriers to entry
D) economies of scale
E) market environment

Question 44

________ refers to a company's target customers,the buying influences that shape the behavior of those customers,and competitors that market similar products to those customers.

A) Regulatory environment
B) Social environment
C) Economic environment
D) Market environment
E) Technological environment

Question 45

Population trends that change the composition of consumer markets and the workforce are a part of a company's ________ environment.

A) economic
B) regulatory
C) cultural
D) social
E) political

Question 46

The legal and regulatory environment would include ________.

A) demographic factors
B) technological innovations
C) the number of competitors in the market
D) preferences of the consumers
E) the speed of obtaining licenses

Question 47

The conditions and forces that affect the cost and availability of goods,services and labor,and shape the behavior of buyers and sellers are BEST described as the ________ environment.

A) market
B) regulatory
C) legal
D) economic
E) social

Question 48

A U.S.multinational retailer corporation wants to set up a chain of large discount department stores in a developing nation.However,it is hindered by strict licensing procedures and bureaucratic delays in obtaining government approvals.In this example,the multinational corporation faces ________.

A) incumbent inertia
B) economies of scale
C) first-mover disadvantage
D) free-rider effects
E) barriers to entry

Question 49

The policies and practices of government bodies would shape the ________ environment for a business.

A) legal and regulatory
B) technological
C) social
D) economic
E) market

Question 50

The advent of ________ has put buyers and sellers on much more equal footing.

A) cloud computing
B) B2B marketing
C) adaptive technology
D) social media
E) pop-up advertising

Question 51

The term ________ refers to forces resulting from the practical application of science to innovations,products,and processes.

A) social trends
B) research and development
C) barriers to entry
D) technological environment
E) business mindset

Question 52

Because they fundamentally change the nature of an industry,________ can be powerful enough to create or destroy entire companies.

A) adaptive technologies
B) disruptive technologies
C) apocryphal technologies
D) incremental technologies
E) innovative technologies

Question 53

A generational "bulge" in the population made up of people born between 1946 and 1964,called the Baby Boom generation,has occupied a large number of middle and upper management positions,frustrating younger professionals who would like to climb the company ladder.This is an example of the effect of ________ environment on businesses.

A) economic
B) social
C) political
D) legal
E) regulatory

Question 54

Taxation,fees,efforts to coordinate multiple regulatory agencies,labor rules,environmental restrictions,protection for assets such as patents and brand names,roads and other infrastructure,and the transparency and consistency of decision making are a part of the ________ environment.

A) economic
B) market
C) legal and regulatory
D) political
E) social

Question 55

________ refers to a view of business that considers the many decisions that must be made and the potential problems that must be overcome before the organization can deliver its products or services.

A) Business mindset
B) Service orientation
C) Free-market philosophy
D) Competitive advantage
E) Business model

Question 56

Which of the following is a component of the specific market environment within which each business operates?

A) demographic factors
B) competitors
C) technological innovations
D) environmental restrictions
E) the speed of granting permits and licenses

Question 57

Typical service businesses tend to ________.

A) operate as not-for-profit enterprises
B) rely more on human resources to prosper
C) use a command-and-control operational strategy
D) depend on property, machinery, and equipment to prosper
E) be resistant to using customer feedback to change the way they do business

Question 58

Which of the following statements is TRUE regarding a business mindset?

A) It involves seeing the business from outside in.
B) It is incompatible with corporate responsibility.
C) It involves appreciating the challenges a company faces in satisfying customer needs.
D) It involves acknowledging that businesses always benefit society.
E) It involves ignoring one's customer experiences.

Question 59

Which one of the following is an element of the economic environment of business that shapes the behavior of buyers and sellers?

A) Forces resulting from the practical application of science to innovations
B) Conditions and forces that affect the cost and availability of goods
C) Laws and regulations that restrain, support, and protect businesses
D) Targeted customers and competitors that market similar products to those customers
E) Population trends, social values, and relationships of society and business

Question 60

All internal and external groups affected by a company's activities are referred to as its ________.

A) shareholders
B) customers
C) stakeholders
D) employees
E) suppliers

Question 61

FinSmart,a finance company,plans to construct a new office building which would be disabled-friendly.The company also plans to make renovations to the existing office buildings to incorporate changes that would make them safer and disabled-friendly.Which of the following persons is most likely to be in charge of planning the new buildings and maintaining them?

A) sales manager
B) facilities manager
C) human resource manager
D) logistics manager
E) distribution manager

Question 62

________ encompasses all the people and processes used to create the goods and perform the services that a company sells.

A) Sales and marketing
B) Information technology management
C) Human resources management
D) Operations management
E) Financial management

Question 63

________ audit the financial reports of public companies as required by law.

A) Internal accountants
B) External auditors
C) Credit managers
D) Management accountants
E) Forensic accountants

Question 64

Creating branding and advertising strategies to communicate with potential customers,and setting prices would fall under the ________ function of a business.

