Small Business Management Exam Bank
Course Introduction
Small Business Management introduces students to the fundamental principles and practices involved in launching, operating, and growing a small business. The course explores key topics such as business planning, financing, marketing strategies, operational management, legal considerations, and risk assessment specifically tailored to small business environments. Students will engage in practical activities such as developing business plans, analyzing case studies, and discussing current challenges faced by entrepreneurs. Emphasis is placed on fostering an entrepreneurial mindset, effective decision-making, and innovative problem-solving skills necessary for the successful management of a small enterprise.
Recommended Textbook
Better Business 3rd Edition by Michael
R. Solomon
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21 Chapters
1726 Verified Questions
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Page 2
Chapter 1: Business Basics
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Sample Questions
Q1) Jarvis runs a restaurant that has had a lot of complaints from customers lately.Jarvis is a strict manager and prefers to make all the decisions himself.A concerned friend recommends that Jarvis delegate more decision-making responsibility to his employees.Which of the following would be the MOST likely result of Jarvis' delegating responsibility?
A) Customers will be upset because the restaurant is being run differently.
B) Customer satisfaction will improve because employees can be more responsive to customer needs.
C) Customer satisfaction will decrease because employees will make the wrong decisions.
D) Employees will quit because of the change in Jarvis' management style.
E) The restaurant will need to increase its prices.
Answer: B
Q2) As more profit is generated,a company is able to increase its productivity. A)True
B)False
Answer: True
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Chapter 2: Economics and Banking
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Q1) Describe how each of the four degrees of competition affect supply and demand. Answer: (1)In a monopoly,there is only one supplier of a good or service.Supply is not as high as it would be in a different form of competition,but demand for that good or service will be very high.
(2)In an oligopoly,there is more supply than in a monopoly and more competition.Prices tend to be very similar between products because the products themselves are similar.Competition is centered on product differentiation in order to capture a larger share of the market rather than on price.
(3)In a monopolistic competition,there are many buyers and sellers and both supply and demand are high.Monopolistic competition is driven by the differences consumers perceive between similar products.This perceived distinction between products is often driven by differences in price.
(4)In perfect competition,there are many buyers and sellers of virtually identical products.Supply and demand are both high,but because consumers do not differentiate between products and there are so many products available,no single seller can set the price.
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Chapter 3: Ethics in Business
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Sample Questions
Q1) Corporate social responsibility is mainly concerned with how a company affects the ________.
A) family
B) investor
C) community
D) vendors
E) stockholders
Answer: C
Q2) Living ethically can provide all of the following benefits EXCEPT ________.
A) reduced stress-related ailments
B) improved personal happiness
C) heightened agreement between personal and communal values
D) improved capability of dealing with challenging situations
E) avoidance of a variety of kinds of mental and physical damage
Answer: C
Q3) Companies must uphold their moral and ethical obligations to consumers above their need to respond to investors.
A)True
B)False
Answer: False
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Chapter 4: Business in a Global Economy
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Sample Questions
Q1) Exchange rates are the rates at which currencies are converted into another country's currency.
A)True
B)False
Q2) When all countries focus on producing those products for which they have a comparative advantage,collectively,they will produce more products.
A)True
B)False
Q3) Brazil has experienced rapid economic growth and increased sales of its products to other countries.This is an example of a(n)________.
A) increase in democratization
B) growing role for developing nations
C) rise in non-U.S. multinational enterprises
D) rise in non-U.S. foreign direct investment
E) dramatic decline in trade barriers
Q4) A free trade area is a compact abolishing trade barriers among member countries.
A)True
B)False
Q5) Give an example of globalization of markets.
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Chapter 5: Small Business and the Entrepreneur
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Q1) If you're purchasing an existing business or a franchise,banks may offer lines of credit to help you ________.
A) create a business plan
B) find an angel investor
C) avoid borrowing from a savings and loan association
D) make payroll when business is slow
E) repay loans from family and friends
Q2) When naming a business,which of the following approaches would NOT be a mistake?
