1. A _____________ economy has characteristics of both planned and market economies. a. capitalist b. hybrid c. privatized d. mixed market 2. A(n) ____________ occurs when the quantity supplied exceeds the quantity demanded. a. shortage b. surplus c. overage d. demand deficit 3. _____________ exists when an industry has only a handful of sellers, most of which are large. a. An oligopoly b. A monopoly c. Monopolistic competition d. Perfect competition 4. The _____________ is the pattern of short-term ups and downs in an economy. a. standard of living b. business cycle c. aggregate output d. balance of payments 5. The _____________ is the amount of money that the government owes to its creditors. a. aggregate output b. national debt c. standard of living d. business cycle 6. The _____________ is a measure of the prices of typical products purchased by consumers     living in urban areas. a. national debt b. gross domestic product c. consumer price index d. gross national product 7. The law of demand maintains that buyers will purchase more of a product as its price     _____________. a. stays the same b. fits a person’s personal budget c. drops d. rises 8. A _____________ is a period during which aggregate output declines. a. recession b. depression c. favorable balance of trade d. decade 9. A(n) _____________ is a prolonged and deep recession. a. depression b. negative trade balance c. contraction d. expansion 10. _____________ are beliefs about what is right and wrong or good or bad. a. Cultures b. Motivators c. Mores d. Ethics 11. Behavior that conforms to individual beliefs and social norms about what is right and good is      referred to as _____________. a. collusion b. ethical behavior c. GAAP d. social reaction 12. Which statement is false? a. Fewer and fewer companies are adopting codes of ethics. b. Some ethical responses can be learned through experience. c. Social responsibility involves providing quality products and pricing products fairly. d. More and more companies are adopting codes of ethics. 13. Product advertising that some consumers consider morally objectionable would include such      products as ____________. a. alcohol b. condoms c. underwear d. All of the above. 14. _____________ is using advertising to project a green image without adopting substantive,      environmentally friendly changes. a. Quality control b. Environmentalism c. Consumerism d. Greenwashing 15. When two or more firms agree to collaborate on wrongful acts, it is referred to as       ______________. a. monopolizing b. brokering c. collusion d. consumerism 16. Responding to increased demand with overly steep, and often unwarranted, price increases is       called _____________. a. price matching b. unit pricing c. price gouging d. price fixing 17. The owners of a corporation are the _____________. a. top managers b. officers c. board of directors d. stockholders 18. Company A purchased Company B. This is an e.

1. 1. A _____________ economy has characteristics of both
planned and market economies.
a. capitalist
b. hybrid
c. privatized
d. mixed market
2. A(n) ____________ occurs when the quantity supplied
exceeds the quantity demanded.
a. shortage
b. surplus
c. overage
d. demand deficit
3. _____________ exists when an industry has only a handful of
sellers, most of which are large.
a. An oligopoly
b. A monopoly
c. Monopolistic competition
d. Perfect competition
4. The _____________ is the pattern of short-term ups and
downs in an economy.
a. standard of living
b. business cycle
c. aggregate output
d. balance of payments
5. The _____________ is the amount of money that the
government owes to its creditors.
a. aggregate output
b. national debt
c. standard of living
d. business cycle
6. The _____________ is a measure of the prices of typical

2. products purchased by consumers living in urban areas.
a. national debt
b. gross domestic product
c. consumer price index
d. gross national product
7. The law of demand maintains that buyers will purchase more
of a product as its price _____________.
a. stays the same
b. fits a person’s personal budget
c. drops
d. rises
8. A _____________ is a period during which aggregate output
declines.
a. recession
b. depression
c. favorable balance of trade
d. decade
9. A(n) _____________ is a prolonged and deep recession.
a. depression
b. negative trade balance
c. contraction
d. expansion
10. _____________ are beliefs about what is right and wrong or
good or bad.
a. Cultures
b. Motivators
c. Mores
d. Ethics
11. Behavior that conforms to individual beliefs and social
norms about what is right and good is referred to as
_____________.

