Business Management + Administration
98. When employees are exposed to a variety of different ideas and perspectives, they are more likely to come up with their own new ideas and strategies. In other words, knowledge and learning lead to
A. leadership.
B. complacency.
C. curiosity.
D. innovation
98. D Innovation.
Innovation, the creation or discovery of something new, such as a new product, strategy, or process, is closely tied to knowledge and learning. When employees are constantly learning at work, they are more likely to innovate. They are not more likely to become complacent, which means feeling satisfied with less-than-stellar performance. Learning and knowledge may also lead to greater curiosity and leadership, but this example specifically references innovation. SOURCE: SM:094 Describe relationship among innovation, learning, and change SOURCE: Management Study Guide. (2020). The new competitive landscape: Role of knowledge, learning and innovation in organizations. Retrieved September 30, 2020, from https://www.managementstudyguide.com/role-of-knowledge-learning-and-innovation-inorganizations.htm
Melissa's family goes to the same remote beach destination every year for one week. All of the family members enjoy the quiet, relaxing atmosphere that the location offers. In this situation, the motive to travel to this location is
A. price.
B. adventure.
C. comfort.
D. prestige
C Comfort.
Some people prefer traveling to familiar places, which in turn, provides comfort. Adventure seekers tend to enjoy visiting different locations and participating in a variety of activities. The situation does not provide enough information to determine if price or prestige play role in the travel motives or decisions. SOURCE: SE:220 SOURCE: Kolter, P., Bowen, J.T., Makens, J.C., & Baloglu, S. (2017). Marketing for hospitality and tourism (7th ed.) [pp. 164-170]. Boston, MA: Pearson Education, Inc.
Every six months, a company holds a meeting for all shareholders and explains how the company has been performing financially. Which component of a well-governed company is this an example of?
A. Fairness
C. Transparency
B. Accountability
D. Viability
C Transparency.
Transparency is maintaining open and truthful communications. It is a principle of good governance because stakeholders should be informed about the company's activities. One way that companies can be transparent is by hosting shareholder meetings and sharing information about financial performance. Accountability is accepting responsibility for decisions. Fairness is the ability to make judgments and act without favoritism or self-interest. Viability is creating long-term value for all relevant stakeholders. This example is not related to accountability, fairness, or viability. SOURCE: PD:214 SOURCE: Pearse Trust. (2014, February 19). The core principles of good corporate governance. Retrieved October 9, 2019, from https://www.pearse-trust.ie/blog/bid/108866/The-CorePrinciples-Of-Good-Corporate-Governance
A message that is as short and to the point as possible is referred to as
A. courteous.
B. concise.
C. correct.
D. complete.
B Concise.
Concise messages are clear and short. A courteous message addresses others with respect. Completeness in communication means giving all the information required. Carefully checking all facts and figures for accuracy before delivering a message should ensure correctness. SOURCE: CO:147 Explain the nature of effective verbal communications SOURCE: Chron. (2020, May 18). How to communicate concisely. Retrieved September 11, 2020, from https://work.chron.com/communicate-concisely-11358.html
When individuals purchase items such as high-performance sports cars, rare collectibles, and jewelry containing large, precious gemstones, they must often pay __________ taxes.
A. luxury
B. gift
C. estate
D. property
A Luxury.
Governments increase their revenues by charging taxes on nonessential, often very expensive goods and services, such as high-end automobiles, rare collectibles, and jewelry. This type of tax is called a luxury tax. An individual who receives a certain amount of money as a gift may be required to pay a gift tax. Property taxes are paid on buildings (e.g., homes) and land. A person who inherits some or all of a deceased person's assets pays an estate tax, which is based on the net value of the assets or estate. SOURCE: BL:134 SOURCE: Investopedia. (2018, May 10). Luxury tax. Retrieved October 10, 2019, from http://www.investopedia.com/terms/l/luxury_tax.asp
Before a bar of soap is bought by a customer, it goes through a long production process. First, the raw materials are shipped to a manufacturer that blends the soap and molds it into bars. Then, the bars are sent to a packaging plant to be put into boxes and printed with labels. Finally, the bars are shipped to distributors throughout the country where they are sold to customers. The relationship among the raw materials distributor, the soap manufacturer, the packaging plant, and the stores where the soap is sold can be described as a
A. supply chain network.
B. route of production.
C. manufacturing route.
D. distribution network.
A Supply chain network.
