An advantage of buying a franchise is that it already has many of the requirements for
success.
If a manager is a perfectionist, he or she does not need to delegate.
Niche marketing is the systematic gathering, recording, and analyzing of data related to
the marketing of goods and services.
Pure risk always exists when the possibility of a loss is present but the possible extent
of the loss is unknown.
Daughters interested in leading the family business should gain experience by working
outside.
Marketing research is possible using customer credit records and sales records.
Which of the following is a reason for starting a small business?
a) To get a chance to act like automatons
b) To get freedom from decision-making responsibility
c) To focus on profit maximization and aggressive growth
d) To satisfy personal objectives
Which type of franchising system grants the franchisee the right to market the product
and trademark and use a complete operating system?
a) Product format franchising
b) Business format franchising
c) Trademark franchising
d) International franchising
Which of the following is an effective technique for minimizing theft?
a) Reduce the number of electronic noise activators.
b) Install wide-angle and one-way mirrors to observe employee or customer behavior.
c) Schedule higher inventory levels on weekends.
d) Institute a flatter organizational structure and replace the status quo.
Sale of proprietary information is an example of _____.
a) a blue-collar crime
b) risk transfer
c) a white-collar crime
d) risk avoidance
The management expert who condensed management philosophy and quality
techniques into “14 points” was _____.
a) W. Edwards Deming
b) Malcolm Baldridge
c) Peter Drucker
d) Jack Welch
A(n) _____ is an item priced at or below cost to attract customers into the store to buy
more profitable items.
a) prestige buy
b) trade-in
c) loss leader
d) premium product
Working capital indicates:
a) the ability a company has to fund innovation.
b) the ability a company has to multiply its profits within a short time.
c) the ability a company has to lower its variable costs of production.
d) the ability a company has to pay its current liabilities.
Matt plans to open a corner store. The startup cost is approximately $10,000. Since
Matt has only $2,500 with him, he decides to invite two of his friends – Brett and Brian
– to join him in this venture. Who should write the business plan in this scenario?
a) Only Brett and Brian – since they are contributing 75 percent of the initial investment
b) Matt, Brett, and Brian – it should be a team effort
c) It depends on who has paid the biggest share of the startup cost.
d) Matt alone, since it was primarily his business plan
Which of the following may be a good test for ethical behavior?
a) Morris water maze test
b) Rotary International’s “Four-Way Test”
c) Conditioned-place preference
d) Two-bottle choice test
The movement to protect the valid interests of consumers is a major force in small
business today. What is this movement called?
a) Protectionism
b) Social responsibility
c) Business ethics
d) Consumerism
A(n) _____ tells the supplier to ship a given amount of an item at a given quality and
price.
a) purchase order
b) standing order
c) bill of lading
d) economic order quantity
Coinsurance is usually used in which of the following types of insurance contracts?
a) Travel insurance contracts
b) Workers’ compensation contracts
c) Property insurance contracts
d) Ransom insurance contracts
_____ are relatively permanent and are necessary for the functioning of the business.
a) Trade credits
b) Fixed assets
c) Current assets
d) Accounts receivables