BUS 101 – What type of company has stock that is widely

Subject: Business    / General Business
Question
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This exam covers Chapters 1 through 7 and consists of 50 true/false and multiple-choice questions. Each question is worth two (2) points for a total of 100 points. Prior to attempting this exam, you should have completed all assignments and activities through Chapter 7. You have one (1) attempt and 60 minutes to complete it, so once you open it, you must complete it.

Make sure you have good Internet connection and use a stable browser, such as Firefox or Chrome.

Read the statements/questions carefully and respond to the best of your knowledge using the information you learned.

What type of company has stock that is widely held and available for sale to the general public?
private corporation
public corporation
general partnership
limited liability corporation
professional corporation

2 points
Question 2

Each year, between 610,000 and 835,000 new businesses are launched in the United States. Approximately how many businesses fail each year?
50,000 to 100,000
100,000 to 250,000
250,000 to 450,000
450,000 to 600,000
600,000 to 800,000

2 points
Question 3

Which of the following types of businesses is MOST common in the United States?
sole proprietorships
general partnerships
cooperatives
corporations
limited partnerships

2 points
Question 4

The U.S. Department of Commerce considers a business “small” if it has fewer than how many employees?
10
50
100
500
1,500

2 points
Question 5

The Small Business Administration is the government agency charged with owning small businesses.

True

False

2 points
Question 6

Which of the following legal forms of business is owned and usually operated by a person who is responsible for its debts?
cartel
corporation
general partnership
sole proprietorship
limited partnership

2 points
Question 7

Manufacturing is overwhelmingly handled by big business.

True

False

2 points
Question 8

International firms conduct a good deal of their business abroad and may even maintain overseas manufacturing facilities.

True

False

2 points
Question 9

U.S. imports of Canadian softwood timber are limited to 14.7 billion board feet per year. What is this practice called?
tariff
embargo
subsidy
dumping
quota

2 points
Question 10

Which of the following denotes the practice of protecting domestic business at the expense of free market competition?
fair trade
balanced trade
free trade
market liberalism
protectionism

2 points
Question 11

Country Z can produce pig iron more efficiently than any other goods. Which type of advantage in pig iron does Country Z have?
absolute advantage
national competitive advantage
comparative advantage
monopolistic advantage
resource advantage

2 points
Question 12

Strategic alliances give firms greater control over foreign activities than do agents and licensees.

True

False

2 points
Question 13

Derrido is an American firm that has produced several successful animated TV series in the United States. It is considering contracting with one or more international companies as a way to market its products overseas.

An executive at Derrido suggests that a contractual relationship will provide the company with a fair amount of control over how the foreign partner markets Derrido’s product. Which of the following, if true, would strengthen this case?
Contractual relationships typically include limits and stipulations on the foreign partner.
Contractual relationships typically limit the responsibility of the originating firm.
Contractual relationships can be complicated by international law.
Foreign companies often have considerable familiarity with American culture.
Foreign companies usually expect to be given latitude with how they market U.S.-made products.

2 points
Question 14

The ultimate form of a quota is a tariff.

True

False

2 points
Question 15

Coordination across functional departments becomes more complicated in smaller firms than in larger firms.

True

False

2 points
Question 16

To avoid bureaucracy within the organization, most large organizations tend to adopt the same types of departmentalization for all levels.

True

False

2 points
Question 17

Which of the following clarifies structure and shows employees where they fit into a firm’s operations?
delegation
departmentalization
organization charts
mission statement
job descriptions

2 points
Question 18

Accountability refers to the liability of subordinates for accomplishing tasks assigned by managers.

True

False

2 points
Question 19

Which of the following structures relies on product departmentalization?
matrix
functional
divisional
international
regional

2 points
Question 20

Thomas Corp. has three basic departments: children’s books, games, and toys. What type of structure does the company have?
divisional
matrix
functional
process
global

2 points
Question 21

In what type of organization do most lower-level decisions need to be approved by upper management before they can be implemented?
line
staff
decentralized
centralized
learning

2 points
Question 22

Geographic departmentalization divides firms according to the areas of the country or the world that they serve.

True

False

2 points
Question 23

Which term refers to the total value of all goods and services produced within a given period by a national economy through domestic factors of production?
standard of living
aggregate output
gross domestic product
gross national product
purchasing power parity

2 points
Question 24

How does monopolistic competition differ from perfect competition?
There are more sellers in a market characterized by monopolistic competition.
It is easier for sellers to enter a market or industry characterized by monopolistic competition.
In a perfectly competitive market, products are more dissimilar.
In a market characterized by monopolistic competition, individual firms have some control over price.
In a perfectly competitive market, the size of the firms must be large.

