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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.
Venture capital is an example of private equity.
Identical goods or services are created in large quantities in mass customization.
Controlling is the process of motivating employees to be committed toward the
organization's values.
A corporation itself has limited liability on its transactions.
The Federal Reserve requires all depository institutions (those that accept deposits from
customers) to hold a portion of those deposits in reserve.
The number of people under one manager's control is that manager's chain of command.
Business and society are mutually dependent; therefore, choices that weaken one or the
other will ultimately weaken both.
Distribution strategy refers to a firm's overall plan for moving products through
intermediaries and on to final customers.
Angel investors provide money to finance new businesses in exchange for a large rate
of interest.
Craft unions offer membership to all workers who are involved in the manufacturing
process of a product.
Customer lifetime value refers to the total potential revenue from each customer over a
certain time span minus the cost of attracting and keeping that customer.
Business is any profit-seeking organization that provides goods and services designed
to satisfy customers' needs.
Capacity planning refers to making decisions about the arrangement of production work
centers and other elements.
Both Fannie Mae and Freddie Mac participate in the secondary mortgage market by
purchasing loans originated by banks and other lenders.
Preferred stock appreciates in value much faster than common stock.
Indoxo Auto Parts is a company that manufactures automobile accessories. The
company is considering the manufacture of a special type of helmet that helps reduce
hair loss. The company conducts an online survey to know what customers think of this
idea. This process of validating ideas through customers is known as ________.
A) business analysis
B) beta testing
C) test marketing
D) concept testing
E) prototyping
The sequence of activities that take the longest time from start to finish in a PERT
diagram is called the ________ path.
A) external
B) lagging
C) minor
D) critical
E) buffered
Jason is an assembly-line worker at Mellick Manufacturers. He feels dissatisfied and
frustrated with his job, which consists of tightening three bolts on each washing
machine as it passes by him on the assembly line. At Mellick Manufacturers,
assembly-line workers are closely supervised, and their incentives are linked to
quantitative measures of productivity. According to the job characteristics model, which
of the following is TRUE about Jason's job?
A) It has high task significance.
B) It has low task identity.
C) It has high autonomy.
D) It has low skill variety.
E) It has low feedback.
Investment banks offer all of the following services EXCEPT ________.
A) facilitating mergers, acquisitions, and sales
B) underwriting initial public offerings
C) offering checking and savings accounts
D) managing and advising on investments
E) enabling clients to trade commodities
Which of the following enables companies to design new and better ways to run their
operations?
A) process R&D
B) legal and regulatory environment
C) barriers to entry
D) economies of scale
E) market environment
Directly intervening in organizational processes to improve performance is an example
of the ________ function of management.
A) communicating
B) controlling
C) planning
D) organizing
E) decision making
A generational "bulge" in the population made up of people born between 1946 and
1964, called the Baby Boom generation, has occupied a large number of middle and
upper management positions, frustrating younger professionals who would like to climb
the company ladder. This is an example of the effect of ________ environment on
businesses.
A) economic
B) social
C) political
D) legal
E) regulatory
The Bookstop, a chain of bookstores in the United States, sells books to individuals for
personal use. The firm began with a traditional retail storefront, and then began to 'sell
through" mail order catalogs as well. Recently, the store also opened a website and sells
its books online. The website also allows customers to place requests for specific books
that are not in the stock. In this example, The Bookstop uses ________.
A) strategic sourcing
B) disintermediation
C) retail theater
D) multichannel retailing
E) wheel of retailing
The ________ is a financial record that represents a company's revenues, expenses, and
profits over a given period of time.
A) statement of current assets
B) income statement
C) balance sheet
D) cash flow statement
E) statement of financial position
Which of the following is a key advantage of incorporating a business as a sole
proprietorship?
A) Owners receive tax exemptions when a business is a sole proprietorship.
B) It helps proprietors file taxes separately from their personal income.
C) It is easy to establish and requires less paperwork than other structures.
D) Owner's risk is limited to the extent he/she has invested in the business.
E) Risk associated with sole proprietorship is less, compared to other structures.