A supply chain network is a group of organizations that have business relationships with each other for the purpose of creating an end product. Raw materials distributors, manufacturers, packaging companies, and stores are examples of the types of companies that participate in supply chains. The terms “route of production,” “manufacturing route,” and “distribution network” are not generally used to describe this type of network. SOURCE: OP:479 Describe supply chain networks SOURCE: Kenton, W. (2020, July 7). Supply chain. Retrieved September 30, 2020, from https://www.investopedia.com/terms/s/supplychain.asp
Jonas is starting a nonprofit organization to save turtles in Mexico. What benefit will Jonas most likely receive from registering as a nonprofit?
A. Dual taxation
B. Federal tax break
C. Bank loan
D. Dividends
2. B Federal tax break.
Nonprofit organizations that are established to benefit society are not generally taxed by the federal government. Dual taxation is the levying of two taxes on the same income, which normally isn't the case for nonprofit organizations. Bank loans are a means of gaining capital funding and are not a benefit of registering as a nonprofit. Dividends are sums of money paid to an investor or stockholder as earnings on an investment. These normally do not apply to nonprofit organizations since they are based on the goal of profit. SOURCE: BL:003 SOURCE: LAP-BL-001—Own It Your Way (Types of Business Ownership)
94. In response to an economic recession and a steady decline in profits, the ARU Company's management staff must eliminate 150 positions. Which of the following would be an ethical way for the company to handle the situation:
A. Hold a press conference after the dismissals to defend the decision to downsize
B. Avoid discussing the situation, so not all of the employees will become upset
C. Provide the affected employees with career counseling and severance pay
D. Advise the remaining employees that they don't need to worry about the company's situation
C Provide the affected employees with career counseling and severance pay.
Downsizing is very difficult for everyone in the company—the affected employees, the remaining employees, and the managers who must make the decisions about whom to let go. Providing the dismissed employees with severance pay and career counseling are ethical behaviors that intend to help them through a difficult transition time. If management does not discuss the situation with its employees, the remaining employees are more likely to become upset, lose respect for, and distrust management. This is likely to create a negative work environment. Advising remaining employees that they don't need to worry about the company's situation is not an ethical action because future financial losses could force the business to close. Holding a press conference is not an activity that directly affects the business's former and current employees. SOURCE: SM:002 SOURCE: Ashe-Edmunds, S. (2016). What ethical issues should a manager consider when downsizing? Retrieved October 11, 2019, from http://smallbusiness.chron.com/ethicalissues-should-manager-consider-downsizing-61674.html
If the headline of a print advertisement identifies a problem, then the copy that follows should provide
A. reactions.
B. descriptions.
C. examples.
D. solutions.
D Solutions.
All the elements of a print ad must be coordinated to produce the effect desired for the advertisement as a whole. If the headline identifies a problem, the copy should tell how the product will solve the problem. By solving the problem raised in the headline, the copy completes the intended message of the advertisement. Providing examples, descriptions, or reactions does not coordinate the copy with the headline. SOURCE: PR:014 Explain the components of advertisements SOURCE: Pearson, O. (2020). Five common elements of print advertisement. Retrieved September 10, 2020, from https://smallbusiness.chron.com/five-common-elements-print-advertisement21400.html
Which of the following is a business risk associated with a failure to follow laws:
A. Increased inventory
B. Government fines
C. Decreased quotas
D. Goal achievement
B Government fines.
Risk management is a business activity that involves the planning, controlling, preventing, and procedures to limit business losses. Compliance with the law is an important aspect of risk management. If a business does not comply with laws, the government may fine the business, which could result in substantial financial losses. A substantial financial loss can hinder the business's ability to achieve its goals. Increased inventory and decreased quotas are not risks that are directly associated with failure to comply with laws. SOURCE: RM:043 SOURCE: Intuit QuickBooks (2019). The dangers of non-compliance for your business. Retrieved October 4, 2019, from https://quickbooks.intuit.com/r/hr-laws-and-regulation/the-dangers-ofnon-compliance-for-your-business/
22. What function of management establishes a company's levels of authority?
A. Organizing
B. Staffing
C. Controlling
D. Evaluating
22. A Organizing.
Organizing is the management function of setting up the way the business's work will be done. A primary organizing activity is establishing levels of authority. Staffing is the management function of finding workers for the company. Controlling is the management function that monitors the work effort. Evaluating is a controlling activity. SOURCE: SM:064 Explain managerial considerations in organizing SOURCE: Management Study Guide. (2020). Importance of organizing function. Retrieved October 29, 2020, from http://www.managementstudyguide.com/organizing_importance.htm
The purpose of a pre-bid meeting is to
A. strengthen relationships between bidders and purchasers.
B. filter out potential bidders.
C. clarify any bidders' concerns.
D. request an extension of the submission date.
C Clarify any bidders' concerns.