2 points
Question 25

Many companies start as nichers to get a foothold against larger competitors and then grow into broader competitors. Enterprise Rent-A-Car began by building a network of neighborhood offices rather than competing with Hertz and Avis in airport locations. Enterprise is now the nation’s largest car rental company.

Which of the following is BEST supported by the statements above?
The best path to long-term growth is to avoid confrontation with larger competitors for as long as possible.
It is generally better to confront one established competitor at a time rather than many at once.
Even when competing in a niche, a company should act in every respect as if it is targeting every market segment.
The car rental industry is the best example for niche companies to consider when evaluating how to grow into prominence.
A company’s initial goals do not place limits on its long-term success.

2 points
Question 26

AB Distributors is a company that serves as a shipping intermediary for other companies. Its sales revenue has increased from the previous year. Jonathan, a sales manager at AB, says, “Since the company has increased its revenue, it is now more profitable.”

Which of the following, if true, would MOST weaken Jonathan’s contention?
AB Distributor’s clients are happy with the company’s services.
Shipping costs for the industry have significantly increased over the last year.
AB Distributor’s employees are dissatisfied with the company’s working conditions.
The shipping intermediary industry has experienced a slowdown overall.
Many of AB Distributor’s employees are new to the business.

2 points
Question 27

Economic systems differ in how factors of production are used.

True

False

2 points
Question 28

Which of the following is characterized by having few sellers, similar prices among sellers, and difficult market entry?
oligopoly
pure competition
monopoly
monopolistic competition
state socialism

2 points
Question 29

What are profits?
total money taken in by a corporation
increases in income from year to year
increases in a corporation’s stock price
revenue generated by goods and services
difference between revenues and expenses

2 points
Question 30

A software development company is designing an evaluation plan for its software programmers. The company feels that changes are necessary because it lacks the facts it needs to distinguish outstanding software programmers from those that are only average, or worse. Previously, the company paid software programmers a flat salary and based evaluations on supervisors’ opinions. Now, however, the company is considering the following measures for its software programmers:

Measurement Strategy Alpha: Software programmers will be evaluated based on the total number of lines of code that they produce.

Measurement Strategy Beta: Software programmers will be evaluated based on their ability to produce computer code that is free of errors.

Measurement Strategy Gamma: Software programmers will be evaluated based on the market success of the products they produce.

The choice to use only Measurement Strategy Beta would be vulnerable to criticism because it would give the software programmers an incentive to do what?
make overly optimistic commitments to customer-facing employees at the company
spend too much time checking their code in order to eliminate any possibility of error
develop projects that meet programming requirements, but not market requirements
skip the quality assurance checks that reveal the most damaging software errors
produce more lines of code than is required to perform a given function

2 points
Question 31

Which type of utility is created when a company makes products available where consumers want them?
time
place
possession
form
operations

2 points
Question 32

Even excellent firms focus on one competence at a time.

True

False

2 points
Question 33

Clean Sweep Corporation is a consumer goods company manufacturing home-care cleaning products. Sales of Sparkle, its flagship disinfectant, and some of its other cleaning products, have been sluggish during the last two quarters. Of late, retailers have also shown a lack of confidence in these product lines. The management is looking at different ways to improve the efficiency of its entire supply chain. Some senior executives believe that the company should shift to a just-in-time logistics system. However, this opinion does not have unanimous support.

Which of the following, if true, would strengthen the argument for the shift to a just-in-time inventory system?
Clean Sweep’s storage and handling costs are significant.
Clean Sweep’s suppliers have not adopted just-in-time systems.
The current system requires higher inventory levels during the summer as compared to the winter.
Demand for Sparkle varies depending on the promotional strategies of Clean Sweep’s retail partners.
Sparkle comes in many varieties, none of which is more popular than the leading brand.