3. a. collusion
b. ethical behavior
c. GAAP
d. social reaction
12. Which statement is false?
a. Fewer and fewer companies are adopting codes of ethics.
b. Some ethical responses can be learned through experience.
c. Social responsibility involves providing quality products and
pricing products fairly.
d. More and more companies are adopting codes of ethics.
13. Product advertising that some consumers consider morally
objectionable would include such products as
____________.
a. alcohol
b. condoms
c. underwear
d. All of the above.
14. _____________ is using advertising to project a green
image without adopting substantive, environmentally
friendly changes.
a. Quality control
b. Environmentalism
c. Consumerism
d. Greenwashing
15. When two or more firms agree to collaborate on wrongful
acts, it is referred to as ______________.
a. monopolizing
b. brokering
c. collusion
d. consumerism
16. Responding to increased demand with overly steep, and

4. often unwarranted, price increases is called
_____________.
a. price matching
b. unit pricing
c. price gouging
d. price fixing
17. The owners of a corporation are the _____________.
a. top managers
b. officers
c. board of directors
d. stockholders
18. Company A purchased Company B. This is an example of
a(n) _____________.
a. spin-off
b. divestiture
c. merger
d. acquisition
19. Which of the following type of store is favored by small-
business retailers?
a. specialty shop
b. superstore
c. department store
d. catalog showroom
20. For loans under $35,000, the SBA offers the _____________
program.
a. SNDC
b. local development company
c. micro-loan
d. advisory
21. The _____________ program consolidates information from
various disciplines and institutions for use by new and

5. existing businesses.
a. Small Business Development Center
b. Progressive Loan
c. Local Development Company
d. University Network
22. About what percent of all new businesses will not last four
years?
a. 16 percent
b. 36 percent
c. 76 percent
d. 56 percent
23. According to authors of your textbook, a new business
should have enough capital to operate at least how many
months without earning a profit?
a. 4
b. 2
c. 6
d. 1
24. A _____________ invests all of the funds needed for a
business but plays no role in its management.
a. silent partner
b. general partner
c. sole proprietor
d. principal
25. Which of the following is NOT an advantage of the
corporate form of organization?
a. continuity
b. professional management
c. limited liability
d. low startup costs
26. In a(n) _____________ corporation, owners are taxed like

6. partners but have limited liability.
a. limited liability
b. private
c. public
d. S
27. Products created abroad and then transported and sold
domestically are called _____________.
a. subsidies
b. imports
c. exports
d. buy backs
28. Which country dominates the Pacific Asia region
economically?
a. Taiwan
b. South Korea
c. Japan
d. China
29. The _____________ is the rate at which the currency of one
nation can be exchanged for that of another.
a. trade surplus
b. floating interest rate
c. balance of payments
d. exchange rate
30. With a(n) _____________ exchange rate, the value of a
country’s currency remains constant relative to that of
another country.
a floating
b. indexed
c. adjusted
d. fixed
31. Which of the following international organization strategies

7. consists of firms giving individuals or companies in a
foreign country exclusive rights to manufacture or market
their products in that market?
a. independent agents
b. branch offices
c. strategic alliances
d. licensing arrangements
32. The ABC Paint Company in the United States has joined
forces with the 1-2-3 Plastics Company in Italy to create a
non-pealing, plastics-based paint. Both companies intend to
share the research costs and any profits. This is an example of
_____________.
a. a strategic alliance
b. foreign direct investment
c. viral marketing
d. a licensing arrangement
33. Associations of producers that control supply and prices are
called _____________.
a. business offices
b. dumpers
c. cartels
d. independent agents
34. Which of the following countries is not considered a part of
Pacific Asia?
a. Saudi Arabia
b. Indonesia
c. China
d. South Korea
35. A main purpose of tariffs on imports is to _____________.
a. increase imports
b. promote free trade
c. stabilize foreign currencies

8. d. maintain domestic competitiveness
36. Statements of how organizations will achieve their purposes
in the environments in which they conduct their business
are called _____________.
a. intermediate goals
b. long-term goals
c. mission statements
d. short-term goals
37. The purpose of _____________ analysis is to better
understand a company’s internal strengths and weaknesses.
a. environmental
b. organizational
c. human resource
d. product
38. The management function of _____________ involves
setting goals, developing a strategy to reach each goal and
designing plans to implement each strategy.
a. planning
b. controlling
c. organizing
d. developing
39. Hewlett Packard’s decision to move towards a more
centralized structure is an example of _____________.
a. leading
b. planning
c. controlling
d. organizing
40. Which of the following are directly responsible for getting
products from producers to consumers?
a. information managers
b. marketing managers

9. c. operations managers
d. production managers
41. Which of the following design and implement systems to
gather, organize and distribute information?
a. marketing managers
b. production managers
c. information managers
d. human resource managers
42. Centralized firms tend to be _____________.
a. flat
b. large
c. very responsive to change
d. tall
43. The duty to perform an assigned task is called
_____________.
a. accountability
b. delegation
c. responsibility
d. authority
44. _____________ is the obligation employees have to their
manager for the successful completion of an assigned task.
a. Authority
b. Accountability
c. Centralization
d. Span of control
45. Authority that flows up and down the chain of command is
called _____________ authority.
a. staff
b. line
c. departmental
d. delegated