A) hiring a company to create a name
B) using geographic names
C) involving employees or clients in the naming decision
D) using a generic name
E) using a name that tries to marry description with product
Q3) Small business owners can seek professional advice at no cost through ________.
A) the Service Corps of Retired Executives
B) Fortune 500 companies
C) the Volunteer Corps of America
D) McKinsey & Company management consulting
E) the Better Business Bureau
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Chapter 6: Forms of Business Ownership
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Q1) Leslie is excited to begin a personal shopping business.She is planning to have employees and is concerned about losing personal assets should something happen to the business.She would like to focus on profits and building a business but she does not want her business to pay its own taxes.What ownership structure is Leslie's best choice?
A) sole proprietor
B) C corporation
C) S corporation
D) cooperative
E) limited partnership
Q2) Owners of limited liability companies are referred to as ________,while owners of corporations are called ________.
A) partners; shareholders
B) shareholders; partners
C) shareholders; members
D) members; shareholders
E) partners; members
Q3) Not-for-profit organizations may NOT earn a profit.
A)True
B)False
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Chapter 7: Business Management and Organization
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Sample Questions
Q1) Once a company's vision and mission statement have been articulated,management must assess a company's SWOT,which stands for ________.
A) strengths, weaknesses, operations, and targets
B) strengths, world view, obligations, and tasks
C) strengths, weaknesses, opportunities, and threats
D) strengths, weaknesses, organization, and threats
E) strengths, world view, organization, and targets
Q2) Tactical plans are made with a six-month to one-year horizon in mind.
A)True
B)False
Q3) It is virtually impossible to learn decision-making skills.Some people are decisive by nature and others are indecisive.
A)True
B)False
Q4) In analyzing a company's strengths and weakness,management must analyze the company's internal resources.Name at least three aspects of these internal resources.
Q5) What are the four primary functions of management?
Q6) Why are horizontal structures called the "model for the knowledge age"?
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Chapter 8: Motivation, Leadership, and Teamwork
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Sample Questions
Q1) William was a factory worker in the 1920s.His company trained him in the exact sequence of steps he needed to make each day so that he would work to maximum productivity.William's company was using the principles of ________.
A) uncertainty management
B) management by objectives
C) Theory Z management
D) scientific management
E) strength-based management
Q2) Teresa likes her job and believes that the tasks she completes each day actually make a difference to the success of her company.She thinks there's always a good chance she'll be rewarded in some way for her work,perhaps even with a very large raise.According to Vroom's model,Teresa's motivation is high.
A)True
B)False
Q3) According to McClelland's "three needs" theory,when an individual has multiple needs,one need tends to dominate the others.
A)True
B)False
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Chapter 9: Human Resource Management
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Sample Questions
Q1) Think of your ideal job.Write a job description and job specifications for it.
Q2) James is a pizza delivery driver and earns just over eight dollars an hour.This compensation is known as a fixed salary.
A)True
B)False
Q3) Recently,negotiations between a grocery store union and their employer broke down.The employees staged an organized effort to encourage their supporters to shop for groceries elsewhere.The employees organized a ________.
A) boycott
B) lockout
C) strike
D) picket
E) collective bargain
Q4) Why might performance management systems be preferred to the performance appraisal system?
Q5) Victor has no desire to supervise other employees,so his company has no way to offer him promotional opportunities.
A)True
B)False
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Chapter 10: Online Business and Technology
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Sample Questions
Q1) Which of the following statements is TRUE about the impact of technology on employee privacy?
A) Technology makes it more difficult for companies to access private information about employees.
B) Technology ensures that individuals will have the same privacy protections at work as they do at home.
C) Technology ensures that employees can access more private information about their fellow employees.
D) Technology allows companies to access information about employees' behavior on the job.
E) Technology protects employees from being monitored in the workplace.
