Business Fundamentals
Question Bank
Course Introduction
Business Fundamentals introduces students to the core principles and practices that underpin the modern business environment. Covering essential topics such as organizational structure, management, marketing, finance, and operations, the course provides a comprehensive overview of how businesses function and compete in a dynamic global marketplace. Students will explore key concepts in decision-making, strategy, and entrepreneurship, while developing practical skills in communication, problem-solving, and teamwork. By the end of the course, learners will have a solid foundation to understand and analyze business activities, paving the way for more advanced studies or entry-level roles in various business settings.
Recommended Textbook
Better Business 3rd Edition by Michael R. Solomon
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21 Chapters
1726 Verified Questions
1726 Flashcards
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Chapter 1: Business Basics
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Sample Questions
Q1) Jose called an electrician to repair some appliances in his home.Which of the following terms BEST describes the electrician's repairs?
A) a service
B) a good
C) a benefit
D) an appointment
E) a liability
Answer: A
Q2) As more profit is generated,a company is able to increase its productivity.
A)True
B)False
Answer: True
Q3) Local businesses are prone to bankruptcy because they are likely to be undercapitalized.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Economics and Banking
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Sample Questions
Q1) ________ is a decrease in the rate of inflation.
A) Deflation
B) Inflation
C) Disinflation
D) Deflection
E) Depression
Answer: C
Q2) ________ occurs when there is only one provider of a service or product and no substitutes for the service or product exist.
A) A duopoly
B) A monopoly
C) An oligopoly
D) Perfect competition
E) Monopolistic competition
Answer: B
Q3) The price of a product or service is based entirely on its actual value.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Ethics in Business
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Sample Questions
Q1) Tools like the Hogan Personal Inventory assess a job candidate in areas such as
A) math abilities
B) business background
C) stress tolerance
D) morning routines
E) hobbies
Answer: C
Q2) A business can improve its culture of ethics by ensuring that a strict code of ethics and a meaningful and current mission statement is in place and that both are clearly communicated to employees when they start working at an organization.
A)True
B)False
Answer: True
Q3) When enough people feel that a particular ethical standard is important,it eventually becomes law.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Business in a Global Economy
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Sample Questions
Q1) The nation of South Pi is experiencing rapid increases in business activity,but still lacks sufficient infrastructure and modern communication systems.Which challenge to conducting international business is the PRIMARY one faced by exporters to Pi?
A) nonconvertible currency
B) government economic policies
C) economic growth and development
D) socioeconomic factors
E) cultural behaviors of a community
Q2) Exchange rates are the rates at which currencies are converted into another country's currency.
A)True
B)False
Q3) What does national security have to do with trade barriers?
Q4) Contract manufacturing occurs when a firm pays another firm to produce part or all of its goods as an alternative to owning and operating its own production facility.
A)True
B)False
Q5) Describe the two major factors that determine an international firm's strategy.
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Chapter 5: Small Business and the Entrepreneur
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Sample Questions
Q1) Which of the following should a business owner create monthly?
A) marketing plans
B) financial statements and budgets
C) mission statement
D) risk analysis
E) operational plans
Q2) What is an entrepreneurial team? Describe the major reasons why an entrepreneurial team might be formed.
Q3) Small businesses are becoming increasingly important to the economy.Describe several specific ways that small business is contributing to the American economy.
Q4) Which of the following is NOT a disadvantage of franchising?
A) lack of control
B) workload
C) competition
D) brand recognition
E) royalty fees
Q5) What is a franchise? What are the major advantages and disadvantages of owning a franchise business?
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Chapter 6: Forms of Business Ownership
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Sample Questions
Q1) It's important for partners to spell out the details of their partnership arrangements in writing because ________.
A) the partnership is not a legally recognized business until the arrangement is in writing
B) a written agreement will help reduce misunderstandings and disagreements among the partners
C) putting the agreement in writing will limit the liability of each partner to a specified level
D) doing so will make it easier to convert the business to a corporation at a later date
E) the law requires these arrangements to be filed with state and federal authorities
Q2) The biggest difference between general and limited partnerships involves who accepts most of the business liability.