10. 46. Authority given to a special group of employees that play
central roles in the firm’s daily operations is called
_____________.
a. risk aversion
b. line authority
c. matrix organization
d. committee and team authority
47. Sears can calculate the profits it generates from appliances,
home furnishings and every other department in the store if
it treats each department as a _____________.
a. profit center
b. centralized unit
c. cost center
d. economic unit
48. In a _____________ organization, decision-making
authority is delegated to levels of management at various
points below the top.
a. decentralized
b. point-of-sale
c. centralized
d. geographic
49. Departments that resemble separate businesses in that they
produce and market their own products are called
_____________.
a. divisions
b. function centers
c. cost centers
d. regions
50. Most service operations provide combinations of
_____________ and ______________.
a. goods; services

11. b. high; low quality levels
c. make-to-stock; make-to-order operations
d. low; high-contact systems
51. Which of the following is NOT a component of materials
management?
a. transportation
b. warehousing
c. supplier selection
d. advertising
52. _____________ is the evaluation of all work activities,
materials flows and paperwork to determine the value that
they add for customers.
a. Quality management
b. Groupware
c. Value-added analysis
d. Benchmarking
53. The _____________ is the flow of information, materials
and services from raw-materials suppliers through stages in
the operations process until the product reaches the end
customer.
a. supply chain
b. distribution chain
c. service channel
d. distribution channel
54. In a _____________ production system, all the needed
materials and parts arrive at the precise moment they are
required for each production stage.
a. quality control
b. process control
c. just-in-time
d. standardized

12. 55. Which of the following best describes business process
reengineering?
a. a program certifying that a factory, laboratory or office has
developed pollution-control standards
b. the redesigning of business processes to improve
performance, quality and productivity
c. a program certifying that a factory, laboratory or office has
met the quality management standards of the International
Organization for Standardization
d. the principle of looking at the supply chain as a whole in
order to improve the overall flow through the system
56. _____________ is the positive behaviors that do not directly
contribute to the bottom line.
a. Counterproductive behavior
b. Organizational citizenship
c. Performance behavior
d. Employee behavior
57. _____________ refers to one’s ability to get along with
others.
a. Managing emotions
b. Agreeableness
c. Empathy
d. Self-awareness
58. Managers who subscribe to _____________ believe that
people are naturally energetic, growth-oriented, self-
motivated and interested in being productive.
a. scientific management
b. two-factor theory
c. Theory X
d. Theory Y
59. Christine Choi is a programmer for BMC Software in
Houston. In terms of a psychological contract, her

13. _____________ include her education, skills, effort, time and
energy.
a. contributions
b. inducements
c. promises
d. commitments
60. Status and job titles can meet the _____________ needs
level in the hierarchy of needs model.
a. esteem
b. self-actualization
c. social
d. physiological
61. _____________ is designed to change behavior by
presenting people with unpleasant consequences if they fail
to change in desirable ways.
a. Punishment
b. Piecework rewards
c. Organizational goal setting
d. Positive reinforcement
62. Who does MBO involve in the organization?
a. subordinates only
b. managers and subordinates
c. managers only
d. everyone working as a team
63. According to Kotter, when developing a human network for
achieving the agenda, managers focus on _____________.
a. organizing and staffing
b. motivating and inspiring
c. aligning people
d. controlling and problem solving
64. In referring to cross-cultural leadership, culture refers to

14. _____________.
a. international differences
b. neither international differences nor diversity-based
differences within one culture
c. international differences and diversity-based differences
within one culture
d. diversity-based differences within one culture
65. To be an effective strategic leader, a manager needs to have
an understanding of the organization’s _____________.
a. culture
b. history
c. strengths and weaknesses
d. All of the above.
66. _____________ lead for stability; _____________ lead for
change.
a. Organizers; managers
b. Leaders; managers
c. Leaders; predictors
d. Managers; leaders
67. According to the situational approach to leadership, the
extent to which a leader or subordinate is involved in
decision making depends on characteristics of _____________.
a. the subordinate(s)
b. the leader
c. the situation
d. Any of the above.
68. Which of the following best defines decision making?
a. reducing risk
b. choosing one alternative from among several
c. avoiding escalation of commitment
d. analyzing the environment

15. 69. _____________ refers to the set of organizational activities
directed at attracting, developing and maintaining an
effective workforce.
a. Human resource management
b. Production management
c. Development of a mission statement
d. Operations management
70. Which of the following describes the skills, abilities and
qualifications required for a job?
a. staffing survey
b. employee analysis
c. job specification
d. advertising budget
71. Which of the following links salary increases to
performance levels in nonsales jobs?
a. cafeteria benefit plans
b. merit salary systems
c. bonuses
d. workers’ compensation insurance
72. Some incentive programs apply to all employees in a firm.
Paying workers to learn new skills and to become proficient
at different jobs is called a ____________ plan.
a. profit-sharing
b. pay-for-knowledge
c. gainsharing
d. None of the above.
73. Which of the following types of training occurs while the
employee is at his or her place of work?
a. off-the-job training
b. incentive training
c. vestibule training
d. on-the-job training

