Foundations of Business Exam Questions
Course Introduction
Foundations of Business introduces students to the fundamental principles and practices essential to the world of business. The course covers key topics such as management, marketing, finance, accounting, entrepreneurship, and the global business environment. Emphasis is placed on understanding how businesses operate, make decisions, and adapt to changing markets. Students will explore ethical considerations, business planning, and the impact of technology on business processes. Through case studies and real-world examples, learners gain a solid foundation to pursue advanced business studies or enter the professional world with a broad perspective on organizational success.
Recommended Textbook Business Essentials 12th Edition by Ronald J. Ebert
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17 Chapters
1912 Verified Questions
1912 Flashcards
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Page 2
Chapter 1: The US Business Environment
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Sample Questions
Q1) What is created when one company is able to supply all the goods or services needed by the marketplace?
A) Communism
B) Natural monopolies
C) Marketplace shifts
D) Monopolistic competition
E) Oligopolies
Answer: B
Q2) The government can influence the availability of capital through the use of the Federal Reserve System.
A)True
B)False
Answer: True
Q3) Which term refers to the pattern of short-term ups and downs in an economy?
A) Aggregate output
B) Business cycle
C) Standard of living
D) Balance of payments
E) Demand and supply schedule
Answer: B
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Chapter 2: Understanding Business Ethics and Social Responsibility
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Sample Questions
Q1) In the United States,there are increased expectations for a greater social role for business.
A)True
B)False
Answer: True
Q2) Which of the following includes provisions that control air pollution by members?
A) Sarbanes-Oxley
B) GAAP
C) Code of ethics
D) NAFTA
E) FTC
Answer: D
Q3) How do issues of social responsibility and ethics affect small business?
Answer: Small businesses must address,more or less,the same issues as big businesses-the differences are primarily differences of scale.
Q4) What is the purpose of a written code of ethics?
Answer: A written code of ethics formally announces a company's intent to do business in an ethical manner and provides guidelines for enforcing their code of ethics.
Page 4
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Chapter 3: Entrepreneurship, New Ventures, and Business Ownership
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Sample Questions
Q1) Corporations enjoy significant tax benefits when compared to sole proprietorships or partnerships.
A)True
B)False
Answer: False
Q2) What is formed when a corporation establishes a trust on behalf of employees for the purpose of buying shares of ownership?
A) Institutional ownership
B) Divestiture
C) Strategic alliance
D) Corporate governance
E) Employee stock ownership plan (ESOP)
Answer: E
Q3) Which of the following is a unique feature of a multinational corporation?
A) Owners have unlimited financial liability.
B) Owners are taxed like partners.
C) It is considered to be a partnership for tax purposes.
D) Stock is held by only a few people.
E) Stock is traded on the exchanges of several countries.
Answer: E
Page 5
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Chapter 4: Understanding the Global Context of Business
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Sample Questions
Q1) A Chinese steel company cannot charge less for its product in the United States than the cost of production.
A)True
B)False
Q2) What is the result when a country can produce goods more efficiently or better than other nations?
A) Balance of trade deficit
B) Absolute advantage
C) Increased globalization
D) Comparative advantage
E) National competitive advantage
Q3) Which of the following is a person's belief about the importance of an individual compared to the importance of a group?
A) Social orientation
B) Power orientation
C) Uncertainty orientation
D) Goal orientation
E) Time orientation
Q4) Explain a floating exchange rate.
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Chapter 5: Managing the Business
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Sample Questions
Q1) Contingency planning seeks to identify how a company will respond to change.
A)True
B)False
Q2) If an organization sets out to increase its share of the snack food market by 10 percent during the next eight years,what kind of goal is the organization setting?
A) A short-term goal
B) An intermediate goal
C) A tactical goal
D) A long-term goal
E) An organizational goal
Q3) Which level of management is responsible for the overall performance and effectiveness of the firm?
A) Top managers
B) First-line managers
C) Middle managers
D) Supervisory managers
E) Human resource managers
Q4) Describe and discuss the three levels of management and their roles in the organization.
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Chapter 6: Organizing the Business
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Sample Questions
Q1) What do managers do when the "job" of a firm is broken down into smaller jobs,allowing others to perform them?
A) Fragment the task
B) Specialize the job
C) Respond to the job
D) Assign the task
E) Control the job
Q2) What is the advantage of an organization that is unstructured and informal?
