Business Environment
Exam Bank
Course Introduction
Business Environment examines the internal and external factors that influence the operations and decisions of organizations. This course provides an in-depth understanding of economic, legal, political, technological, social, and global forces shaping the contemporary business landscape. Students will analyze how organizations adapt to environmental changes, manage risks, and leverage opportunities within various market conditions. Emphasis is placed on critical thinking, strategic analysis, and the ethical implications of business actions in a dynamic and interconnected world.
Recommended Textbook
Business Essentials 8th Canadian Edition by
Ronald J. Ebert
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15 Chapters
4158 Verified Questions
4158 Flashcards
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2
Chapter 1: Understanding the Canadian Business System
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250 Verified Questions
250 Flashcards
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Sample Questions
Q1) Which of the following is correct with regard to the Competition Act?
A) A company can cut prices in one region of Canada while selling at a higher price everywhere else even if this substantially lessens competition.
B) Businesses are generally satisfied that the Competition Bureau moves fairly quickly in approving or denying merger plans.
C) Pyramid selling is permitted as long as participant know they are involved in a pyramid selling scheme and they know they are not allowed to make windfall profits from the scheme.
D) The mere existence of a conspiracy is assumed to be proof that competition has been reduced.
E) All of these are correct.
Answer: D
Q2) What happens when a company underestimates demand?
Answer: - Too few products are produced
- Potential profits lost
- Unhappy customers cannot buy what they want
- Knowledge of the shortage attracts more competition
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Chapter 2: The Environment of Business
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235 Verified Questions
235 Flashcards
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Sample Questions
Q1) If, in the long run, international trade improves the standard of living in participating countries, why might some countries want to place trade barriers, such as tariffs, on imported products?
A) Imported products compete with domestic products and thus put pressure on local business.
B) Imported products are usually not as good quality as domestically made products.
C) Generating government revenue is often more economically valuable than free trade.
D) This is necessary to keep a country's currency strong.
E) International trade tends to lead to political tension.
Answer: A
Q2) List the five forces in Porter's model.
Answer: Rivalry among existing competitors, threat of potential entrants, suppliers, buyers, and substitutes
Q3) What is a recession?
Answer: A recession is a period during which aggregate output declines.
Q4) List the four phases in the business cycle.
Answer: The four phases are peak, recession, trough, and recovery.
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Chapter 3: Conducting Business Ethically and Responsibly
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275 Verified Questions
275 Flashcards
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Sample Questions
Q1) The conversion of waste materials into useful products is called
A) recycling.
B) solid waste recovery.
C) acid rain.
D) biomass.
E) toxic waste disposal.
Answer: A
Q2) It is illegal to misrepresent a company's finances, but the situation regarding improper financial mismanagement is not so clear.
A)True
B)False
Answer: True
Q3) Xanex Corp. will often respond positively to requests for donations from certain charitable organizations, but it will not seek them out. Xanex has adopted a defensive stance to social responsibility.
A)True
B)False
Answer: False
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Chapter 4: Entrepreneurship, Small Business, and New
Venture Creation
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243 Verified Questions
243 Flashcards
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Sample Questions
Q1) Short and Shearer are two friends who want to begin an entrepreneurship as business partners. They need to decide whether to start up a new business or to buy an existing business. To do this, Short and Shearer need to weigh the pros and cons of each in order to see what the best strategy for them would be. Which of the following, if true, would weaken the case for Short and Shearer's starting a new business?
A) Starting a new business allows an entrepreneur to determine their own working hours.
B) Starting a new business allows an entrepreneur to establish their own clientele.
C) Starting a new business allows an entrepreneur to use their own ideas.
D) Starting a new business gives a potential for a feeling of great accomplishment.
E) Starting a new business involves using an untested business model.
Q2) ________ is the governing body of a corporation.
A) The board of directors
B) The majority shareholders committee
C) The audit committee
D) The CEO
E) A shareholders' board
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6
Chapter 5: The Global Context of Business
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260 Verified Questions
260 Flashcards
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Sample Questions
Q1) What is a trade deficit?
Q2) McCain Foods developed single-sized portions of frozen vegetables to serve customers in South Africa that do not have proper refrigeration. This is an example of
A) determining whether there is international demand for a product.
B) modifying a product to fit a foreign market.
C) determining the receptivity of a foreign market for a company's product.
D) acquiring the necessary skills to do business abroad.
E) bootstrapping.