A)True
B)False
Q3) The owners of a corporation are known as general corporate partners.
A)True
B)False
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Chapter 7: Business Management and Organization
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Sample Questions
Q1) The benefit of a horizontal organization is that each team has more responsibility for the outcome of its work.
A)True
B)False
Q2) An understanding of the company mission can help fuel employee enthusiasm.
A)True
B)False
Q3) Managers do not need to be comfortable with technology because they can delegate those tasks to their information technology (IT)staff.
A)True
B)False
Q4) What are at least three of the interpersonal skills that a top manager must develop in order to work successfully with people both inside and outside an organizations?
Q5) What is controlling?
Q6) What are some challenges to the vertical organizational structure?
Q7) What are the four primary functions of management?
Q8) Explain the acronym SMARTER.It should be kept in mind by managers when designing and wording goals and objectives.
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Chapter 8: Motivation, Leadership, and Teamwork
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Sample Questions
Q1) Bernie is working as many overtime hours as he can to cover the down payment on his family's new house.According to Maslow,what needs are motivating Bernie to work extra hours?
Q2) Chris owns a small grocery store.He notices that his employees seem unmotivated to work harder during peak times in his business.Chris increases the number of bonuses each employee may earn during those seasons.Chris is assuming his employees are motivated intrinsically.
A)True
B)False
Q3) The Q12 has identified Miranda as an actively disengaged employee.Which of the following statements is TRUE?
A) Miranda does not hinder others' work.
B) Miranda is indifferent to the company.
C) Miranda adds to the success of the company.
D) Miranda combats the efforts of engaged employees.
E) MIranda makes little contribution to the company.
Q4) Amelia manages a group of administrative assistants.For them to create their best work,she would like to increase their motivation levels and foster an atmosphere of flow.What kinds of things can Amelia do?
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Chapter 9: Human Resource Management
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Sample Questions
Q1) Teresa just received a quarterly statement from the Vanguard Group,which shows earnings from investments using her pretax dollars.Teresa contributes a percentage of her salary to the plan and her company matches it.Teresa is participating in a(n)________.
A) pension plan
B) 401(k)
C) stock option agreement
D) ESOP
E) profit sharing plan
Q2) Lauren has a full-time job.Due to an erratic child care situation,she works from 7:00 A.M.until 3:30 P.M.two days a week so she can leave in time to pick up her children at 4:00 P.M.The rest of the week,she works from 8:00 A.M.until 4:30 P.M.What type of alternative schedule arrangement does Lauren's company offer? How do you know?
Q3) If the union and management cannot reach an agreement through collective bargaining,what options exist to bring the sides to agreement?
Q4) Edith is an older worker who has no interest in retiring.What benefits does the company expect from Edith's employment? What disadvantages?
Q5) Why are performance appraisals useful? What are the drawbacks?
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Chapter 10: Online Business and Technology
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Sample Questions
Q1) eBay is an example of which type of e-commerce transaction?
A) B2B
B) B2C
C) C2C
D) C2B
E) 2C2
Q2) Melinda has just graduated with a master's degree in information technology and has been having trouble finding a corporate job.None of the large companies she has contacted have job openings in her field.So Melinda decides to try marketing her services to some of her home town businesses.These businesses have been very slow to adopt new technology.For instance,the local hardware store runs just like it did thirty years ago,with an aging cash register and paper-based bookkeeping.She plans to talk with the store's owner about hiring her part time as its IT specialist to modernize the store's systems.What objections might the hardware store owner have to the idea of hiring an IT specialist,and what should Melinda say to convince the owner of the store that she can help increase the store's sales?
Q3) What is the main difference between an IT system and an MIS system? Provide an example of how an MIS professional could contribute to a technology-related business decision.
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Page 12
Chapter 11: Production, operations, and the Supply Chain
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Sample Questions
Q1) Which of the following is NOT a component of the human factor?