A pre-bid meeting is a formal meeting that gives bidders a chance to clarify any concerns with the scope of work, documents, and other details. The pre-bid meeting is usually open to all bidders or a pre-qualified group of bidders. It is not used to filter out potential bidders. The purpose of the pre-bid meeting is not to strengthen relationships. Finally, a request for an extension may come out of a pre-bid meeting, but this is not the only reason for these meetings to occur. SOURCE: OP:160 SOURCE: Lynch, J. (2015, June 20). Pre-bid meetings and site visits. Retrieved November 13, 2017, from http://procurementclassroom.com/pre-bid-meetings-and-site-visits/
89. Which of the following is a potential challenge when implementing quality management:
A. Too-specific goals and plans
B. A budget surplus
C. Lack of integration
D. Difficult laws/regulations
Lack of integration.
One challenge that an organization might face when implementing quality management is a lack of integration throughout the entire company. Unless the entire organization participates in quality management, it will not be successful. Specific goals and plans are a good thing when it comes to quality management! A lack of money in the budget might be a challenge, but a budget surplus would also be good. Laws and regulations usually do not keep organizations from pursuing quality management. SOURCE: QM:001 SOURCE: LAP-QM-001—Keep It Quality (Nature of Quality Management)
Which of the following marketing strategies is appropriate for the maturity stage of the product life cycle:
A. Increasing media advertising
B. Finding nontraditional distribution channels
C. Offering incentives to distributors
D. Increasing prices
C Offering incentives to distributors.
During the maturity stage, intensive distribution is desirable but may be more difficult to achieve than in the growth stage. For this reason, marketers sometimes offer distribution incentives to encourage distributors to carry the product. Finding nontraditional distribution channels is an appropriate strategy for the decline stage. Marketers usually decrease media advertising during the maturity stage and focus more on in-store promotions. Prices during the maturity stage usually stabilize or decrease. SOURCE: PM:024 Identify the impact of product life cycles on marketing decisions SOURCE: LAP-PM-024—Get a Life (Cycle) (Product Life Cycles)
Makayla wants to know whether or not her customer can pay short-term debts. What type of financial ratio analysis should Makayla use?
A. Working capital
B. Debit/Equity
C. Asset turnover
D. Profit margin
A Working capital.
Working capital is a measure of short-term financial health that can be found by subtracting current liabilities from current assets. It indicates whether or not a company can cover its current debts, so it is the appropriate technique to provide Makayla with the information she needs. Debit/Equity ratio shows the relationship between total liabilities and shareholder's equity. It indicates how much debt a company is using to finance its assets. This ratio will not provide the information that Makayla needs. Asset turnover ratio measures sales revenue in relation to the value of assets. It indicates efficiency of performance, which is not what Makayla needs to know. Finally, profit margin demonstrates the amount of each dollar of sales that is kept in earnings. This is not related to Makayla's inquiry. SOURCE: FM:009 SOURCE: Kenton, W. (2019, June 13). Ratio analysis. Retrieved October 30, 201
8. Greta worked for Coca-Cola for 10 years, but after leaving her position, she was offered a new job with Pepsi. Coca-Cola sought legal action to prevent Greta from sharing her knowledge about the company with its top competitor. This is due to a legal doctrine known as
A. antitrust policy.
B. a copyright violation.
C. a noncompete agreement.
D. inevitable disclosure.
D Inevitable disclosure.
