Small Business Management
Final Test Solutions
Course Introduction
Small Business Management explores the fundamental principles and practices required to successfully launch, operate, and grow a small business. The course covers essential topics such as business planning, financing, marketing, management of resources, and legal considerations unique to small enterprises. Through case studies, practical exercises, and real-world examples, students develop skills in strategic decision-making, problem-solving, and innovation, preparing them to navigate the challenges and opportunities of small business ownership or management in a dynamic marketplace.
Recommended Textbook
Contemporary Business 16th Edition by
Louis E. Boone
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17 Chapters
2631 Verified Questions
2631 Flashcards
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Page 2
Chapter 1: The Changing Face of Business
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156 Verified Questions
156 Flashcards
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Sample Questions
Q1) Today, workers are much less likely to remain with the same employer throughout their entire careers.
A)True
B)False
Answer: True
Q2) Managers are beginning to recognize the different needs of workers of different ages.
A)True
B)False
Answer: True
Q3) Which of the following is considered to be the most fundamental right of the private enterprise system?
A) The right to private property
B) The right to guaranteed profits
C) The right to exercise price discrimination
D) The right to fair competition
Answer: A
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Page 3
Chapter 2: Business Ethics and Social Responsibility
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183 Verified Questions
183 Flashcards
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Sample Questions
Q1) When management considers social and economic issues in decision making, the company is practicing _____.
A) gatekeeping
B) consumerism
C) social responsibility
D) altruism
Answer: C
Q2) Bayarmaa discovered unlawful conduct at her company and notified authorities. Under the Sarbanes-Oxley Act of 2002, anyone who retaliates against Bayarmaa can be prosecuted.
A)True
B)False
Answer: True
Q3) Loyalty and truthfulness often conflict with one another in the business world.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Economic Challenges Facing Contemporary Business
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) The equilibrium price is established when the _____.
A) prevailing market price of an item is same as the price at which a consumer can buy the item
B) demand curve and the supply curve are parallel to each other
C) opportunity cost of a product is greater than its production cost
D) production cost of an item is greater than its selling price
Answer: A
Q2) During economic recession:
A) unemployment begins to decline as business activity accelerates.
B) businesses expand by hiring more employees.
C) people turn to lower-priced retailers for the goods they need.
D) consumer confidence about the future is optimistic.
Answer: C
Q3) As prices of goods and services rise, the quantity demanded will generally decline. A)True
B)False
Answer: True
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Page 5
Chapter 4: Competing in World Markets
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) Cultural sensitivity is not as important of an issue in cyberspace as it is in other communication realms.
A)True
B)False
Q2) A superior education system has proven to have no effect on comparative advantages in human resources.
A)True
B)False
Q3) A global marketing approach is ideal for marketing luxury items due to their universal appeal.
A)True
B)False
Q4) If a foreign company offers steel in the United States below the company's cost of production, the company might be accused of _____.
A) protective tariffs
B) dumping
C) a managed trade agreement
D) quota
Q5) Define offset agreement and describe how it might be beneficial to a small firm.
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Chapter 5: Forms of Business Ownership and Organization
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) The joining of two car manufacturing companies will be an example of a _____.
A) conglomerate company
B) horizontal merger
C) vertical merger
D) joint venture
Q2) Many small-business start-ups are more competitive because of technology and online resources.
A)True
B)False
Q3) Farid is the owner of a small mushroom farm in Pennsylvania. He would like to join hands with other growers to create an organization that will promote and distribute mushrooms. The form of ownership that would be most suited for Farid and other growers will be a(n) _____.
A) joint venture
B) open corporation
C) government-owned collective
D) cooperative
Q4) List the elements contained in a business plan.
Q5) Compare mergers and acquisitions.
Q6) What is a business incubator?
Page 7
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Chapter 6: Starting Your Own Business: the Entrepreneurship Alternative
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) Michelle works for a large bank that recently merged with another financial institution. Word of layoffs has been discussed. Michelle is most likely to become an entrepreneur in order to _____.
A) avoid taking risks
B) obtain job security
C) have employment as a cushion for failures
D) guarantee financial success
Q2) Most entrepreneurs are skeptical of using social media to promote their businesses. A)True
B)False
Q3) Concerning education and entrepreneurs, all of the following statements are correct EXCEPT:
A) today, many U.S. universities offer full-fledged majors in entrepreneurship.
