Business Basics
What is a good?
A. Work performed for someone else
B. A physical product that can be purchased
C. A long-term career goal
D. A law protecting consumers
B. A physical product that can be purchased
A business will make a profit when:
A. Expenses are greater than revenue
B. Revenue is greater than expenses
C. Revenue equals expenses
D. Debt is greater than assets
B. Revenue is greater than expenses
What is a sole proprietorship?
A. A business owned by one person
B. A business owned by stockholders only
C. A business operated by another company’s brand name
D. A business owned by the government
A. A business owned by one person
What is a franchise?
A. A business that imports only raw materials
B. A business operated using another company’s name and system
C. A loan without collateral
D. A form filed to report income taxes
B. A business operated using another company’s name and system
What is a contract?
A. A legally enforceable agreement between parties
B. A type of insurance policy only
C. A plan for advertising a product
D. A monthly bank statement
A. A legally enforceable agreement between parties
What are imports?
A. Goods or services sold to another country
B. Goods or services bought from another country
C. Taxes paid on local sales
D. Products made only for one city
B. Goods or services bought from another country
What is an entrepreneur?
A. A person who starts and runs a business while taking risk
B. A person who only buys products for personal use
C. A government worker who sets prices
D. A customer who uses a debit card
A. A person who starts and runs a business while taking risk
What is management?
A. The process of borrowing money with collateral
B. The process of only advertising products
C. The process of planning, organizing, leading, and controlling resources
D. The process of filing a personal tax return
C. The process of planning, organizing, leading, and controlling resources
What is Human Resource Management?
A. The process of importing products
B. The process of hiring, training, and developing employees
C. The process of changing product prices
D. The process of paying insurance premiums only
B. The process of hiring, training, and developing employees
What is marketing?
A. Only hiring employees
B. Identifying, anticipating, and satisfying customer demand while making a profit
C. Only creating a business budget
D. Only placing products on shelves
B. Identifying, anticipating, and satisfying customer demand while making a profit
What is a service?
A. A physical object sold in a store
B. A business owned by stockholders
C. Work performed for another person or customer
D. A tax on imported goods
C. Work performed for another person or customer
Which business function obtains and manages the funds needed to operate?
A. Promotion
B. Distribution
C. Finance
D. Orientation
C. Finance
What is a partnership?
A. A business owned by two or more people
B. A company legally separate from its owners
C. A tax placed on imported goods
D. A short-term sales promotion
A. A business owned by two or more people
Which is a common advantage of a franchise?
A. Brand recognition and an established business system
B. No rules from the parent company
C. No startup costs
D. Guaranteed profit every year
A. Brand recognition and an established business system
Which of the following is an example of unethical business behavior?
A. Clearly explaining return policies
B. Treating employees fairly
C. Misleading customers through false advertising
D. Training new employees
C. Misleading customers through false advertising
What are exports?
A. Goods or services sold to another country
B. Goods or services bought from another country
C. Personal expenses on a budget
D. Loans backed by collateral
A. Goods or services sold to another country
What is the purpose of a business plan?
A. To organize a business idea and explain how it may succeed
B. To replace all employee training
C. To guarantee that a business cannot fail
D. To avoid researching customers
A. To organize a business idea and explain how it may succeed
Which management function involves setting goals and deciding how to reach them?
A. Controlling
B. Planning
C. Appraising
D. Borrowing
B. Planning
What is orientation?
A. Dividing customers by age and income
B. Setting the final selling price of a product
C. Paying a claim after an accident
D. Introducing new employees to the company and job expectations
D. Introducing new employees to the company and job expectations
What is the marketing concept?
A. Selling products without knowing customer needs
B. Avoiding competition
C. Focusing on customer needs and satisfaction while earning a profit
D. Choosing prices randomly
C. Focusing on customer needs and satisfaction while earning a profit
What is a consumer?
A. A person who buys or uses goods and services
B. A person who only sells products to wholesalers
C. A company that produces raw materials
D. A government agency that sets prices
A. A person who buys or uses goods and services
What is the profit motive?
A. The desire to earn money from business activity
B. The requirement that all businesses become corporations
C. The process of dividing customers into groups
D. The cost of borrowing money
A. The desire to earn money from business activity
What is a corporation?
A. A business owned and operated by one person
B. A business legally separate from its owners
C. A temporary job position
D. A checking account used by a business
B. A business legally separate from its owners
What is a market?
A. A group of potential customers
B. A company’s unpaid debt
C. A type of insurance claim
D. A payroll deduction
A. A group of potential customers
A store advertises a low-priced product, claims it is unavailable, and pressures customers to buy a more expensive item. What is this called?
A. Product testing
B. Bait and switch
C. Public relations
D. Market research
B. Bait and switch
What is a tariff?
