Business Fundamentals
Review Questions
Course Introduction
Business Fundamentals introduces students to the essential concepts and practices that form the foundation of the business world. Covering topics such as management, marketing, finance, operations, and entrepreneurship, this course provides a comprehensive overview of how businesses are structured, how they operate in a competitive environment, and the key skills necessary for success in the marketplace. Through real-world examples and case studies, students will develop critical thinking and problem-solving abilities, preparing them for further study in business or entry-level roles in various industries.
Recommended Textbook
Business 12th Edition by William M. Pride
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24 Chapters
4484 Verified Questions
4484 Flashcards
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Page 2
Chapter 1: Exploring the World of Business and Economics
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Sample Questions
Q1) The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs is called
A) consumerism.
B) the economy.
C) capitalism.
D) business.
E) the workplace.
Answer: D
Q2) For a business, stakeholders represent
A) investors in the business.
B) lenders that have provided loans.
C) suppliers that have extended credit to the firm in search of profit for the firm..
D) employees who work for the firm.
E) all of the different people or groups who are affected by the business.
Answer: E
Q3) Karl Marx is known as the father of communism.
A)True
B)False
Answer: True
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Page 3
Chapter 2: A: Being Ethical and Socially Responsible
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Sample Questions
Q1) Travis is in charge of writing a report for his company that talks about the quality and safety of his company's products, business practices, involvement in the community, human resources, and efforts to reduce pollution. This is called a(n)
A) ethics report.
B) social audit.
C) compliance review.
D) responsibility policy.
E) citizenship report.
Answer: B
Q2) The socioeconomic model of social responsibility places primary emphasis on A) quality of life.
B) production.
C) economic return.
D) exploitation of natural resources.
E) profit.
Answer: A
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Chapter 2: B: Being Ethical and Socially Responsible
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Sample Questions
Q1) In support of their position, proponents of the socioeconomic model argue that businesses should be allowed to ignore social issues.
A)True
B)False
Answer: False
Q2) Most authorities agree that business ethics should be improved.
A)True
B)False
Answer: True
Q3) Recently, consumers and the government have been losing an increasing number of product liability lawsuits against sellers of defective products.
A)True
B)False
Answer: False
Q4) The planning stage of a social responsibility program can involve outside consultants to help develop it.
A)True
B)False
Answer: True
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Chapter 3: A: Exploring Global Business
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Sample Questions
Q1) A ____ is issued by a bank upon request of an importer stating that the bank will pay an amount of money to a stated beneficiary.
A) license
B) letter of credit
C) bill of lading
D) draft
E) voucher
Q2) A(n) ____ will, for a commission or fee, arrange the sale of a company's products to foreign intermediaries.
A) export-import merchant
B) international bank
C) joint venture
D) export-import agent
E) trading broker
Q3) The United States is a member of the ____, which is the successor to GATT.
A) World Trade Organization
B) North American Free Trade Agreement
C) United Nations
D) European Union
E) Kennedy Round
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Chapter 3: B: Exploring Global Business
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Sample Questions
Q1) Comparative advantage is the ability to produce a specific product more efficiently than any other nation.
A)True
B)False
Q2) The total flow of money into a country less the total flow of money out of the country over some period of time is called the nation's balance of trade.
A)True
B)False
Q3) The World Trade Organization (WTO) was established by GATT to oversee the provisions of the Uruguay Round.
A)True
B)False
Q4) Cultural barriers can impede acceptance of products in foreign countries.
A)True
B)False
Q5) Decreases in trade barriers create more choices for consumers and new opportunities for job seekers.
A)True
B)False
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Chapter 4: Choosing a Form of Business Ownership
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Sample Questions
Q1) How do management tasks differ for a general partner and a limited partner?
Q2) Sears Holding Corporation is incorporated in Delaware, but when it operates in Illinois and Texas, it is considered a(n) ____ corporation in those states.
A) domestic
B) foreign
C) alien
D) small
E) midsized
Q3) A corporation is perhaps the easiest form of business to organize.
A)True
B)False
Q4) Because of rising fuel costs, a group of farmers have organized a retail gasoline outlet so they can make more reasonable purchases. This type of business is referred to as a(n)
A) syndicate.
B) cooperative.
C) joint venture.
D) corporation.
E) S-corporation.
