Principles of Business Exam Review
Course Introduction
Principles of Business introduces students to the foundational concepts, practices, and structures within the world of commerce. Covering topics such as business organization, management, marketing, finance, human resources, and the external business environment, the course provides a comprehensive overview of how businesses operate and contribute to the economy. Students will explore ethical considerations, entrepreneurship, global business trends, and the role of technology in modern enterprises. By understanding these fundamental principles, learners are equipped to analyze business decisions, develop strategic thinking, and appreciate the dynamic nature of the corporate world.
Recommended Textbook
Business A Changing World 9th Edition by
O. C. Ferrell
16 Chapters
1518 Verified Questions
1518 Flashcards
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Page 2
Chapter 1: The Dynamics of Business and Economics
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Businesses differ from nonprofit organizations in that a business's focus is on A) price.
B) goods.
C) profit.
D) organization.
E) plans.
Answer: C
Q2) A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with limited resources.
A)True
B)False
Answer: True
Q3) Countries measure the state of their economies to A) determine whether they are expanding or contracting.
B) regulate wages and employment.
C) let other nations know the state of their economic health.
D) avoid taking corrective action.
E) control government spending.
Answer: A
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Page 3
Chapter 2: Business Ethics and Social Responsibility
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94 Verified Questions
94 Flashcards
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Sample Questions
Q1) The right to safety requires that businesses provide a safe place for consumers to shop.
A)True
B)False
Answer: True
Q2) If Sony was investigated for allegedly raising prices of its PlayStation excessively during the Christmas buying season and thereby manipulating the supply of games available at that time,this would be an ethical issue concerned primarily with
A) conflict of interest.
B) communications.
C) fairness and honesty.
D) cost control.
E) game rules.
Answer: C
Q3) Codes of ethics foster ethical behavior because they expand the opportunity to behave unethically.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Business in a Borderless World
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Why does direct investment have a greater degree of commitment than a countertrade agreement?
Answer: Countertrade agreements merely involve bartering products for other products instead of currency.There is no large commitment of time,capital,or other resources.Direct investment,on the other hand,involves a large degree of financial investment in facilities,training,and employees.It also involves an element of risk because a company is setting up permanent or semi-permanent facilities in a country that differs politically,economically,and culturally from the home country.
Q2) Companies doing business internationally have traditionally used a globalization strategy.
A)True
B)False
Answer: False
Q3) A common reason for establishing quotas or tariffs is to prohibit dumping.
A)True
B)False
Answer: True
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Chapter 4: Options for Organizing Business
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Sample Questions
Q1) Sole proprietorships have the least degree of secrecy.
A)True
B)False
Q2) A written authorization assigning a stockholder's voting privilege to another is a
A) stock sale.
B) stock certificate.
C) stock split.
D) dividend restructuring.
E) proxy.
Q3) While corporations account for the majority of businesses in the United States,they represent a small percentage of profits.
A)True
B)False
Q4) Most sole proprietorships focus on manufacturing.
A)True
B)False
Q5) What is a vertical merger and why would a firm attempt one? What are the benefits?
Q6) Define the partnership form of business organization.What are its advantages?
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Chapter 5: Small Business, entrepreneurship, and Franchising
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Although some businesses are less risky than others,overall the financial risks of running a small business are
A) very low.
B) moderate.
C) insurmountable.
D) low.
E) very high.
Q2) The Small Business Administration offers managerial and financial assistance to small businesses.
A)True
B)False
Q3) What is not a decision that Jack and Bruce have to make before starting their business?
A) What organizational form to use
B) How to market their product
C) How to determine what to sell
D) The general idea for their business
E) The target market
Q4) What advice would you give Jack and Bruce as they start up their business?
Page 7
Q5) What are some of the advantages of small-business ownership?
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Chapter 6: The Nature of Management
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95 Flashcards
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Sample Questions
Q1) Downsizing is an aspect most closely associated with A) staffing.
B) planning.
C) organizing.
D) controlling.
E) directing.
Q2) Management takes place only in business settings.
A)True
B)False
Q3) A department manager is a first-line manager.
A)True
B)False
Q4) Having conceptual skills often means being able to A) perceive the causes of problems.
B) identify relevant issues and recognize their importance.
C) use a computer.
D) motivate employees.
E) think creatively and in abstract terms.
Q5) Describe the major functions of management.
Q6) Why is monitoring the consequences of decisions important?
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Chapter 7: Organization, teamwork, and Communication
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Sample Questions
Q1) Organizational growth requires organizing different resources.
A)True
B)False
Q2) A temporary group of employees responsible for bringing about a particular change is a
A) task force.
B) product-development team.
C) project team.
D) committee.
E) self-directed work team.
Q3) A department store's organizational structure defines the relationships between A) salespersons and merchandise buyers.
B) credit managers and maintenance people.
C) department managers and customers.
D) maintenance people and salespersons.
E) all the individuals working together to achieve its objectives.
Q4) Horizontal communication involves the traditional flow of information from upper organizational levels downward.
A)True
B)False
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Chapter 8: Managing Service and Manufacturing Operations
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95 Flashcards
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Sample Questions
Q1) The ISO 9000 is a series of international quality management standards for organizations.
A)True
B)False
Q2) What does McKing Corporation wish to do?
A) To release a new line of sandwiches
B) To start selling its food products in grocery stores
C) To diversify into selling pizzas
D) To start selling insurance
E) McKing wants to keep selling the same products it always has
Q3) The term used to refer to the raw materials,components,completed or partially completed products,and pieces of equipment a firm uses is
A) inventory.
B) order quantities.
C) production.
D) tangibles.
E) intangibles.
