Business in Action 7th Edition

According to Frederick Herzberg's two-factor theory, which of the following factors acts as a motivator? A) favorable working conditions B) favorable company policies C) increase in pay D) job security E) responsibility Answer: EExplanation:A) In Herzberg's two-factor theory, motivators are associated with satisfying experiences. Motivators tend to be intrinsic and include achievement, recognition, responsibility, and

Outsourcing reduces opportunities for small businesses and entrepreneurs. Answer: FALSEExplanation: Outsourcing, the practice of engaging outside firms to handle either individual projects or entire business functions, creates numerous opportunities for small businesses and entrepreneurs. Answer: FALSEExplanation: Outsourcing, the practice of engaging outside firms to handle either individual projects or entire business

An in-person or online gathering of media representatives at which companies announce new information is called a ________. A) press conference B) press release C) conversation marketing D) sale promotion E) trade promotion Answer: AExplanation:A) Press conference refers to an in-person or online gathering of media representatives at which companies announce new information; also called

A product is called a good if ________. A) its price is below the market standards B) it is predominantly tangible C) it has been standardized D) it is sold directly to the end consumers E) its price is above the market standards Answer: BExplanation:A) Products contain both tangible and intangible components. Predominantly tangible products

Preparing a public offering involves ________. A) issuing corporate bonds to the employees of the firm B) hiring a public accounting firm to serve as auditor C) hiring a private company as a proxy firm D) raising $1 million as a security deposit to the SEC E) engaging in collective bargaining with the employees Answer:

The purchasing behavior of organizations is easier to understand than the purchasing behavior of consumers because it's more clearly driven by economics and influenced less by subconscious and emotional factors. Answer: TRUEExplanation: The purchasing behavior of organizations is easier to understand than the purchasing behavior of consumers because it's more

The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly. Answer: TRUEEXPLANATION: The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly. Answer: TRUEEXPLANATION: The situation in which one supplier thoroughly dominates a

The manufacturing approach in which part of the product is mass-produced and the remaining features are customized is known as ________. A) batch-of-one production B) mass production C) customized production D) mass manufacturing E) mass customization Answer: EExplanation:A) Mass customization is a manufacturing approach in which part of the product is mass-produced and the remaining

Theocratic law is law based on religious principles. Answer: TRUEEXPLANATION: Theocratic law is law based on religious principles. It predominates in such countries as Iran and Pakistan. Answer: TRUEEXPLANATION: Theocratic law is law based on religious principles. It predominates in such countries as Iran and Pakistan. Answer: TRUE EXPLANATION: Theocratic law is law

A corporation is a legal entity distinct from the persons running the corporation. Answer: TRUEExplanation: A corporation is a legal entity, distinct from any individual persons, that has the power to own property and conduct business. Answer: TRUEExplanation: A corporation is a legal entity, distinct from any individual persons, that has

Which of the following is TRUE about the Americans with Disabilities Act (AD A)? A) It allows employers to ask job applicants to pass a physical examination as a condition of employment. B) It protects only those individuals who have physical handicaps. C) It guarantees equal opportunities in housing, transportation, education, employment, and other

Dumping ________. A) involves selling a product at a price lower than the cost of production B) is a strategy used by firms to enter an industrialized nation C) refers to the practice of selling products in small quantities D) is a strategy used by organizations to enter a developed market E) is typically prevented

________ stocks tend to fare better when the economy is doing worse and vice versa. A) Blue chip B) Income C) Penny D) Cyclical E) Defensive Answer: EExplanation:A) Defensive stocks are stocks of companies that tend to fare better when the economy is doing worse and vice versa. For example, new car sales decline in

Retail stores that exist for only a short time and are designed more as attention-getting events than as ongoing retail operations are called ________. A) pop-up stores B) retail theaters C) hybrid stores D) off-price stores E) specialty stores Answer: AExplanation:A) Pop-up stores exist for only a short time and are designed more as attention-getting

