1. Companies that outsource research and development and design jobs:
A. have always made a wise decision.
B. will be more profitable in the long run.
C. run the risk of overseas companies using the information to produce competitive products.
D. always invest in the overseas companies that take on these jobs.
2. For-profit businesses and nonprofit organizations are similar in that they both:
A. contribute to the welfare of society.
B. seek to earn a profit.
C. have a limited life.
D. must be controlled by a board of directors.
3. Adam Smith believed that countries would prosper if businesspeople were free to start and run their own businesses. Businesspeople would make a profit by providing the goods, services and ideas that others in the economy wanted, and they would hire others to help increase those profits, leading to social and economics benefits for many. This idea was called the __________.
A. kinked demand theory.
B. invisible hand.
C. spending multiplier.
D. demand accelerator.
4. Jake considers himself to be a follower of Thomas Malthus. Which of the following statements would Jake be most likely to make?
A. The key to economic growth is to keep taxes and government regulations to a minimum.
B. Command economies are more likely to encourage economic growth than free market economies.
C. Allowing people to follow their self-interest is the best way to generate economic growth and prosperity.
D. A society will not experience sustainable economic progress unless it accepts the need to limit population growth.
5. Which of the following statements best describes the theory of comparative advantage?
A. The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services.
B. Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce efficiently from other nations.
C. The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.
D. A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for which domestic demand is comparatively weak.
6. Free trade between nations generally results in:
A. industrialized nations gaining at the expense of developing nations.
B. an increase of jobs in developed nations.
C. mutually beneficial exchange relationships.
D. higher prices for imported goods.
7. Given the ethical lapses that are prevalent today in our businesses, which of the following can be done to restore trust in the free-market system and leaders in general?
A. Business leaders that have broken the law should be given another chance.
B. New laws making accounting records transparent may help restore trust.
C. Making the government accountable for business leader behavior will restore trust.
D. It’s up to the government to pass laws requiring ethical behavior of all leaders, business and otherwise.
8. Laws represent the standards of ________ behavior.
D. socially responsible
9. A ___________ is a form of business that is owned, and usually managed, by one person.
A. closed corporation
B. subchapter S corporation
C. sole proprietorship
D. limited partnership
10. ____________ comprise about 20% of all businesses but account for about 81% of U.S. business receipts.
C. Sole proprietorships
D. Limited liability companies
11. The U.S. government’s Immigration Act of 1990: A. encouraged entrepreneurs to come to the U.S. through “investor visas”. B. established a government program to teach American workers displaced by immigration how to start their own businesses. C. established guidelines to help entrepreneurs recruit legal aliens as a source of low cost labor. D. proposed an exchange program for American and European entrepreneurs to temporarily live internationally in order to open up foreign branches for their businesses.
12. Which of the following statements is characteristic of entrepreneurs A. They like certainty B. They have the ability to visualize a clear path C. They look at problems and see opportunities D. They prefer to be inventive rather than worry about whether the invention solves a customer need
13. A vision for a company is: A. an explanation of why the company exists and where it wants to go. B. the same thing as an objective. C. a detailed plan that outlines the major organizational structure of the firm. D. very relevant for the short-term, but less useful for the long-term.
14. _________ planning is a part of contingency planning that is used to deal with sudden and unexpected changes in the business environment. A. Crisis B. Tactical C. Operational D. SWOT
15. Fayol’s ____________ principle says that workers’ attitudes would create an environment of pride and loyalty within an organization. A. esprit de corps B. hierarchy of loyalty C. unity of command D. equity
16. __________ believed that managers were trustworthy and companies would do well if employees simply did what they were told. A. John Keynes B. Adam Smith C. Peter Drucker D. Max Weber
17. One strategy U.S. manufacturers have employed in order to become more competitive is:
A. focusing on providing the lowest priced products.
B. relying on advanced technology and the Internet to unite companies.
C. maintaining a distance relationship with suppliers in an effort to guard trade secrets.
D. increasing advertising budgets.
18. To strengthen its manufacturing base in the future, U.S. will have to:
A. uncover lower wage workers in the U.S. to compete with China.
B. continue to innovate.
C. support students in high school and college interested in studying the arts.
D. cut the amount of benefits offered to workers.
19. The concept that a hierarchy of human needs could be used to explain motivation was developed by:
A. Abraham Maslow.
B. Frederick Taylor.
C. Douglas McGregor.
D. Frederick Herzberg.
20. Abraham Maslow thought that once needs at one level of his hierarchy were met:
A. motivation would diminish.
B. another, higher order need would emerge to motivate that person.
C. that type of need would never again be an effective motivator.
D. he or she would become more interested in lower-level needs.
TRUE OR FALSE
21. The sense of satisfaction you get when you achieve an important goal is an intrinsic reward.
22. Extrinsic rewards are those that are given to a person by someone else.
23. Since motivation comes from within an individual, there is little that managers can do to help motivate employees.
24. When unhappy employees leave a company, the firm normally ends up benefiting financially.
25. A key element of Frederick Taylor’s approach was the time-motion study, which examined the tasks performed to complete a job and the time needed to complete each task.