Chapter 05Multiple Choice Questions26. _____ is the pr.docx

Chapter 05
Multiple Choice Questions
26. _____ is the process of creating and managing a business to
achieve desired objectives.
A. Entrepreneurship
B. Bootstrapping
C. Intrapreneuship
D. Innovation
E. Brainstorming
.
27. A _____ is best described as any independently owned and
operated business that is not
dominant in its competitive area and does not employ more than
500 people.
A. publicly owned business
B. limited liability company
C. small business
D. publicly traded company

E. for-profit corporation
28. A small business is any independently owned business that
employs not more than _____ people.
A. 100
B. 500
C. 300
D. 200
E. 20
29. Vernon runs Buzz, his own event management company,
which frequently organizes large
corporate events. Vernon has established a good reputation for
organizing corporate events with a
fair degree of professionalism at reasonable costs. Vernon
works out of his old house with a staff
of about 55 employees. Vernon's company is most likely to be
categorized as a(n):
A. multinational corporation.
B. limited liability company.

C. franchise.
D. public sector holding.
E. small business.
30. The Small Business Administration (SBA) is a(n):
A. body established by the U.S. Chamber of Commerce to
encourage the intrapreneurial spirit in
small businesses.
B. independent agency of the federal government that offers
managerial and financial assistance
to small businesses.
C. independent agency created under the GATT to protect small
businesses against competition
from larger companies.
D. division of the federal government that is responsible for
ensuring that newly formed
businesses adhere to the law.
E. U.S. Congressional agency that regulates the issue of stocks
by small businesses.
31. Which of the following is an advantage for small businesses
that choose to enter the retailing
industry?

A. Retailing is relatively difficult field to gain entry.
B. Retailing requires a large capital investment in the initial
stages.
C. Retailing allows small business to focus on specific groups
of consumers.
D. Retailing requires sophisticated machinery and technical
expertise.
E. Retailing suffers from heavy competition and losses only in
the initial stages.
32. Which of the following reasons makes retailing an attractive
industry for small businesses?
A. Retailing eliminates the need for any entrepreneurial skills.
B. Retailing offers high barriers to entry.
C. Retailing eliminates the need to engage in active interactions
with the final customers.
D. Retailing requires low initial financing.
E. Retailing limits a firm's need to focus on specific groups of
consumers.
33. Which of the following best illustrates a small business
operating in a retail industry as opposed to
wholesaling its products?

A. Janet bakes cakes and sells them to other restaurants and
cafes in malls.
B. BC Inc. manufactures stationery and sells it in bulk to book
shops and supermarkets.
C. Pink Cult, an apparel company, sells its merchandise through
OMG!.com.
D. Neon Love Inc. imports candles and directly sells them to
customers through kiosks.
E. Auto Line Inc. manufactures component parts of cars and
sells them to automobile companies.
34. Many service providers are considered retailers because
they:
A. require a high initial start-up cost.
B. provide their services directly to ultimate consumers.
C. sell their services from a single store location.
D. focus on large market segments and institutional buyers.
E. employ only a small number of people.
35. Which of the following traits will help entrepreneurs
succeed?
A. Risk aversion
B. Intolerance

C. Frugality
D. Impulsivity
E. Neuroticism
36. One of the major reasons people want to own and operate
their own business is to:
A. avoid the risk of competition.
B. be their own boss.
C. avoid multi-tasking.
D. reduce stress levels.
E. avoid direct responsibility of the operations.
37. Which of the following is an advantage of a small business?
A. Greater adaptability to changing market demands
B. Highly trained and competent staff
C. Low levels of stress in managing the business
D. Diverse and large workforce
E. High success rates
38. Red Carpet Inc. is a small apparel store started by an
aspiring designer. The store needs to

compete against larger, well-established multinational brands.
Which of the following strategies
will most help Red Carpet Inc. avoid competition from larger
firms?
A. Red Carpet Inc. should have multiple levels of management
like the larger firms.
B. Red Carpet Inc. should target large market segments that the
competitors serve.
C. Red Carpet Inc. should expand the scale of production to
enjoy greater economies of scale.
D. Red Carpet Inc. should start to work with customers only
when the products are ready for sale.
E. Red Carpet Inc. should focus on and target small market
niches or product needs.
39. Small businesses usually have only one layer of
management. Which of the following is an
implication of this?
A. Small businesses face a low risk of failure.
B. Small businesses have great flexibility to adapt to changing
market conditions.
C. The decision-making process is lengthy in small businesses.
D. Small businesses have better access to managerial experience
and skills than larger firms.

