TEST ITEM FILE George Dracopoulos Vanier College and McGill University
Business Essentials Tenth Canadian Edition Ronald J. Ebert/ Ricky W. Griffin/ George Dracopoulos/ Frederick A. Starke
Business Essentials, 10Ce (Ebert) Chapter 1 Understanding the Canadian Business System 1 .1
Define the nature of Canadian business and identify its main goals.
1) Which of the following is the best definition of "profit?" A) Total money taken in by a corporation B) Increases in income from year to year C) Increases in a corporation's stock price D) Revenue generated by goods and services E) Difference between revenues and expenses Answer: E Diff: 1 Type: MC Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals. 2) This week, Abe's Muffler Shop had sales of $9500, employees were paid $2500, the cost of goods was $3500, and rent was $2000. Profit for the week was A) $3000. B) $1500. C) $4000. D) $2500. E) $6500. Answer: B Diff: 2 Type: MC Skill: Application Objective: 1.1 Define the nature of Canadian business and identify its main goals. 3) How are provincial universities in Canada different from business firms? A) They do not seek to make a profit. B) They deal with people, not things. C) Their organizational boundaries exclude business firms. D) They do not produce goods or services. E) They are more important to society than business firms. Answer: A Diff: 2 Type: MC Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals.
1 .
4) Examples of businesses include all of the following except A) local supermarkets. B) one-person businesses, like barbershops. C) non-profit organizations. D) large corporations like Canadian Pacific or Telus. E) farms. Answer: C Diff: 2 Type: MC Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 5) ________ produce most of the goods and services consumed in Canada. A) Businesses B) Labour unions C) Non-profit organizations D) Canadian provincial governments E) Charities Answer: A Diff: 1 Type: MC Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 6) Not-for-profit organizations A) are content with small profits, whereas business firms want large profits. B) are more important than business firms in the Canadian economy. C) use the funds from government grants or from the sale of goods or services to provide service to the public. D) sell only services, not goods. E) are not allowed to operate in the manufacturing sector. Answer: C Diff: 2 Type: MC Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 7) Charities, labour unions, hospitals, educational institutions, and government agencies are all examples of which of the following? A) Co-operatives B) Corporations C) Businesses D) Government agencies E) Not-for-profit organizations Answer: E Diff: 1 Type: MC Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals.
2 .
8) Business principles are helpful to non-profit organizations as they try to achieve their service goals. Answer: TRUE Diff: 2 Type: TF Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 9) A business is an organization that seeks to earn profits by providing goods and services to customers. Answer: TRUE Diff: 1 Type: TF Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals. 10) Many organizations in Canada do not even try to make a profit. Answer: TRUE Diff: 1 Type: TF Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals. 11) If there is anything left after a business subtracts its expenses from revenues, it is referred to as profit. Answer: TRUE Diff: 1 Type: TF Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals. 12) The term "business" typically includes large organizations, such as General Motors), which seek a profit, but does not include individuals who are self-employed, e.g., a carpenter, or a beautician who operates a shop in her home. Answer: FALSE Diff: 2 Type: TF Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 13) A business is an organization that seeks to earn profits by providing one or more of the factors of production to consumers. Answer: FALSE Diff: 2 Type: TF Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals.
3 .
14) What is a business? Answer: A business is an organization that provides goods or services that are sold to earn profits. Diff: 1 Type: SA Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 15) What are profits and why are they important in Canada's economic system? Answer: Profits = revenues minus expenses - They are rewards for taking risks - They are used to support government and charities, and to pay wages - They are needed to continue the financing of goods and services production Diff: 2 Type: SA Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 16) Explain the role of both profit-seeking businesses and non-profit organizations in the overall "meaning of business." Answer: Businesses are organizations that provide goods and services that are then sold to earn profits. Indeed, the prospect of earning profits—the difference between a business's revenue and its expenses—is what encourages people to open and expand businesses. After all, profits are the reward owners get for risking their money and time. The right to pursue profits distinguishes a business from non-profit organizations, such as universities, hospitals, and government agencies, that run in much the same way but that generally do not seek profits. Whereas profits may be considered the final reward in profit-seeking businesses, the final reward for non-profit organizations might be, for example, operational efficiency. Diff: 3 Type: ES Skill: Comprehension Objective: 1.1 Define the nature of Canadian business and identify its main goals. 17) What are the primary goals of not-for-profit organizations? Answer: They use the funds they generate from government grants or from the sale of goods or services to provide services to the public. -They include charities, educational institutions, hospitals, labour unions, and government agencies. - Business principles are helpful to these not-for-profit organizations as they try to achieve their service goals. Diff: 2 Type: ES Skill: Knowledge Objective: 1.1 Define the nature of Canadian business and identify its main goals.
4 .