Introduction to Business Textbook Exam
Questions
Course Introduction
Introduction to Business provides students with a comprehensive overview of the fundamental concepts and functions of the business world. Covering topics such as management, marketing, finance, operations, and entrepreneurship, this course examines how organizations operate within both domestic and global environments. Students will gain insights into ethical decision-making, organizational structures, business strategies, and the impact of technology on business. Through real-world case studies and practical examples, the course prepares students to understand the dynamic nature of business and equips them with foundational knowledge essential for further study or entry-level positions in various business fields.
Recommended Textbook
Essentials of Entrepreneurship and Small Business Management 9th Edition by Norman M. Scarborough
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17 Chapters
1957 Verified Questions
1957 Flashcards
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Chapter 1: The Foundations of Entrepreneurship
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Because of their size and limited resources, small businesses rarely create innovations that are important to the U.S. economy.
A)True
B)False
Answer: False
Q2) Too many entrepreneurs start their business undercapitalized.
A)True
B)False
Answer: True
Q3) Within five years, ________ percent of new businesses will fail.
A)21
B)45
C)52
D)65
Answer: C
Q4) Small businesses actually create more jobs than the number of jobs big businesses create.
A)True
B)False
Answer: True
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Chapter 2: Ethics and Social Responsibility: Doing the Right Thing
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) A ________ is a written statement of the standards of behavior and ethical principles a company expects from its employees.
A)company credo
B)company annual report
C)company vision
D)code of ethics
Answer: D
Q2) ________ is a branch of philosophy that studies and creates theories about the basic nature of right and wrong, duty, obligation, and virtue.
A)Semantics
B)Ethics
C)Religion
D)History
Answer: B
Q3) Actions that are legal, however, may not be ethical.
A)True
B)False
Answer: True
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Chapter 3: Creativity and Innovation: Keys to Entrepreneurial Success
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118 Verified Questions
118 Flashcards
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Sample Questions
Q1) Innovation must be a constant process because most ideas do not work and most innovations fail.
A)True
B)False
Answer: True
Q2) Entrepreneurs must embrace traditional assumptions and perspectives about how things ought to be because they support creativity.
A)True
B)False
Answer: False
Q3) Steps in the patent process include ________.
A)establishing whether it is a novelty
B)documenting and verifying the date the idea was first conceived
C)searching existing patents
D)All of the above
Answer: D
Q4) Businesses typically foster an environment that encourages creativity.
A)True
B)False
Answer: False
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Chapter 4: Conducting a Feasibility Analysis and Designing a Business Model
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) The Internet is an example of a(n)________ force.
A)economic
B)demographic
C)technological
D)sociocultural
Q2) New entrants to an industry can erode existing companies' market share and profits.
A)True
B)False
Q3) The first step in assessing industry attractiveness is to paint a picture of the industry in broad strokes, assessing it from a "macro" level.
A)True
B)False
Q4) A(n)________ group involves enlisting a small number of potential customers to get feedback on specific issues about the company's product or service.
A)Delphi
B)focus
C)industry
D)trade
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Chapter 5: Crafting a Business Plan and Building a Solid Strategic Plan
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) Small companies' core competencies are often the result of benefits such as agility, speed, closeness to customers, superior service, and innovative ability - all of which are size advantages that allow them to do things that their larger competitors cannot.
A)True
B)False
Q2) The ideal strategic planning process for a small company should start with setting objectives.
A)True
B)False
Q3) Which of the following is not a recommended method of collecting competitive intelligence?
A)Attend trade shows and collect competitors' sales literature.
B)Buy competitors' products or services and assess their quality and features, benchmarking their products and services against yours.
C)Pay competitors' employees to become informants about their companies' strategies, markets, and trade secrets.
D)Watch for employment ads from competitors to determine the types of workers they are hiring.
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Chapter 6: Forms of Business Ownership
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83 Flashcards
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Sample Questions
Q1) A general partner is personally liable only for the amount of money he has invested in the partnership.
A)True
B)False
Q2) Marco is opening a new computer repair shop. He is owner and sole employee. He has paid the appropriate fees and licensing costs and begun his business. This is an example of a(n)________.