E. Small business owners have a limited amount of direct
authority.
40. Which of the following is a disadvantage of small-business
ownership?
A. High cost of formation
B. Bureaucratic decision-making process
C. Ability to focus upon specific groups of customers
D. Worries about employee problems or competition
E. Limited scope for innovation
41. Which of the following is a reason behind the failure of
small businesses?
A. Overcapitalization
B. Reputation
C. Managerial experience
D. Poor business concept
E. High costs of start-up
42. Carol has recently opened a restaurant in her neighborhood.
Which of the following is NOT likely
to be a source of stress?

A. Competition
B. Reputation
C. Rent increases
D. Employee issues
E. Changing market demand
43. _____ is best described as the lack of funds to operate a
business normally.
A. Debt financing
B. Trade credit
C. Franchising
D. Trade deficit
E. Undercapitalization
44. Gerald started a business using the savings from his
previous job. He planned to run his business
on the revenue generated from sales. However, a few months
later, Gerald found it difficult to pay
his staff, rent, and other expenses. Seasonal sales and inability
to secure sufficient credit from
local banks made it difficult for Gerald to operate the business

normally. Which of the following
causes of small business failure does this scenario best
illustrate?
A. Undercapitalization
B. Trade credit
C. Economies of scale
D. Debt financing
E. Debt factoring
45. Which of the following is the shortest path to business
failure?
A. Overcapitalization
B. Undercapitalization
C. Rent increases
D. Competition
E. Changing market demand
46. The principal immediate threats to small and mid-sized
businesses include:
A. rapidly advancing technology.
B. rising entrepreneurial spirit.

C. reducing imports.
D. escalating costs.
E. increasing exports.
47. A business plan should do all of the following EXCEPT:
A. provide the rationale for the business.
B. include estimates of income and expenses.
C. establish a strategy for acquiring sufficient funds.
D. include an analysis of the competition.
E. limit the business's flexibility and decision-making ability.
48. Arnold approached a bank to get a loan for a business he
planned to launch later in that year. He
explained his business idea and its capital requirements to the
bank manager. The manager
listened to the plan and asked Arnold to provide a formal
document that included a rationale for
the business, an explanation of how it will achieve its goals, an
analysis of the competition, and
estimates of income and expenses among other information.
Which of the following documents
does the bank expect from Arnold in this scenario?

A. A business plan
B. A cash flow statement
C. A promissory note
D. A balance sheet
E. A marketing plan
49. In the process of starting a business, the step that
immediately succeeds the development of a
business plan involves:
A. organizing resources like labor and supplies.
B. developing some general business ideas.
C. deciding an appropriate legal form of business ownership.
D. promoting the business to the customers.
E. filing for tax returns for the business with the Internal
Revenue Service.
50. To make profits from a small business, the owner must first
provide or obtain _____ to start the
business and keep it running smoothly.
A. products
B. employees

C. profits
D. supplies
E. capital
51. Which of the following is NOT a source of equity
financing?
A. Reinvesting profits into the business
B. Selling personal assets to raise funds
C. Bringing in useful personal assets such as a computer into
the business
D. Securing long-term loans from a family member
E. Selling stock in the business to family members or friends
52. Walter sold a piece of land he inherited from his
grandparents and started a business with the
proceeds. Which of the following sources has Walter used to
raise funds for his business?
A. Equity financing
B. Debt financing
C. Venture capital
D. Initial public offering

E. Angel Investment
53. Janice works in a factory that manufactures decorative
accessories for office spaces, hotels, and
designer homes. She wants to start her own business because
she believes that the market for
decorative products has a great growth potential. However, she
does not want to depend on
anyone else for the procuring the initial capital and would like
to raise the amount herself. In this
scenario, which of the following methods would Janice adopt to
raise funds through equity
financing?
A. Janice would secure a mortgage from a family member or
friend.
B. Janice would secure a loan from the Small Business
Administration (SBA).
C. Janice would ask for a line of credit from her previous bank.
D. Janice would invest her savings in the new business.
E. Janice would ask suppliers for a longer trade credit.
54. Jacob and Harry are business partners in a company that
manufactures portable solar panels.