________ is an accounting method in which revenue is recorded when a sale is made, and expense is recorded when it is incurred. A) Accrual basis B) Cash basis C) Profit basis D) Depreciation E) Deferral basis Answer: AExplanation:A) Accrual basis is an accounting method in which revenue is recorded when a sale is made,

The federal funds rate is also known as the overnight rate. Answer: TRUEExplanation: The federal funds rate (aka, overnight rate) is the rate that member banks charge each other to borrow money overnight from the funds they keep in the Federal Reserve accounts. Answer: TRUEExplanation: The federal funds rate (aka, overnight

The board of directors are ________. A) the highest-ranked managers of a corporation B) elected by corporate officers C) representatives of the shareholders D) the top executives running a corporation E) elected by the employees of an organization Answer: CExplanation:A) The board of directors is a group of professionals elected by shareholders as their representatives,

One of the biggest disadvantages to advertising in newspapers is declining readership in many cities. Answer: TRUEExplanation: One of the biggest disadvantages to advertising in newspapers is declining readership in many cities. Answer: TRUEExplanation: One of the biggest disadvantages to advertising in newspapers is declining readership in many cities. Answer: TRUE Explanation: One of

Suppose that a manager completely hands over operational decision making to her subordinates. This manager is a democratic leader. Answer: FALSEExplanation: Leaders who leave most decisions up to employees are called laissez-faire leaders. Democratic leaders involve employees in decision-making; however, they don't cede complete control over decision making to them. Answer:

In a ________ organization, a manager usually has a wide span of control. A) tall B) line C) flat D) line-and-staff E) formal Answer: CExplanation:A) When a large number of people report directly to one person, that person has a wide span of management. This situation is common in flat organizations with relatively few levels

Over the past century, the union movement has attracted the greatest numbers of new members during times of prosperity. Answer: TRUEExplanation: Over the past century, the union movement has gotten its biggest boosts in times of great upheaval-specifically, the two World Wars and the Great Depression. Answer: TRUEExplanation: Over the past

A bank is building a new branch in a small suburb, and one of the decisions it must make is how many teller windows it needs to serve its customers effectively and cost efficiently on an average day. This is an example of ________. A) production scheduling B) capacity planning C) site selection D)

Balanced funds refer to funds that invest in a combination of stocks and bonds. Answer: TRUEExplanation: Balanced funds are funds that invest in a combination of stocks and bonds. Answer: TRUEExplanation: Balanced funds are funds that invest in a combination of stocks and bonds. Answer: TRUE Explanation: Balanced funds are funds that invest

Factoring refers to lending a lump sum of cash via a promissory note or on-demand access without accepting any other securities. Answer: FALSEExplanation: Factoring is a source of finance where a company sells its accounts receivable to an intermediary that collects from the customer. Answer: FALSEExplanation: Factoring is a source of

________ involves ads with graphical content served up on web pages based on some knowledge of an individual's interests or behaviors. A) Targeted display advertising B) Infomercials C) Institutional advertising D) Guerrilla advertising E) Product placement Answer: AExplanation:A) Targeted display advertising involves ads with graphical (as opposed to just textual) content served up on web

The legal systems in the United States and the United Kingdom are based on civil law. Answer: FALSEEXPLANATION: The legal systems in the United States and the United Kingdom are based on common law whereas legal systems in countries such as France and Germany arebased on civil law. Answer: FALSEEXPLANATION: The

For goals to function as a motivator, the employee must believe in his or her ability to meet that goal. Answer: TRUEExplanation: For goals to function as a motivator, the employee must believe in his or her ability to meet that goal. Answer: TRUEExplanation: For goals to function as a motivator,

Companies attempt to increase the market valuation of a share by ________. A) repurchasing some of the shares through a stock buyback B) maintaining a lower than average price/earnings ratio C) announcing a stock split of its shares D) dividing the shares into multiple shares E) reducing the percentage of dividend being paid out to

________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial papers. A) Options market B) Bond market C) Money market D) Stock market E) Futures market Answer: CExplanation:A) The money market is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial paper. Its purpose is to