A) Decisions can be made by consensus.
B) There is less effect on the organization in a rapidly changing market.
C) Managers do not become overwhelmed with decision making.
D) It can become a more complex structure quickly and efficiently.
E) The structure is more adaptable to the environment.
Q3) Which feature characterizes the organization of centralized firms?
A) Flat
B) Tall
C) Very large
D) Responsive to change
E) Well capitalized
Q4) Identify and discuss three factors that may affect a manager's span of control.
Page 8
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Chapter 7: Operations Management and Quality
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Sample Questions
Q1) What type of strategy is a firm using when promoting quick,consistent and on time delivery,for every order?
A) Quality
B) Low cost
C) Flexibility
D) Dependability
E) Accessibility
Q2) A value chain includes an entire network of firms,beginning with suppliers and ending when production is complete.
A)True
B)False
Q3) Staff schedules identify which products will be produced and when.
A)True
B)False
Q4) Describe the difference between the make-to-order and make-to-stock production processes.
Q5) Explain how JIT production and lean manufacturing are related.
Q6) Describe the five most commonly used tools for TQM.
Q7) Describe how a Gantt chart and a PERT chart are similar,and how they are different.
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Chapter 8: Employee Behavior and Motivation
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Sample Questions
Q1) According to the classical theory of motivation,attention from the supervisor is more of a motivator than money.
A)True
B)False
Q2) Which of these "big five" personality traits is an indication of how open or rigid a person is in terms of his or her beliefs?
A) Openness
B) Extraversion
C) Emotionality
D) Conscientiousness
E) Agreeableness
Q3) Those employees who like to experiment with new ideas or gamble on the development of new products are considered to have a higher degree of
A) self-esteem.
B) intrinsic reward need.
C) authoritarianism.
D) propensity for risk.
E) cognition.
Q4) Discuss the potential benefits to the employer from a flextime program.
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Chapter 9: Leadership and Decision Making
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Sample Questions
Q1) Which approach to leadership is based on the assumption that appropriate behavior varies from one experience to another?
A) Situational leadership
B) Trait-based leadership
C) Transformational leadership
D) Transactional leadership
E) Charismatic leadership
Q2) Leadership researchers in the late 1940s believed that leaders should engage in which of the following behaviors?
A) Mostly employee-focused leader behavior
B) Mostly task-focused leader behavior
C) Both employee-focused leader behavior and task-focused leader behavior in equal amounts
D) A mixture of employee-focused leader behavior and task-focused behavior depending on the task
E) A mixture of employee-focused leader behavior and task-focused behavior depending on the employees
Q3) What is the difference between leadership and management within an organization?
Q4) Identify three crucial elements of charismatic leadership.
Page 11
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Chapter 10: Human Resource Management and Labor Relations
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Sample Questions
Q1) How does the EEOC define sexual harassment in the workplace?
A) A single off-color joke that makes a worker uncomfortable
B) Any unwelcomed sexual advances
C) Persistent sexual advances
D) Unwelcome sexual advances made only by members of the opposite sex
E) Behavior that is sexual in nature only when it is instigated by a supervisor
Q2) Replacement charts can be used to forecast the external supply of candidates for senior managerial positions in the organization.
A)True
B)False
Q3) Which term refers to employees hired to supplement a firm's permanent workforce?
A) Union workers
B) Contingent workers
C) Knowledge workers
D) Flextime workers
E) Remote workers
Q4) Human resource managers need to forecast the internal and external supply of employees.
A)True
B)False
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Chapter 11: Marketing Processes and Consumer Behavior
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Sample Questions
Q1) Which of the following is the BEST example of a B2B market transaction?
A) A college student buys dorm furniture from an on-campus store.
B) A group of teenage girls buy new clothes for the upcoming school year.
C) A high-school coach borrows sports equipment from a neighboring school.
D) A dentist provides free toothbrushes to patients.
E) A chain of ice cream parlors regularly purchases napkins from the same supplier.
Q2) When is conducting market research generally most effective?
A) When entering international markets
B) When sales begin to drop
C) When competitors release newer, competitive products.
D) When developing new products or altering existing products
E) When a new product is ready to be released
Q3) When conducting market research,what type of data is used when existing data is unavailable or inadequate?