A) availability of labor
B) living conditions
C) available transportation
D) laws and regulations
E) skill level or labor force
Q2) Retro Inc.wanted to reduce the amount of supplies it had on hand at any given time to the minimum required.To accomplish this goal,it implemented a ________ system.
A) just-in-time
B) reserve stock system
C) stock book solution
D) manual eyeballing
E) TQM
Q3) Supply chains are part of ________.
A) manufacturing firms only
B) service industries only
C) for profit businesses only
D) not-for-profit organizations only
E) all businesses
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Page 13
Chapter 12: Marketing and Consumer Behavior
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Sample Questions
Q1) Which of the following is NOT a primary source of data?
A) interviews
B) controlled experiments
C) accounting records
D) sampling
E) customer feedback
Q2) What is the type of market segmentation based on lifestyles called? Provide an example of a retailer who would segment the market based on lifestyles.
Q3) Secondary marketing data,which has already been collected and processed,is usually more expensive to obtain than primary data.
A)True
B)False
Q4) How can social media be used in market research?
Q5) What do the letters S,W,O,and T stand for in the term SWOT when it is applied to situational analysis?
Q6) What are some of the ways that automobile manufacturers can use their knowledge of consumers' changing attitudes and behavior?
Q7) Describe the kinds of utility that marketing provides to customers.
Page 14
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Chapter 13: Product Development and Pricing Strategies
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Sample Questions
Q1) What are the seven steps in new product development?
Q2) Maturity is a stage in the product life cycle.
A)True
B)False
Q3) What is a component part? Provide an example.
Q4) The two functions of labels are ________.
A) inform and facilitate use
B) inform and persuade
C) protect the product and persuade
D) facilitate use and be environmentally friendly
E) to entice and mislead
Q5) What is penetration pricing? Give an example.
Q6) Each of the following is a form of discount EXCEPT ________.
A) packaging discounts
B) cash discounts
C) seasonal discounts
D) quantity discounts
E) allowance discounts
Q7) How does convenient packaging affect sales?
Q8) Give an example of a loss leader.
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Chapter 14: Promotion and Distribution
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Sample Questions
Q1) Which of the following is an example of a sales promotion?
A) a perfume sample inserted in the pages of a magazine
B) a rebate offer on an ink-jet printer
C) a television spot claiming the health benefits of a new energy drink
D) a press release emphasizing the quality of workmanship of Adirondack chairs
E) a magazine ad for a new car model
Q2) When creating a promotional campaign,what should a business keep in mind when designing the message?
Q3) Gail's Gears is a new company selling accessories for bicycles.Its new advertising campaign features instructions on how to assemble various accessories,including flashing lights for traffic safety,gear boxes to mount on the handlebars,and other products to attach to the seat over the back tire.This advertising campaign is an example of ________.
A) retail advertising
B) public service advertising
C) product advertising
D) interactive advertising
E) mobile advertising
Q4) Although it is costly,advertising often leads to lower prices for consumers.Explain why.
Page 16
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Chapter 15: Financing and Tracking Business Operations
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Sample Questions
Q1) What would be a project to be worked on in a managerial accounting department?
Q2) Accounting is important for ________.
A) large organizations only
B) for-profit companies only
C) small businesses only
D) organizations of all sizes and types
E) Fortune 500 companies only
Q3) Assets = Liabilities + Owners' Equity is the fundamental ________ equation.
A) asset
B) accounting
C) mathematical
D) corporate
E) profit
Q4) The longest period covered in financial accounting reports is three months.
A)True
B)False
Q5) Imagine that you have just completed your first budget as a new financial manager.How will you make sure that your company follows the budget?
Q6) What does an income statement show?
Q7) What is a cash flow budget?
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Chapter 16: Investment Opportunities in the Securities Market
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Sample Questions
Q1) A bear market occurs when stocks have bottomed out and investor confidence is shifting from negative to positive.
A)True
B)False
Q2) The first time a company sells stock,it does so through an initial public offering. A)True
B)False
Q3) What are the most important factors to consider when deciding which particular stock to purchase?
Q4) In general,the riskier an investment,the greater the opportunity for a large return.