Q2) What is the current situation regarding sales taxes on Internet commerce? Who benefits? Who loses? Is the situation fair? Why or why not?
Q3) IT departments must ensure that companies use the newest technology that is available.
A)True
B)False
Q4) What aspect of social media is Kickstarter an example of,and what does it do?
Q5) Define and describe viral marketing.Use at least one example in your answer.
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Chapter 11: Production, operations, and the Supply Chain
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Sample Questions
Q1) Crystal is the production manager at Pawelk's,a vacuum cleaner manufacturer.When ordering from her supplier,she must ensure that it does all of the following EXCEPT
A) provide trusted quality
B) meet product deadlines
C) deliver appropriate quantities
D) gives positive recommendations
E) offers a competitive price
Q2) Good supply chain management is key to Ikea's success.
A)True
B)False
Q3) Which of the following computer-based programs lets a manager know what resources are needed by a particular date to fill an order on time?
A) statistical process control
B) computer-aided manufacturing
C) materials requirement planning
D) stock book solution
E) radio frequency identification
Q4) Why is supply chain management important?
Q5) How does manufacturing affect the global economy?
Page 13
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Chapter 12: Marketing and Consumer Behavior
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Sample Questions
Q1) The competitive advantages or core competencies that a company has at its disposal to meet a specified marketing objective are called its ________.
A) opportunities
B) consumer confidence level
C) marketing mix
D) internal strengths
E) external offsets
Q2) What are the five steps in the marketing process?
Q3) The market mechanism benefits society by ensuring that ________.
A) more people will want to buy more BlackBerrys
B) society will maintain the current standard of living
C) resources are used to increase the benefits of low-value products
D) scarce resources are channeled into products most desired by society
E) raw materials and labor flow into the production of goods with lowest demand
Q4) What factors do B2B purchasers typically take into consideration when making a purchasing decision?
Q5) Why is it becoming more common to find labels on products published in Spanish,Spanish language television stations and newspapers,and companies marketing their products to the Spanish-speaking population in the United States?
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Chapter 13: Product Development and Pricing Strategies
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Sample Questions
Q1) Give an example of a company following the pricing objective of maximizing profits.
Q2) What are the seven steps in new product development?
Q3) Distinguish between product line length and product mix width.
Q4) Demand-based pricing (sometimes called value-based pricing)is pricing a good or service based on the demand for the product or its perceived value.
A)True
B)False
Q5) A new freelance writer who sets a price at a level to generate just enough revenues to pay expenses is using the pricing objective of ________.
A) covering costs to survive
B) creating an image
C) achieving social objectives
D) maximizing profits
E) matching the status quo prices
Q6) How does a company benefit from product differentiation?
Q7) Give an example of a loss leader.
Q8) What is an unsought service? Provide an example.
Page 15
Q9) List five methods for extending a product life cycle.
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Chapter 14: Promotion and Distribution
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Sample Questions
Q1) When different members of an organization's marketing team are each allowed to develop their own unique communication with customers,this MOST often promotes
A) diversity in the workplace
B) consumer confusion
C) improved employee relations
D) improved customer relations
E) a clear, unified message
Q2) Which of the following is NOT one of the common public relations tools?
A) globally integrated messages
B) controlled messages
C) publicity messages
D) semi-controlled messages
E) sponsorship of special events
Q3) What distinguishes agents from brokers?
Q4) Consumer sales promotions are becoming more common because they help segment markets and they are cost-effective.
A)True
B)False
Q5) Name at least three forums in which semi-controlled messages can be placed.
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Chapter 15: Financing and Tracking Business Operations
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Sample Questions
Q1) Because BackBeatMusic.com's current assets are less than its current liabilities,the company has positive working capital.
A)True
B)False
Q2) CFO Jorge Sierra needs short-term financing for a large corporation.He decides to issue an unsecured debt instrument of $200,000 to be paid back in 150 days.Jorge is using ________.