They initially started the business with their savings. However,
now the company plans to expand
its operations and the required amount of capital cannot be
raised through savings or by
reinvesting profits. Thus, the partners have decided to sell stock
in their business to family
members, friends, and employees. Which of the following
sources of capital have Jacob and Harry
planned to use for the expansion of their business?
A. Debt financing
B. Bootstrapping
C. Equity financing
D. Mortgaging
E. Factoring
55. Persons or organizations that agree to provide some funds
for a new business in exchange for
ownership interest or stock are called ____.
A. intrapreneurs
B. category captains
C. venture capitalists

D. trade debtors
E. franchisers
56. Securing a mortgage from a bank for a new business venture
is an example of:
A. equity financing.
B. venture capitalism.
C. debt financing.
D. trade credits.
E. collaterals.
57. When an entrepreneur takes out a loan from a bank, the bank
will require him to put up _____,
which is a financial interest in the property or fixtures of the
business, to guarantee payment of the
loan.
A. collateral
B. venture capital
C. trade credit
D. business plan
E. cash flow statement

58. Lara, a single mother, borrowed some capital for her
business from Women Progress Council
(WPC) at an extremely low rate of interest. Which of the
following forms of funding a new small
business does this scenario best illustrate?
A. Trade credit
B. Equity financing
C. Venture capital
D. Debt financing
E. Crowdsourcing
59. Andrew, a pharmacist, realized that he should stock extra
supplies of a particular medicine to
respond to an outbreak of a particular infection in the city.
Lacking sufficient capital to purchase
the extra inventory, he turned to his bank and asked to borrow a
predetermined sum of money.
Which of the following sources of funding does this scenario
best illustrate?
A. Trade credit
B. Initial public offering
C. Venture capital

D. Equity financing
E. Line of credit
60. A license to sell another's products or to use another's name
in business, or both, is called a ____.
A. franchise
B. cartel
C. collateral
D. mortgage
E. collusion
61. Since Eva Carl has decided to use her savings to purchase
the rights to own and operate a
McDonald's fast-food restaurant rather than starting her own
restaurant, she is probably a(n)
____.
A. trade creditor
B. franchisee
C. franchiser
D. intrapreneur

E. venture capitalist
62. Nathan started the first outlet of Dynamix Gym in New York
City in 1995. The business expanded
over time, and Nathan became the owner of a chain of gyms in
New York State. Though the
business had potential to expand outside New York, Nathan did
not want to take the risk or
responsibility. Hence, he decided to sell the license to own and
operate gyms in the name of
Dynamix Gym to independent owners. In return, he charged
them an initial fee and a small share
in the monthly profits. In this scenario, Nathan is a(n) ____.
A. franchisee
B. intrapreneur
C. angel investor
D. franchiser
E. venture capitalist
63. Which of the following statements accurately brings out the
difference between franchising and
building an independent business from scratch?

A. The time required to set up an independent business is much
lower than obtaining a franchise.
B. A franchise outlet often reaches the break-even point faster
than an independent business
would.
C. A franchisee would experience more flexibility in decision
making than the owner of an
independent business.
D. The quality of goods and services needs to be more
standardized and uniform in independent
business than in franchises.
E. Access to managerial and financial assistance is more limited
in franchises than in
independent businesses.
64. Which of the following is an advantage that purchasers of a
popular franchise experience?
A. They get access to the already established brand name or
brand equity.
B. They have great flexibility to make decisions for their
individual franchise outlets.
C. They can enjoy their total profits without having to share
anything with the franchisers.
D. They can easily add or delete a good or service from the

existing product line.
E. They are free to vary their operational processes based on
their needs and constraints.
65. One of the main drawbacks of franchising is that it requires
the franchisee to:
A. invest a lot of time and effort in setting up the business.
B. take sole responsibility for all decisions in the business.
C. share the profits of the business with the franchiser.
D. build the brand appeal for the franchise outlet on his or her
own.
E. invest considerable capital in national and local advertising
programs.
66. Paul has recently quit his job as an investment banker. He
plans to open a restaurant. He has two
options: he can either start his own new restaurant from scratch
or purchase a franchise from an
already established restaurant or fast food chain. His wife, Lisa,
supports the former plan. Which
of the following statements strengthens the argument in favor of
Lisa's choice of opening a
restaurant independently?