A)S corporation
B)partnership
C)corporation
D)sole proprietorship
Q3) Would a limited liability corporation be any better for Duke? Why or why not?
Q4) Which form of ownership generally has the least ability to accumulate capital?
A)Partnership
B)Sole proprietorship
C)Corporation
D)S corporation
Q5) Some forms of ownership are much more costly and involved to create.
A)True
B)False
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Chapter 7: Buying an Existing Business
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80 Flashcards
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Sample Questions
Q1) The majority of the deals make it from the letter of intent stage to the final closing. A)True
B)False
Q2) Asset valuation is an important part of the due diligence process. Why?
Q3) The goal of the due diligence process is to discover exactly what the buyer is purchasing and avoid any unpleasant surprises ________ the deal is closed.
A)before B)after C)during D)while
Q4) The due diligence process that involves analyzing and evaluating an existing business for possible purchase is much less time-consuming than the process of developing a comprehensive business plan for a start-up. A)True
B)False
Q5) Communicating with employees helps smoothen the transition. A)True B)False
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Chapter 8: Franchising and the Entrepreneur
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Sample Questions
Q1) The principle of placing smaller franchise units directly in the paths of potential customers is referred to as intercept marketing.
A)True
B)False
Q2) Most franchisors provide extensive financial help such as loans and low-rate financing for their franchises.
A)True
B)False
Q3) Franchisors generally do which of the following regarding financial assistance to franchisees?
A)Provide direct financing.
B)Assist in finding financing and occasionally provide direct assistance in a specific area.
C)Waive royalty fees for franchisees not making an adequate profit.
D)Franchisors provide no assistance because having or finding financing is a requirement for qualifying for a franchise.
Q4) Define franchising. Explain the three types of franchising. Which is the fastest-growing segment?
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Chapter 9: Building a Powerful Bootstrap Marketing Plan
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Giving customers a chance to complain about a problem usually is fruitless; once a business makes a customer angry, (s)he typically will not buy from that company again under any circumstances.
A)True
B)False
Q2) The majority of customers who stop patronizing a particular store do so because ________.
A)its prices are too high
B)its quality is too low
C)an indifferent employee treated them poorly
D)it failed to advertise enough
Q3) A "shotgun approach" to marketing is the small business' secret to competing successfully with larger rivals and their bigger marketing budgets.
A)True
B)False
Q4) The specific group of customers at whom a company aims its goods and services is its target market.
A)True
B)False
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Chapter 10: E-Commerce and the Entrepreneur
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) For many entrepreneurs, the key barrier to not using the Web as a business tool is that they do not see any benefits to selling online.
A)True
B)False
Q2) The average conversion rate for e-commerce sites is ________ percent.
A)2.82
B)3.16
C)4.91
D)5.71
Q3) An important part of any e-commerce effort is ________.
A)the use of current technology and its successful implementation
B)the ability to understand the underlying business and to develop a workable business model
C)to have a site that is fast and dependable
D)to have high traffic to the site, regardless of the customers' interest in what the site actually offers
Q4) How significant are the Internet and a Web site presence to small businesses of the twenty-first century? How have they transformed the way we do business?
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Chapter 11: Pricing and Credit Strategies
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114 Flashcards
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Sample Questions
Q1) A technique that greatly simplifies the pricing function by pricing different products in a product line at different price points, depending on their quality, features and cost, is referred to as odd pricing.
A)True
B)False
Q2) ________ pricing strategies work best in markets where no "elite" segments exist or in highly competitive markets where similar products are trying to gain a foothold.
A)Skimming
B)Sliding-down-the-demand-curve
C)Odd
D)Penetration
Q3) For most service firms, labor and profit comprise the greatest portion of the cost of the service.
A)True
B)False
Q4) Dynamic pricing may raise ethical questions.
A)True
B)False
Q5) If Miller desires a profit of $120,000, what price should she set?
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Chapter 12: Creating a Successful Financial Plan
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) ________ ratios indicate how efficiently the small firm is being managed.
A)Liquidity
B)Profitability
C)Leverage
D)Operating
Q2) The ________ ratio measures the percentage of total assets financed by a small company's creditors compared to its owners.
