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306. During the past 150 years, the U.S. has evolved from:
A. An agrarian economy to an information technology economy.
B. A business to business economy to a business to consumer economy.
C. An agrarian economy to a manufacturing economy to a service oriented economy.
D. A manufacturing economy to a service economy, to a cottage economy, and now we
are trending back to an agrarian economy.
307. Businesses that produce and sell tangible products such as steel and machines are part of
the:
A. manufacturing industry.
B. knowledge-based industry.
C. service industry.
D. production sector.
308. The service industry represents ________ of the value of the U.S. economy.
A. about 30%
B. under 50%
C. about 70%
D. about 50%
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312. The new era of business is likely to be dominated by the:
A. service sector.
B. information-based sector.
C. manufacturing sector.
D. continued decline in productivity.
313. Appliance repair firms, tax consultants, law firms, and insurance companies are all
business firms that are part of the:
A. production sector.
B. management sector.
C. neo-industrial sector.
D. service sector.
All of these companies provide an intangible product. Thus, they are included in the service
sector.
314.
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In recent years, manufacturing firms in the United States have laid off workers. The best
explanation of this trend is that:
A. firms have been trying to weaken unions by reducing their reliance on labor.
B. workers in the U.S. have become less productive and are no longer able to compete in
the global economy.
C. firms in many industries have become so efficient that they need fewer workers.
D. the economy has been in a prolonged depression that has lasted more than a decade.
Feedback: While layoffs in manufacturing seem to imply that American firms are becoming
less competitive, the opposite is actually the case. The layoffs are the result of tremendous
improvements in productivity in recent years, which have enabled U.S. manufacturing firms
to produce more goods with fewer workers.
315. Which of the following best describes recent job growth in the service sector?
A. The service sector has generated almost all new jobs in the American economy since
the mid 1980s, but the rate of job growth in services has slowed in recent years.
B. Jobs in the service sector have increased slowly over the past decade, but most new
jobs are created in the manufacturing industries.
C. Employment in the service sector has declined in recent years, and this decline is
expected to continue.
D. There has been little change in the number of jobs in the service sector in recent years,
however employment is expected to increase rapidly.
Feedback: The service sector has grown rapidly over the past two decades. However, the
growth rate has slowed in recent years.
316.
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Which of the following organizations is an example of the goods-producing sector of the
economy?
A. Ford Motor Company
B. Florida State University
C. Children’s Hospital
D. H & R Block Tax Consulting
Feedback: Firms in the goods-producing sector produce tangible products. Of the
organizations listed in this question, only Ford Motor Company produces a tangible product.
317. Certain industries of the U.S. economy such as farming and heavy equipment
manufacturing have experienced a significant decline in employment. Which of the
following best explains this job loss?
A. The cause is a decline in the productivity of labor in these industries.
B. Workers lost these jobs because technological advances increased productivity.
C. The U.S. economy cannot compete in these industries any longer.
D. Government regulations have eliminated profit opportunities in these industries.
Feedback: History shows that technology has allowed business organizations to be more
productive and therefore require less labor. This scenario first was observed in agriculture as
productivity increases resulted in fewer farm jobs. Technological improvements in
manufacturing have also resulted in increased productivity and fewer jobs.
318.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
Jenna Leigh is an information savvy, 20-something person who is trying to select
between two marketing job offers. She can either join a company that makes small
hammers and screwdrivers for the do-it-yourself hardware store business, or she can join a
company developing the fourth generation cell phone service. She is quite impressed that
the hardware business is growing quite nicely in China, Mexico, and India where people
are starting to expand their living spaces. She is also aware of:
A. Declines in the telecommunications business now that new cell phone service
companies are springing-up everywhere.
B. A decline in the domestic hardware market due to older Americans losing interest in
keeping up their living quarters.
C. An information-based global revolution that might make her career at a
telecommunications company more lucrative in the long run.
D. An increase in the price of the actual cell phones must indicate that there is still a great
demand for phones.
Feedback: Futuristic business professionals believe we are in the midst of an information-
based global revolution that will alter all sectors of the economy: agricultural, industrial, and
service.