Q3) Government support of domestic businesses is the most important factor in generating national competitive advantage.
A)True
B)False
Q4) Which of the following companies may not find it profitable to go international?
A) A mining company
B) A company that buys and sells fresh produce and fish
C) A manufacturing firm specializing in bicycles
D) A financial investment firm
E) A newsprint company
Q5) What are the three goals of the World Trade Organization (WTO)?
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Chapter 6: Managing the Business Enterprise
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271 Verified Questions
271 Flashcards
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Sample Questions
Q1) Which of the following best captures the difference between efficiency and effectiveness?
A) Efficiency means doing what the company's engineers want, while effectiveness means doing what consumers want.
B) Efficiency means maximizing output, while effectiveness means maximizing profit.
C) Efficiency means doing things right, while effectiveness means doing the right things.
D) Efficiency means doing what production wants, while effectiveness means doing what marketing wants.
E) Efficiency means working as fast as possible without regard to product quality, while effectiveness means working more carefully and paying attention to quality.
Q2) What are the three types of time-based goals?
Q3) The organizing function of management is concerned with mobilizing the necessary resources to complete a particular task.
A)True
B)False
Q4) What is contingency planning?
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Page 8
Chapter 7: Organizing the Business Enterprise
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278 Verified Questions
278 Flashcards
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Sample Questions
Q1) The greater the ________, the wider the span of control is likely to be, while the greater the ________, the narrower the span of control is likely to be.
A) complexity of the task; employees' abilities
B) the supervisor's managerial skills; interrelationship of the tasks
C) uniqueness of the task; routineness of the task
D) interrelationship of the tasks; the supervisor's managerial skills
E) complexity of the task; the supervisor's managerial skills
Q2) Susie's Pets and Supplies, a retail shop that sells pets and many related products needed by those pets, has recently reorganized. One area of the store is exclusively for dogs, another exclusively for cats, another exclusively for tropical fish, and so on. The shop is departmentalized by
A) process.
B) function.
C) geography.
D) customer.
E) product.
Q3) What are the advantages and disadvantages of departmentalization by geography?
Q4) What is centralization and decentralization, and how are they related to span of control and delegation?
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Chapter 8: Managing Human Resources and Labour Relations
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293 Verified Questions
293 Flashcards
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Sample Questions
Q1) What third-party options can be used to overcome disputes between labour and management?
Q2) Which occupations have over 80 percent unionized workers?
A) Teaching and food and beverage workers
B) Teaching and nursing
C) Lawyers and food and beverage workers
D) Nursing and doctors
E) Management and teaching
Q3) When university and college teachers grade on the normal curve, they are essentially using which method for appraising the performance of students?
A) Forced distribution method
B) Simple ranking method
C) Graphic rating scale
D) 360-degree feedback
E) None of these
Q4) The Constitution Act divided authority over labour regulations between the federal and provincial governments.
A)True
B)False
Page 10
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Chapter 9: Motivating, Satisfying, and Leading Employees
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319 Verified Questions
319 Flashcards
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Sample Questions
Q1) A company is convinced of the benefits of exercise for its workers. Healthy employees take fewer sick days and tend to be more focused on their job. In addition, exercise enhances the workers' positive moods. The company is so persuaded of the value of exercise that it has adopted a new policy: Moving forward, all workers will be allowed to exercise during the work day for up to three hours per week. The reasoning behind the company's exercise policy assumes which of the following?
A) Exercise is the most effective way to improve the moods of the workers.
B) The exercise that the workers would engage in will be more strenuous than the exercise they would do on their own.
C) Most employees will not exercise more unless they are forced to do so.
D) Adopting the policy will not require the company to purchase any special equipment or reallocate any office space.
E) The employees who would exercise during the work day are not getting enough exercise.
Q2) What is the key assumption in the leader-member exchange (LMX) model?
Q3) What was the goal of the behavioural approach to leadership?
Q4) How does expectancy theory explain employee motivation?
Q5) When is a person-job fit considered to be good?
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Chapter 10: Operations Management, Productivity, and Quality
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300 Verified Questions
300 Flashcards
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Sample Questions
Q1) Merritt Corp. implements the best practices from its own past performance and those of other companies to improve its own products. This is an example of re-engineering.
A)True
B)False
Q2) A chart on which results of test sampling of a product are plotted to reveal when a process is beginning to depart from normal operating conditions is known as a(n)
A) Gantt chart.
B) productivity chart.
C) control chart.
