Title: Role of Business
Course: Demo 1

Q: A(n) ________ is any activity that provides goods or services to consumers for the purpose of making a profit.
- market
- economy
- business
A: business

Q: Which of the following is/are example(s) of business?
- a grocery store
- a hotel
- a car dealer
A: a grocery store; a hotel; a car dealer

Q: Which of the following is/are example(s) of business?
- an insurance broker
- an online retailer
- an oil refinery
A: an insurance broker; an online retailer; an oil refinery

Q: A hotel provides both goods and services. Which of the following is an example of a good provided by a hotel?
- Offering rooms for rent.
- Providing clean linens for use during your stay.
- Offering a bathrobe that you can purchase to take home with you.
A: Offering a bathrobe that you can purchase to take home with you.

Q: Which of the following is/are an example(s) of a service?
- a couch or sofa
- a computer
- a flight from Los Angeles to Dallas
A: a flight from Los Angeles to Dallas

Q: Which of the following is/are an example(s) of a good?
- a ride in a taxi
- an oil change for your car
- a textbook purchased at the bookstore
A: a textbook purchased at the bookstore

Q: A business that provides goods or services to consumers but whose primary goal is not profit is ________.
- unsuccessful
- publicly held
- a non-profit business
A: a non-profit business

Q: The primary goal of a for-profit business is to ________ .
- contribute to society
- fulfill its mission
- maximize profits for shareholders
A: maximize profits for shareholders

Q: The primary goal of a non-profit business is to ________ .
- maximize profits for shareholders
- invest in its employees’ development of new skills
- use its revenues to further its mission
A: use its revenues to further its mission

Q: Both for-profit and non-profit organizations can ________.
- have a charitable tax status
- have shareholders
- earn revenues
A: earn revenues

Q: Which of the following is/are example(s) of a for-profit organization?
- Internal Revenue Service
- Make-a-Wish Foundation
- Walmart
A: Walmart

Q: Which of the following is/are an example(s) of a non-profit organization?
- eBay
- Netflix
- United Way
A: United Way

Q: Sasha was exceptional at organizing educational events in her community. As friends and professional contacts were asking for more of her time and expertise she decided to start a business with the mission of improving the performance of students in grades K-12 in her community. After significant analysis of her options, Sasha decided to create a NON-PROFIT BUSINESS because:
- the non-profit designation prevented her from earning revenue, allowing her to focus only on the mission of the business.
- she could own the non-profit business and earn some profits that she would use for her own benefit.
- she can use the revenue to further the mission of her business.
A: she can use the revenue to further the mission of her business.

Q: Sasha was exceptional at organizing educational events in her community. As friends and professional contacts were asking for more of her time and expertise she decided to start a business with the mission of improving the performance of students in grades K-12 in her community. After analyzing her options, Sasha decided to create a FOR-PROFIT BUSINESS. Which of the following reason(s) would justify this decision?
- She is committed to using surplus revenues to further the company mission, rather than distributing profits or dividends.
- She could still receive tax-free charitable contributions.
- She could bring in other owners who would invest in and share in her profits and success.
A: She could bring in other owners who would invest in and share in her profits and success.

Q: Varvitsiotis Architecture is a commercial architecture company founded in 1996 by two brothers. As the company grew they took on additional partners and eventually sold stock in the company. By 2010 they had six employees, $500,000 in annual revenue, five projects under way, and plans to reinvest profits to fund significant growth. Based on the information provided about the company, what type of organization is Varvitsiotis Architecture?
- non-profit
- benefit corporation
- for-profit
A: for-profit

Q: Petite Palate was a gourmet baby food company founded in 2006 and was growing until the fall of 2008 when potential investors in the company pulled out because they were concerned about the weakening economy and chose to make fewer outside investments. Based on the information provided about the company, what type of organization was Petite Palate?
- non-profit
- benefit corporation
- for-profit
A: for-profit

Q: The factors of production include which of the following?
- natural resources
- equipment
- entrepreneurship
A: natural resources; equipment; entrepreneurship

Q: Examples of natural resources include(s) ________.
- trees
- copper
- nuclear waste
A: trees; copper

Q: Natural resources have the following key characteristics:
- they are only found in remote locations in nature.
- they are made from natural ingredients and are sold to consumers.
- they are found in nature and can be used for the production of goods and services.
A: they are found in nature and can be used for the production of goods and services.

Q: Natural resources:
- are found in nature
- can be used for the production of goods and services
- are made from all natural ingredients)
A: are found in nature; can be used for the production of goods and services

Q: In business, the proper term for human effort that can be applied to production is:
- working hours.
- unions.
- labor.
A: labor.

Q: Resources that have been produced AND can be used to produce other good and services are:
- human resources.
- natural resources.
- capital.
A: capital.

Q: A widget manufacturer earns cash from the sale of its high quality widgets. The manufacturer then uses this cash to purchase equipment that will allow then to also manufacture gizmos. This is an example of which of the following factors of production?
- natural resources
- human resources
- capital
A: capital

Q: Both capital and natural resources can be used to produce other goods and services, but only capital resources:
- grow naturally.
- require bank financing.
- have been produced.
A: have been produced.

Q: A person who seeks to earn profits by finding new ways to organize factors of production is a(n):
- employee.
- manager.
- entrepreneur.
A: entrepreneur.

