Chapter 4
Insider trading involves:
Select one:
a.an Internet activity that establishes a barter exchange system between businesses.
b.investors using private company information to further their own fortunes.
c.the exchange of assets between companies in the same industry.
d.a payment or reward for socially conscious behavior.
b. investors using private company information to further their own fortunes.
Name an advantage of a partnership?
Shared management and pooled skills
Successful entrepreneurial teams:
Select one:
a.quickly organize themselves like large corporations.
b.assign only one person to new product innovation.
c.bring a variety of talent to the business venture.
d.outsource most of the details of innovation.
c.bring a variety of talent to the business venture.
To many businesspeople, one of the major attractions of a sole proprietorship is:
Select one:
a.the ability to obtain additional financial resources.
b.the protection of limited liability.
c.an unlimited lifespan.
d.the chance to be their own boss.
d.the chance to be their own boss
One of the challenges of running a home-based business is:
Select one:
a.an increase in business risk.
b.managing the extra time on your hands.
c.keeping work and family tasks separate.
d.burdensome tax laws.
c.keeping work and family tasks separate.
Many Americans define ethical behavior according to the situation in which they find themselves. This suggests that there may be situations where ________ to cheat, steal, or lie.
Select one:
a.it is absolutely wrong
b.it might be okay
c.business people are expected
d.capitalism forces people
b.
it might be okay
One reason many companies do not organize themselves as an S corporation is that this form of business:
has a special eligibility restriction, which many businesses are unable to meet.
A detailed written statement that describes the nature of the business, the target market, the firm's competitive advantages, as well as the owner's resources and qualifications is a:
business plan.
Business is under pressure from society to be more socially responsible. However, even the strongest advocates for corporate responsibility can't seem to agree:
Select one:
a.on what social responsibility involves.
b.who should be policing businesses' behavior.
c.if all businesses, large and small, should be held to the same standards.
d.if politicians should be held to the same standards of behavior.
on what social responsibility involves.
Which of the following statements is not a challenge for home-based businesses?
Select one:
a.Affordable technology such as the Internet
b.Staying focused on the business and leaving home chores for after-business hours
c.Using your time wisely
d.Promoting your services
Affordable technology such as the Internet
Business relationships often present ethical dilemmas that are:
not easily resolved.
Global franchising offers:
Select one:
a.few opportunities for American investors.
b.opportunities for large franchise systems, but not small ones.
c.opportunities for both large and small franchises.
d.American firms the opportunity to market goods overseas without any need to adjust for cultural differences.
opportunities for both large and small franchises.
A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service
market
Being your own boss means:
Select one:
a.reducing your working hours.
b.having the freedom to set your own working hours and taking lots of vacations, particularly when just beginning the business.
c.accepting accountability for the mistakes of the business.
d.having limited financial resources to throw into the business.
accepting accountability for the mistakes of the business.
Ethical dilemmas in business:
Select one:
a.force us to make poor choices.
b.always end up bringing out the best in us.
c.often force us to choose between equally unsatisfactory alternatives.
d.define us as being moral absolutists or moral situationalists.
often force us to choose between equally unsatisfactory alternatives.
Corporate social responsibility describes the firm's:
concern for the welfare of society.
A(n) ___________ is an arrangement whereby someone with a proven idea for a business sells the rights to use the business model, to sell a product or service to others in a given territory.
franchise agreement
One reason franchises have become so popular is that this arrangement provides the franchisee with:
Select one:
a.a nationally recognized name and product.
b.a low cost way to start a business.
c.limited liability.
d.the right to retain all profits earned by their franchise.
a.a nationally recognized name and product.
The first step when facing an ethical dilemma is to ask:
"Is it legal?"
One disadvantage of a limited liability company is that it:
Select one:
a.requires all earnings of the business be taxed at the corporate rate.
b.has a limited life span.
c.requires the owners to divide up profits and losses in a fixed proportion.
d.has a more restrictive ownership requirement than S corporations.
has a limited life span.
A very critical last step in the process of establishing an ethics code is ________.
enforcement
One disadvantage of _________ is the initial cost of formation.
corporations
A distinguishing feature of a cooperative is that it:
Select one:
a.maintains a distinct separation between ownership and management.
b.is only intended to operate for a limited period of time.
c.is owned and operated by the people who use it.
d.can have no more than 75 owners, all of whom must be citizens of the United States.
c.is owned and operated by the people who use it.
A(n) _____________ is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory
franchisor
Which of the following explains why individuals accept the risks of business ownership?
Select one:
a.The potential for learning how to be self-disciplined
b.The sense of self-satisfaction and independence
c.The challenge of seeking power
d.The desire to work fewer hours
The sense of self-satisfaction and independence