Question 1

Service businesses employ approximately ___ percent of a western work force.

Accepted Answer

A)  40 
B)  50 
C)  65 
D)  75 
E)  85

Question 2

A copyright of a product exists indefinitely.

Accepted Answer

A) True 
 B)False

Question 3

For firms like Walmart, competition

Accepted Answer

A)  is not a factor that must be considered in a free-market economy. 
B)  affects smaller businesses but not large chain operations. 
C)  affects larger chain operations but not smaller businesses. 
D)  is a rivalry among businesses for sales to potential customers. 
E)  is a problem that has been eliminated in the twenty-first century.

Question 4

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about what his company would produce and how.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
-Refer to Satellite Communications.Which company has the correct objective?

Accepted Answer

A)  Satellite Communications 
B)  Universal Communications 
C)  Both of them 
D)  None of them 
E)  Not enough information is provided.

Question 5

The maker of Hanes pantyhose attempts to set its product apart from the competition.As a result, the company obtained limited control over the price of its product.Achieving price control in this manner is known as

Accepted Answer

A)  advertising. 
B)  distributional efficiency. 
C)  low-cost production. 
D)  niche marketing. 
E)  product differentiation.

Question 6

Mondell Weller decides to start a residential landscaping business.How would this business most likely be classified?

Accepted Answer

A)  Manufacturing business 
B)  Marketing intermediary 
C)  Service business 
D)  Corporation 
E)  Nonprofit organization

Question 7

The production and operations manager at a large shoe factory notices that the total number of hours worked by production employees has increased 12 percent, while the number of pairs of shoes ready for shipping has dropped 6 percent this year over last year.This means

Accepted Answer

A)  the inflation rate is unchanged. 
B)  the demand for shoes is decreasing. 
C)  the manager's calculations cannot be correct. 
D)  productivity has decreased. 
E)  the gross national product has increased by 6 percent.

Question 8

According to economists, inflation is

Accepted Answer

A)  a general decrease in the level of prices. 
B)  a general rise in the level of prices. 
C)  unavoidable, and therefore something beyond the control of government. 
D)  eliminated by the government. 
E)  a general problem for countries with command economies.

Question 9

Productivity is the total output per worker per year.

Accepted Answer

A) True 
 B)False

Question 10

Sony is most correctly classified as a marketing intermediary type of business.

Accepted Answer

A) True 
 B)False

Question 11

As Rachel Smith and her friends prepare to graduate from college, they are faced with numerous job offers with starting salaries better than they could have imagined when they began college four years ago.Based on this information, which stage of the business cycle would the economy be in?

Accepted Answer

A)  Depression 
B)  Peak 
C)  Recession 
D)  Trough 
E)  Recovery

Question 12

Exxon Mobil and Shell are two of the relatively few sellers in the oil-refining industry.Due to the tremendous capital investment required to enter this industry, these companies are insulated significantly from the threat of new competitive entrants and thus have considerable control over price.This market situation is referred to as a(n)

Accepted Answer

A)  cartel. 
B)  monopoly. 
C)  natural monopoly. 
D)  oligopoly. 
E)  trust.

Question 13

Inflation is a general rise in the level of prices experienced by people in a nation.

Accepted Answer

A) True 
 B)False

Question 14

Satellite Communications
Jonathan worked for Satellite Communications for twenty years.In the time that he worked there, he learned a lot about the company and how it operated.The company met its sales and revenue goals every year.However, most of the employees had similar educational and cultural backgrounds.He believed that the company could do much better if it cultivated an environment that promoted many different ideas.Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year.Jonathan felt that the most important goal should be to satisfy customers.He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base.He was happy to have this opportunity because it was a dream that he had always had.He had always wanted to make his own decisions about what his company would produce and how.The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
-Refer to Satellite Communications.When hiring people, Jonathan thinks it is important to consider

Accepted Answer

A)  unilateral thinking. 
B)  profit. 
C)  wage increases. 
D)  health benefits. 
E)  cultural diversity.

Question 15

When Toyota experienced declining sales as a result of quality and safety issues, it began offering buyer incentives to new-car buyers.Nearly immediately, Ford and General Motors began similar promotions.These businesses

Accepted Answer

A)  represent an oligopoly in which there are few sellers, and each seller has considerable control over price. 
B)  represent a monopoly in which only one firm supplies a product or products. 
C)  are engaging in monopolistic competition in which there are many buyers as well as a relatively large number of sellers that differentiate their products from those of competitors. 
D)  are engaging in pure competition, in which no single seller is powerful enough to affect prices. 
E)  are engaging in monopolistic competition, in which the products are very similar.

Question 16

For a Pepperidge Farm production facility, managers and employees would be

Accepted Answer

A)  natural resources. 
B)  capital. 
C)  information resources. 
D)  labour. 
E)  the entrepreneurial resource.

Question 17

In the last decade of the century, ____ became a major force in the economy in regard to business.

Accepted Answer

A)  reduced business profits 
B)  high interest rates 
C)  high inflation 
D)  the Internet 
E)  shortage of crude oil

Question 18

In a monopoly situation, there is no close substitute for the product or service.

Accepted Answer

A) True 
 B)False

Question 19

Although changes have occurred over the years, ____ is historically considered to have a communist economy.

Accepted Answer

A)  Germany 
B)  Sweden 
C)  Norway 
D)  North Korea 
E)  Britain

Question 20

If all leading corporations in the soft-drink industry merged, this would

Accepted Answer

A)  encourage pure competition. 
B)  encourage monopolistic competition. 
C)  lead to an oligopoly. 
D)  create a limited monopoly. 
E)  create a monopoly.

Exam 1: Introduction to Business

Service businesses employ approximately ___ percent of a western work force.

A copyright of a product exists indefinitely.

For firms like Walmart, competition

The maker of Hanes pantyhose attempts to set its product apart from the competition.As a result, the company obtained limited control over the price of its product.Achieving price control in this manner is known as

Mondell Weller decides to start a residential landscaping business.How would this business most likely be classified?

The production and operations manager at a large shoe factory notices that the total number of hours worked by production employees has increased 12 percent, while the number of pairs of shoes ready for shipping has dropped 6 percent this year over last year.This means

According to economists, inflation is

Productivity is the total output per worker per year.

Sony is most correctly classified as a marketing intermediary type of business.

As Rachel Smith and her friends prepare to graduate from college, they are faced with numerous job offers with starting salaries better than they could have imagined when they began college four years ago.Based on this information, which stage of the business cycle would the economy be in?

Inflation is a general rise in the level of prices experienced by people in a nation.

When Toyota experienced declining sales as a result of quality and safety issues, it began offering buyer incentives to new-car buyers.Nearly immediately, Ford and General Motors began similar promotions.These businesses

For a Pepperidge Farm production facility, managers and employees would be

In the last decade of the century, ____ became a major force in the economy in regard to business.

In a monopoly situation, there is no close substitute for the product or service.

Although changes have occurred over the years, ____ is historically considered to have a communist economy.

If all leading corporations in the soft-drink industry merged, this would