95 test bank for m business 4th edition by ferrell

95 Test Bank for M Business 4th Edition by Ferrell 25 Test Bank True – False Questions 20 Test Bank Free Text Questions 50 Free Multiple Choice Questions All the groups that have an interest in an organization's success and outcomes are known as the organization's agencies stakeholders owners investors shareholders All of the following emerged in the U.S as a result of the manufacturing and marketing economies, EXCEPT: buying on credit widespread use of assembly lines advertising farming marketing research When different businesses can promote similar products based on different features, and consumers are willing to pay more for products containing the features they desire, the competitive environment is most likely to be: monopolistic competition pure competition an oligopoly 4 a monopoly socialist When a business fails or does not make a profit, _ have the most to lose in terms of finances consumers media agencies government bodies owners market experts _ is the study of how resources are distributed for the production of goods and services within a social system Public relations Sociology Demographics Psychographics Economics Which of the following statements is true about businesses and profits? Profit making is a business activity that seldom requires risk taking Businesses not have the right to use their profits the way they choose Profit-making businesses often weaken the economy of a country Earning profits contributes to society by providing employment Businesses have found that the best way to make profits is by ignoring the interests of stakeholders Economic expansion occurs when: fewer goods and services are produced than consumer demand 2 an economy is growing and people are spending more money a nation's standard of living drops dramatically employment levels decline over time prices begin to rise and incomes begin to fall As U.S consumers get busier and earn more money, they hire others to tasks such as house cleaning, laundry, and landscaping, resulting in the development of a(n) _ economy focused on making life easier for busy consumers manufacturing service-based agricultural technology-based marketing In which of the following markets is there most likely to be a monopoly? Agricultural commodities Lifestyle gadgets Airlines Electricity supply Sports utility vehicles is often called the father of capitalism Karl Marx George Washington Benjamin Franklin Alan Greenspan Adam Smith _ measures changes in the prices of goods and services purchased for consumption by typical urban households GDP Per capita income Worker productivity Trade balance Consumer price index _ refers to all activities concerned with obtaining and managing money and using it effectively Public relations Marketing Production Advertising Finance The _ is the price at which the number of products that businesses are willing to supply equals the number of products consumers are willing to purchase at a point in time bundled price equilibrium price discount price competitive price maximum retail price _ relates to the number of goods and services that consumers are willing to buy at different prices at a specific time Demand Supply Elasticity Balance of payments Deficit Which of the following is a force within an organization's control that has an impact on the business's daily operations? Employees Regulatory environment Competition Political environment Technology In a capitalist economic system: the government owns and operates all businesses there is little scope for competition consumers have a limited choice of goods and services the majority of people possesses government jobs prices of goods and services are determined by demand and supply The market for corn in Brazil has a large number of sellers, and there is no difference in the products sold by each seller As there are also a large number of buyers for the corn, the actions of a single seller or buyer cannot affect the price The market for corn can be described as a monopoly monopolistic competition pure competition an oligopoly modified competition Using the supply and demand curves shown in the graph that follows, what is the equilibrium price for soft drinks? 35 cents 45 cents 50 cents 55 cents 75 cents _ indicates the income level of "average" Americans It is useful in determining how much "average" consumers spend and how much money Americans are earning Per capita income GDP Budget deficit Consumer price index Worker productivity A budget deficit occurs when a nation: reduces its expenditures receives excess taxes has no national debts spends more than it takes in from taxes balances taxes and expenditures Following a bad harvest, the prices of agricultural commodities in Urbania have increased dramatically, as have the prices of products manufactured from agricultural commodities Government intervention has failed to arrest the rising prices Based on this information, Urbania is undergoing deflation stagflation contraction depression inflation The American economic system is best described as _ because the government regulates business to preserve competition and protect consumers and employees socialist laissez-faire capitalist modified capitalist communist Marxist Which of the following is a factor of production for a firm? Advertising media Legal consultants Customers Natural resources Company reputation Egalitarianism refers to the: exemption of taxes for successful businesses 2 restrictions on taking up non-government jobs equal distribution of income and social services concept of the rich getting richer and the poor getting poorer restriction of competition in small businesses by government regulations Increased unemployment can reduce consumer demand for goods and services, leading to: economic expansion inflation deflation budget surplus recovery What is the primary lesson to be learned from the economic scandals of the early 21st century? Ethical conduct and corporate social responsibility are linked to increased profits Businesses not need to consider social values in the contemporary scenario Investors and retired employees remain unaffected in case of scandals Businesses' reputations depend solely on their profits Business misconduct is likely to be widely excused if it enhances firms' profits In the history of the American economy, the period following the Industrial Revolution was known for an increasing emphasis on: services artisanship manufacturing agriculture information  _ exists when there are many small businesses selling one standardized product Monopolistic competition Oligopoly Pure competition Monopoly Monopsony Which of the following statements is true about GDP as a measure of a country's economic health? It does not include the services produced in a country It measures only those goods and services made within a country It includes profits from companies' overseas operations It does not include profits earned by foreign companies