B) a number of schools offer opportunities to intern with a start-up.
C) one has to major in business to become an entrepreneur.
D) some colleges and universities offer entrepreneurship courses outside the usual business curriculum.
Q4) List the eight major characteristics of an entrepreneur.
Q5) Distinguish between venture capitalists and angel investors.
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Chapter 7: Management, Leadership, and the Internal Organization
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194 Verified Questions
194 Flashcards
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Sample Questions
Q1) Which leadership style would allow sales personnel to participate in setting sales quotas along with the managers?
A) Free-rein
B) Judgmental
C) Democratic
D) Autocratic
Q2) The major benefits of the matrix structure come from its flexibility in adapting quickly to rapid changes in the environment and its capability of focusing resources on major problems or products.
A)True
B)False
Q3) Programmed decisions eliminate the time-consuming process of evaluating alternatives.
A)True
B)False
Q4) Provide examples of tools managers might use to reinforce corporate culture.
Q5) Tactical planning is the primary responsibility of middle management.
A)True
B)False
Q6) Describe each of the management functions. Page 9
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Page 10
Chapter 8: Human Resource Management: From
Recruitment to Labor Relations
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) An arbitrator's decision is not legally binding.
A)True
B)False
Q2) Flexible work plans have proven to reduce absenteeism and boost work productivity.
A)True
B)False
Q3) Gain sharing is a type of incentive compensation that provides:
A) increased stock options if the company is doing well.
B) bonuses for recruiting new employees for needed positions.
C) bonuses based on quality improvements.
D) salary increases based on learning new job skills.
Q4) Downsizing streamlines an organization.
A)True
B)False
Q5) The _____ is one of the most effective tools of the labor union.
A) strike
B) boycott
C) picket line
D) slowdown
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Chapter 9: Top Performance Through Empowerment,
Teamwork, and Communication
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146 Verified Questions
146 Flashcards
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Sample Questions
Q1) When speaking during business conversations, Americans tend to stand closer together than Latin Americans.
A)True
B)False
Q2) With _______, employees receive stock shares or the value of the stock upon retiring or leaving the company.
A) treasury bills
B) stock certificates
C) ESOPs (employee stock ownership plans)
D) stock options
Q3) Jose is part of a temporary team that works together to solve a specific problem and then disband. Jose is part of a cross-functional team.
A)True
B)False
Q4) Ilona likes to send out a weekly e-mail to all her employees discussing the results and challenges for the week. This is an example of an informal communication.
A)True
B)False
Page 12
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Chapter 10: Production and Operations Management
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166 Verified Questions
166 Flashcards
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Sample Questions
Q1) Describe just-in-time (JIT) inventory systems.
Q2) Which production process describes a manufacturing operation in which long production runs generate finished products over a period of time?
A) Continuous
B) Intermittent
C) Customized
D) Periodic
Q3) Part of Vicky's job as a production supervisor is to instruct each department on what work to do and the time in which they have to complete their work assignments. This part of her job is known as _____.
A) routing
B) dispatching
C) scheduling
D) planning
Q4) Define continuous production processes and intermittent production processes and provide an example of each.
Q5) Describe the differences between mass production, flexible production, and customer-driven production.
Q6) Describe a flexible manufacturing system.
Page 13
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Chapter 11: Customer-Driven Marketing
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156 Verified Questions
156 Flashcards
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Sample Questions
Q1) Compare comarketing and cobranding. Give an example of each.
Q2) As its ultimate goal, relationship marketing seeks to achieve customer satisfaction.
A)True
B)False
Q3) The location of a coffee shop franchise in a mall creates _____ utility.
A) place
B) ownership
C) form
D) time
Q4) A company's financial records are a source of _____ and _____ data for marketing researchers.
A) Internal; primary
B) external; primary
C) external; secondary
D) internal; secondary
Q5) Define consumer products and business products and provide an example of how a product could be classified as both.
Q6) What is marketing? Explain.
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Chapter 12: Product and Distribution Strategies
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184 Verified Questions
184 Flashcards
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Sample Questions
Q1) Merchant wholesalers are independently owned and take actual title to the goods they handle.