A. A tax on imported goods
B. A refund from filing taxes
C. A type of life insurance
D. A business ownership form
A. A tax on imported goods
Which is an important trait for an entrepreneur?
A. Avoiding responsibility
B. Refusing to adapt
C. Creativity and persistence
D. Ignoring customer needs
C. Creativity and persistence
Which management function involves arranging people, tasks, and resources?
A. Importing
B. Segmenting
C. Promoting
D. Organizing
D. Organizing
What is employee training?
A. Teaching employees the skills needed to perform their jobs
B. Charging customers a higher price
C. Borrowing money from a lender
D. Measuring the value of money
A. Teaching employees the skills needed to perform their jobs
Which element of the marketing concept means customers are pleased with goods or services?
A. Employee turnover
B. Gross pay
C. Collateral
D. Customer satisfaction
D. Customer satisfaction
What is profit?
A. The total cost of running a business
B. Money left after expenses are subtracted from revenue
C. The amount borrowed from a bank
D. The number of products sold
B. Money left after expenses are subtracted from revenue
Which feature of free enterprise allows businesses to try to attract the same customers?
A. Competition
B. Taxation
C. Regulation
D. Collateral
A. Competition
Which type of business ownership usually offers limited liability to owners?
A. Sole proprietorship
B. General partnership
C. Corporation
D. Informal club
C. Corporation
What is a target market?
A. A specific group that products or services are intended to reach
B. A random group of people with no shared interests
C. A government agency that controls businesses
D. A list of all business expenses
A. A specific group that products or services are intended to reach
Which situation best shows honest business communication?
A. A company hides extra fees until after purchase
B. A salesperson explains the real price and return policy clearly
C. A store advertises products it does not plan to sell
D. A business copies another company’s logo
B. A salesperson explains the real price and return policy clearly
Which is a possible challenge of doing business globally?
A. Every country uses the same laws
B. Shipping, culture, currency, and laws may differ
C. Customers always want the same product
D. Businesses never face risk overseas
B. Shipping, culture, currency, and laws may differ
How can entrepreneurs reduce risk?
A. By avoiding all planning
B. By researching, budgeting, and testing ideas
C. By refusing feedback
D. By copying every competitor exactly
B. By researching, budgeting, and testing ideas
Which management function involves motivating and guiding employees?
A. Leading
B. Pricing
C. Auditing
D. Depositing
A. Leading
What is a performance appraisal?
A. A tax on imported goods
B. A type of debit card transaction
C. A formal evaluation of an employee’s work
D. A form of market segmentation
C. A formal evaluation of an employee’s work
What is the marketing mix?
A. Product, Price, Place, and Promotion
B. People, Payroll, Premium, and Principal
C. Profit, Planning, Policy, and Payment
D. Product, Payroll, Place, and Premium
D. Product, Payroll, Place, and Premium
Revenue – Expenses =
A. Net Income
B. Liabilities
C. Collateral
D. Imports
A. Net Income
Which of the following is a benefit of competition?
A. Businesses never need to improve
B. Customers have fewer choices
C. Businesses may improve quality and lower prices
D. The government sets every price
C. Businesses may improve quality and lower prices
Which is a disadvantage of a sole proprietorship?
A. The owner has no control
B. The owner may have unlimited liability
C. The business must sell stock
D. The business cannot earn profit
B. The owner may have unlimited liability
Which of the following is an example of a retailer?
A. A store that buys products and sells them to final consumers
B. A factory that only produces raw materials
C. A bank that gives business loans
D. A person who files a tax return
A. A store that buys products and sells them to final consumers
Why are ethics important in business?
A. They help businesses build trust with customers and employees
B. They allow companies to ignore laws
C. They guarantee every business will make a profit
D. They replace the need for contracts
A. They help businesses build trust with customers and employees
Why might a business study another country’s culture before selling there?
A. To understand customer preferences and avoid mistakes
B. To avoid making a business plan
C. To guarantee that tariffs disappear
D. To stop competition completely
A. To understand customer preferences and avoid mistakes
Which part of a business plan explains who is most likely to buy the product?
A. Target market section
B. Payroll deduction section
C. Insurance claim section
D. Tax return section
A. Target market section
Which management function involves checking progress and correcting problems?
A. Exporting
B. Borrowing
C. Controlling
D. Franchising
C. Controlling
Which HR task helps a business choose qualified job applicants?
A. Price skimming
B. Exporting
C. Paying claims
D. Recruitment and interviewing
D. Recruitment and interviewing
Which statement best explains segmentation and mass marketing?
A. Both mean the exact same thing
B. Mass marketing divides the market into small groups, while segmentation avoids customers
C. Neither involves customers
D. Segmentation divides the market into smaller groups, while mass marketing targets a large general group
D. Segmentation divides the market into smaller groups, while mass marketing targets a large general group