Fundamentals of Business
Exam Answer Key
Course Introduction
Fundamentals of Business introduces students to the core concepts and practices essential to understanding the modern business world. The course covers a broad spectrum of topics including the foundations of economics, forms of business ownership, management principles, marketing strategies, financial literacy, and the ethical considerations in decision-making. Through the exploration of real-world examples and case studies, students will develop a strong grasp of how businesses operate within local and global environments, preparing them for more specialized study or entry-level professional roles.
Recommended Textbook
Business Essentials 9th Edition by Ronald J. Ebert
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16 Chapters
2037 Verified Questions
2037 Flashcards
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Page 2
Chapter 1: The Us Business Environment
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) The technological environment includes only electronics and telecommunications used to perform business activities.
A)True
B)False
Answer: False
Q2) Which of the following statements about inflation is True?
A) The consumer price index is a good way of measuring inflation.
B) Productivity decreases the purchasing power of consumer dollars.
C) Inflation increases the purchasing power of consumer dollars.
D) Localized price increases can cause inflation across the economic system.
E) The amount of money tends to be distributed evenly during inflationary periods.
Answer: A
Q3) How does inflation affect purchasing power?
Answer: Inflation is the occurrence of widespread price increases throughout an economic system. Purchasing power declines as a result of the increased prices associated with inflation.
Explanation:Inflation occurs when an economic system experiences widespread price increases, which has a negative impact on purchasing power.
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3
Chapter 2: Business Ethics and Social Responsibility
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) What is the most effective step that a company can take to promote ethical behavior?
A) conduct frequent comprehensive audits of all financial information
B) have employees sign a code of conduct upon hiring
C) demonstrate top management support of ethical standards
D) publicize efforts to become more ethical
E) survey employees on their personal ethical codes
Answer: C
Q2) How does certain software protect e-mail communication?
Answer: Software has been created that encrypts e-mail messages. In addition, the software sets an expiration date and prevents resending or printing.
Explanation:Software such as that created by Omniva may be used to preserve e-mails, as users cannot unilaterally delete their own e-mail on their own initiative.
Q3) Accepting and offering bribes is a normal part of doing business in some parts of the world.
A)True
B)False
Answer: True
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4
Chapter 3: Entrepreneurship, New Ventures, and Business Ownership
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) Which of the following, if True, would weaken the case for Sam and Nina owning the business in a partnership?
A) Sam and Nina have different personalities.
B) Sam and Nina have known each other for many years.
C) Sam and Nina have conflicting ideas about what would make a dry-cleaning business succeed.
D) Nina is experienced in finance but not in equipment repair.
E) Sam is experienced in dry-cleaning but not skilled as an administrator.
Answer: C
Q2) In which business sector are cooperatives still important?
A) manufacturing
B) automotive
C) public utilities
D) agriculture
E) health care
Answer: D
Q3) The failure rate among small businesses has been increasing in recent years.
A)True
B)False
Answer: False
Page 5
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Chapter 4: The Global Context of Business
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) Which of the following refers to the practice of selling a product abroad for less than the cost of production?
A) exporting
B) importing
C) dumping
D) safeguarding
E) offshoring
Q2) Why should companies conducting international operations be concerned about exchange rate fluctuations?
Q3) Which of the following refers to tariffs that are imposed strictly to raise money for the government?
A) revenue tariffs
B) protectionist tariffs
C) quota tariffs
D) subsidy tariffs
E) labor tariffs
Q4) Free market economies often establish some system of quotas and/or tariffs.
A)True
B)False
Q5) What are the advantages and disadvantages of globalization?
Page 6
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Chapter 5: Business Management
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Long-term goals are derived directly from a firm's mission statement.
A)True
B)False
Q2) Which of the following best explains why Cathi should be skeptical about the description of the corporate culture at Domino Grace?
A) Human Resources representatives have no direct knowledge of corporate cultures.
B) Human Resources representatives have an incentive to describe the company in a positive light.
C) Human Resources representatives have a strong role in determining corporate culture.
D) The description of the corporate culture at Domino Grace is self-contradictory.
E) There are no other reliable sources of information about the corporate culture at Domino Grace.
Q3) Donna feels that leading may be the most difficult part of her new job. Why would she feel this way?
Q4) After planning, what is the next step in the management process? Why will Donna need to follow this process?