Q: Which function is responsible for aligning staffing plans to organizational strategies and goals?
- operations
- accounting
- management
A: management

Q: When products and services are produced or provided, which function is responsible for ensuring that those products and services meet high quality standards?
- management
- operations
- accounting
A: management; operations

Q: Which function is responsible for understanding customer needs and aligning products and services to those needs?
- management
- operations
- marketing
A: marketing

Q: Which function is responsible for creating financial reports that can be used to evaluate the financial performance of the business?
- management
- finance
- accounting
A: accounting

Q: Which function is responsible for raising the funds required for the business to grow?
- marketing
- accounting
- finance
A: finance

Q: InfoTech is a computer application firm based in Silicon Valley and has been responsible for introducing some of the highest rated applications available for personal productivity. Two brothers originally founded the company, but they quickly realized they needed to convert the business into a corporation and establish functional areas within the company to handle various aspects of operations. The company is now considering expanding operations by building a production facility in another country. The Board of Directors has approved this move, and now it will become the responsibility of which functional area to secure the necessary funding for the expansion?
- marketing
- accounting
- finance
A: finance

Q: Petite Palate is a gourmet baby food company founded in 2006. Petite Palate’s founders believe that frozen baby food is healthier than baby food in jars or pouches, but the company struggled to get its product into the freezer section in grocery stores. The consumer was not accustomed to looking in the freezer for baby food. Which function was responsible for understanding consumer behavior and aligning product to consumer preferences?
- management
- operations
- marketing
A: marketing

Q: Varvitsiotis Architecture is a commercial architecture company founded in 1996. Their primary client base is private businesses and industries. They have little experience bidding on or designing projects for government entities, such as Department of Defense or the State of Alabama. Recently, the U.S. government announced an economic stimulus program that is intended to jumpstart construction. However, these funds were allocated to public (government) projects where the firm currently does not have a presence. Which function in Varvitsiotis Architecture would have primary responsibility for defining a business strategy that would create success for the company in this environment?
- marketing
- accounting
- management
A: management

Q: ________ are people who work directly within the business.
- Shareholders
- External stakeholders
- Internal stakeholders
A: Internal stakeholders

Q: Which group(s) outside of the business is/are affected in some way by the decisions of the business?
- customers
- suppliers
- employees
A: customers; suppliers

Q: Which of the following is/are internal stakeholders in a business?
- government
- shareholders
- employees
A: employees

Q: Which of the following is/are external stakeholders in a business?
- employees
- owners
- creditors
A: creditors

Q: Which of the following is/are internal stakeholders in a business?
- competitors
- industry associations
- managers
A: managers

Q: A company decides to relocate its operations to another state in order to take advantage of some new business investment credits. When the company closes its current location, other than the employees which of the following groups will be impacted?
- The local taxing authority.
- The company’s insurance agent.
- The elementary school.
A: The local taxing authority.; The company’s insurance agent.

Q: External forces that affect businesses include:
- employees
- the company mission
- government regulations
A: government regulations

Q: Consider the following text: “In 2008, credit markets froze up and banks stopped making loans. Lawmakers tried to get money flowing again by passing a $700 billion Wall Street bailout, yet businesses and individuals were still denied access to needed credit. Without money or credit, consumer confidence in the economy dropped and consumers cut back their spending.”

Which of the following are examples of an external ECONOMIC factor that influenced businesses in 2008?
- Credit markets froze up.
- Lawmakers passed a $700 billion Wall Street bailout.
- Consumer confidence and spending dropped.
A: Credit markets froze up.; Lawmakers passed a $700 billion Wall Street bailout.; Consumer confidence and spending dropped.

Q: Consider the following text: “In 2008, credit markets froze up and banks stopped making loans. Lawmakers tried to get money flowing again by passing a $700 billion Wall Street bailout, yet businesses and individuals were still denied access to needed credit. Without money or credit, consumer confidence in the economy dropped and consumers cut back their spending.”

Which of the following is an example of an external GOVERNMENT factor that influenced businesses in 2008?
- Credit markets froze up.
- Consumer confidence and spending dropped.
- Lawmakers passed a $700 billion Wall Street bailout.
A: Lawmakers passed a $700 billion Wall Street bailout.

Q: Consider the following text: “In 2008, credit markets froze up and banks stopped making loans. Lawmakers tried to get money flowing again by passing a $700 billion Wall Street bailout, yet businesses and individuals were still denied access to needed credit. Without money or credit, consumer confidence in the economy dropped and consumers cut back their spending.”

Which of the following is an example of an external CONSUMER TREND that influenced businesses in 2008?
- credit markets froze up
- lawmakers passed a $700 billion Wall Street bailout
- consumer confidence and spending dropped
A: consumer confidence and spending dropped

Q: Petite Palate was a gourmet baby food company founded in 2006 that failed during the Great Recession of 2008. The company sold its high quality, frozen baby food on Amazon Grocery and in more than 100 stores. Prior to the recession, the company was growing quickly. Once the recession began, which of the following EXTERNAL FACTORS likely had a significant impact on Petite Palate’s business?
- Consumers had less disposable income to spend on high-cost products.
- Banks and other investors were making less capital or funding available.
- It was difficult to convince consumers to trust online retailers such as Amazon to deliver frozen foods.
A: Consumers had less disposable income to spend on high-cost products.; Banks and other investors were making less capital or funding available.

Q: Varvitsiotis Architecture was a commercial architecture company founded in 1996 and was impacted by the recession in 2008. When the recession began, the company had six employees, $500,000 in annual revenue, five projects under way, and plans to reinvest profits to fund significant growth. Once the recession began, which of the following EXTERNAL FACTORS were likely to have a significant impact on Varvitsiotis Architecture’s business?
- Business customers had less revenue to spend on new construction projects.
- Government stimulus dollars were allocated to public works projects, rather than commercial construction.
- Managers did not create a business strategy that included both private and public projects.
A: Business customers had less revenue to spend on new construction projects.; Government stimulus dollars were allocated to public works projects, rather than commercial construction.