D) kaizen chart.
E) upper specification limit chart.
Q3) Louis is a production manager. How can he determine if production machinery is capable of meeting the upper and lower specification limits?
A) Use control charts
B) Conduct a process capability study
C) Conduct competitive product analysis
D) Implement a quality circles program
E) Hire a marketing consultant
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Chapter 11: Understanding Accounting
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258 Verified Questions
258 Flashcards
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Sample
Questions
Q1) What is the fundamental purpose of strong ethical standards in accounting?
Q2) The debt-to-equity ratio is calculated by dividing
A) current liabilities by owners' equity.
B) total liabilities by owners' equity.
C) long-term liabilities by retained earnings.
D) total liabilities by retained earnings.
E) long-term liabilities by owners' equity.
Q3) What is the difference between financial accounting and managerial accounting?
Q4) What is the formula for the current ratio?
Q5) List the potential users of accounting information.
Q6) Accounting and bookkeeping are essentially synonymous.
A)True
B)False
Q7) Paid-in capital is
A) a debt that must be paid within the year.
B) the process of distributing the cost of an asset over its useful life.
C) the amount paid for an existing business above the value of its other assets.
D) a debt that is not due for at least one year.
E) additional money, above proceeds from a stock sale, paid directly to a firm by its owners.
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Chapter 12: Understanding Marketing Principles and Developing Products
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324 Verified Questions
324 Flashcards
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Sample Questions
Q1) Bentley Corp. is involved in the new product development process. Their first step was to solicit ideas for a new product from the company's sales force, the research and development group, and the engineering department. Their next step is to use market research to solicit consumers' input about the ideas they are working on.
A)True
B)False
Q2) Marketing plans, decisions, and strategies are not determined unilaterally by any business. Rather, they are strongly influenced by powerful environmental forces.
A)True
B)False
Q3) Market segmentation is a strategy for analyzing consumers, not products. A)True
B)False
Q4) What is the first step in the consumer buying process?
Q5) B2B markets account for more than twice the sales of the B2C market. A)True
B)False
Q6) What are secondary data?
Page 14
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Chapter 13: Pricing, Promotion, and Distributing Products
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296 Verified Questions
296 Flashcards
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Sample Questions
Q1) The principal difference in costs among trucks, railroads, planes, ships, and pipelines is directly related to the safety of delivery.
A)True B)False
Q2) The formula for determining the break-even point (in units) is total fixed costs divided by price minus variable cost.
A)True B)False
Q3) What is the fundamental difference between retailers and wholesalers?
Q4) What is the difference between coupons and premiums?
Q5) A good example of cost-oriented pricing is theatre ticket prices for Hollywood films. A)True B)False
Q6) Premiums grab customers' attention and eliminate competitive products from consideration.
A)True B)False
Q7) What are pricing objectives?
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Chapter 14: Money and Banking
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226 Verified Questions
226 Flashcards
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Sample Questions
Q1) A country's currency becomes overvalued when its exchange rate is higher than warranted by its economic conditions.
A)True
B)False
Q2) In Canada, the value of goods bought with credit cards each year is about
A) $180 million.
B) $980 million.
C) $30 billion.
D) $150 billion.
E) $1.2 trillion.
Q3) When a bank makes your monthly bill payments and manages your investment portfolio, this is known as
A) a trust service.
B) a smart card.
C) an ABM.
D) a direct deposit.
E) a point-of-sale transfer.
Q4) What is M-1 and what are the major elements that make it up?
Q5) Briefly describe the attributes an object must possess to be used as money.
Q6) What is a smart card?
Page 16
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Chapter 15: Finacial Decisions and Risk Management
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330 Verified Questions
330 Flashcards
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Sample Questions
Q1) How is the current dividend yield calculated?
Q2) What is a debenture?
Q3) Give an example of how commercial paper works.
Q4) Preferred stock with a $100 par value and a 5 percent dividend is currently trading on the market at $90 per share. What is the amount of the dividend the holder is entitled to receive each year on each share?
A) $90 (i.e., 90 percent of $100)
B) 5 percent of $90
C) 5 percent of total corporate profits divided by the number of shares outstanding D) $5
E) None of these
Q5) Identify, briefly describe, and give one example for each of the two types of long-term financing.
Q6) Inventory can only rarely be used as collateral.
A)True
B)False
Q7) What is open-book credit?
Q8) What questions must the financial manager ask in order to develop a sound financial plan?
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