BUS001 2016 Questions

1.A friend of yours has recently received his MBA. He wants to open his own business but feels that it might be too riskyat this point in his career. As an SBA counselor, you are able to advise him and explain more clearly to him some ofthe advantages and disadvantages of starting a small business. Which of the following statements best representssomething you might tell him?
A.Small businesses foster personal relationships and offer flexibility and independence
B.The cost of opening a small business is relatively low, and financing is easily obtained.
C.Although opening a small business is risky, there is practically unlimited potential.
D.Record keeping will be complicated, and public disclosure of most transactions is required.
E.Opening a small business is especially difficult because there is little help available for those desiring to do so.

2.A furniture manufacturer like Thomasville would be concerned with the producer price index because it
A.measures the effect of interest rates on the economy.
B.tracks the cost of housing and transportation.
C.measures prices that manufacturers must pay for lumber and other raw materials used in the manufacturingprocess.
D.is related to the real gross domestic product.
E.is published daily.
3. A limited-liability company is

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A.taxed like a partnership

B.always used to organize charitable organizations

C.similar to a cooperative

D.the result of a horizontal merger

E.taxed like a corporation

4.A local retailer calls its customers when it receives merchandise that they may be interested in, provides individual service to each customer, providesforms and phone numbers for complaints and comments, and has a 100 percent satisfaction guarantee. Which objective is this business working hard toaccomplish?

A.Achieving low employee turnover

B.Keeping up with the current technology

C.Making a profit

D.Satisfying the needs of its customers

E.Increasing the owner’s wealth

5.Although Frank is not in top management, he is charismatic and well liked by others in his organization. Other employeesoften look to Frank to see how he reacts to new policies implemented by top management, and they follow his lead.Frank has       leadership in his organization.

A.informational

B.formal

C.personal

D.informal

E.unofficial
6.An organization of nations formed to promote the free movement of resources and products among its members and tocreate common economic policies is called a(n)

A.free trade association

B.common market

C.none of the above

D.economic community

E.international alliance
7.Angela has been working for a local small business called Personal Wellness for the last three years. It is a retail businessthat sells sporting goods equipment. When she started to work there, she noticed several things that were possibly thecause of the business not doing as well as it hoped. Angela has been thinking of starting her own small business becauseshe feels she has learned much through working for Personal Wellness.

Angela’s manager asked her to create a business plan for Personal Wellness. The manager hoped that this planwould put things into perspective to help the company do better. After creating the plan, Angela suggested thatPersonal Wellness contact a group of senior and graduate students to provide management counseling for thecompany. Angela wants to make sure that her leaving does not become the cause of the company going under.

Question: Personal Wellness can be classified as operating in what type of industry?

A.Service

B.Wholesaling

C.Production

D.Distribution

E.Manufacturing

8As a businessperson planning to open a new small business, you know that the business plan should not contain
A.a discussion of the nature and mission of the new business.
B.pages and pages of detailed facts and figures
C.any mention of the businessperson’s goals; financial institutions just aren’t interested in these.
D.an explanation of why opening a business of this type makes good business sense.
E.information about how much it will cost to open and operate the new business
9.As a limited partner in a construction business, Joe

A.does not receive any portion of the profits

B.contributes only his time and not his money

C.has input only on major company decisions

D.cannot lose his investment in the partnership

E.only risks his initial investment

10.As a manager at Johnson Electric, an armature motor manufacturer, Charles is responsible for quality. As he carries outhis controlling function, Charles sets the standard for the number of defective parts per million, and then he gathersthe data measuring the actual performance. What third step of the control function should Charles take next?

A.Change the standards to match the actual performance

B.Take corrective action

C.Begin planning again

D.Determine the cause of the discrepancy

E.Motivate his employees

11.Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant. Before he took theinitiative to open the franchise, he tried to weigh all the advantages and disadvantages. He decided, based on hisresearch and understanding, that it would be beneficial to open a local fast-food restaurant.

Question: Which of the following would be an advantage for Brian?

A.Franchise holders paying for their security

B.Contract disputes

C.Disagreements increasing

D.The franchisor maintaining a great deal of control

E.Guidance from the franchisor

12.By age 26, Tom was a plant manager in the snack-foods division. By 33, he headed the division, one of the mostprofitable in the corporation. Eventually, however, the company decided to move its corporate offices. Although heloved the job and thought the work was great, Tom’s lifestyle was awful. He was on the road so often that he wasgiving up much of his family life. Tom had also become disenchanted with corporate life. He saw that the closer onegot to the top, the more vulnerable one’s position became. Thus, Tom left the corporation to start his own
snack-foods company. His thoughts and actions most clearly reveal his

A.need for independence

B.lack of self-confidence

C.desire to determine his own destiny

D.entrepreneurial spirit.

E.willingness to find and accept a challenge
Centrum Springs, Inc.

13.Riley has worked for Centrum Springs, Inc., for many years and has now been given the opportunity to advance in thecompany. His manager is retiring and hopes that Riley will take over for him. However, even though Riley is anexperienced employee, there are many things that he still needs to learn. Riley has trained many new employees, buthe has never held a management position. Riley needs to have a general understanding of what it takes to be amanager.