A) a mortgage
B) factoring
C) commercial paper
D) retained earnings
E) trade credit
Q3) Government and not-for-profit accounting refers to the accounting required for organizations that are not focused on generating a profit,such as legislative bodies and charities.
A)True
B)False
Q4) What is a cash flow budget?
Q5) What are three measurements used to analyze an income statement?
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Chapter 16: Investment Opportunities in the Securities Market
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Q1) A retired person of modest means is best served by purchasing growth stocks.
A)True
B)False
Q2) What does NAV stand for?
A) new archive value
B) net asset value
C) net allocation variety
D) new asset venture
E) net allocation venture
Q3) The first time a company sells stock,it does so through an initial public offering.
A)True
B)False
Q4) What are the basic characteristics of a bull market and a bear market in terms of stock market performance and investor confidence?
Q5) The S&P 500 tracks more companies than does the DJIA. A)True
B)False
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Q6) What factors can affect a person's risk tolerance,and how can risk tolerance change over time?
Chapter 17: Business Law
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Sample Questions
Q1) What government body was established in 1970 to "protect human health and the environment?"
A) FTC
B) EPA
C) UCC
D) DMCA
E) OSHA
Q2) ________ form the basis for much personal and business interaction,including when a company hires another company or individual to do work for them or when property is bought and sold.
A) Contracts
B) Precedents
C) Principles
D) Codes
E) Courts
Q3) Can anyone enter into a business contract?
Q4) The legal framework in which business is conducted is called business law.
A)True
B)False
Q5) What is the FTC's interest in mergers?
Page 19
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Chapter 18: Constructing an Effective Business Plan
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Q1) Which section contains an analysis of whether there will be enough customers to purchase the product in the future?
A) market research
B) market investment
C) competitive assessment
D) promotional plan
E) financials
Q2) "Indulge and treat yourself to a luxurious day at Shasta Mountain Spa and experience rejuvenation and peace" is a competitive advantage statement.
A)True
B)False
Q3) Which section of a business plan lists what a company thinks customers would be willing to pay for the merchandise?
A) financials
B) sales and promotion
C) product
D) market analysis
E) executive summary
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Chapter 19: Business Communications
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Q1) Like exchanging e-mails and attachments,there are timing and version issues to contend with when using wikis,making it difficult to use them in a team setting.
A)True
B)False
Q2) One good way to practice active listening skills is to ________.
A) try to think of what you are going to say next on the same subject while you listen
B) jot down your opinions on the subject matter while you listen
C) repeat back points that the speaker made when the speaker is finished
D) discuss your own thoughts on the subject when the speaker is finished
E) make sure you have a solution in your mind before hearing what everyone else has to say
Q3) Which of the following is the most used form of digital communication in the business world?
A) blogs
B) wikis
C) e-mail
D) chat rooms
E) social networks
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Chapter 20: Finding a Job
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Q1) When attending a networking event such as a job fair,it is important to let people know right away that you are looking for a job,so ask for a job right away.
A)True
B)False
Q2) Which of the following is a question that an interviewer is legally allowed to ask a job applicant?
A) Where were you last employed?
B) Do you have children?
C) How old are you?
D) Where were you born?
E) Are you affiliated with any religion?
Q3) Which of the following is the BEST resource for college students to use when exploring potential career paths and trying to find current job openings?
A) human resources department
B) campus career resources center
C) student services office
D) academic support center
E) bursar's office
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22
Chapter 21: Personal Finance
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Sample Questions
Q1) An arrangement that pays to replace your possessions if they are stolen is ________ insurance.
A) health
B) homeowner's
C) life
D) disability
E) malpractice
Q2) Special retirement pretax savings accounts created by the government are
A) Roth IRAs
B) pension plans
C) IRAs
D) NDAs
E) 401(k) plans
Q3) Planning to buy a house in ten years is an example of financial planning step 2: set financial goals.
A)True
B)False
Q4) Give an example of an unexpected expense.
Q5) What is a credit score?
Page 23
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