Inevitable disclosure is a legal doctrine that allows companies to prevent former employees from working for competitors because the employees would likely give away trade secrets. Coca-Cola can seek legal action to prevent Greta from sharing trade secrets with Pepsi. A copyright violation occurs when someone violates the rights of someone who has a legally protected artistic work. Noncompete agreements are clauses in contracts that require employees to agree not to work for a competitor. There is no indication that Coca-Cola asked Greta to sign a noncompete agreement. Antitrust policy includes laws that prevent a person or company from restricting free trade and competition in the marketplace. SOURCE: KM:004 Explain legal considerations for knowledge management SOURCE: Fair Competition Law. (2019, June 5). Inevitable disclosure doctrine: A brief history and summary. Retrieved October 29, 2020, from https://www.faircompetitionlaw.com/2019/06/05/inevitable-disclosure-doctrine-a-brief-historyand-summary
99. Each year, the Big Roy family restaurant sells packets of Valentine's Day gift certificates for free children's meals. Each $3.99 packet contains 10 gift certificates. Each gift certificate has a maximum value of $2.50. What is most likely to be the restaurant's primary motivation for selling these gift certificates?
A. To increase the number of families dining at Big Roy
B. To publicize Big Roy's Valentine's Day cakes and pies
C. To feed underprivileged children in the community
D. To generate $1.44 in profit from the sale of each packet
A To increase the number of families dining at Big Roy. Although Big Roy is potentially selling the gift certificates at a huge loss ($25.00 in gift certificates for $3.99), the restaurant expects to more than cover this loss through future sales. Big Roy is anticipating that when a child receives one of these gift certificates, her/his entire family will accompany the child to Big Roy. The restaurant's overall sales among families will increase because the child's parents will purchase meals for themselves and possibly dessert for everyone in the family. The restaurant's primary motivation is not likely to be to publicize its cakes and pies, feed underprivileged children, or generate any initial profit from the sale of each packet of gift certificates. SOURCE: SE:479 SOURCE: Kotler, P., Bowen, J.T., & Makens, J.C. (2010). Marketing for hospitality and tourism (5th ed.) [pp. 412-413]. Upper Saddle River, NJ: Prentice Hall.
A retailer buys a variety of toys from a number of different producers and makes them all available for sale in the same place. The retailer is reducing a discrepancy of
A. promotion.
C. installation.
B. quantity.
D. assortment.
Assortment. The retailer is reducing a discrepancy of assortment by making a variety of toys available in one place. Reducing a discrepancy of quantity means breaking down a large quantity of a product into smaller quantities for final consumers to buy. There is no such thing as a discrepancy of installation or a discrepancy of promotion. SOURCE: CM:001 SOURCE: LAP-CM-002—Chart Your Channels (Channel Management)
Which of the following statements regarding corporate branding is true:
A. A business's core values identify the beliefs that the business stands for.
B. Customer touch points typically occur before sales transactions.
C. Customer service representatives are responsible for corporate branding.
D. Brand cues are used primarily to identify the company in its advertising.
A A business's core values identify the beliefs that the business stands for.
A corporate brand consists of all of the combined customer impressions and experiences associated with a particular company. Many different elements, including the company's core values, brand cues, brand personality, brand promise, and touch points, make up a corporate brand's identity. A business's core values, also known as its brand values, are the beliefs or qualities that a brand stands for and is built around. The first step of building a corporate brand involves defining the company's core values. Customer touch points, which are all the opportunities that businesses have to connect with customers and reinforce their brand values, occur before, during, and after sales transactions. Everyone in the company is responsible for corporate branding—not just the customer service representatives. Employees must understand and embrace the brand's values, personality, and promise for the corporate brand to take hold and be a success. Brand cues are elements that remind customers and employees of brands and their values. They appear throughout the workplace and community as well as in advertising. SOURCE: PM:207 Describe factors used by businesses to position corporate brands SOURCE: Couchman, H. (2017, September 18). The search for value: How to define brand values for your company. Retrieved September 10, 2020, from https://fabrikbrands.com/how-to-definebrand-values/
Why are financial institutions using tokenization?
A. To provide incentives for increased investing
B. To create credit cards
C. To protect online transactions
D. To overcome government-regulated quotas
C To protect online transactions.
Tokenization is the process of substituting a random number in place of an account number to process the transaction online. In this way, financial institutions are able to protect customer data from fraud. Credit card creation, provision of incentives, and government-required quotas are not aspects of tokenization. SOURCE: RM:058 SOURCE: Worthington, D. (2018, July 17). Tokenization. Retrieved October 4, 2019, https://www.mobilepaymentstoday.com/blogs/securing-real-time-payments-with-tokenization/
1. Serena is responsible for making business decisions on Logan's behalf, which includes looking out for his best interests. In this situation, Serena is the __________, and Logan is the __________.