There are many problems in Riley’s department. There are no plans to fall back on in case the initial plan fails. Rileyalso will need to learn how to direct people in such a way that makes them want to do more than they absolutelyhave to. Riley feels that this is a great opportunity, and he is anxious to learn everything to be a great manager. Heknows that if he performs well in this position, he will have the opportunity to move up the corporate ladder.
Question: Riley’s usual duties represent which of these areas?

A.Human resources management

B.Financial management

C.Operations management

D.Administrative management

E.Marketing management
14.Clarke Tools, concerned about its loss of market share in previous years, has recently implemented several programs toencourage prompt and courteous customer service, employee self-management, and better coordination withsuppliers. Clarke Tools is making an effort to achieve

A.a quality concern focus

B.total quality development

C.quality improvement planning

D.total quality management

E.total quality commitment
Dazzle Magazine

15.Rosalea recently switched careers. Previously, she was a college professor, but she felt she needed more real- worldexperience to help her business students more fully. She became a manager at Dazzle Magazine, where she was incharge of the layout. Always open to new ways of doing things, Rosalea let her staff implement their ideas
at times. Rosalea learned firsthand the different roles she had to play as a manager.

It always got stressful when the publication deadline neared. At one point, there was a major mix-up in the layoutsfor the front cover. Rosalea was not sure of the correct layout because she had allowed one of her employees,Joseph, to modify and run with his idea on this matter. However, she could not ask for Joseph’s help with the coversbecause he happened to be out of town at the time. Rosalea quickly looked over the layouts but felt that they stillneeded some work.

She decided to ask the design manager for her help. The design manager did not feel comfortable making a decisionon the issue, so she did not give Rosalea an answer. Rosalea then went to an employee within her department foradvice. That employee suggested some ideas, but Rosalea was still not satisfied. Finally, Rosalea called one of her topgraduate students with whom she had kept in contact and asked her if she could offer some ideas. The graduatestudent quickly came to the magazine’s office and helped Rosalea decide on the alternative that should beimplemented. Rosalea greatly appreciated the assistance and the suggestion. The final cover design went to press,and that issue of the magazine was successful. This helped Rosalea realize that considering the big picture was good,but equally important were the little details.

Question: The graduate student’s assistance represents which step of the decision-making process?

A.Select alternative

B.Evaluate solution

C.Generate many alternatives

D.Identify problem and opportunity

E.Implement solution
16.
Excellent Air Inc. is a well-known establishment in the airline business. It is currently one of the top firms in theindustry. The company prides itself on good customer service and being concerned with the broader societal good. EAImanagement is not only concerned with doing things right, but also with doing the right things. Many of their decisionsreflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethicalbehavior to the press instead of to EAI management. As a result, the company made sure its employees knew thefirm’s guidelines on fixing ethical issues. EAI also developed a code of conduct based on standards that continue to beupheld within the company. Since the code of conduct has been put in place, there have been fewer ethical violations.

Although employee salaries at EAI are not as high as those at competing firms, the company experiences very lowemployee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but thatalso results in higher profits. If EAI can maintain the relationship it has built with its employees and customers, it willhave little difficulty keeping up its remarkable success.

Initially, employees were not willing to go to EAI management with ethical issues but would instead report them to the press. This is an example of

A.a social audit

B.poor employees

C.opportunity emptor

D.whistle-blowing

E.a narc
17
Excellent Air Inc. is a well-known establishment in the airline business. It is currently one of the top firms in theindustry. The company prides itself on good customer service and being concerned with the broader societal good. EAImanagement is not only concerned with doing things right, but also with doing the right things. Many of their decisionsreflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethicalbehavior to the press instead of to EAI management. As a result, the company made sure its employees knew thefirm’s guidelines on fixing ethical issues. EAI also developed a code of conduct based on standards that continue to beupheld within the company. Since the code of conduct has been put in place, there have been fewer ethical violations.

Although employee salaries at EAI are not as high as those at competing firms, the company experiences very lowemployee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but thatalso results in higher profits. If EAI can maintain the relationship it has built with its employees and customers, it willhave little difficulty keeping up its remarkable success.

EAI’s creation of its code of conduct demonstrated its application of moral standards to business situations, which isalso known as

A.business ethics

B.moral consciousness

C.social consciousness

D.social responsibility

E.moral responsibility
18
For firms like Target and Walmart, competition
A.is not a factor that must be considered in a free-market economy.
B.is a rivalry among businesses for sales to potential customers.
C.affects smaller businesses but not large chain operations.
D.affects larger chain operations but not smaller businesses.
E.is a problem that has been eliminated in the twenty-first century.
19Frank Roberts recently has been named to head a major manufacturing plant at Dow Chemical. The plant has hadsignificant increases in inventory and declines in net income over the past two years. Frank’s task is to eliminate theexcess inventory and return the plant to its previous level of profitability. To begin solving this problem, Frank invitessuggestions from line workers, gathers managers from various levels of the plant to brainstorm, and talks with experts in the field of operations management. This step in the managerial decision-making process is known as

A.implementing a solution

B.identifying the problem

C.performance measurement

D.generating alternatives

E.selecting an alternative

20If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80 worth of bows andarrows, it has a(n)

A.trade deficit

B.trade surplus

C.negative cash flow

D.unfavorable balance of trade

E.export slide