within the country being measured It essentially takes into account the concept of GDP in relation to population Which of the following is NOT a product? A Dell personal computer A veterinarian's treatment of a pet's injuries A lawyer's advice in a divorce case A checkup by a doctor A business profit The entrepreneur has been primarily associated with willingness to: change employers frequently work under authority be conservative 4 possess a government job take risks Economic contraction is said to have occurred when: GDP increases spending declines jobs increase inflation decreases unemployment falls When there is only one business providing a product in a given market, there exists: an oligopoly modified competition pure competition monopolistic competition a monopoly Which of the following statements is true about communism? It is characterized by the government owning and operating most businesses It relies on supply and demand to make decisions about pricing and production of goods It encourages private ownership of the means of production It encourages free market and competition It provides scope for the production of a large variety of goods and services _ gather information and conduct research to determine what customers want They also plan and develop products and make decisions about how much to charge for their products and when and where to make them available 1 Accountants Engineers Marketers Supervisors Stock brokers Businesses differ from nonprofit organizations in that a business's focus is on: profit goods price charity fund raising Generally, when a retailer announces a discount sale on all its products: consumers will not demand more than normal the store will not supply more products than it normally does consumers will demand more products the manufacturer will halt production consumers will demand fewer products than normal Which of the following is a change that occurred in the U.S during the Industrial Revolution? Farm production decreased as industrial production increased As work became more localized, productivity decreased Trade within the country decreased as regions became self-sufficient Farmers began to move to cities to find jobs in factories Fewer goods were available, and prices of goods increased Which of the following is true of the responsibilities of the people involved in a business? Finance is concerned with acquiring, developing, and using human effectively and efficiently Marketing refers to all activities concerned with obtaining money for the firm and using it effectively Nonprofit organizations include all the functions that businesses do, except for the marketing function Management is not involved in the day-to-day functions of production and manufacturing It is the primary responsibility of the owners to provide financial resources for the operation of the business The functions of organizing, staffing, planning, and controlling are most closely associated with: managers assembly line workers investment advisors stockbrokers direct sales executives Advertising, personal selling, coupons, and sweepstakes are forms of the _ aspect of marketing activities finance promotion production fund raising social responsibility All the following are factors of production used to make goods and services, EXCEPT: natural resources human resources customers capital financial resources In a socialist economic system: individuals own and operate all businesses very few people work for government organizations competition is restricted in major industries there is no concept of small businesses owned by individuals demand and supply have no role to play in the pricing of products and services A condition characterized by continuing rise in prices over a period of time refers to: inflation economic expansion a recession economic contraction deflation A firm's _ resources are also known as labor economic human intangible financial natural is the primary goal of business Charity Profit Bureaucracy Quality Strategy Financial resources are also known as capital labor barter natural resources exchange Which of the following is a similarity between businesses and nonprofit organizations? Both not have to abide by government regulations Both are unaffected by political or social change Both of them engage in management and finance activities Both of them not need to adapt to technological changes Both aim to maximize financial returns for their owners Before the Industrial Revolution, the economy of North America under the colonists was characterized by: hunting and gathering instead of agriculture the export of manufactured goods to England a scarcity of natural resources dependence on England for everyday goods 5 the domestic system of manufacture of goods Which of the following is an example of an intangible product? A movie DVD A sandwich A sports car A music concert Jewelry 25 Free Test Bank for M Business 4th Edition by Ferrell True - False Questions Owners have little responsibility to provide funds for the operation of the business True False Gross domestic product is the sum of all goods and services produced in a country during a year True False Nonprofit organizations such as Habitat for Humanity not engage in management, marketing, or finance activities True False The equilibrium price is represented by the point where a product's supply and demand curves intersect True False Owners always manage their businesses True False Free-market capitalism and laissez-faire capitalism are essentially the same thing True False The focus of all marketing activities is customer satisfaction True False A product's equilibrium price is constantly changing in response to changes in economic conditions, availability of resources, and degree of competition True False Demand is the quantity of goods and services that consumers are willing to buy at different prices at a specific time True False Most socialist nations are democratic True False Monopolistic competition exists when there is only one producer of a product in a given market True False Managers coordinate resources to achieve the firm's goals True False The standard of living rises when people have less money to spend True False Products have only tangible attributes True False A severe recession may turn into a depression True False Finance refers to all activities concerned with obtaining money and using it effectively True False Businesses have the right to keep and use their profits as they choose, without limitations True False After World War II, the United States became an agricultural economy True False In a free-market system, the government regulates business True False An oligopoly exists when there are many small businesses selling one standardized product True False When a nation takes more from taxes than it spends, it has a budget deficit True False Profit is what it costs to make and sell a product True False Capitalism is an economic system in which the government