A growing number of customers are pursuing strategic sourcing, in which they forge closer relationships with a smaller number of strategic distribution partners. Answer: TRUEExplanation: A growing number of customers are pursuing strategic sourcing. In strategic sourcing customers forge closer relationships with a smaller number of strategic distribution partners. Answer: TRUEExplanation:

All businesses have the capacity to cause harm to employees, customers, other companies, their communities, and investors. Answer: TRUEEXPLANATION: All businesses have the capacity to cause harm to employees, customers, other companies, their communities, and investors. Answer: TRUEEXPLANATION: All businesses have the capacity to cause harm to employees, customers, other companies,

Job enrichment expands a job horizontally. Answer: FALSEExplanation: Job enrichment refers to making jobs more challenging and interesting by expanding the range of skills required. It is a sort of vertical expansion. Answer: FALSEExplanation: Job enrichment refers to making jobs more challenging and interesting by expanding the range of skills required.

________ refers to the rate at which the company is using up the funds from its initial investors. A) Capital ratio B) Order rate C) Hedge rate D) Burn rate E) Current ratio Answer: DExplanation:A) Burn rate is the rate at which the company is using up the funds from its initial investors. It is

Sam's Club sells sports apparel to individual consumers for their personal use and to small businesses that resell those goods to consumers. Therefore, Sam's Club functions as both a retailer and a wholesaler. Answer: TRUEExplanation: Wholesalers are intermediaries that sell products to other intermediaries for resale or to organizations for

________ refers to measuring quality against established standards after the good or service has been produced and weeding out any defective products. A) Statistical process control B) Quality assurance C) Quality control D) Continuous quality E) Total quality management Answer: CExplanation:A) Quality control refers to measuring quality against established standards after the good or service

Product mix is a complete list of all products that a company offers for sale. Answer: TRUEExplanation: Product mix is a complete list of all products that a company offers for sale. Answer: TRUEExplanation: Product mix is a complete list of all products that a company offers for sale. Answer: TRUE Explanation: Product

Organization structure is a framework that enables managers to divide responsibilities, ensure employee accountability, and distribute decision-making authority. Answer: TRUEExplanation: Organization structure is a framework that enables managers to divide responsibilities, ensure employee accountability, and distribute decision-making authority. Answer: TRUEExplanation: Organization structure is a framework that enables managers to divide responsibilities,

Savings and loan associations are not-for-profit, member-owned cooperatives that focus on offering home mortgage loans. Answer: FALSEExplanation: Savings and loan associations offer deposit accounts and focus on offering home mortgage loans. They may not be not-for-profit organizations. Answer: FALSEExplanation: Savings and loan associations offer deposit accounts and focus on offering home mortgage

The federal government recognizes a sole proprietorship as an independent taxable entity. Answer: FALSEExplanation: Income tax is a straightforward matter for sole proprietorships. The federal government doesn't recognize the company as a taxable entity. Answer: FALSEExplanation: Income tax is a straightforward matter for sole proprietorships. The federal government doesn't recognize the

The number of units of one currency that must be exchanged for a unit of the second currency is known as the exchange rate between the currencies. Answer: TRUEEXPLANATION: The number of units of one currency that must be exchanged for a unit of the second currency is known as

Theory Y-oriented managers believe that employees like to work. Answer: TRUEExplanation: Theory Y-oriented managers believe that employees like to work. It is the managerial assumption that employees enjoy meaningful work, are naturally committed to certain goals. Answer: TRUEExplanation: Theory Y-oriented managers believe that employees like to work. It is the managerial

Providing education in return of fees is an example of a service. Answer: TRUEExplanation: Products contain both tangible and intangible components. Predominantly intangible products are categorized as services. Education is predominantly intangible. Answer: TRUEExplanation: Products contain both tangible and intangible components. Predominantly intangible products are categorized as services. Education is predominantly

The thinking behind celebrity involvement in advertising is that people will be more inclined to use products endorsed by a celebrity because they will identify with and want to be like this person. Answer: TRUEExplanation: The thinking behind celebrity involvement in advertising is that people will be more inclined to