A. It is easier and faster to build a business from scratch.
B. It is easier to reach the break-even point through an
independent business.
C. It is more difficult to attract customers in a franchise
business as the entrepreneur has to
personally build the brand appeal.
D. It is easier and more flexible to make and execute decisions
in an independent business.
E. It is easier to succeed in a business built from scratch as the
products and the business format
are already proven.
67. Millennials number around 75 million and represent a huge
business opportunity in the United
States. Which of the following is a defining feature of the
millennials?
A. Baby boomers above the age 50
B. First generation immigrants
C. People born at the turn of the millennium between 1999 and
2001
D. People from immigrant communities who migrated to U.S.
between 1946 and 1964
E. People born between 1977 and 1994

68. Sally is a human resource manager at a company. A survey
of the company's employees revealed
that more than 80 percent of the employees belonged to the
demographic segment Generation Y.
In this scenario, which of the following HR strategies should
Sally implement in order to best serve
the needs of the employees?
A. Sally should solely use financial rewards to motivate the
employees to improve their
productivity.
B. Sally should keep the training sessions highly formal with no
scope for entertainment.
C. Sally should restrict the employees from using work from
home or telecommuting options.
D. Sally should avoid giving regular, direct feedback to the
employees.
E. Sally should use recognition and advancement as the driving
forces to motivate employees.
69. Which of the following demographic segments should small
retailers specializing in ethnic
products and small service providers target?
A. Immigrants

B. Echo boomers
C. Baby boomers
D. Generation X
E. Drivers
70. Which of the following demographic trends has made health
care and financial planning industries
attractive for small businesses in the United States?
A. Decreasing population of millennials
B. Increasing income among generation X
C. Aging baby boomers who are wealthy
D. Reducing entrepreneurial spirit among young generations
E. Increasing imports into the economy
71. Which of the following is an implication of technological
advances to small businesses?
A. It fails to make any significant changes as small businesses
cannot afford to use sophisticated
technology in their operations.
B. It reduces a small business's ability to adapt to changing
trends and market demands.

C. It increases the ratio of baby boomers as employees in small
businesses.
D. It provides new opportunities for small businesses to expand
their operations abroad.
E. It reduces a small company's ability to customize their
services and products.
72. Norton is a human resource manager at a large multinational
company. After a drastic drop in
revenue, his company is thinking of ways to correct the
situation. At a meeting with the top
management, the CEO suggested that 20 percent of the
employees should be eliminated. This
move would help the company cut costs and continue
functioning on the current projects. In this
scenario, which of the following strategies is this MNC
planning to use?
A. Debt financing
B. Intrapreneruship
C. Crowdsourcing
D. Franchising
E. Downsizing
73. Downsizing is an effective way to:

A. gain the advantages of small businesses.
B. increase organizational tasks.
C. reduce entrepreneurial spirit among employees.
D. increase the management layers.
E. gain employee trust.
74. Which of the following statements accurately describes
intrapreneurs?
A. Employees who become a part of a company's board of
directors through internal promotions
are referred to as intrapreneurs.
B. Entrepreneurs who sell the rights to use their products to
independent owners are
intrapreneurs.
C. Entrepreneurs who are involved in international business are
referred to as intrapreneurs.
D. Independent investors who help a company raise capital
through internal financing are
intrapreneurs.
E. Individuals in large firms who take responsibility for the
development of innovations within the

organizations are intrapreneurs.
75. Which of the following is an ineffective practice in making
big businesses act small?
A. Encouraging a spirit of entrepreneurship within the
organization
B. Increasing the layers of management within the organization
C. Downsizing to reduce work tasks
D. Keeping the growth vision long term
E. Focusing on current customers rather than looking for new
customers
76. George is an employee at a company that provides
information technology solutions to other
firms. He has been developing a new smart phone application
from the resources of the company.
In this scenario, George best illustrates a(n) ____.
A. franchiser
B. venture capitalist
C. intrapreneur
D. entrepreneur
E. trade creditor

Chapter 8
26. If an employee is involved with transforming resources into
goods and services, then he is in:
A. marketing.
B. financing.
C. human resources.
D. operations management.
E. budgeting.
27. Irene is an employee associated with producing goods,
services, and ideas that satisfy the needs
of customers. Thus, she works most closely with:
A. financing.
B. budgeting.
C. production.
D. human resources.
E. operations.
28. Operations management has the primary responsibility for:

A. employing computer-assisted manufacturing (CAM)
exclusively for all transformations.
B. transforming goods and services into resources.
C. creating products that satisfy customers.
D. developing only such products which are intangible.
E. converting outputs into inputs.
29. Which of the following is true of the transformation
process?
A. It is the development and administration of activities that
transform resources into goods,
services, and ideas.
B. It is the conversion of human, financial, and physical
resources into goods, services, and
ideas.
C. It involves the assigning of labor, energy, and money for the
advertisement of services.
D. It is associated with the promotion and pricing of goods and
services.
E. It deals with the distribution and logistics of products.
30. Viewed from the perspective of operations, the money used
to purchase a carpenter's tools and

the electricity used to run his power saw are:
A. processes.
B. outputs.
C. stocks.
D. inputs.
E. maintenance costs.
31. Viewed from the perspective of operations, the furniture
items produced by a carpenter are:
A. variations.
B. inputs.
C. equipment.
D. outputs.
E. processes.
32. From the perspective of operations, food sold at a restaurant
and services provided by a plumbing
company are:
A. processes.
B. inputs.

C. outputs.
D. stocks.
E. costs.
33. How do operations managers ensure quality and efficiency
during the transformation process?
A. They ensure that their products never use the modular design
of transforming because this
process increases the cost of labor.
B. They always employ computer-assisted manufacturing
(CAM) technologies to guide and
control the transformation processes.
C. They shift from material-requirements planning (MRP) to
just-in-time (JIT) inventory
management.
D. They keep the work cycling between two different batches of
labor in order to track any
loopholes.
E. They take feedback at various points in the transformation
process and compare them to
established standards.
34. Money, employees, time, and equipment are examples of an

airline's _____ to the transformation
process.
A. outputs
B. intangibles
C. products
D. services
E. inputs
35. Which of the following is true of the transformation
process?
A. It does not occur in service companies.
B. It occurs in all organizations, regardless of what they
produce or their objectives.
C. It occurs only in manufacturing companies because they use
tangible inputs.
D. It excludes fund-raising and promoting a cause.
E. It is not a part of government agencies because they do not
use machineries for mass
production.
36. Which of the following is NOT a point of difference
between service providers and manufacturers?

A. Services are more labor-intensive.
B. Manufacturing has more uniform outputs.
C. Services do not undergo a transformation process.
D. Manufacturing productivity can be measured
straightforwardly.
E. Service providers have less control over the variability of
their inputs.
37. For most organizations, the ultimate objective is for
produced outputs to be:
A. easy to develop.
B. tangible, hard goods.
C. inexpensive.
D. worth more than the cost of inputs.
E. equal to the costs of input.
38. The nature of the service provider's product requires:
A. fewer employee inputs.
B. a higher degree of customer contact.
C. delayed consumption.

D. more expensive inputs.
E. more standardization.
39. Actual performance of the service provider's product
typically occurs:
A. several days after purchase.
B. outside the service provider's facility.
C. at the point of consumption.
D. in the buyer's home.
E. before the point of consumption.
40. To receive a haircut, you generally have to go to a salon.
This information reflects the _____.
A. uniformity of inputs
B. uniformity of outputs
C. labor required
D. measurement of productivity
E. nature and consumption of output
41. The products of service providers tend to be more
customized than those of manufacturers
because:

A. different customers have different needs.
B. the requirements of all customers are more or less the same.
C. technological innovations have reduced variability.
D. there is more capital required in service provision.
E. the specific needs of individual customers get incorporated.
42. The fact that a hairdresser gives each customer a different
haircut relates to the difference
between service providers and manufacturers in terms of:
A. consumption of output.
B. uniformity of inputs.
C. labor required.
D. measurement of productivity.
E. uniformity of output.
43. When compared to service providers, the products of
manufacturers are typically:
A. more labor-intensive.
B. less uniform.
C. more difficult to store.
D. more standardized.

E. cheaper.
44. Compared to service providers, manufacturers generally:
A. are more labor-intensive.
B. are more capital-intensive.
C. customize their outputs.
D. have difficulty measuring productivity.
E. produce intangible outputs.
45. Zedpro Computer Company is determining demand for its
future products and how much
consumers are willing to pay. For this, Zedpro should rely on:
A. the economy.
B. marketing research.
C. its competitor's moves.
D. successful past experiences.
E. intuition.
46. As a manufacturing process, the term standardization means:
A. ensuring that each product is sold at the same price.

B. that similar products, manufactured by different companies,
all operate in the same manner.
C. making identical, interchangeable components or complete
products.
D. making the exact product a particular customer needs or
wants.
E. making an item in self-contained units that can be
interchanged to create different products.
47. A primary reason for using standardization is to:
A. reduce production costs.
B. increase consumer options.
C. reduce product quality.
D. increase variations.
E. foster creativity.
48. Building a computer so that the components can be installed
in different configurations to meet
customers' needs is a result of:
A. flexible manufacturing.
B. modular design.
C. customization.

