Using internal sources for recruitment reduces a company’s stability.
Small business owners need not absorb the losses of the firm.
Right-to-work laws define the areas in which an employer has the right to act freely as
an employer, without interference from the union.
An entrepreneurial venture may never grow large, and the owners may not want it to, as
they prefer a more relaxed and less aggressive approach to running the business.
No dividends can be paid to the common stockholders until preferred stock dividends
have been paid.
It is impossible to identify the areas that are particularly susceptible to crime.
When one wants to start a new business, the first step should be to decide whether to
start a new business, buy an existing one, or buy a franchise.
Common stock is issued with a fixed par value.
In the context of small businesses, _______ is the use of modern media such as fax
machines, computers, modems and fax/modems, and scanners, to work from an office,
home, or any location.
a) merchandising
b) prospecting
c) telecommuting
d) freestanding
Which of the following is true about exporting by American firms?
a) Only large firms can export successfully.
b) Payment for goods sold to foreign buyers is uncertain.
c) Overseas markets represent unlimited sales opportunities.
d) Foreign consumers will not buy American products.
Which of the following is true about failure and small businesses?
a) Personal failures typically end up in court with some kind of loss to the creditors.
b) A discontinuance may result from the apparent advantages of working for some else.
c) Formal failures are far more numerous than personal ones.
d) Discontinuance usually results when creditors file a lawsuit against a small business.
Expansion for small family-owned businesses may be limited by:
a) the size of the family.
b) low motivation level of employees.
c) the amount of family assets available.
d) the retirement age of the owner.
In the context of a family-owned business, which of the following is a disadvantage of a
living trust?
a) The business goes to the designated heirs without going through probate court.
b) Property can be put into the trust while the owner is alive.
c) The ownership still remains with the owner after transferring the title to the trust.
d) The title on real estate and securities must be changed to the name of the trust.
John wants to start his own fruit juice and beverage company. He is aware of the large
number of competitors in this industry. He is also aware of the fact that his product
should not be very costly. To differentiate his product from that of his competitors, he
decides to sell his beverages in specially designed containers that keep the juice fresh
for 7 days even without refrigeration. John is focusing on the _____ component of the
marketing mix.
a) place
b) pricing
c) packaging
d) product
What is the advantage of using multiple sources of supply?
a) During shortages better services can be received.
b) Discounts can be obtained with low-volume buying.
c) The cost of ordering is low.
d) Greater variety of goods can be obtained.
Which of the following is true for criminal law?
a) It deals with punishing those who commit illegal acts.
b) It deals with the rights and powers of the government.
c) It implies that everyone is entitled to a day in court.
d) It is an unwritten law derived from judicial decisions.
Which of the following is a major reason for the increased interest in small business?
a) There is no major fear of being impacted by recession.
b) There is a growing trend toward self-employment.
c) There is an abundance of financing opportunities for small businesses.
d) There are very few government regulations and paperwork for small businesses.
Raw materials used to produce products are:
a) variable expenses.
b) overhead expenses.
c) fixed expenses.
d) promotional expenses.
Which of the following is one of the two current trends in purchasing that are causing
considerable problems for small firms?
a) Lack of stockouts
b) Supplier-base upsizing
c) Weak demand for American products
d) Fully integrated production networks
What are the factors that influence the location decisions of retailers and producers?
Define feedback. What forms of feedback can a small business owner obtain to analyze
the actual performance of its operations?
Describe some industries in the U.S. where franchising is expected to grow.
Describe a cooperative and a joint venture.
What is leadership?
Why are some owners reluctant to use computer technology?
Explain what is involved in the purchasing process.
Describe the various methods that can be used for selecting the right person for a
particular job opening.
Mention some major contributions made by small businesses.