Homework 1

I. Single Choice Questions

1) What is the MOST important source of money for new business start-ups?

A) Banks

B) The SBA

C) Personal resources

D) Government grants

E) Venture capital

2) Who constitutes the membership of SCORE?

A) Retired executives

B) Venture capitalists

C) Company officers

D) Commercial lenders

E) Successful entrepreneurs

3) What does a start-up company need in order to estimate the required size of a plant, store, or office, inventory levels, and size of staff?

A) Sales forecast

B) Tax estimate

C) Business objective

D) Stock options

E) Funding source

4) What is the major drawback of accepting venture capital?

A) Sharing company control

B) Having to pay high interest rates

C) Limiting expansion

D) Facing a short repayment period

E) Having to write proposals

5) Which of the following are groups of small investors seeking to make profits on companies with rapid growth potential?

A) Community banks

B) Venture capital companies

C) Equity managers

D) Government securities dealers

E) Stock brokers

6) Which of the following is federally licensed to borrow money from the Small Business Administration to invest in or lend to small businesses?

A) SCORE

B) SBICs

C) SBDC

D) FDIC

E) SEC

7) What condition is needed to gain a national competitive advantage that includes a large domestic consumer base that promotes use of innovative products?

A) Factor conditions

B) Strategies and structures

C) Demand conditions

D) Rivalries

E) Related and supporting industries

8) What is the common currency for nations who are members of the European Union?

A) Deutsche Mark

B) Euro

C) Dollar

D) Lira

E) Franc

9) Changes in which type of business environment can reduce or replace the need for traditional working methods, physical equipment, and other platforms needed to conduct business?

A) Global business environment

B) Economic environment

C) Domestic business environment

D) Technological environment

E) Political-legal environment

10) Standards that help to shape behaviors towards employees, the organization, and other economic agents are

A) social responsibilities.

B) managerial ethics.

C) whistle-blowing techniques.

D) values.

E) morals.

11) When a firm significantly increases the price of a good or service because of an increase in demand, what unethical practice are they potentially engaging in?

A) Consumerism

B) Collusion

C) Unfair pricing

D) Collaboration

E) Price gouging

12) Why did the European Union develop the euro as its common currency?

A) To better compete with the U.S. dollar

B) To improve the integration of the economic system between member countries

C) To be able to outsource work to countries where wages are lower

D) To integrate a quality standard of production between member countries

E) To speed the issue of payment between member and nonmember countries

13) Which environment is NOT an important dimension of a business organization's external environment?

A) The political-legal environment

B) The sociocultural environment

C) The technological environment

D) The corporate cultural environment

E) The global business environment

14) What is profit?

A) Total money taken in by a corporation

B) Increases in income from year to year

C) Increases in a corporation's stock price

D) Revenue generated by goods and services

E) Difference between revenues and expenses

15) What is the environment where a firm conducts its operations and derives its revenues known as?

A) Global business environment

B) Economic environment

C) Domestic business environment

D) Technological environment

E) Political-legal environment

16) Factors such as international trade agreements, economic conditions, and political unrest will have the greatest impact on what type of business environment?

A) Global business environment

B) Economic environment

C) Domestic business environment

D) Technological environment

E) Political-legal environment

17) What does an entrepreneur use to summarize his or her business strategy for a proposed new venture?

A) Success chart

B) Director's guideline

C) Financial blueprint

D) Business plan

E) Balance sheet

18) What is considered to be a significant disadvantage of owning a franchise?

A) Start-up costs

B) Operational guidelines

C) Difficulty obtaining loans

D) Double taxation

E) Competition

II. True or False

1) Ethics are beliefs about what is right and wrong.

TRUE or FALSE?

2) Business ethics refer to ethical or unethical behaviors by employees in the context of their personal lives.

TRUE or FALSE?

3) The standards of behavior that guide managers in their work are called written codes.

TRUE or FALSE?

4) Some ethical and unethical behaviors fall into gray areas, while others are widely agreed upon.

TRUE or FALSE?

5) A conflict of interest occurs when an activity may benefit the individual to the detriment of his or her employer.

TRUE or FALSE?

6) Ethical values do not vary from person to person.

TRUE or FALSE?

7) What constitutes ethical behavior is determined entirely by the individual.

TRUE or FALSE?

8) An individual's personal code of ethics is shaped by his or her life experiences.

TRUE or FALSE?

9) Most successful entrepreneurs have a strong desire to be their own bosses.

TRUE or FALSE?

10) If the United States exports more to the Netherlands than it imports from the Netherlands, the United States has a trade deficit with the Netherlands.

TRUE or FALSE?

11) Today, fixed exchange rates are the norm for most major nations of the world.

TRUE or FALSE?

12) A comparative advantage exists when a country can produce something more cost effectively and/or of higher quality than any other country.

TRUE or FALSE?

13) The single largest trading partner of the United States is China.

TRUE or FALSE?

14) The United States has large trade deficits with Japan, China, and Mexico. This means that the United States has imported more from them than what they have purchased from us.

TRUE or FALSE?

15) The pursuit of profits is how a business differs from organizations such as public universities, public hospitals, and government agencies.

TRUE or FALSE?

16) An organization's external environment consists of everything outside of the organization that might affect it.

TRUE or FALSE?

III. Question and Answer

1) Compare a sociocultural environment to an economic environment.

2) How do consumer choice and demand affect a capitalistic system?

3) What are the benefits of business for society?

4) Explain entrepreneurship and describe key entrepreneurial characteristics.

5) Describe how balance of trade and balance of payments work and define both terms.

6) In assessing a country's national competitive advantage, what is meant by factor conditions?