Chapter 1
How do businesses and not-for-profit organizations contribute to our standard of living?
A) By solely focusing on profit maximization.
B) By providing goods and services desired by customers and necessary services for society.
C) By increasing the amount of goods available for consumers.
D) By solely focusing on economic growth.
B) By providing goods and services desired by customers and necessary services for society.
What is the term for the set of moral standards used to judge right from wrong?
A) Ethics
B) Justice
C) Morality
D) Responsibility
A) Ethics
In international trade, when Canadian logging companies sell timber to the U.S., how is the timber categorized for each country?
A) For the U.S., it is a product; for Canada, it is an export.
B) For the U.S., it is an import; for Canada, it is an export.
C) For both, it is an export.
D) For both, it is an import.
B) For the U.S., it is an import; for Canada, it is an export.
What type of business organization typically generates the most total sales?
A) Sole proprietorship
B) Partnership
C) Corporation
D) Cooperative
C) Corporation
Who is defined as the person taking the risk of starting and managing a business for profit?
a) Business owner
b) Entrepreneur
c) Investor
d) Manager
b) Entrepreneur
Which of the following is NOT considered one of the factors of production?
A) Natural resources
B) Labor
C) Capital
D) Market demand
D) Market demand
Land
Labor
Capital
Entrepreneurship
Which of the following best illustrates the tension between personal values and organizational ethics in decision-making?
A) Adhering to company policies even when they conflict with personal beliefs
B) Making decisions based solely on potential personal gain
C) Upholding a moral duty that aligns with both personal and organizational standards
D) Following legal regulations regardless of personal values
A) Adhering to company policies even when they conflict with personal beliefs
What does the term "trade balance" refer to?
A) The total value of a country's imports.
B) The difference between a country's exports and imports over a period of time.
C) The amount of currency exchanged in trade.
D) The overall profit from international trade.
B) The difference between a country's exports and imports over a period of time.
Which of the following is an advantage of sole proprietorships?
A) Limited liability
B) Full control over business decisions
C) Easier access to capital
D) Separate legal entity
B) Full control over business decisions
Which type of entrepreneur starts a business with the intention of keeping ownership and management responsibilities of the entity?
a) Corporate entrepreneur
b) Classic entrepreneur
c) Serial entrepreneur
d) Intrapreneur
b) Classic entrepreneur
What economic system is characterized by private ownership and marketplace competition?
A) Socialism
B) Communism
C) Capitalism
D) Traditional economy
C) Capitalism
Which philosophy evaluates the morality of actions based on their consequences for the majority (outcomes)?
A) Deontology
B) Utilitarianism
C) Virtue ethics
D) Ethical relativism
B) Utilitarianism
If Austria exported $122.5 billion and imported $118.8 billion in 2018, what was Austria's trade balance?
A) Trade deficit
B) Trade surplus
C) Balanced trade
D) Trade embargo
B) Trade surplus
In a partnership, how are responsibilities and profits typically managed among owners?
A) One partner manages all responsibilities
B) Profits are shared equally regardless of contribution
C) Responsibilities and profits are divided based on agreement
D) Partners do not share profits
C) Responsibilities and profits are divided based on agreement
What is the primary difference between small business owners and entrepreneurs?
a) Entrepreneurs tend to start small businesses.
b) Entrepreneurs take more risks and seek growth opportunities.
c) Small business owners often have higher incomes.
d) Entrepreneurs work independently without any financing.
b) Entrepreneurs take more risks and seek growth opportunities.
What do the concepts of demand and supply refer to in microeconomics?
A) Demand is the amount of a good firms will produce; supply is the amount consumers want.
B) Demand is the quantity of a good people will buy at a given price; supply is the quantity firms will produce at that price.
C) Demand and supply are the same.
D) Demand is fixed, while supply varies.
B) Demand is the quantity of a good people will buy at a given price; supply is the quantity firms will produce at that price.
What is corporate philanthropy?
A) The practice of making profits
B) Charitable giving by corporations
C) Investment in securities
D) Ethical decision-making
B) Charitable giving by corporations
What does the term "exchange rate" refer to in the context of currency trading?
A) The interest rate on foreign loans.
B) The value of one currency in relation to another.
C) The total amount of currency in circulation.
D) The fees charged by banks for currency exchange.
B) The value of one currency in relation to another.
What is a key advantage of incorporating a business as a C-Corp?
A) Unlimited personal liability
B) Easier to attract investors
C) Less regulatory oversight
D) Simplified tax process
B) Easier to attract investors
What is the first step in starting a business?
a) Writing a business plan
b) Conducting market research
c) Doing a self-assessment
d) Finding investors
c) Doing a self-assessment
Which market structure is characterized by a few firms that dominate the market?
A) Perfect competition
B) Monopolistic competition
C) Oligopoly
D) Pure monopoly
C) Oligopoly
What level of the corporate social responsibility pyramid involves actions that, while legal, may not align with ethical standards or benefit society?
A) Economic responsibilities
B) Legal responsibilities
C) Ethical responsibilities
D) Philanthropic responsibilities
C) Ethical responsibilities
What is the term for government policies designed to restrict international trade to protect domestic industries?
A) Free trade
B) Comparative advantage
C) Protectionism
D) Globalization
C) Protectionism
What is the term for when two companies combine to form one entity?
A) Acquisition
B) Joint venture
C) Merger
D) Franchise
C) Merger
Which type of investor provides large amounts of funding to startups and emerging companies, often during later stages of growth, usually in exchange for equity?
a) Angel investors
b) Venture capitalists
c) SBA lenders
d) Private equity firms
b) Venture capitalists