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Chapter 5: Small Business, Entrepreneurship, and Franchises
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Sample Questions
Q1) Sarah owns a 7-Eleven franchise. What is the primary disadvantage of owning a franchise for Sarah?
A) She has to pay royalties to the franchisor.
B) She cannot use her name as the restaurant name.
C) The franchisor still retains a great deal of control.
D) Sarah is not allowed to hire her own employees.
E) Sarah may not find ways to improve operations.
Q2) Many small firms seek to establish a particular niche in the market, realizing that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies. When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognize and account for their influence on the market. In this way, small businesses are primarily
A) fostering competition.
B) providing technical innovation.
C) creating jobs.
D) satisfying the needs of other businesses.
E) avoiding competition.
Q3) What is the primary function of SBA financial assistance?
Q4) What can the Small Business Administration do for a small business?
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Chapter 6: Understanding the Management Process
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Sample Questions
Q1) A former CEO at International Telephone and Telegraph had a reputation for publicly humiliating subordinates who annoyed or disappointed him. This manager obviously needed to improve his ____ skills.
A) conceptual
B) diagnostic
C) functional
D) interpersonal
E) negotiating
Q2) Specific skills needed to accomplish specialized activities such as drafting and welding are known as ____ skills.
A) standard operating
B) tactical
C) interpersonal
D) conceptual
E) technical
Q3) The four basic management functions are planning, organizing, leading and motivating, and controlling.
A)True
B)False
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Page 10
Chapter 7: Creating a Flexible Organization
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Sample Questions
Q1) When the matrix structure is used, employees report to more than one supervisor.
A)True
B)False
Q2) Describe each of the three primary types of committees that exist in business firms. Offer one specific example of each.
Q3) Which organizational structure is also called a virtual organization?
A) Matrix
B) Informal
C) Line-and-staff
D) Network
E) Line
Q4) Generally speaking, a narrow span of management implies that the height of the organization will be ____; a wide span of management implies that the height of the organization will be ____.
A) tall; flat
B) tall; sloped
C) flat; tall
D) short; tall
E) long; short
Q5) What is the informal organization? Where is it shown on the organization chart?
Page 11
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Chapter 8: Producing Quality Goods and Services
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Sample Questions
Q1) The process of creating a set of specifications from which the product can be produced is called
A) technology.
B) research and development.
C) design planning.
D) product design.
E) a product line.
Q2) Operations control includes all of the following except A) scheduling.
B) inventory control.
C) basic research.
D) purchasing.
E) quality control.
Q3) Robotics is the use of programmable machines to perform a variety of tasks by manipulating A) people and machines.
B) machines and tools.
C) materials and people.
D) materials and tools.
E) tools and financing.
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Chapter 9: Attracting and Retaining the Best Employees
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Sample Questions
Q1) The Age Discrimination in Employment Act of 1967 and its amended version in 1978 apply directly to
A) wages.
B) equal pay for equal work.
C) selection and promotion.
D) employee health and safety.
E) discrimination based on age.
Q2) Attrition is a method of reducing the size of the workforce by permitting people who are within a few years of retirement to retire early with full benefits.
A)True
B)False
Q3) New employees at Disney World in Orlando spend their first several days learning what it means to be a "cast member" by studying the traditions that are Disney. This is called
A) pre-employment testing.
B) recruitment.
C) internal recruitment.
D) an orientation process.
E) compensation.
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Page 13
Chapter 10: Motivating and Satisfying Employees and Teams
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Sample Questions
Q1) Abena Toure worked as a welder for BCD Company for ten years before the company changed its rigid tuition reimbursement policy. This year, the new education support policy will allow her to take any course that interests her, not just a course in her field of employment. She is very excited about this and has enrolled in two management courses. She has always thought she had the ability to become a good manager. Abena is attempting to satisfy her ____ needs.
A) esteem
B) self-actualization
C) physiological
D) social
E) safety
Q2) Under Taylor's scientific management system, what did management have the responsibility to determine about an employee's work, and what did the employee have the responsibility to decide?
Q3) According to Maslow's hierarchy of needs, the most basic needs are physiological needs.
A)True
B)False
Q4) Describe the various stages of team development.
Page 14
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Chapter 11: Enhancing Union-Management Relations
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Sample Questions
Q1) American Telephone and Telegraph managers have filled in for striking union members to keep the long-distance lines operating. Unionists would call these managers
A) boycotts.
