General Directions: Read each item carefully and write the letter of the best answer before each number. A. Principles, Tools, and Techniques Directions: For items number 1-4, choose the answer from choices given below: A. sole proprietorship B. corporation C. cooperative D. partnership 1. It is a business owned by two or more people who combine their resources with the purpose of making profit. 2. Among other forms of business, this is the easiest to set-up and is the least costly among all forms of ownership. 3. The owners of this business form enjoy limited liability but have limited involvement in the company's operations. 4. It is owned by a group of individuals and is operated for their mutual benefit. 5. In this type of partnership, all partners have unlimited liability. A. limited B. general C. close D. open 6. Ownership in a stock corporation is represented by shares of A. dividends B. stock C. bond D. savings 7. The persons making up a cooperative are called A. incorporators B. stockholders C. members D. partners 8. Which of the following phrases DOES NOT describe a sole proprietor? A. has limited liability C. gets all the profits earned B. shoulders all the losses D. enjoys exclusive control and decision making 9. Which of the following is the best description of a large-scale business? A. has total assets of P 1,500,001 to P 15,000,000 C. has total assets of P 60,000,001 to P80, 000,000 B. has total assets of P15, 000,001 to P 60,000,000 D. has total assets of more than P60, 000,000B. Tools in Evaluating a Business Choices for item numbers 10-13: A. Industry Analysis B. SWOT Analysis C. Environmental Analysis D. Porter's Five Forces 10. It was developed in 1979 in Harvard School as a framework or a guide in assessing and evaluating the competitive strength and position of a business organization. 11. It is a significant tool for organizations to understand the factors affecting profitability in a specific industry. 12. It is a tool that can be used to assess a business organization's competitive strength and position in the industry. 13. It is a framework that can help identify the business' risks and reward and a means of identifying the internal and external forces. For items 14-18, identify which of the Porter's Five Forces of Competitive Analysis is described. 14. The smaller the number of buyers in the market, the greater is the power enjoyed by the buyer. A. threats of new entrants B. threats of substitution C. supplier power D. buyer power 15. When investors see that a market is profitable, they will desire to join the bandwagon and get the share of the profits potentially eroding the profits in the long run. A. supplier power B. buyer power C. number of competitors D. threats of new entrants 16. The number and capability of competitors in the market may also impact the attractiveness of the market. A. number of Competitors B. threats of new entrants C. supplier power D. buyer power 17. When it is easy to substitute the products in the market, it is expected that the buyers will switch to alternatives in case of price increase. 18. The more unique the product, the easier it is for the supplier to drive up prices. A. supplier power B. buyer power C. threats of substitute D. number of competitors 19. These are goods that can be used in place of another; this may satisfy the same needs of a customer that the consumer may use one instead of another. A. substitutes B. complements C. supplies D. bids 20. This is the cheapest source of supplies since there is no middlemen involved. A. wholesalers B. brokers C. distributors D. manufacturers21. They are wholesalers or brokers who buy in quantities from manufacturers. A. competitors B. distributors C. retailers D. bidders For item numbers 22-26, identify the forces described under Environmental Analysis. 22. This includes studying the consumption patterns of customers, as a means to identify the goods and services that will fit into the celebrations and spending behavior. A. cultures and lifestyles B. physical environment C. political factors D. competition 23. This is something that needs to be studied as a means of determining the success or failure of a business and the extent and strength of the same business in the industry. A. cultures and lifestyles B. physical environment C. economic forces D. competition 24. The type of government, the stability and strength of the government, and the leadership which can be advantageous to the certain business. A. political factors B. economic forces C. political factors D. competition 25. This involves a careful look at economic factors such as income of the people, specifically the target market, economic conditions such as inflation, recession, prosperity, and demand and supply in the market. A. cultures and lifestyles B. political factors C. economic factors D. All the given choices 26. This includes the study of population size, the geography of the place where the business will be located, land distribution, climate, and in today's global warming situation. A. economic forces B. physical environment C. economic forces D. competition Directions for item 27-30: The following statements are based on the SWOT analysis of Nike (Dalavagas, 2015). Tell whether the given internal/external factor is a Strength (A), Weakness (B), Opportunity (C), or Threats (D). 27. Strong Global Brand: Nike is the most valuable sports brand in the world. Its "Swoosh" logo is instantly recognizable around the globe. 28. Ongoing Perception of Poor Labor Practices: The Company itself has acknowledged that the low wages for some of its workers remains a concern. Safety issues at certain locations are also an issue. 29. Currency Volatility: Since the majority of Nike's sales are generated outside of the United States, the company is exposed to significant currency fluctuations. 30. Emerging Markets: While Nike already has a presence in many emerging markets, it is believed that there is still significant growth potential there.C. The Circular Flow of Economic Activity 31. Which of the following is the best example of raw material? A. cocoa powder B. coffee bean C. coconut oil D. coconut jam 32. The following are examples of final goods EXCEPT: A. ice cream B. book C. steel D. chair 33. Which of the following best describes intermediate goods? A. Unprocessed goods which are extracted from their sources. C. Goods that are ready for direct use. B. Semi-processed goods that are not yet ready for final use. D. All processed goods. 34. These are considered as the primary producing sectors of the economy; they reap the fruits of natural resources like oil, water, and forests. A. agriculture, fishery, forestry B. service C. industrial D. government 35. Which sector produces the intangibles supporting and complementing production in the other sectors as well as among its own industries? A. Agriculture, Fishery, Forestry B. Service C. Industrial D. government