D. specialization.
E. varied engineering.
49. Facility location decisions are complex because:
A. all customers want plants nearby.
B. transportation costs are excessively high.
C. speed of delivery is not very important.
D. proximity to market or community characteristics are not
important factors.
E. the firm must live with it once the decision has been made
and implemented.
50. A company that manufactures large products, such as houses
or bridges, may require that all
resources be brought to a central location during production.
This type of facility layout is called:
A. fixed-position layout.
B. product layout.
C. line layout.
D. central control layout.
E. assembly line layout.

51. A company performing large, complex tasks such as
construction or exploration is called a(n):
A. continuous manufacturing organization.
B. intermittent organization.
C. project organization.
D. exploration company.
E. survey company.
52. A metal fabrication plant with a cutting department, a
drilling department, and a polishing
department would likely use _____ layout.
A. fixed-position
B. horizontal-position
C. process
D. geographical
E. customer-based
53. A hospital having an X-ray unit, an obstetrics unit, few
emergency rooms, and other units would
best be classified as a(n):

A. intermittent organization.
B. project organization.
C. continuous manufacturing organization.
D. fixed organization.
E. assembly line organizations.
54. An organization that creates many products with similar
characteristics, such as automobiles,
television sets, or vacuum cleaners, would most likely be
categorized as a(n):
A. continuous manufacturing organization.
B. intermittent organization.
C. project organization.
D. process layout organization.
E. fixed-position organization.
55. Which of the following statements is true?
A. Organizations can start greening their supply chains by
increasing resource consumption and
waste.
B. The adoption of 100 percent wind-powered electricity
increases carbon emissions.

C. Aluminum cans can be recycled an infinite number of times.
D. It is mandatory for organizations to incorporate
sustainability into their business models.
E. Balancing profitability and socially responsibility is
impossible for corporate organizations.
56. Which of the following activities is NOT included in supply
chain management?
A. Getting products to customers
B. Obtaining and managing raw materials
C. Managing finished products
D. Packaging finished products
E. Researching and developing products
57. All activities involved in obtaining and managing raw
materials and component parts, managing
finished products, packaging them, and getting them to
customers are part of:
A. stock management.
B. supply chain management.
C. engineering.
D. finance.

E. strategic planning.
58. Within organizations, purchasing is also referred to as:
A. consumption.
B. disposition.
C. acquisition.
D. procurement.
E. budgeting.
59. The buying of all materials needed by an organization is
called:
A. consumer behavior.
B. capital expenditure.
C. purchasing.
D. standardization.
E. just-in-time management.
60. The term _____ refers to all raw materials, components,
completed or partially completed
products, and pieces of equipment a firm uses.
A. inventory

B. order quantities
C. production
D. raw materials inventory
E. intangibles
61. Materials that have been purchased to be used as inputs in
making other products are included
in:
A. finished inventory.
B. partial inventory.
C. raw materials inventory.
D. supplier inventory.
E. component parts inventory.
62. The process of determining how many supplies and goods
are needed, keeping track of quantities
on hand, each item's location, and who is responsible for it is
called:
A. process layout.
B. product layout.

C. material-requirements planning.
D. inventory control.
E. continuous manufacturing control.
63. A model of inventory management that identifies the
optimum number of items to order to
minimize the costs of managing them is called the:
A. just-in-time management model.
B. flexible scheduling model.
C. material requirements planning model.
D. economic order quantity model.
E. logistics model.
64. Minimizing inventory by providing an almost continuous
flow of items from suppliers to the
production facility is referred to as:
A. just-in-time inventory management.
B. flexible scheduling.
C. material-requirements planning.
D. logistics.

E. the economic order quantity model.
65. A planning system that schedules the precise quantity of
materials needed to make a product is
called:
A. just-in-time management.
B. material-requirements planning.
C. economic order quantities.
D. flexible scheduling.
E. cycle-time management.
66. One popular method of scheduling is the _____ which
identifies all the major activities or events
required to complete a project, arranges them in a sequence or
path, determines the critical path,
and estimates the time required for each event.
A. computer-assisted manufacturing (CAM)
B. Program Evaluation and Review Technique (PERT)
C. Critical Path Method (CPM)
D. economic order quantity (EOQ) model
E. material-requirements planning (MRP)

67. The system in which management collects and analyzes
information about the production process
to pinpoint quality problems in the production system is called:
A. total quality management.
B. statistical process control.
C. Program Evaluation and Review Technique (PERT).
D. operations control.
E. production control.
68. Which of the following is true about quality?
A. It is a concern only for manufacturing companies.
B. It is a concern only for service providers.
C. It always indicates the price charged for a product.
D. It is a critical element of operations management.
E. Its definition should vary from employee to employee.
69. The degree to which a good or service meets the demands
and requirements of customers is
called:
A. efficiency.
B. productivity.