Unlike with the other classical theories, there is a lot of research to validate Herzberg's two-factor theory. Answer: FALSEExplanation: Unlike with the other classical theories, there is a lot of research to validate McClelland's ideas and to explain particular outcomes in the workplace. Answer: FALSEExplanation: Unlike with the other classical theories,

Core competencies are those activities in which a company excels and has the potential to create competitive advantages. Answer: TRUEExplanation: Core competencies are those activities in which a company excels and has thepotential to create competitive advantages. Answer: TRUEExplanation: Core competencies are those activities in which a company excels and has

The ________ to resolving ethical dilemmas involves choosing the option that delivers the most good for the most people (or protects the most people from a negative outcome). A) justice approach B) utilitarian approach C) individual rights approach D) individual responsibilities approach E) common good approach Answer: BEXPLANATION:A) As an approach to resolving ethical dilemmas,

The chief operating officer is the highest-ranking officer of a corporation. Answer: FALSEExplanation: Corporate officers are the top executives who run a corporation. Of them, the highest-ranking officer is the chief executive officer (CEO). Answer: FALSEExplanation: Corporate officers are the top executives who run a corporation. Of them, the highest-ranking officer

Providing short-term loans to countries that are unable to meet their financial obligations is a primary function of the International Monetary Fund. Answer: TRUEEXPLANATION: The International Monetary Fund's primary functions are monitoring global financial developments, providing technical advice and training, providing short-term loans to countries that are unable to meet

A partnership is a company that is owned by two or more people but is not a corporation. Answer: TRUEExplanation: A partnership is a company that is owned by two or more people but is not a corporation. Answer: TRUEExplanation: A partnership is a company that is owned by two or

At DBT Enterprises, when an employee is late for a meeting, it is an informal rule that he or she must pay $2 to the "party fund." When there is enough money in the "party fund," the company has a pizza party. This is an example of ________. A) groupthink B) heuristics C)

Capital structure is ________. A) the original monetary value of an economic item B) a statement of the financial position of a company C) the summary of the financial balances of a business D) a firm's mix of debt and equity financing E) a combination of operational expenses and capital expenses Answer: DExplanation:A) Capital structure

Skim pricing refers to introducing a new product at a low price in hopes of building sales volume quickly. Answer: FALSEExplanation: Skim pricing refers to charging a high price for a new product during the introductory stage and lowering the price later.[/cpmembership] Answer: FALSEExplanation: Skim pricing refers to charging a high

Quality of hire measures ________. A) the amount of money spent in hiring and training new employees B) the level of productivity of employees in the probationary period C) how closely incoming employees meet the company's needs D) the percentage of minority groups in a firm's workforce E) the percentage of the workforce that leaves

The exchange of value between parties is referred to as a(n) ________. A) emolument B) sale C) purchase D) transition E) transaction Answer: EExplanation:A) Transaction refers to an exchange of value between parties.B) Transaction refers to an exchange of value between parties.C) Transaction refers to an exchange of value between parties.D) Transaction refers to an

Riban Industries is a manufacturer of watches. The company's profits are predictable and the stock yields huge dividends, although the prospects for growth are low. Riban Industries is an example of a(n) ________ stock. A) blue chip B) income C) cyclical D) penny E) defensive Answer: BExplanation:A) Income stocks are purchased primarily for dividend payouts

In the United States, a corporation is called a domestic corporation if it ________. A) does business only in the state where it is chartered B) files income taxes with the U.S. government C) does business only within the United States D) has more than 5 subsidiaries in the United States E) has incorporated its

Cash basis is an accounting method in which revenue is recorded when a sale is made. Answer: FALSEExplanation: Cash basis is an accounting method in which revenue is recorded when payment is received and expense is recorded when cash is paid. Answer: FALSEExplanation: Cash basis is an accounting method in which

A firm's suppliers are not part of its value chain. Answer: FALSEExplanation: The value chain includes all the elements and processes that add value as rawmaterials are transformed into the final products made available to the ultimate customer. Answer: FALSEExplanation: The value chain includes all the elements and processes that add