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7
Chapter 6: Organizing the Business
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Sample Questions
Q1) Line, staff, and committee and team forms of authority are not likely to all be found within the same organization.
A)True
B)False
Q2) In what type of organization do most lower-level decisions need to be approved by upper management before they can be implemented?
A) line
B) staff
C) decentralized
D) centralized
E) learning
Q3) Which of the following best describes responsibility?
A) the power to make the decisions necessary to complete a task
B) the liability of subordinates for accomplishing tasks assigned by managers
C) the number of people supervised by one manager
D) the duty to perform an assigned task
E) the need to prove satisfactory work performance
Q4) Why are centralization and decentralization, delegation, and authority the key ingredients in establishing the decision-making hierarchy?
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Chapter 7: Operations Management and Quality
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) Which program certifies improvements in environmental performance?
A) ISO 9000
B) ISO 9000:2000
C) ISO 14000
D) TQM 2001
E) TQM 2012
Q2) Automobile, food-processing, and television assembly plants use which type of layout?
A) make-to-order
B) location
C) custom-products
D) quality
E) same-steps
Q3) Outsourcing has led to increasingly global supply chains. Describe three ways that a more global supply chain might be risky for a company that outsources.
Q4) Even excellent firms focus on one competence at a time.
A)True
B)False
Q5) Differentiate between high- and low-contact processes. Give an example of each.
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Chapter 8: Employee Behavior and Motivation
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) Under what conditions might the use of work teams be inappropriate?
Q2) Which of the following theories focuses on people evaluating their treatment by the organization relative to the treatment of others?
A) equity theory
B) hierarchy of needs
C) expectancy theory
D) goal-setting theory
E) X and Y theory
Q3) Discuss modified work schedules and how they increase job satisfaction.
Q4) Which of the following would have the lowest cost to an organization?
A) absenteeism
B) workplace violence
C) sexual harassment
D) theft
E) racism
Q5) When people feel they are being inequitably treated, they are likely to ask for raises, increase their efforts, and work longer hours.
A)True
B)False
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Chapter 9: Leadership and Decision Making
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) Which of the following may describe charismatic leadership?
A) an approach to leadership emphasizing the perspectives of the leader
B) an approach to leadership emphasizing the perspectives of the followers
C) an approach to leadership emphasizing the perspectives of the clientele
D) an approach to leadership emphasizing the perspectives of the managers
E) an approach to leadership emphasizing the perspectives of all parties in the organization
Q2) What is the definition of a coalition?
A) an informal group formed to achieve a common goal
B) an institution incorporated in order to achieve a common goal
C) a pro-business political party
D) the network of management within a firm
E) the network of employees within a firm
Q3) The more important the decision, the more attention needs to be directed to developing alternatives.
A)True
B)False
Q4) If the typical aspects about gender differences in leadership are observable at Calder Enterprises, how will Mary's leadership style be possibly different than that of her male predecessor?
Page 11
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Chapter 10: Human Resource Management and Labor Relations
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) What are the two common tools used by labor in union contracts to secure wage increases? Explain.
Q2) What is an impasse in labor relations?
Q3) How does NetFlix attempt to meet employees' esteem needs?
Q4) What is the name given to an employee who is hired on something other than a permanent or full-time basis?
A) knowledge expert
B) contingent worker
C) technical employee
D) supervisory manager
E) managing director
Q5) How does NetFlix attempt to meet employees' social needs?
Q6) The number of variable pay programs in the United States has been consistently falling for the last decade, and it is predicted that they will continue to decline in popularity.
A)True
B)False
Q7) How do human resource managers use job analysis for human resource planning?
Q8) The environment at Super TV Channel 6 displays workforce diversity. What does this mean? Page 12
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Chapter 11: Marketing Processes and Consumer Behavior
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) What are three functions of packaging?
Q2) The director of marketing argues that Dinasonic should use an adaptation strategy for its marketing because its products will need to be adapted to different markets. Which of the following, if True, would strengthen this position?
A) Dinasonic's products have consistently had the most competitive prices in the U.S. market.
B) For the kinds of products that Dinasonic makes, preferences for their use vary between different cultures.
C) Dinasonic will not face much competition in the countries in which it plans to sell its products.