C. quality.
D. effectiveness.
E. customer satisfaction.
70. It is especially difficult to measure quality characteristics
when:
A. a firm uses ISO 9000.
B. a firm has a total quality management program.
C. the product is a good.
D. the product is a service.
E. a firm uses statistical process control.
71. _____ refers to the processes an organization uses to
maintain its established quality standards.
A. Quality control
B. Implementation
C. Continuous manufacturing
D. Fixed-position layout
E. Logistics
72. _____ is a philosophy that uniform commitment to quality

in all areas of an organization will
promote a culture that meets customers' perceptions of quality.
A. The marketing concept
B. Total quality manufacturing
C. ISO 9000
D. Statistical process control
E. Total quality management
73. The first step in quality control for any organization is:
A. undertaking inspections.
B. establishing standards.
C. sampling products.
D. implementing services.
E. initiating corrections.
74. Sampling is likely to be used:
A. when inspection tests are destructive.
B. when every product must be tested because of human life and
safety.
C. to assess the quality of services.

D. sampling is the most expensive option.
E. testing takes a few minutes to complete.
75. It is desirable to test only a sample of the product in all of
the following circumstances EXCEPT
when:
A. inspection procedures are expensive.
B. elaborate testing equipment is required.
C. testing takes a significant number of hours to complete.
D. the product is destroyed by sampling.
E. sampling does not destroy the product.
Chapter 10
26. All of the following are activities performed by human
resources managers EXCEPT:
A. planning.
B. recruiting.
C. selling.
D. training.

E. compensating.
27. A human resources manager deciding how many new
employees an organization will need to fill
vacant positions in the near future is engaging in the activity of
____.
A. recruiting
B. planning
C. training
D. selling
E. compensating
28. _____ involves determining, through observation and study,
the specific tasks that comprise a job
and the knowledge, skills, and abilities necessary to perform the
job.
A. Job description
B. Job specification
C. Job design
D. Job analysis
E. Job appraisal

29. An overview of a job's title, tasks, relationships with other
jobs, the physical and mental skills
required, duties, responsibilities, and working conditions is
referred to as the:
A. job appraisal.
B. job portfolio.
C. job description.
D. job analysis.
E. job specification.
30. The qualifications necessary for a specific job, in terms of
education, experience, and personal
and physical characteristics are spelled out in the ____.
A. job evaluation
B. job specification
C. job analysis
D. job description
E. job assessment
31. ______ refers to forming a pool of qualified applicants from
which management can select new

employees.
A. Planning
B. Training
C. Compensating
D. Appraising
E. Recruiting
32. When compared to the external sources of recruitment,
recruiting from internal sources:
A. results in higher turnover.
B. incurs higher costs.
C. increases the possibility of lockouts.
D. decreases picketing.
E. improves employee morale.
33. Which of the following is an internal source of recruitment
for an organization?
A. Vocational schools
B. Current employees
C. Social networking sites

D. Competing firms
E. Colleges
34. A characteristic of search firms known as headhunters is
that they:
A. focus on internal rather than external sources of recruitment.
B. specialize in recruiting employees for entry-level jobs.
C. look for qualified candidates who are working for other
companies.
D. undertake training for unusual job requirements or skillsets.
E. operate as career planners for employees within
organizations.
35. An employer beginning the selection process for new
employees would begin with ____.
A. training
B. reference checking
C. testing
D. the application form
E. orientation
36. Which stage of the employee selection process allows

management to obtain detailed information
about an applicant's experience and skills, reasons for changing
jobs, and an idea of whether the
person would fit in with the company?
A. Orientation
B. Training
C. Testing
D. Reference checking
E. Interviewing
37. During which stage of the selection process is a candidate
expected to undergo physical
examinations to determine his or her suitability for a specific
job?
A. Orientation
B. Reference checking
C. Interviewing
D. Filling out the application form
E. Testing
38. At which stage in the selection process is an employer likely

to make use of the Myers-Briggs
Type Indicator?
A. Interviewing
B. Reference checking
C. Orientation
D. Training
E. Testing
39. Reference checking usually involves:
A. monitoring the working conditions in a firm.
B. checking a company's compliance with its policies.
C. assessing an applicant's potential for a job.
D. checking the previous work experience of a candidate.
E. identifying possible sources for recruitment.
40. The _____ is a federal agency established by the Civil
Rights Act of 1964 and dedicated to
increasing job opportunities for women and minorities and
eliminating job discrimination based on
race, religion, color, sex, national origin, or handicap.