2 points
Question 34

Which of the following is NOT one of the areas of materials management?
transportation
warehousing
purchasing
supplier selection
customer service

2 points
Question 35

Which of the following BEST describes supply chain management?
the principle of improving the supply chain by focusing on the slowest step in the chain
a limitation on the number of suppliers allowed to supply a particular company
complete movement of raw materials throughout a manufacturing or service facility
a cost-reduction program in which wholesalers and retailers are eliminated in an effort to entice consumers to purchase directly from manufacturers
the principle of looking at the supply chain as a whole in order to improve the overall flow through the system

2 points
Question 36

Which of the following is the ability of a product to satisfy a human want or need?
utility
relative advantage
content
satisfaction
capacity

2 points
Question 37

How do top managers BEST demonstrate a commitment to ethical business practices?
by adopting written codes of ethics
by reading employees’ e-mails
by decentralized decision-making practices
by cooperating with other companies
by monitoring employees’ Web searches

2 points
Question 38

Jordan is a recent college graduate with a degree in computer programming. He has just begun his first full-time job and is excited to apply the skills that he worked so hard to acquire. Though he excelled as a student, Jordan is anxious about how successful he will be as an employee. When an opportunity unexpectedly presents itself to take credit for a brilliant software program that someone else wrote, Jordan does not resist and claims the program as his own. Which of the following statements must be true about Jordan’s decision?
It was made with careful thought.
It does not reveal anything about his beliefs or character.
It raises questions about his personal ethics.
It will strengthen his professional skills.
It will not benefit him professionally.

2 points
Question 39

Which of the following would NOT be included among the primary agents of interest with regard to a company’s ethical behavior?
stockholders
unions
bloggers
customers
competitors

2 points
Question 40

Moia is a successful entrepreneur who owns several popular pastry shops. She often imports macadamia nuts from countries with poor economic conditions, which has furthered her desire to help improve the lives of the people living there. How can Moia BEST exhibit corporate social responsibility to the citizens of these nations?
by including labels on her products indicating where the nuts come from
by hiring people who have traveled to these nations
by opening pastry shops in these countries that would create jobs for the citizens there
by purchasing the nuts more regularly
by shipping free pastries to these nations

2 points
Question 41

A company that does not act responsibly toward its customers may lose their trust and ultimately their business.

True

False

2 points
Question 42

A manager who discriminates against African Americans in hiring exhibits both unethical and illegal behavior.

True

False

2 points
Question 43

Which of the following statements is MOST likely to be included in a company’s code of ethics?
We reward high achievers.
We strive for domination in the market.
We achieve our objective by raising capital.
We believe in our company brand.
We reward all valuable contributions.

2 points
Question 44

Which type of manager spends most of their time working with and supervising the employees who report to them?
first-line managers
information managers
top managers
chief executive officers
operations managers

2 points
Question 45

Which of the following is NOT a characteristic of a solid contingency plan?
contact information for an on-site crisis manager
information systems backup software
an evacuation plan
a prioritized list of critical operations
a summary of common types of emergencies

2 points
Question 46

Information managers are responsible for getting products from producers to consumers.

True

False

2 points
Question 47

Camille Graham is a manager who works well with people and makes them feel excited about their work. What type of skills is she illustrating?
human relations skills
technical skills
accounting skills
conceptual skills
marketing skills

2 points
Question 48

Since the mid-1980s, the Walt Disney Company’s strategic planning group turned the company into a huge and diverse collection of media and entertainment businesses. The sprawling Disney grew to include everything from theme resorts and film studios to media networks to consumer products and a cruise line. The newly transformed company proved hard to manage and performed unevenly. So Disney disbanded the centralized strategic planning unit, decentralizing its functions to Disney division managers. Since then, Disney’s management has helped it perform strongly in a competitive marketplace.

Suppose that one of Disney’s business units is a chain of sound studios. The studios have low profit potential, and the chain commands a relatively small share of the market. On these grounds, Disney is considering whether to sell the chain. Which of the following, if true, would MOST strongly suggest that Disney should keep the chain instead?
The chain has reduced its operating loss in each of the last three years.
The chain has penetrated the market in coastal areas but not inland areas.
Other Disney companies use the chain’s studios for a wide variety of projects, resulting in significant cost savings for Disney.
The chain uses the most up-to-date technology in its sound studios.
The chain staffing levels are comparable to those of similar companies in the industry.

2 points
Question 49

Which of the following is TRUE about corporate culture?
It can direct employees’ efforts toward goals.
It is usually determined by outside forces.
It cannot be changed.
It is easy to change.
It rarely affects newcomers in an organization.

2 points
Question 50

CFO and controller are titles associated with what type of manager?
financial
information
human resource
marketing
operations

2 points