D) Dinasonic will have a limited advertising budget for its international marketing efforts. E) Dinasonic has consistently gained in market share in the United States over the last several years.
Q3) Discuss the issues of international promotion.
Q4) The reseller market includes farmers, manufacturers, and some retailers.
A)True
B)False
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Chapter 12: Pricing, Distributing, and Promoting Products
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) Using the odd-even psychological pricing strategy, a restaurant would price an entree at $10.00 rather than $9.95.
A)True
B)False
Q2) List one advantage of using trucks for transportation and one disadvantage.
Q3) One manager argues that Riverdale's corporate image will suffer if customers receive too many e-mails about its different services and offerings. Which of the following, if True, is the most effective counterargument?
A) Customers can report the e-mails as spam and ensure that they do not receive these service mails in their inboxes in the future.
B) Research shows that customers who opt to receive marketing e-mails rarely complain, even if they are not happy about them.
C) This is a problem that affects all e-mail marketers, not Riverdale alone.
D) Customers can use a ready menu of e-mail selections to opt in and receive only the marketing product information they are interested in.
E) The cost of e-mail marketing is lower than public service advertising.
Q4) What is cost-oriented pricing?
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Page 15
Chapter 13: Information Technology for Business
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) A small preschool decided to give its teachers access to a portable laptop during daily naptime. Administrators found over time that teacher productivity actually decreased. Which statement would BEST explain why teacher productivity has decreased in spite of the increased computer time?
A) Too many children were disruptive during naptime hours.
B) Teachers added more tasks to get done and could not complete them all during naptime.
C) Teachers could not watch the children and work on the computer at the same time. D) The classroom lacked the necessary office equipment needed to be productive.
E) Teachers spent most of the naptime surfing Internet Web sites unrelated to their work assignments.
Q2) Electronic conferencing is popular because it reduces travel expenses and saves money.
A)True
B)False
Q3) The most common type of network used in businesses is a client-server network. Explain what might comprise Worldwide's client-server network.
Q4) Identify the threats and risks information technology poses on businesses.
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Page 16
Chapter 14: The Role of Accountants and Accounting Information
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Bennequin Manufacturing was a highly profitable firm five years ago but has since been severely declining in net revenue, even though the amount of business has held steady. Marlena has been hired as the new Chief Executive Officer to help turn things around for the company. She would like to understand what happened financially to the company in the past five years in order to start coming up with possible solutions. Which of the following documents would be most useful for her?
A) income statements from the past five years
B) debt statements from the past five years
C) statements of cash flows from the past five years
D) budgets from the past five years
E) balance sheets from the past five years
Q2) Owners' equity is net worth minus liabilities.
A)True
B)False
Q3) An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.
A)True
B)False
Q4) What is a leveraged buyout?
Page 17
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Chapter 15: Money and Banking
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Suppose a list of all American deposit institutions were created and a name chosen randomly from this list. Which of the following would the chosen institution most likely be?
A) a commercial bank
B) a savings institution
C) a savings and loan association
D) a mutual savings bank
E) a credit union
Q2) Toyota, based in Japan, would like to build a new factory and a new retail distribution center. Both or either of these may be built in the United States and in Canada. Currently, the U.S. dollar is weak compared to the Canadian dollar. Which of the following would be in Toyota's best interest?
A) build the cars in Canada and sell them in the United States
B) build the cars in the United States and sell them in Canada
C) build the cars in Canada and sell them in both countries
D) build the cars in the United States and sell them in both countries
E) build the cars in both countries and sell them in both countries
Q3) What are the components of the M-1 money supply?
Q4) Explain how current financial institutions can create $342 out of a deposit of $200.
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Chapter 16: Managing Finances
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Sample Questions
Q1) The investment industry categorizes firms according to size of capitalization.
A)True
B)False
Q2) Lito is working with a discount broker. Which service would Lito NOT be likely to receive?
A) stock research
B) industry analysis
C) face-to-face consultations
D) screening for specific types of stocks
E) quality suggestions for investments
Q3) The stock of Simonsen, Inc. is being bought up by an individual who intends to take over Simonsen and sell off its assets for a profit. What is the individual in this scenario called?
A) angel investor
B) corporate raider
C) inside trader
D) stock broker
E) bondholder
Q4) Explain the difference between debt financing and equity financing?
Q5) Describe the services provided by investment banks.
Page 19
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