Q4) Determining quality can be difficult.
A)True
B)False
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Chapter 9: Motivating the Workforce
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Sample Questions
Q1) What is the difference between an intrinsic and an extrinsic reward? Provide an example of each.
Q2) The Hawthorne Studies earned their name because they were conducted by Mr.Hawthorne.
A)True
B)False
Q3) Flextime is associated with a number of benefits.One of the more unexpected ones is
A) better communication between managers and employees.
B) less commuter traffic and congestion.
C) more physical activity and better sleeping habits.
D) greater productivity in operations management.
E) more efficiency.
Q4) Human relations is concerned with all of the following except A) the needs of employees.
B) employee motivation.
C) job performance.
D) morale.
E) sales.
Q5) What is Herzberg's Two-Factor Theory? Define hygiene and motivational factors.
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Chapter 10: Managing Human Resources
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Sample Questions
Q1) Vikram,a Ph.D. ,has worked in the Monsanto research lab as a chemist for several years.He is currently participating in a series of management seminars at company expense.This is an example of A) development.
B) orientation.
C) training.
D) an assessment center.
E) performance appraisal.
Q2) A separation is a horizontal move from one job to another within a company.
A)True
B)False
Q3) Determining,through observation and study,the specific tasks that comprise a job and the knowledge,skills,and abilities necessary to perform it is called A) job description.
B) job specification.
C) job design.
D) job analysis.
E) job designation.
Q4) What is profit sharing? Why has it gained in popularity?
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Chapter 11: Customer-Driven Marketing
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95 Flashcards
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Sample Questions
Q1) The marketing mix is a combination of
A) product,price,promotion,and distribution.
B) compensation,regulation,segmentation,and ethics.
C) sales,advertising,and publicity.
D) product,price,advertising,and distribution.
E) product,sales,advertising,and segmentation.
Q2) Psychographic characteristics of segmentation include personality characteristics,motives,and lifestyles.
A)True
B)False
Q3) What are the functions of marketing?
Q4) Anna is active in recycling and tree-planting programs in her community and she refuses to buy products that have excessive packaging.This illustrates which of the following factors of buyer behavior?
A) Attitude
B) Personality
C) Social class
D) Motivation
E) Reference group
Q5) What is the marketing environment?
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Chapter 12: Dimensions of Marketing Strategy
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Sample Questions
Q1) A light bulb used to provide light for workers on an assembly line would be classified as what type of product?
A) Mechanical
B) Technical
C) Business
D) Commercial
E) Consumer
Q2) Design a marketing strategy for the new product line.
Q3) Factors such as characteristics of the intended audience,the objective,and the platform used can all affect how an advertising campaign is constructed and its message.
A)True
B)False
Q4) Price is the least flexible variable in the marketing mix.
A)True
B)False
Q5) Price skimming is charging a low price to help a product enter the market and gain market share rapidly.
A)True
B)False
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Chapter 13: Digital Marketing and Social Networking
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95 Flashcards
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Sample Questions
Q1) What is a likely reason that Myspace now lags behind Facebook?
A) Its focus on art and music
B) Its focus on teens and young adults
C) A failure to include a "like" button
D) A failure to innovate
E) A failure to promote viral marketing
Q2) Media sharing sites tend to allow businesses to be more _______ than reactive because they do not permit companies to respond to or interact with customers.
A) pricing oriented
B) distributional
C) promotional
D) progressive
E) virtual
Q3) Companies sometimes utilize Facebook and similar sites to help generate interest about new products.
A)True
B)False
Q4) Discuss the appeal to marketers of online social networking sites.Why are marketers utilizing them more and more?
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Chapter 14: Accounting and Financial Statements
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Sample Questions
Q1) Billy Banker has to decide whether to lend the Safe Toy Company $10,000 to pay suppliers.He will
A) review the company's financial statements.
B) give it the loan because he likes its toys.
C) see if its gum blows good bubbles.
D) ask its competition what to do.
E) turn down the loan application.
Q2) Owners' equity includes financial obligations to short-term creditors and amounts owed to suppliers to goods and services purchased on credit.
A)True
B)False
Q3) When a company wants to place a value on a physical asset for its balance sheet,it must
A) reduce the value by the amount the asset has depreciated.
B) auction the asset off.
C) ask its competitors what the asset is worth.
D) price a new one.
E) increase the value by the amount the asset has appreciated.
Q4) How do managers and owners use financial statements?
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Chapter 15: Money and the Financial System
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Sample Questions
Q1) When a dollar bill is handled hundreds of times and is still being used,it has which of the following characteristics?
A) Portability
B) Divisibility
C) Durability
D) Stability
E) Difficult to counterfeit
Q2) Which was not a problem during the most recent financial crisis?
A) Dramatic declines in bank assets
B) Collapse of the subprime mortgage market
C) Declining home values and foreclosures
D) Escalating home values
E) Excessively risky securities
Q3) The U.S.government created the Troubled Asset Relief Program (TARP)in an effort to prevent economic collapse during the most recent financial recession.
A)True
B)False
Q4) What is a mutual fund?
Q5) What are the three functions of money?
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Chapter 16: Financial Management and Securities Markets
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Sample Questions
Q1) The last in line for the payment of profits are the
A) bondholders.
B) common stockholders.
C) preferred stockholders.
D) government.
E) customers.
Q2) Two common means of financing with long-term liabilities are equity financing and debt financing.
A)True
B)False
Q3) The face value of a bond,its initial sales price,is typically ____.
A) $1
B) $10
C) $100
D) $1,000
E) $10,000
Q4) Why would a firm want to invest its idle cash?
Q5) A bond can be transferred from one owner to another.
A)True
B)False
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