A)True
B)False
Q2) In which stage of the product life cycle do sales reach a saturation level, making further sales expansion difficult?
A) Maturity stage
B) Growth stage
C) Introductory stage
D) Decline stage
Q3) Marketing intermediaries often create financial burdens for manufacturers.
A)True
B)False
Q4) Differentiate between a merchant wholesaler and an agent or broker in terms of title to the goods.
Q5) Physical distribution is the movement of products from producer to user.
A)True
B)False
Q6) Describe methods used to extend life cycle of a product.
Q7) Define concept testing and focus groups.
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Chapter 13: Promotion and Pricing Strategies
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) Consumer products generally depend on pushing strategies.
A)True
B)False
Q2) Andrew is allowed to purchase a reasonably priced notebook computer for graduation. He sees one at Excel Electronics for $999.99 and calls his parents to assure them the computer costs "less than a thousand." Both Andrew and Excel Electronics are using _____ to downplay the price of the computer.
A) cost-based pricing
B) personal selling
C) price fixing
D) odd pricing
Q3) Advertising is a global activity.
A)True
B)False
Q4) If a product sells for $20 and the variable costs is $14, then the per-unit contribution to fixed costs is $34.
A)True
B)False
Q5) Describe advertising specialties.
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Chapter 14: Using Technology to Manage Information
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Which of the following statements is true about intranets?
A) Intranets require a Windows operation system.
B) Intranets can be accessed by anyone with an Internet connection.
C) Intranets provide secure connections between two points on the Internet.
D) Intranets allow information sharing within a company network.
Q2) One basic form of disaster prevention is routinely backing up software and data.
A)True
B)False
Q3) Grid computing is a cost-effective solution for smaller-sized companies.
A)True
B)False
Q4) Sales figures are an example of data.
A)True
B)False
Q5) In the context of security and ethical issues affecting information system, theft of equipment is a type of malware.
A)True
B)False
Q6) Provide examples of ethical concerns regarding information technology and information systems.
Page 17
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Chapter 15: Understanding Accounting and Financial Statements
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Assets can include intangible possessions such as patents and trademarks.
A)True
B)False
Q2) _____ activities focus on selling goods and services.
A) Marketing
B) Operating
C) Financing
D) Investing
Q3) What is the purpose of the balance sheet? Explain how it is organized.
Q4) Explain how exchange rates influence international accounting practices. Why was the International Accounting Standards Committee established?
Q5) The Securities and Exchange Commission is the chief federal regulator of financial markets and the accounting industry.
A)True
B)False
Q6) Explain the accounting equation.
Q7) Identify and briefly describe the four categories of financial ratios.
Q8) Define GAAP and explain its purpose.
Q9) Explain the differences between public accountants and management accountants. Page 18
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Page 19
Chapter 16: The Financial System
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163 Verified Questions
163 Flashcards
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Sample Questions
Q1) Bonds vary considerably in terms of risk. One tool used by bond investors to assess the risk of a bond is its so-called risk rating.
A)True
B)False
Q2) The National Association of Securities Dealers (NASD) purpose is to ensure that brokers perform their basic functions honestly and fairly, under constant supervision.
A)True
B)False
Q3) _____ are creditors of a corporation or government body.
A) Commercial paper holders
B) Bondholders
C) Treasury bills holders
D) Certificate of deposit holders
Q4) Mortgage pass-through securities are relatively safe, even when loans are made to borrowers with poor credit ratings.
A)True
B)False
Q5) Explain the main features of preferred stock.
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Chapter 17: Financial Management
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99 Verified Questions
99 Flashcards
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Sample Questions
Q1) A(n) _____ is a document that specifies the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds.
A) asset management plan
B) leverage plan
C) strategic plan
D) financial plan
Q2) Explain how the cash inflows and outflows of a business are similar to those of a household.
Q3) Explain each role in the hierarchy of financial management at a large firm.
Q4) If a firm has numerous investment opportunities and wishes to finance some of them with equity funding, it will likely pay large dividends to shareholders.
A)True
B)False
Q5) A(n) _____ is a transaction in which one company buys another.
A) acquisition
B) merger
C) takeover
D) synergy
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