Test Bank for Business Essentials, 13th Edition

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1Business Essentials, 13e(Ebert/Griffin)Chapter 1The U.S. Business Environment1) Which of the following best describes profit?A) Total money taken in by a corporationB) Increases in income from year to yearC) Increases in acorporation's stock priceD) Revenue generated by goods and servicesE) Difference between revenues and expensesAnswer:EDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.1: Define the nature of U.S. business,describe the external environments of business,and discuss how these environments affect the success or failure of organizations.2) Which of the following is defined as the environment where a firm conducts its operations andderives its revenues knownas?A) Global business environmentB) Economic environmentC) Domestic business environmentD) Technological environmentE) Political-legal environmentAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1:Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.3) Factors such as international trade agreements, economic conditions, and political unrest willhave the greatest impact on which type of business environment?A) Global business environmentB) Economic environmentC) Domestic businessenvironmentD) Technological environmentE) Political-legal environmentAnswer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.

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24) Changes in which type of business environment can reduce or replace the need for traditionalworking methods, physical equipment, and other platforms needed to conduct business?A) Global business environmentB) Economic environmentC) Domestic business environmentD) Technological environmentE) Political-legal environmentAnswer:DDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.5) As a teenager, Melinda started cutting grass for her neighbor. She did a good job, and moreand more neighbors began to hire her. After saving money and investing in additional equipment,Melinda began to earn an even greater profit. Which of the following did Melinda create whenshe began cutting her neighbor's yard and earningincome?A) NonprofitB) Corporate cultureC) Market economyD) Monopolistic competitionE) BusinessAnswer:EDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1:Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.6) In which way does consumer choice and demand affect the way a business operates?A)Businesses must take into account what consumers want or need.B) Businesses must produce most of the goods and services we consume.C) Businesses must find opportunity and develop a plan to capitalize on it.D) Business must prepare to compete in the global marketplace.E) Business must use technology to track changing demographics in the community.Answer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.

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37) Which of the following consists of everything outside an organization's boundaries that mightaffect how the business operates?A) Opportunities and enterpriseB) Corporate cultureC) External environmentD) Domestic business environmentE) Political-legal environmentAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.8) Aimee wants to open her retail shop in her local community so that she canestablish strongrelationships with suppliers and customers, and distinguish herself and her shop from thecompetition. In which environment does Aimee wish to do business?A) GlobalB) Political-legalC) DomesticD) EconomicE) TechnologicalAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.9) The Basic Broom Company orders much of its raw material from overseas markets, eventhough the product is made locally. Which of the following business environments might preventThe Basic Broom Company from being ableto get its supply of raw material when they need it?A) Changes in the global business environmentB) Changes in the technological environmentC) Changes in the economic environmentD) Changes in the factors of productionE) Changes in the labor forceAnswer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure oforganizations.

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410) Which of the following includes all the ways a firm creates value for their customers?A) Technological environmentB) ProfitabilityC) Economic environmentD) Creation of a market economyE) Law of supply and demandAnswer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure oforganizations.11) Sally's Supply shop has recently had to change her process for shipping supplies because ofchanges in government regulations. She now also has to change how she reports profit and loss,and when those reports are processed. Which ofthe following is forcing these changes for Sally'sSupply shopA) The laws of supply and demandB) Political-legal environmentC) The establishment of perfect competitionD) Changes in the market economyE) Economic environmentAnswer:BDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.12) A newrestaurant recently opened in the local community. It serves a variety of ethnic foods,and plays background music in keeping with the customers and values of the local demographicsmake up of the community. Which external environment of business is thisrestaurantconsidering when they support the customs, values, and demographics of the local community?A) MonopolyB) SocioculturalC) Freedom of choiceD) Perfect competitionE) GlobalAnswer:BDifficulty:ModerateAACSB:Application ofknowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.

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513) Which of the following include relevant conditions that exist such as wage rates, number ofpeople looking for jobs, and competition?A) Global business environmentB) Technological environmentC) Political-legal environmentD) Sociocultural environmentE) Economic environmentAnswer:EDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure oforganizations.14) Which of the following business environments includes the customers, mores, values, anddemographic characteristics of the society where the organization functions?A) SocioculturalB) TechnologicalC) Political-legalD) FiscalE) EconomicAnswer:ADifficulty:DifficultAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.15) The pursuit of profits is how a business differs from organizations such as publicuniversities, public hospitals, and government agencies.Answer:TRUEDifficulty:EasyAACSB:Application of knowledgeQuestionCategory:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.16) An organization's external environment consists of everything outside of the organizationthat might affect it.Answer:TRUEDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discusshow these environments affect the success or failure of organizations.