A. executor; advocate
B. advocate; agent
C. principal; executor
D. agent; principal
1. D Agent; principal.
An agent is a person or business that is authorized to conduct certain activities with third parties on the behalf of another person or business, which is the principal (Logan). Because Serena is acting in and advocating for Logan's best interests, Serena is an agent. Employees, attorneys, and accountants are examples of people who enter into relationships as agents for others. Depending on Serena's responsibilities, she may be an executor of Logan's estate, but there is not enough information provided to determine if this is the case. In legal terms, Logan is not an agent, advocate, or executor. SOURCE: BL:072 Explain the nature of agency relationships SOURCE: LawShelf. (2020). Business law: The principal-agent relationship. Retrieved September 30, 2020, from https://lawshelf.com/shortvideoscontentview/business-law-the-principal-agentrelationship
Calculate the amount charged to a hotel guest's credit card using the following information: A four-night stay at a room rate of $128 per night and 14.5% sales-tax rate.
A. $586.24
B. $594.42
C. $598.42
D. $582.24
A $586.24.
To calculate the amount charged to the hotel guest's credit card, first multiply the number of nights stayed by the room rate (4 X $128 = $512). Then, multiply the dollar amount of the four-night stay by the sales tax rate ($512 X 114.5% = $586.24) or ($512 X 14.5% or .145 = $74.24; $512 + $74.24 = $586.24). SOURCE: SE:329 SOURCE: Eliot, A. (2017, February 8). How to calculate hotel tax. Retrieved
Analyzing data with Simpson's Paradox in mind can help account for
A. human error.
B. unconsidered variables or dimensions.
C. inconsistencies in data generation.
D. incorrect assumptions.
B Unconsidered variables or dimensions.
Simpson's Paradox occurs when a trend that appears in different groups of data disappears when the groups are combined. It helps reveal instances where data can be misinterpreted or variables can be overlooked because data have not been examined from multiple perspectives. Simpson's Paradox does not necessarily account for human error, inconsistencies in data generation, or incorrect assumptions about data. SOURCE: NF:139 SOURCE: Reda, G. (2014, March 23). Principles of good data analysis. Retrieved October 11, 2019, from http://www.gregreda.com/2014/03/23/principles-of-good-data-analysis/
Which of the following is not required by the Federal Trade Commission in a written warranty:
A. Where to take or send the merchandise for service
B. How long the warranty is in effect
C. What kinds of service or repairs are included
D. How to contact government agencies
D How to contact government agencies.
There are many city, state, and federal government agencies that regulate the rights of consumers, but these agencies are not listed in a warranty. Explaining what kind of service or repairs are included, how long the warranty is in effect, and where to take or send the merchandise for service should be included in a written warranty. SOURCE: PM:017 Identify consumer protection provisions of appropriate agencies SOURCE: LAP-PM-007—Protect and Serve (Consumer Protection)
Which of the following is an example of arbitrage:
A. A business sells corporate bonds to obtain funds to finance major expansion efforts.
B. An individual earns interest on his/her money by agreeing to leave it in a financial institution for a certain time frame.
C. A business places a percentage of its income into a retirement account for employees.
D. An individual buys 10 shares of stock for $150 per share on one market, and immediately sells each share for $200 on another market.
D An individual buys 10 shares of stock for $150 per share on one market, and immediately sells each share for $200 on another market.
Arbitrage is profiting from the sale of a financial instrument (e.g., stock) or good on a different market. Arbitrage often involves the buying and selling of goods and other types of services. For example, a person who buys a set of football tickets from a sport organization for $100 and sells them on eBay to another person for $500 is engaging in arbitrage. When an individual earns interest on his/her money by agreeing to leave it in a financial institution for a certain time frame, s/he is investing in a certificate of deposit. Businesses that set aside money for their employees' retirement are contributing to a pension plan. A business that sells bonds is using debt financing to raise funds for its expansion efforts. SOURCE: FI:574 SOURCE: Moffatt, M. (2019, March 4). What is arbitrage? Retrieved October 4, 2019, from http://economics.about.com/cs/finance/a/