Business Law
Which of the following is a characteristic of a legally enforceable contract?
A. The parties must have the legal capacity to contract.
B. The terms must be vague.
C. The agreement must be verbal.
D. One party must receive all the benefits.
Answer: A. The parties must have the legal capacity to contract
Which of the following is a characteristic of an entrepreneur?
A. Prefers to avoid taking risks
B. Works strictly for a salary
C. Takes initiative to start new ventures
D. Always follows established procedures
C. Takes initiative to start new ventures
Strategic management primarily involves:
A. Day-to-day operations of a business
B. Long-term planning and goal-setting for an organization
C. Supervising entry-level employees
D. Ensuring compliance with tax regulations
B. Long-term planning and goal-setting for an organization
Operations management is primarily concerned with:
A. Designing marketing campaigns
B. Managing the day-to-day activities of a business
C. Establishing the company's mission statement
D. Developing new financial products
B. Managing the day-to-day activities of a business
What is the main goal of marketing in a business?
A. To reduce production costs
B. To create and maintain relationships with customers
C. To manage financial resources effectively
D. To control inventory levels
B. To create and maintain relationships with customers
A contract is considered void if it:
A. Involves the sale of legal goods.
B. Requires one party to perform an illegal act.
C. Is written and signed by both parties.
D. Has terms that can be understood by the average person.
Answer: B. Requires one party to perform an illegal act.
A business plan serves primarily as a:
A. Tool for tracking employee performance
B. Marketing strategy for selling products
C. Guide for the operations and direction of a new business
D. Document to fulfill legal requirements for starting a business
C. Guide for the operations and direction of a new business
A mission statement is important in strategic management because it:
A. Provides details about employee roles and responsibilities
B. Outlines the company's products and services
C. Defines the organization's purpose and guides decision-making
D. Lists the company's competitors
C. Defines the organization's purpose and guides decision-making
Which of the following is an example of a process improvement in business operations?
A. Increasing product prices to boost revenue
B. Redesigning the company's logo for better branding
C. Streamlining the workflow to reduce production time
D. Hiring more sales representatives to improve customer service
C. Streamlining the workflow to reduce production time
In marketing, the term "target market" refers to:
A. The geographic area where a business is located
B. The competitors that a business aims to outperform
C. The group of customers most likely to purchase a product
D. The suppliers that provide raw materials to a company
C. The group of customers most likely to purchase a product
When a business engages in deceptive advertising, it is violating what type of law?
A. Antitrust law
B. Tort law
C. Intellectual property law
D. Consumer protection law
Answer: D. Consumer protection law.
Which of the following is a common source of funding for new business ventures?
A. Corporate bonds
B. Venture capital
C. Subsidies from competitors
D. Government penalties
B. Venture capital
Which of the following is a tool used in strategic management to identify the external factors that could impact a business?
A. SWOT analysis
B. Market segmentation
C. Financial statement analysis
D. Organizational chart
A. SWOT analysis
A key function of inventory management in operations is to:
A. Minimize the costs associated with carrying too much inventory
B. Maximize advertising effectiveness
C. Increase employee retention
D. Evaluate the company's marketing strategy
A. Minimize the costs associated with carrying too much inventory
Which of the following is a promotional strategy commonly used by entrepreneurs to reach potential customers?
A. SWOT analysis
B. Personal selling
C. Inventory management
D. Cost accounting
B. Personal selling
A business that shares false information about a competitor's products to gain an advantage may be liable for:
A. Breach of contract
B. Copyright infringement
C. Slander or libel
D. Patent violation
Answer: C. Slander or libel.
The primary purpose of conducting a SWOT analysis for a new business is to:
A. Develop a promotional campaign
B. Determine pricing strategies for products
C. Assess the strengths, weaknesses, opportunities, and threats
D. Write financial statements
C. Assess the strengths, weaknesses, opportunities, and threats
In strategic management, the process of setting measurable and achievable objectives is known as:
A. Forecasting
B. Benchmarking
C. Goal setting
D. Diversification
C. Goal setting
Quality control in business operations is used to:
A. Ensure products meet established standards before reaching the customer
B. Create promotional materials for advertising
C. Develop a new business idea
D. Set financial budgets for the upcoming fiscal year
A. Ensure products meet established standards before reaching the customer
Marketing segmentation involves:
A. Dividing the market into distinct groups of customers with similar needs
B. Setting prices for products and services based on production costs
C. Creating a brand logo to represent the company
D. Analyzing the financial performance of marketing campaigns
A. Dividing the market into distinct groups of customers with similar needs
If an employee signs a non-compete agreement and then leaves to work for a competitor, the original employer can enforce the agreement if:
A. The employee worked in any industry unrelated to the original employer.
B. The agreement is considered reasonable in scope, duration, and geographic area.
C. The employee was not informed about the non-compete agreement's conditions.
D. The employee worked at the original company for less than a month.
Answer: B. The agreement is considered reasonable in scope, duration, and geographic area
Which type of business ownership limits personal liability while allowing profits to pass directly to the owners without being taxed at the corporate level?
A. Sole proprietorship
B. Partnership
C. S corporation
D. C corporation
C. S corporation
A competitive advantage that is difficult for competitors to replicate and provides long-term success for a company is known as a:
A. Cost leadership strategy
B. Differentiation strategy
C. Sustainable competitive advantage
D. Product development strategy
C. Sustainable competitive advantage
In operations, the concept of "lean production" refers to:
A. Hiring more workers to speed up production
B. Reducing waste and improving efficiency in the production process
C. Expanding the product line to reach more customers
D. Increasing the inventory levels to avoid stockouts
B. Reducing waste and improving efficiency in the production process
A pricing strategy in which a company sets a high initial price for a new product, then gradually lowers the price over time, is known as:
A. Penetration pricing
B. Price skimming
C. Psychological pricing
D. Bundle pricing
B. Price skimming