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617) Businesses improve society by improving the quality of life in a society.Answer:TRUEDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.18) The environment, not economic forces, play a major role in the success and failure ofbusinesses everywhere.Answer:FALSEDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.19) The customs, values, and demographic characteristics of the society in which an organizationfunctions are the principal elements of the political-legal environment.Answer:FALSEDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.20) Thetechnological environment includes only electronics and telecommunications used toperform business activities.Answer:FALSEDifficulty:ModerateAACSB:Analytical thinkingQuestion Category:ApplicationLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.

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721) Compare a sociocultural environment to an economic environment.Answer:The sociocultural environment includes the customs, mores, values, and demographiccharacteristics of the society in which an organization functions. Sociocultural processes alsodetermine the goods and services, as well as the standards of business conduct, that a society islikely to value and accept. The economic environment refers to relevant conditions that exist inthe economic system in which a company operates. For example, if an economy is doing wellenough that most people have jobs and wages are high, a growing company may find itnecessaryto pay even higher wages and offer more benefits to attract workers from othercompanies. But if many people in an economy are looking for jobs, a firm may be able to payless and offer fewer benefits.Difficulty:ModerateAACSB:Application of knowledgeQuestion Category:Critical ThinkingLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.22) Describe the domestic business environment.Answer:The domestic business environment refers to the environment in which a firmconducts its operations and derives its revenues. In general, businesses seek to be close to theircustomers, to establish strong relationships with their suppliers, and to distinguish themselvesfrom their competitors.Difficulty:EasyAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss howthese environments affect the success or failure of organizations.23) How do consumer choice and demand affect a capitalistic system?Answer:In a capitalistic system, such as that in the United States, businesses exist to earnprofits forowners. Within certain broad constraints, an owner is free to set up a new business,grow that business, sell it, or even shut it down. But consumers also have freedom of choice. Inchoosing how to pursue profits, businesses must take into account what consumers want or need.No matter how efficient a business is, it won't survive if there is no demand for its goods orservices.Difficulty:EasyAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.

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824) What are the benefits of business for society?Answer:Businesses produce most of the goods and services we consume, and they employmost working people. They create most innovations and provide a vast range of opportunities fornew businesses, which serve as their suppliers. A healthy business climate also contributes to thequality of life and standard of living of people in a society. Business profits enhance the personalincomes of millions of owners and stockholders, and business taxes help to support governmentsat all levels. Many businesses support charities and provide community leadership.Difficulty:EasyAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.1: Define the nature of U.S. business, describe the external environments of business,and discuss how these environments affect the success or failure of organizations.25) What is the general term for resources used by a business to produce a good or servicereferred to as?A) LaborB) Human ResourcesC) Human capitalD) Factors of productionE) Economic systemsAnswer:DDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.26) Which of the following denotes a nation's basis for allocating its resources among itscitizens?A) Capital structureB) Economic systemC) Ownership processesD) Distribution networkE) National regulationsAnswer:BDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2:Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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927) Which of the following is the process for converting government enterprises intoindividually owned firms?A) ProductionallocationB) PrivatizationC) EntrepreneurshipD) Demand assessmentE) Profit maximizationAnswer:BDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.28) Which is the term for the physical and intellectual contributions of people while engaged inthe production of goods and services?A) Human resourcesB) Working capitalC) Physical resourcesD) Planned resourcesE) Market resourcesAnswer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich theycontrol the factors of production.29) Who is described as the person who accepts the risks and opportunities inherent in a newbusiness opportunity?A) Capital managersB) EntrepreneursC) Human resourcesD) Home country economic systems managersE) Information technology managersAnswer:BDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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1030) What factor of production is used to generate forecasts based on specialized knowledge andeconomic data?A) Economic resourcesB) LaborC) Information resourcesD) EntrepreneursE) Physical resourcesAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.31) When makingdecisions about production and allocation, which type of system depends onindividual producers and consumers to create a combination of supply and demand?A) Planned economyB) CommunismC) Private economyD) Market economyE) SocialismAnswer:DDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:AnalyticalLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.32) The idea that individuals would contribute according to their abilities and receive benefitsaccording to their needs supports which type of economy?A) Market economyB) Socialist based economyC) Mixed market economyD) Capitalist market economyE) Communist based economyAnswer:EDifficulty:ModerateAACSB:Analytical thinkingQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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1133) Which type of economy is the United States reflective of?A) PlannedB) MixedC) MarketD) PrivateE) SocialistAnswer:CDifficulty:ModerateAACSB:Analytical thinkingQuestion Category:Critical ThinkingLO:1.2: Describe the different types of global economic systemsaccording to the means bywhich they control the factors of production.34) What does a planned economy rely on a centralized government to do?A) Support free enterprise in every way possibleB) Determine how to allocate all or most factors of productionC) Encourage citizens to buy shares of stock in small companiesD) Keep its control activities to a minimumE) Direct workers to start their own small businessesAnswer:BDifficulty:ModerateAACSB:Analytical thinkingQuestion Category:Critical ThinkingLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.35) Which economic system emphasizes the private ownership of most factors of production?A) SocialismB) CommunismC) CapitalismD) MarxismE) FederalismAnswer:CDifficulty:EasyAACSB:Analytical thinkingQuestion Category:Critical ThinkingLO:1.2: Describe the different types of global economic systems according to the means bywhich they control thefactors of production.