16. 74. The total package that a firm offers employees in return for
their labor is called a ______________.
a. wage
b. salary
c. benefits package
d. compensation system
75. An executive who is paid $2.5 million to achieve results,
even if that means working 5 hours one day and 15 the next,
is typically paid a(n) _____________.
a. fringe benefits
b. wage
c. incentive
d. salary
76. Which of the following emphasizes lasting relationships
with customers and suppliers?
a. advertising
b. relationship marketing
c. industrial marketing
d. personal selling
77. Which of the following matches the products of domestic
marketers against those of foreign competitors?
a. substitute competition
b. international competition
c. brand competition
d. arbitrage
78. _____________ are the qualities, tangible and intangible,
that a company builds into its products.
a. Safety devices
b. Requirements
c. Features
d. Benefits

17. 79. Brand _____________ refers to the extent to which a brand
name comes to mind when the consumer considers a
particular product category.
a. value
b. awareness
c. loyalty
d. equity
80. The marketing mix element of communicating information
about products is referred to as ______________.
a. promotion
b. place
c. product
d. price
81. Which of the following types of variables describe
populations and identify traits such as age, income, gender
and marital status?
a. demographic
b. geographic
c. product
d. price
82. During the _____________ stage of the product life cycle,
sales begin to slow down but profit levels are at their
highest. Competition becomes more active and toward the end
of this stage sales start to fall.
a. introduction
b. growth
c. maturity
d. decline
83. A distribution channel with no intermediaries is
_____________.
a. a quick channel

18. b. not possible
c. very rare
d. a direct channel
84. A salesperson communicates one-to-one with potential
customers to identify their needs and to line them up with
the seller’s product through _____________.
a. word-of-mouth
b. personal selling
c. personal endorsement advertising
d. sales promotion
85. Which of the following is NOT a type of sales promotion?
a. free samples
b. personal selling
c. point-of-sale displays
d. coupons
86. Convenience stores/gas stations are examples of which kind
of distribution?
a. a combined channel
b. retail distribution
c. direct channel
d. wholesale distribution
87. _____________ are the slowest and the cheapest modes of
transportation.
a. Planes
b. Pipelines
c. Railroads
d. Water carriers
88. _____________ is crucial for high-priced consumer
products such as homes and cars.
a. Interactive marketing
b. Missionary selling

19. c. Order processing
d. Creative selling
89. _____________ allows participants to see one another on
video screens while the conference is in progress.
a. Dataconferencing
b. Digital information service
c. Voice mail
d. Videoconferencing
90. A firewall provides _____________.
a. protection from electrical surges
b. the connection of stations in a LAN
c. privacy protection
d. Internet access
91. The protocol used to send e-mail is called _____________.
a. extranet transfer protocol (SMTP)
b. post office protocol (POP)
c. hypertext transfer protocol (HTTP)
d. All of the above.
92. A(n) _____________ system is an interactive system that
creates virtual business models and tests them with different
data to see how they respond.
a. decision support
b. application
c. expert
d. management information
93. _____________ are costs, other than the cost of goods sold,
incurred in producing a good or service.
a. Operating incomes
b. Inventory expenses
c. Operating expenses
d. Depreciation

20. 94. The formula for the _____________ is current assets
divided by current liabilities.
a. current ratio
b. acid test ratio
c. profit margin
d. return on equity
95. _____________ is the ability of a firm to finance an
investment through borrowed funds.
a. Solvency
b. Profitability
c. Leverage
d. Liquidity
96. The management of the nation’s economic growth by
managing money supply and interest rates is called a
_____________ policy.
a. monetary
b. supply/demand
c. fiscal
d. growth
97. Which of the following is an advantage of ETFs over mutual
funds?
a. ETFs have low operating expenses.
b. ETFs do not require high initial investments.
c. ETFs can be traded throughout the day like a stock.
d. All of the above.
98. New stocks and bonds are sold in the _____________.
a. secondary market
b. primary securities market
c. tertiary market
d. private placement market

21. 99. _____________ receive and execute buy-and-sell orders for
other people in return for commissions.
a. Stock exchanges
b. Investment banks
c. Stock brokers
d. Stock agents
100. _____________ is a financial institution that specializes in
issuing and reselling new securities.
a. The New York Stock Exchange
b. The secondary securities market
c. A commercial bank
d. An investment bank