A)debt
B)times-interest-earned
C)net sales to total assets
D)total asset turnover
Q3) Explain the three basic financial reports that a small business uses in building a financial plan: the balance sheet, the income statement, and the statement of cash flows. What information is contained in each, and of what value is it to the small business owner?
Q4) Cash requirements can be determined by dividing cash expenses by ________.
A)liabilities
B)accounts receivables
C)total assets
D)the average inventory turnover
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Chapter 13: Managing Cash Flow
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Sample Questions
Q1) The cash budget is nothing more than a forecast of the firm's cash inflows and outflows for a specific time period, and it will never be completely accurate.
A)True
B)False
Q2) A small business whose sales are highly variable, such as a seasonal business, should use a short cash planning horizon.
A)True
B)False
Q3) A sweep account is a checking account that automatically "sweeps" all funds in a company's checking account above a predetermined minimum into an interest-bearing account.
A)True
B)False
Q4) A cash budget is only as accurate as the ________ forecast from which it is derived.
A)profit B)receivables
C)income D)sales
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Chapter 14: Choosing the Right Location and Layout
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Sample Questions
Q1) Choosing a location in which many other businesses have failed can create a negative image, even for a "new" business.
A)True
B)False
Q2) Identify and briefly discuss the eight factors an entrepreneur should consider when selecting the city in which to locate her business.
Q3) ________ is a system that divides a county or city into small cells or districts to control the use of land, buildings, and sites.
A)An enterprise zone
B)Zoning
C)Apportioning
D)Redistricting
Q4) Briefly explain the fundamental considerations in evaluating an existing building as a location. Utilize the explanation of zoning laws, ergonomics and the Americans with Disabilities Act in your explanation.
Q5) What publications could Fred use to investigate whether or not this is a good region for this bar?
Q6) What are the advantages and disadvantages of the restaurant's current location?
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Chapter 15: Sources of Financing: Equity and Debt
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117 Flashcards
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Sample Questions
Q1) The recent turbulence in the financial markets has caused banks to ________ their lending standards, making it ________ for small businesses to qualify for loans.
A)tighten; easier
B)tighten; more difficult
C)relax; easier
D)relax; more difficult
Q2) ________ loans are typically unsecured.
A)Equity
B)Capital
C)Asset-based
D)Term
Q3) The Community Advantage Loan Program provides loans to communities that have suffered a natural disaster.
A)True
B)False
Q4) Capital is any form of wealth employed to produce more wealth.
A)True
B)False
Q5) What other sources of capital would you suggest that Christine explore?
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Chapter 16: Global Aspects of Entrepreneurship
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133 Flashcards
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Sample Questions
Q1) Which of the following is not one of the three major advantages to establishing an international location?
A)Lower production costs
B)Need for smaller staff
C)Lower marketing costs
D)Development of an intimate knowledge of customer preferences
Q2) An embargo is ________.
A)a duty, or tax, that a government puts on products that are imported into the country
B)the maximum amount of a product that can be imported or exported
C)a prohibition or suspension of foreign trade of specific imports or exports
D)a law that a government uses to regulate products that are imported into the country
Q3) The second step to creating a sound export strategy involves ________.
A)analyzing the product or service
B)recognizing the potential to export
C)analyze your commitment
D)research market and pick your target
Q4) Identify and discuss the domestic barriers to trade.
Q5) Identify and discuss the international barriers to trade.
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Chapter 17: Building a New Venture Team and Planning for the Next Generation
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119 Verified Questions
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Sample Questions
Q1) Would you like working for Norm? Why or why not?
Q2) Business owners must recognize that what they do before they start interviewing candidates for a position determines to a great extent how successful they will be in the hiring process.
A)True
B)False
Q3) Discuss the three options that entrepreneurs may consider when they sell their business to insiders.
Q4) The classic auto assembly line is based on which job design principle?
A)Job enlargement
B)Job enrichment
C)Job simplification
D)Job rotation
Q5) Small companies are least likely to make hiring mistakes because most owners have developed clearly defined job specifications and job descriptions.
A)True
B)False
Q6) Is Norm Schultz correct in his attitude about workers not wanting recognition?
19
Q7) What criteria should Wallace use in selecting employees?
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