B) heroes.
C) wildcatters.
D) strikebreakers.
E) stewards.
Q2) Although President Harry Truman vetoed the Taft-Hartley Act, it was passed by Congress.
A)True
B)False
Q3) Refer to Crain's United, Inc. As Paul discusses union developments over the years, he might identify the ____ as the first major piece of legislation to secure rights for unions.
A) Norris-LaGuardia Act
B) National Labor Relations Act
C) Fair Labor Standards Act
D) Labor-Management Relations Act
E) Landrum-Griffin Act
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Page 15
Chapter 12: Building Customer Relationships Through Effective Marketing
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201 Verified Questions
201 Flashcards
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Sample Questions
Q1) The power of a good or service to satisfy a human need is called utility.
A)True
B)False
Q2) The process of dividing a market into segments is called
A) market grouping.
B) market segmentation.
C) market sampling.
D) target marketing.
E) consumer sampling.
Q3) In the 1920s, producers had to shift to a new sales orientation, which was characterized by all of the following except A) taking orders and delivering goods.
B) increasing advertising.
C) determining what goods consumers wanted.
D) enlarging the sales force.
E) using occasional high-pressure selling techniques.
Q4) Would personal income, disposable income, or discretionary income be of the greatest interest to marketers? Explain your answer.
Q5) How is relationship marketing related to the marketing concept?
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Chapter 13: A: Creating and Pricing Products That Satisfy Customers
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200 Flashcards
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Sample Questions
Q1) Which of the following is considered a trade name?
A) Tide laundry detergent
B) GE
C) General Motors Corp.
D) Coke
E) Adidas's three stripes
Q2) Refer to Your Way, Inc. Which of the following descriptions should Eric use to best explain the difference between the product line and product mix?
A) The product line is a group of similar products that differ only in relatively minor characteristics, whereas product mix is all the products a firm offers for sale.
B) The product mix is a group of similar products that differ only in relatively minor characteristics, whereas product line is all the products a firm offers for sale.
C) The product line is a group of unrelated products, whereas product mix is all the products a firm offers for sale.
D) The product line is a group of similar products, whereas product mix is all products that are different.
E) There is no difference between a product line and product mix.
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Chapter 13: B: Creating and Pricing Products That Satisfy Customers
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Sample Questions
Q1) An early bird special offered by a restaurant during off-peak hours is an example of a secondary-market pricing strategy.
A)True
B)False
Q2) Markup pricing is easy to apply, although it is difficult to determine an effective markup percentage.
A)True
B)False
Q3) A trademark is legally protected from use by anyone except its owner.
A)True
B)False
Q4) The width of a product mix is a measure of the number of individual products within each line.
A)True B)False
Q5) Random discounting is often predictable so consumers wait to make purchases until they can benefit from the price reductions.
A)True B)False
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Chapter 14: Wholesaling, Retailing, and Physical Distribution
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Sample Questions
Q1) All those activities concerned with the efficient movement of products from the producer to the ultimate user are called
A) inventory management.
B) order processing.
C) physical distribution.
D) materials handling.
E) distribution planning.
Q2) Most convenience food stores that sell a limited variety of merchandise
A) are a threat to discounters.
B) expect customers to provide paper bags or cartons.
C) remain open well beyond normal business hours.
D) charge lower prices than supermarkets.
E) are also called "off-price" stores.
Q3) Exclusive distribution is usually limited to very prestigious products like jewelry or fine china.
A)True B)False
Q4) Eliminating wholesalers would bring prices down.
A)True
B)False
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Chapter 15: Developing Integrated Marketing Communications
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Sample Questions
Q1) Refer to SME Ads Inc. SME recently created advertising for Maruti Automobiles for its new line of cars called Maruti Marvels. Such brand-oriented advertising is called
A) primary-demand advertising.
B) selective-demand advertising.
C) institutional advertising.
D) individualized advertising.
E) private advertising.
Q2) In general, consumer goods will depend on ____; industrial products are more likely to use ____ as the primary focus of their promotion mix.
A) publicity; sales promotion
B) personal selling; advertising
C) sales promotion; publicity
D) advertising; publicity
E) advertising; personal selling
Q3) The combination of promotion methods that a firm uses to reach a target market is called advertising.