Arabex is a stock market in one of the developing countries. Most of the stocks listed in
the market are increasing in value. Arabex is an example of a(n) ________.
A) partial bear market
B) bull market
C) derivative market
D) bear market
E) commodity market
Which of the following statements is TRUE regarding divisional departmentalization?
A) It refers to grouping employees according to their skills.
B) It makes the organization more rigid, and incapable of reacting quickly to change.
C) It reduces the autonomy of business units.
D) It results in the creation of a virtual organization.
E) It can increase costs through duplication.
An organization that seeks to operate efficiently and effectively to achieve its goals
without focusing on financial gains is a ________.
A) business intermediary
B) nonprofit organization
C) service business
D) government-owned corporation
E) goods-producing business
Stocks of major, well-established corporations with demonstrated ability to manage
their way through every kind of economic condition are known as ________ stocks.
A) blue chip
B) income
C) growth
D) penny
E) cyclical
________ ratio is calculated by dividing the market value per share by the earnings per
share.
A) Return on capital
B) Price/earnings
C) Sales/income
D) Gross value
E) Gross margin
A ________ is a partnership in which each partner has unrestricted accountability only
for his or her own actions and at least some degree of responsibility for the partnership
as a whole.
A) master limited partnership
B) general partnership
C) sole proprietorship
D) combined proprietorship
E) limited liability partnership
Which of the following is an example of deregulation?
A) lifting redundant restrictions on airline competition
B) banning the sale of tobacco to minors under the age of 18
C) lowering the speed limit on an interstate highway
D) approving a proposed merger between Google and Microsoft
E) establishing economic development zones to attract new businesses
Just Bakes, a bakery outlet in Cincinnati, is famous for the uniqueness of its bakery
items, such as the baguette supreme, made from mixed-flour dough. The outlet also has
an online ordering system that offers original gift baskets. Most of its target customers
find it to be more appealing. In this example, Just Bakes has a(n) ________.
A) economies of scale benefit
B) barrier to entry advantage
C) horizontal integration
D) competitive advantage
E) vertical integration
Lifestyle Apparels Inc., an international fashion and apparel manufacturing and selling
company, divides its target market segment into groups based on the climatic conditions
of the locations where the customers reside. This enables the firm to offer products that
are suited to the climatic conditions of the place where the customers reside. In this
example, Lifestyle Apparels Inc. uses which of the following strategies?
A) market development
B) vertical integration
C) market segmentation
D) horizontal integration
E) cause-related marketing
Grouping workers according to their similar skills, resource use, and expertise is called
a(n) ________ structure.
A) divisional
B) functional
C) matrix
D) virtual
E) network
________ refers to pay tied to an employee's acquisition of skills.
A) Cafeteria plan
B) Knowledge-based pay
C) Sliding-scale plan
D) Gain sharing
E) Commission
________ refers to overseeing all the activities involved in producing goods and
services.
A) Facilities management
B) Capacity planning
C) Procurement
D) Logistics
E) Operations management
The Federal Reserve establishes the federal funds rate and influences the money supply
by buying and selling Treasuries (negotiable U.S. Government debt obligations) in the
open market. If the Fed buys Treasuries, the money supply will ________ and the
federal funds rate will ________.
A) decrease, decrease
B) decrease, increase
C) increase, stabilize
D) increase, decrease
E) stabilize, increase
With a(n) ________, employers charge for health insurance based on salary, making
insurance more affordable for lower-wage workers.
A) sliding-scale plan
B) wellness plan
C) employee stock-ownership plan
D) 401(k)
E) pension plan
Create a sample capacity plan for a business that you want to start. Clearly mention
such aspects as future demand and starting capacity.
Compare and contrast a money market and derivatives market.
Identify and discuss the Fed's major responsibilities.
Compare and contrast a closed shop with a union shop.
Discuss integrated marketing communications.
Explain the advantages and disadvantages of investing in mutual funds rather than in
individual stocks.
Compare and contrast consumer market with organizational market.
Compare and contrast between free-market systems and planned systems.