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320. Describe several ways that governments can foster entrepreneurship and encourage the
creation of wealth.
321.
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Describe how businesses can use technology to be more responsive to customers.
322. Competition among businesses has never been greater. Identify and describe several ways
that businesses can become more competitive.
323.
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What is demography? Identify several demographic trends in the United States and
discuss how they will impact U.S. businesses.
324.
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Describe what we mean by greening and thinking green. List several ways that people and
businesses are participating in the green movement. List business opportunities that may
emerge from this movement.
325.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
Trace the evolution of American business. Identify the key trends, and discuss the
implications these trends have for the future.
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326. As he explores his options, Sergio notices that some opportunities appear to be riskier than
others. When considering various opportunities, Sergio should keep in mind that:
A. he will be better off picking a low risk business opportunity, since the safest ones are
usually the most profitable as well.
B. even though some opportunities appear riskier than others, the level of risk actually
varies little from one opportunity to another.
C. high risk business opportunities often have the potential for high returns as well.
D. government regulations are in place to protect investors and entrepreneurs from failure,
so there is no need to worry about risk.
Feedback: In many cases, business opportunities that have the potential for earning high
profits also carry a high level of risk. Investors must weigh profit and risk and choose
opportunities that offer an acceptable trade-off between the two.
327.
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Sergio’s frustration with his lack of freedom and flexibility at work indicates that Bigbux:
A. prefers the use of cross-functional teams rather than individual initiative.
B. has not adopted a strategy of empowerment.
C. knows that the best way to ensure good customer service is to closely monitor its
lower-level employees.
D. is trying to please customers as well as other stakeholders.
Feedback: Empowerment means giving lower-level workers the freedom and flexibility to
respond quickly to customers without consulting with managers.
328. Two of his friends approached Sergio with a proposal to start a language school. Sergio is
fluent in English and Spanish, and also has an education degree. Sergio is strongly
considering the idea but also wants to know if there is a growing demand for his services.
He learns that an important demographic trend is:
A. the service sector is likely to decline in significance in the next few years.
B. the number of young children in the U.S. will decrease significantly over the next few
years as the population of the country levels off.
C. the number of immigrants from South and Central America is increasing steadily in his
area, and across the nation. Professionals in hospitals and schools need to know how to
speak Spanish. Immigrants need to know how to speak English.
D. the number of retirees is decreasing, making way for a younger generation.
Feedback: Legal and illegal immigrants have had a dramatic effect on many cities. The
schools and hospitals, and other services have been affected. Some local governments are
making every effort to adapt, including changing signs, brochures, websites, and forms to
include other languages.
329.
Chapter 01 – Taking Risks and Making Profits within the Dynamic Business Environment
As he explores his options for starting a new business, Sergio has looked into the tax
implications and government regulations that he would encounter. He wants to maintain
an office in a different location from his home. He has discovered that some nearby
communities offer tax credits and lower taxes than his town. Sergio’s decision will be
influenced by the:
A. demographic environment.
B. technological environment.
C. socio-religious environment.
D. economic and legal environment.
Feedback: The economic environment includes taxes and government regulations. As the
textbook notes: Entrepreneurial decisions about where to locate a business can be strongly
influenced by differences in taxes and government regulations.
330. If Sergio starts his own business, his firm’s activities and policies will impact many
different groups and individuals, including employees, customers, creditors, suppliers, and
people living in the community where his business is located. Which of the following
statements represents how Sergio should deal with these various groups? Sergio should:
A. take the needs of all of these groups into account, and try to satisfy each group as much
as possible.
B. concentrate on meeting the needs of his customers, since they are crucial to the success
of his business, but ignore the needs of other groups in order to keep costs low.
C. satisfy whichever group complains the loudest, using the “squeaky wheel gets the
grease” philosophy.
D. concentrate on maximizing his own profits and let everyone else look out for
themselves.
Feedback: All of the groups mentioned in this question are stakeholders in a business. They
are all affected by the products, policies, and practices of the firm and their concerns need to
be addressed.