A)True
B)False
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Chapter 16: Social Media, E-Business, and Accounting
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Sample Questions
Q1) How does a computer virus differ from malware? Are these the only two threats to computers?
Q2) KPI stands for key preference indicators.
A)True
B)False
Q3) Which of the following type of individual who uses social media maintains a profile and visits social networking sites?
A) Collectors
B) Joiners
C) Critics
D) Creators
E) Spectators
Q4) Social media is used by approximately ____ of online adults.
A) two-thirds
B) three-fourths
C) 90%
D) 25%
E) one-quarter
Q5) Describe m-commerce. How do you think it may change the retail industry?
Q6) Why is green IT important?
21
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Chapter 17: Using Management and Accounting Information
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Sample Questions
Q1) Information rules
A) emerge when research confirms the same results each time a problem is studied. B) are of no use to most managers because situations are constantly changing.
C) are often called the great confusers.
D) cost too much to implement.
E) are valid only when they can be used to aid the decision-making process over a large number of years.
Q2) Today corporations are required to send their stockholders an annual report. Assume that you are a prospective investor trying to decide if you should invest in a specific corporation. What type of information is contained in an annual report that would help you decide if this is the right investment for you?
Q3) A person who wishes to practice accounting as a CPA must pass an exam prepared by the American Institute of Certified Public Accountants (AICPA).
A)True
B)False
Q4) Define a balance sheet (also called a statement of financial position). What does it balance?
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Chapter 18: Understanding Money, Banking, and Credit
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Sample Questions
Q1) The Federal Reserve System was organized in A) 1893.
B) 1933.
C) 1913.
D) 1943.
E) 1981.
Q2) A short-term loan is usually repaid within ____ year(s) or less.
A) seven
B) three
C) one
D) five
E) ten
Q3) The United States trades a shipment of wheat to Saudi Arabia in exchange for a shipment of oil. This type of arrangement is called
A) an exchange medium.
B) barter.
C) an auction.
D) a moneyless transfer.
E) electronic commerce.
Q4) Name the five Cs of credit management. Why is each important?
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Chapter 19: Mastering Financial Management
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Sample Questions
Q1) Tom Jackson, president of Jackson Manufacturing, suspects that the managers of two departments have been padding their budgets for the last three years. To eliminate this problem, Tom would
A) fire the managers.
B) hire an efficiency expert.
C) hire a new accountant.
D) use zero-base budgeting.
E) use traditional budgeting.
Q2) Financial managers should
A) ignore minor budgeting problems and concentrate on major problems when budgeting.
B) establish a means of monitoring financial performance on an interim basis.
C) prepare budgets and hope for the best.
D) hire a person to go over interim budgets.
E) fire or demote individual managers when budgeting goals are not achieved.
Q3) Your small business has been very successful and has amassed a large amount of accounts receivable from reputable firms, but you find yourself short of ready cash to replace inventory. How could a factor help you?
Q4) What is a budget? How is it used by a business firm?
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Chapter 20: A: Understanding Personal Finances and Investments
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Sample Questions
Q1) Kenneth calls his broker and asks him to sell 1,000 shares of IBM stock. The broker executes his client's order without making any suggestions or recommendations. This broker is most likely a
A) market broker.
B) discount broker.
C) full-service broker.
D) limited broker.
E) day trader.
Q2) Index funds are often referred to as
A) active funds.
B) passive funds.
C) deceptive funds.
D) socially responsible funds.
E) bad investments.
Q3) The Wall Street Journal is published
A) twice a month.
B) weekly.
C) monthly.
D) on weekdays.
E) twice a week.
Page 25
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Chapter 20: B: Understanding Personal Finances and Investments
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Sample Questions
Q1) Bonds issued by municipal government units do not need to be evaluated.
A)True
B)False
Q2) The Wall Street Journal and Barron's devote their reporting almost exclusively to financial and economic news.
A)True
B)False
Q3) The family-of-funds concept allows investors to exchange shares in one mutual fund for shares in another fund providing that the investor is willing to pay a 10 percent penalty of the value of the funds transferred.
A)True
B)False
Q4) For an investor, liquidity can be defined as the ease with which an investment can be converted into cash.
A)True
B)False
Q5) The market value is the price of one share of a stock at a particular time.
A)True
B)False
Page 26
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