A) Secondary
B) Demographical
C) Global
D) Psychographic
E) Primary
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Page 13
Chapter 12: Developing and Pricing Products
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Sample Questions
Q1) With product adaptation,the product is modified for greater appeal in different countries.
A)True
B)False
Q2) Which of the following is a primary advantage for the consumer when using the internet for shopping?
A) Objective customer reviews
B) Faster delivery
C) Elimination of added costs of wholesalers and retailers
D) Efficient use of corporate resources
E) Cost-oriented pricing
Q3) What is cost-oriented pricing?
Q4) How can a good or service provider stimulate demand during off-peak seasons?
A) Price lining
B) Discounts
C) Skimming
D) Odd-even pricing
E) Bundling
Q5) How has e-business contributed to lower prices?
Q6) Why would a firm want to set its price above competitors' prices?
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Chapter 13: Distributing and Promoting Products
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Sample Questions
Q1) Choosing a distribution network is a strategic decision in that the decision determines the amount and cost of what?
A) Channel conflict
B) Market coverage
C) Online retailing
D) Retail coverage
E) Channel leadership
Q2) List and describe the three personal selling tasks.
Q3) A firm that wanted to conduct a short-term activity in order to boost consumer buying would use which of the following strategies?
A) Sales promotions
B) Special offers
C) Trade shows
D) Point-of-sale displays
E) Missionary selling
Q4) Explain the primary difference between a retailer and a wholesaler.
Q5) Shopping agents (e-agents)help people shop from factory outlet stores.
A)True
B)False
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Chapter 14: Information Technology Itfor Business
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108 Flashcards
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Sample Questions
Q1) Which type of software searches incoming e-mail and data for indications of a known virus?
A) Malware
B) Firewalls
C) Anti-virus software
D) Routers
E) Spyware
Q2) Identify the IT resources businesses have at their disposal and how these resources are used.
Q3) IBM's Visualization Data Explorer is an example of groupware.
A)True
B)False
Q4) Who generally has access to intranets?
A) Employees
B) Suppliers
C) Customers
D) Shareholders
E) Dealers
Q5) Explain the principle of mass-customization.
Q6) Why is electronic conferencing a desirable alternative for business?
Page 16
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Chapter 15: The Role of Accountants and Accounting Information
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Sample Questions
Q1) What is the statement of cash flow required by the SEC and why is it required?
Q2) Which of the following is the difference between revenues and the cost of revenues?
A) Net income
B) Gross profit
C) Accounts payable
D) Interest expense
E) Cash flow
Q3) Which of the following is considered to be the most important internal financial statement for planning,controlling,and decision making?
A) Income statement
B) Flow of cash statement
C) Balance sheet
D) Budget
E) Statement of projected earnings
Q4) Discuss the fair value discloser standard that is being jointly developed by the FASB and the IASB.
Q5) Owners' equity is net worth minus liabilities.
A)True
B)False
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Chapter 16: Understanding Money and the Role of Banking
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Sample Questions
Q1) Individual retirement accounts can be opened only by self-employed people such as doctors,small business owners,and consultants.
A)True
B)False
Q2) Like most of the federal government,the governors of the Federal Reserve System are democratically elected by the citizens of the United States.
A)True
B)False
Q3) Which of the following BEST describes the <i>durability</i> characteristic of money?
A) Units of money do not expire after a certain time limit.
B) Units of money can be matched with the value of goods.
C) Units of money allow people to measure the relative value of goods and services.
D) Units of money of different nations are easily converted to other units of money.
E) Units of money have lasting value.
Q4) What is the difference between a credit card and a debit card?
Q5) How does the Fed's monetary policy influence banks' willingness to loan money?
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Chapter 17: Managing Business Finances
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Sample Questions
Q1) The use of special knowledge about a firm,which results in an unfair advantage or generates profit or other types of gain,is known as what?
A) Equity financing
B) Market capitalization
C) Insider trading
D) Prospectus information
E) FINRA violation
Q2) How are federal and state projects,such as roads and schools,typically financed?
A) Municipal bonds
B) Common stock
C) Angel investors
D) Corporate bonds
E) TARP loans
Q3) The Russell 2000 Index focuses primarily on technology companies,small-company stocks,and has a smaller representation of sectors such as financial,consumer products,and industrials.
A)True
B)False
Q4) Explain how dividend yield and interest dividend yield are computed.
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