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1236) In which type of economy do the individual producer and consumer control productionthrough supply and demand?A) PlannedB) CommunistC) MarketD) SocialistE) MixedAnswer:CDifficulty:ModerateAACSB:Analytical thinkingQuestion Category:Critical ThinkingLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.37) Which of the following marks the key difference between economicsystems?A) The way the factors of production are managedB) The way goods are transported within their bordersC) The way rules and regulations are legislatedD) The way workers are relocated to different regionsE) The way basic necessities are determinedAnswer:ADifficulty:ModerateAACSB:Analytical thinkingQuestion Category:AnalyticalLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.38) Which of the following represents the financial resources needed to operate a business?A) Factors of productionB) SavingsC) EconomyD) Supply and demandE) CapitalAnswer:EDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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1339) Kathleen has ordered new computers and office equipment of her tax preparation business.She is alsoconsidered renting a larger office for next year? Which of the following refer to thetangible things that Kathleen needs and uses to operate her business.A) Technological environmentB) Private propertyC) Business cycleD) Physical resourcesE) CapitalAnswer:DDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.40) Which of the following refers to a reliance on a centralized government to allocate mostfactors of production?A) Market economyB) Global business environmentC) Information resourcesD) Planned economyE) Sociocultural environmentAnswer:DDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.41) Which of the following do most countries rely on in terms of economic systems?A) Mixed market economyB) PrivatizationC) Market economiesD) CapitalismE) CommunismAnswer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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1442) Which of the following is a mechanism for exchange between buyers and sellers of specificgoods or services?A) MarketB) EntrepreneurshipC) CommunismD) CapitalismE) Free enterpriseAnswer:ADifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.43) Which of the following does a market economy depend on?A) ProfitsB) Freedom of choiceC) Economic restrictionsD) CompetitionE) PrivatizationAnswer:BDifficulty:DifficultAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.44) Which of the following is the economic basis of the market process?A) Profit and lossB) Supply and demandC) Planned and market economiesD) Labor and capitalE) Physical and technological resourcesAnswer:BDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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1545) Which of the following is the underlyingpremise of a market economy?A) A matured societyB) Direct ownership of factors of productionC) Creation of shared valueD) Centralized governmentE) A political basis of the market processAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.46) Which of the following is the political basis of the market economy process?A) CommunismB) SocialismC) CapitalismD) Planned economic supportE) Centralized governmentsAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.47) In which planned economic systems does the government own and operate selected majorindustries and sources of production?A) MixedB) PrivatizationC) SocialismD)CommunismE) CapitalismAnswer:CDifficulty:ModerateAACSB:Application of knowledgeQuestion Category:ConceptLO:1.2: Describe the different types of global economic systems according to the means bywhich they control the factors of production.48) Physical resources include the data and other information used by businesses.Answer:FALSEDifficulty:EasyAACSB:Application of knowledgeQuestion Category:ApplicationLO:1.2:Describe the different types of global economic systems according to the means bywhich they control the factors of production.

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