A)True
B)False
Q5) Is it possible to have money in a savings account and actually lose purchasing power in the long run?
Q6) The S&P 500 tracks more companies than does the DJIA. A)True
B)False
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Q7) What do the terms par (face)value,coupon,and maturity date mean for bonds?
Chapter 17: Business Law
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Sample Questions
Q1) In 2010,U.S.businesses spent ________ on advertising.
A) $279 million
B) $27.9 billion
C) $279 billion
D) $2.79 trillion
E) $27.9 trillion
Q2) Statutory law is ________.
A) the written text of the U.S. Constitution
B) written law determined by the legislative branch of the government
C) the written text of the Bill of Rights
D) unwritten but applied law
E) written by judges who try important cases
Q3) All of the following are true of constitutional law EXCEPT
A) it is the written text of the U.S. Constitution
B) it is the foundation of U.S. law
C) it is the written text of the Bill of Rights
D) it is written law determined by the legislative branch of the government
E) all other laws fall subordinate to it
Q4) Why should bankruptcy only be used as a last resort?
Q5) Are a tort and a breach of contract the same thing? Explain.
Page 19
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Chapter 18: Constructing an Effective Business Plan
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Sample Questions
Q1) An exit strategy is often included in the financial section of a business plan.
A)True
B)False
Q2) First describe a potential business you would like to start.Then describe three ways a business plan could help you be more successful.
Q3) Which section of a business plan lists what a company thinks customers would be willing to pay for the merchandise?
A) financials
B) sales and promotion
C) product
D) market analysis
E) executive summary
Q4) All of the following are included within the business plan BEFORE the appendices EXCEPT ________.
A) marketing strategy
B) professional references
C) core production strategy
D) table of contents
E) company profile and strategy
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Chapter 19: Business Communications
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Sample Questions
Q1) Most podcasts,as well as the necessary software,are free.
A)True
B)False
Q2) For which of the following is a memo LEAST likely to be used?
A) to make an internal announcement
B) to inform a client about an important change in procedure
C) to request information from a colleague within the office
D) to summarize facts from a team meeting
E) to introduce a report you are submitting to your supervisor
Q3) One good way to practice active listening skills is to ________.
A) try to think of what you are going to say next on the same subject while you listen
B) jot down your opinions on the subject matter while you listen
C) repeat back points that the speaker made when the speaker is finished
D) discuss your own thoughts on the subject when the speaker is finished
E) make sure you have a solution in your mind before hearing what everyone else has to say
Q4) Which form of communication is best if you want to work collaboratively on a document with several people who are located in different states: conference call,wikis,videoconferencing,or e-mail?
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Chapter 20: Finding a Job
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Sample Questions
Q1) What is a chronological resume and when is it the appropriate?
Q2) If the job applicant speaks a foreign language,this should be included in the ________ section of the resume.
A) education
B) experience
C) interests
D) objective
E) references
Q3) Which of the following is a question that an interviewer is legally allowed to ask a job applicant?
A) Where were you last employed?
B) Do you have children?
C) How old are you?
D) Where were you born?
E) Are you affiliated with any religion?
Q4) If a salary is offered that is not what you had in mind,consider negotiating other factors such as benefits,vacation time,or a more flexible schedule.
A)True
B)False
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Chapter 21: Personal Finance
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Sample Questions
Q1) How can online resources and software help with money management?
Q2) What is the difference between defined benefit plans and defined contribution plans?
Q3) Money management is critical for corporations,but not for individuals.
A)True
B)False
Q4) You earned $20,000 in taxable income.The tax rate on the first $10,000 is 10%.The tax rate on income between $10,001 and $20,000,inclusive,is 20%.Your tax is ________.
A) $10,000
B) $1,000
C) $2,000
D) $3,000
E) $4,000
Q5) All of the following are deductions from taxable income EXCEPT ________.
A) financial payments to a tax-deferred retirement plan
B) financial payments to charity
C) financial payments for personal clothing
D) financial payments for interest on mortgages
E) financial payments for medical expenses
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