A) human resource
B) accounting
C) logistics
D) marketing
E) research and development

Question 65

Alvy Smith is the forensic accountant at KPM Financial Group,a company that provides investment services.He is most likely to do which of the following activities?

A) establish the long-term financial goals and budgets of the firm
B) purchase supplies required for the upkeep of the office premises
C) determine the pricing of the services provided by the firm
D) investigate charges of falsification of financial statements against an employee of the firm
E) build relationships with customers and help them make purchase decisions

Question 66

An operations manager is most likely to be responsible for ________.

A) developing relationships with potential customers
B) using social media to interact with customers
C) helping to promote products to retailers
D) creating branding and advertising strategies
E) arranging to buy the necessary materials for manufacturing

Question 67

________ is the quality of performing at a high level and conducting oneself with purpose and pride.

A) Business mindset
B) Professionalism
C) Job enrichment
D) Positive reinforcement
E) Etiquette

Question 68

Systems that promote communication and data usage through the company or allow it to offer new services to their customers are called ________.

A) research and development (R&D)
B) marketing strategies
C) product engineering
D) information technology (IT)
E) forensic technology (FT)

Question 69

The ________ function of a business involves the recruiting,hiring and support of its personnel.

A) operations
B) finance
C) human resources
D) accounting
E) information technology

Question 70

An HR specialist is most likely to be responsible for which of the following activities?

A) motivate and train diverse workforces
B) production engineering
C) design, implement, and maintain information systems
D) lodge the annual tax returns for the company
E) verify the financial reports of public companies

Question 71

A management accountant is likely to be responsible for which of the following activities?

A) purchasing raw material for production
B) assessing the manufacturing costs of new products
C) determining the prices of products
D) removing a distributor from the supply chain
E) determining the money allocated for marketing

Question 72

Which of the following statements is TRUE about the major functional areas in a business enterprise?

A) An R&D function is an integral part of all businesses.
B) Operations managers create branding and advertising strategies to communicate with potential customers.
C) Accounting specialists work closely with other functional areas to ensure profitable decision making.
D) Managers in finance and accounting functions remain uninvolved in the hiring and training process.
E) Social media has resulted in customers being passive recipients of broadcast advertising messages rather than being participants in a multidirectional conversation with companies.

Question 73

Which of the following statements is TRUE regarding business services?

A) Business services refer to those functions of business that are performed by external firms.
B) Business services refer to the in-house department of a company that is responsible for providing customer support.
C) Business services create the goods and services that a company can manufacture or perform for its customers.
D) Business services are found more in labor-intensive firms, as compared to capital-intensive firms.
E) Business services exist to help companies with specific needs in law, banking, real estate, and other areas.

Question 74

Which of the following statements is TRUE about professionalism?

A) Professionalism involves striving to excel in a single area, instead of attempting to excel at every level.
B) Professionalism consists of working individually, rather than in a team.
C) Professionalism involves prioritizing business goals over ethical considerations.
D) Professionalism involves being accountable.
E) Professionalism involves having the confidence to present opinions as facts.

Question 75

Which of the following activities would be a part of facilities management?

A) designing a new product
B) devising a marketing strategy
C) ensuring that the office building adheres to safety standards
D) delivering the finished product to the customer
E) maintaining demographic and contact details of potential customers

Question 76

The ________ function of an organization coordinates the incoming flow of materials and the outgoing flow of finished products.

A) finance
B) logistics
C) human resource
D) purchasing
E) sales

Question 77

The manager of a firm was accused of diverting company funds for personal use.Andrew was the person responsible for reviewing his financial activities to see if any of the finances were diverted for personal use,and to determine if he had performed any financial crime.Andrew is most likely to be a(n)________.

A) forensic accountant
B) chief information officer
C) external auditor
D) operations manager
E) treasurer

Question 78

Which of the following positions would be responsible for establishing the long-term financial goals of the company,investing its funds and raising capital for the business?

A) cash manager
B) internal auditor
C) chief information officer
D) forensic accountant
E) treasurer

Question 79

________ refers to the area where the company makes whatever it makes (for goods-producing businesses)or does whatever it does (for service businesses).

A) Operations
B) Finance
C) Distribution
D) Process R&D
E) Marketing

Question 80

Which of the following statements regarding a sales professional is TRUE?

A) A career in sales is limited to the retail sector of professional selling.
B) Personal characteristics are of little importance in the sales professional.
C) A sales professional is responsible for determining long-term financial goals and budgets.
D) A sales professional is responsible for building relationships with customers and helping them make purchase decisions.
E) A sales professional does not receive any immediate indicators of success or failure.