owns and operates basic industries while individuals own most other businesses True False A central issue of economics is how to fulfill an unlimited demand for goods and services in a world with limited resources True False The primary goal of business activities is profit True False 20 Free Test Bank for M Business 4th Edition by Ferrell Free Text Questions What impact did the Industrial Revolution in the nineteenth century have on the American economy? Answer Given The nineteenth century and the Industrial Revolution brought the development of new technology and factories The factory brought together all the resources needed to make a product—materials, machines, and workers Work in factories became specialized as workers focused on one or two tasks As work became more efficient, productivity increased, making more goods available at lower prices Railroads brought major changes, allowing farmers to send their surplus crops and goods all over the nation for barter or for sale Rising productivity also permitted many farmers to move to the cities to find higher-paying factory jobs Why are entrepreneurs important to the economy? Answer Given Entrepreneurs are important to the economy because they are willing to take the risks necessary to bring ideas for new goods, services, and business practices into the marketplace They bring together all the factors of production to produce new products Define supply, demand, and equilibrium price, and explain their relationship with each other Answer Given Supply is the quantity of goods or services that businesses are willing to sell at different prices at a specific time Demand is the quantity of goods or services that consumers are willing to buy at different prices at a specific time Both can be shown graphically with supply and demand curves Where the supply and demand curves intersect is the equilibrium price, the price at which the quantity of products businesses are willing to supply equals the quantity of products consumers are willing to buy at a specific point in time If economic conditions, resource availability, degree of competition, or some other factor changes either supply or demand, a new equilibrium price will be established What are the people and activities of business? Define each group Answer Given The people of business are owners, employees, and customers Owners have to put up resources—money or credit—to start a business Employees-including managers—are responsible for the work that goes on within a business Owners can manage the business themselves or hire employees to accomplish this task A business's most important role is to satisfy the customers who buy its goods or services The major activities of business are management, marketing and finance What are the basic individual and business rights that must exist for free enterprise to work? Answer Given A number of basic individual and business rights must exist for free enterprise to work These rights are the goals of many countries that have recently embraced free enterprise: Individuals must have the right to own property and to pass this property on to their heirs This right motivates people to work hard and save to buy property; Individuals and businesses must have the right to earn profits and to use the profits as they wish, within the constraints of their society's laws, principles, and values; Individuals and businesses must have the right to make decisions that determine the way the business operates; Although there is government regulation, the philosophy in countries like the United States and Australia is to permit maximum freedom within a set of rules of fairness; Individuals must have the right to choose what career to pursue, where to live, what goods and services to purchase, and more Businesses must have the right to choose where to locate, what goods and services to produce, what resources to use in the production process, and so on How is Gross Domestic Product (GDP) used as a measure of a nation's economic health? Answer Given One commonly used economic measure is gross domestic product (GDP)—the sum of all goods and services produced in a country during a year GDP measures only those goods and services made within a country and therefore does not include profits from companies' overseas operations; it does include profits earned by foreign companies within the country being measured However, it does not take into account the concept of GDP in relation to population (GDP per capita) Differentiate between communist and capitalist economic systems Answer Given Karl Marx (1818-1883) first described communism as a society in which the people, without regard to class, own all the nation's resources In his ideal political-economic system, everyone contributes according to ability and receives benefits according to need In a communist economy, the people (through the government) own and operate all businesses and factors of production Central government planning determines what goods and services satisfy citizens' needs, how the goods and services are produced, and how they are distributed Capitalism, or free enterprise, is an economic system in which individuals own and operate the majority of businesses that provide goods and services Competition, supply, and demand determine which goods and services are produced, how they are produced, and how they are distributed Define economic expansion What factors are responsible for it? Answer Given Economies are not stagnant; they expand and contract Economic expansion occurs when an economy is growing and people are spending more money Their purchases stimulate the production of goods and services, which in turn stimulates employment The standard of living rises because more people are employed and have money to spend Rapid expansions of the economy, however, may result in inflation, a continuing rise in prices Describe the role of ethics and social responsibility in business today Answer Given In the past few years, a number of scandals in large corporations have undermined consumers' faith in businesses These scandals have increased consumer focus on the ethics of large companies Society is increasingly demanding that businesspeople behave ethically and socially responsibly toward not only their customers but also their employees, investors, government regulators, communities, and the natural environment While one view is that ethics and social responsibility are a good supplement to business activities, there is an alternative viewpoint Research has shown that ethical behavior can not only enhance a company's reputation but can also drive profits There is growing recognition that the long-term value of conducting business in an ethical and socially responsible manner that considers the interests of all stakeholders creates superior financial performance What are nonprofit organizations? Differentiate between nonprofit organizations and businesses Answer Given Nonprofit organizations are organizations that may provide goods or services but not have the fundamental purpose of earning profits Nonprofit organizations, such as the Red Cross, Special Olympics, and other charities and social causes, not have the fundamental purpose of earning profits, although they may provide goods or services and engage in fund raising Businesses, on the other hand, try to earn a profit by providing products that satisfy people's needs Describe the role of government in the United States' economy Answer Given The economic system of the United States is best described as modified capitalism because the government regulates business to preserve competition and protect consumers and employees Federal, state, and local governments intervene in the economy with laws and regulations designed to promote competition and to protect consumers, employees, and the environment Additionally, government agencies such as the U.S Department of Commerce measure the health of the economy (GDP, productivity, etc.) and, when necessary, take steps to minimize the disruptive effects of economic fluctuations and reduce unemployment What are the factors of production? Briefly describe each one Answer Given Land, forests, minerals, water, and other things that are not made by people are natural resources Human resources, or labor, refer to the physical and mental abilities that people use to produce goods and services Financial resources, or capital, are the funds used to acquire the natural and human resources needed to provide products Because natural, human, and financial resources are used to produce goods and services, they are sometimes called factors of production Define competition, and describe the different forms it can take Answer Given Competition, the rivalry among businesses for consumers' dollars, is a vital element in free enterprise Pure competition exists when there are many small businesses selling one standardized product, such as agricultural commodities like wheat, corn, and cotton Monopolistic competition exists when there are fewer businesses than in a pure-competition environment and the differences among the goods they sell are small An oligopoly exists when there are very few businesses selling a product In an oligopoly, individual businesses have control over their products' price because each business supplies a large portion of the products sold in the marketplace Where there is just one business supplying a product for a given market, a monopoly exists Monopolies may be permitted because the cost of developing or supplying the product may be so great that new firms could not compete Briefly describe the goals of a business, especially the primary goal Answer Given The primary goal of business is profit, the difference between what it costs to make and sell a product and what the customer pays for it Other business goals may include acting ethically and being socially responsible Describe the pre-industrial economic phases of the United States Answer Given Before the colonization of North America, Native Americans lived as hunter/gatherers and farmers, with some trade among tribes The colonists who came later operated primarily as an agricultural economy People were selfsufficient and produced everything they needed at home, including food, clothing, and furniture Abundant natural resources and a moderate climate nourished industries such as farming, fishing, shipping, and fur trading A few manufactured goods and money for the colonies' burgeoning industries came from England and other countries Describe the relationship between management, marketing, and finance Answer Given Management, marketing, and finance are the primary business activities Management involves coordinating the efforts of employees to achieve organizational objectives Marketing involves activities designed to provide goods and services that satisfy customers Finance involves activities concerned with obtaining money—from owners and investors and other sources—and using it effectively What is a service economy? What factors led to the United States becoming a service economy? Answer Given After World War II, continued improvements in productivity and standard of living left many Americans with more money and time They began to pay others to tasks they used to at home, like cooking, laundry, landscaping, and child care These trends have gradually changed the United States to a service economy— one devoted to the production of services that make life easier for busy consumers Businesses increased their demand for services, especially in the areas of finance and information technology What are the three main questions that all economic systems must answer? Who answers them under a communist system? A socialist system? A capitalist system? Answer Given The three economic questions are (1) What goods and services and how much of each will satisfy the needs of the consumer? (2) How will goods and services be produced and who will produce them and with what resources? (3) How are the goods and services to be distributed to the consumer? Under a true communist system, these questions are answered by a central government planning committee Under a true socialist system, a central government planning committee answers the questions for basic goods and industries, while the forces of supply and demand answer them for most other products Within a capitalist system, competition, supply, and demand determine the answers What is an economic contraction, and to what can it lead? Answer Given Economic contraction occurs when spending declines Businesses cut back on production and lay off workers, and the economy as a whole slows down Contractions of the economy lead to recession—a decline in production, employment, and income Recessions are often characterized by rising levels of unemployment, which is measured as the percentage of the population that wants to work but is unable to find jobs Define budget deficit What are the factors responsible for a budget deficit? Answer Given One important indicator of a nation's economic health is the relationship between its spending and income (from taxes) When a nation spends more than it takes in from taxes, it has a budget deficit Although the U.S eliminated its long-standing budget deficit during the 1990s, it re-emerged and grew to record levels during the early 2000s ... unlimited demand for goods and services in a world with limited resources True False The primary goal of business activities is profit True False 20 Free Test Bank for M Business 4th Edition by Ferrell. .. A movie DVD A sandwich A sports car A music concert Jewelry 25 Free Test Bank for M Business 4th Edition by Ferrell True - False Questions Owners have little responsibility to provide funds for. .. poorer restriction of competition in small businesses by government regulations Increased unemployment can reduce consumer demand for goods and services, leading to: economic expansion inflation