A. National Center for Civil and Human Rights
B. United States Commission on Civil Rights
C. Equal Employment Opportunity Commission
D. Pension Benefit Guaranty Corporation
E. National Association for the Advancement of Colored People
41. Orientation is the human resources function that:
A. includes building tours, introductions, and socialization.
B. provides on-the-job training to employees.
C. appraises employees subjectively.
D. teaches employees to do specific job tasks.
E. occurs after the employee is on the job for several months.
42. An orientation includes all of the following EXCEPT:
A. on-the-job training.
B. a tour of the building.
C. introductions to supervisors.
D. description of company benefits.
E. distribution of organizational manuals.

43. Vikram is an employee of the Monsanto research lab. In an
effort to improve his managerial skills
and prepare him for a promotion, his company sends him on a
series of experiential management
training exercises at company expense. By helping him increase
his knowledge, Vikram's
company is involved in:
A. development.
B. orientation.
C. testing.
D. grade assignment.
E. performance appraisal.
44. A(n) _____ is a performance appraisal method that provides
feedback from a panel that typically
includes superiors, peers, and subordinates.
A. ranking
B. grade assignment
C. polygraph
D. 360-degree feedback system
E. behavioral checklist

45. When Sophia Smith moved to a new job that involved more
responsibility and an increase in
compensation, the move would typically be considered a(n):
A. transfer.
B. conciliation.
C. separation.
D. arbitration.
E. promotion.
46. Joe was recently moved to a new position in his company
that involved learning new skills and
undertaking work assignments. However, he received no salary
raise. Joe's change in position
can best be described as a(n):
A. promotion.
B. lockout.
C. separation.
D. arbitration.
E. transfer.
47. Which of the following statements is true of a separation?

A. It is an employee's departure from an organization due to
termination or some other reason.
B. It is an employment change that involves demotion.
C. It is an advancement to a higher-level job.
D. It is a temporary suspension of employment due to violation
of work rules.
E. It is a horizontal move from one job to another within the
same company.
48. Socorro was terminated from her job by her employer
because she was repeatedly late to work.
She contributes to her company's turnover through:
A. conciliation.
B. demotion.
C. transfer.
D. separation.
E. arbitration.
49. Which of the following is likely to be an unacceptable
reason for firing an employee?
A. Violation of company rules

B. Excessive absenteeism
C. Frequent tardiness
D. Being a union organizer
E. Poor performance
50. Human resources departments strive to:
A. increase lockouts.
B. avoid arbitration to resolve third party issues.
C. minimize losses due to separations and transfers.
D. discourage strikebreaking.
E. fire employees because of their race, religion, gender, or age.
51. Financial compensation falls into two general categories:
A. time wages and piece wages.
B. wages and salaries.
C. wages and benefits.
D. commissions and incentives.
E. salaries and benefits.
52. A wage/salary survey indicates:

A. how much employees in a company need to earn in order to
meet their financial needs.
B. how much compensation similar firms are paying for jobs
that the firms have in common.
C. the proportion of compensation that can be paid through non-
financial methods.
D. how satisfied employees are with the compensation they
receive from their employers.
E. the differences between the salaries of men and women
performing the same jobs.
53. Which of the following statements is true of payment using
time wages?
A. It encourages employees to be more productive.
B. It provides incentives to increase productivity.
C. It is primarily used for skilled craftworkers.
D. It is appropriate when employees are continually interrupted.
E. It is used when quantity is more important than quality.
54. In a sales company, employees are paid a percentage of their
sales in order to motivate them to
sell as much as they can. The company incorporates _____ as an
incentive system.

A. commissions
B. time wages
C. profit sharing
D. salaries
E. bonuses
55. Which of the following statements is true of salary as
employee compensation?
A. It involves distributing a percentage of company profits.
B. It is a nonfinancial reward.
C. It is associated with white-collar workers.
D. It involves paying a percentage of an employee's sales.
E. It a monetary reward for exceptional performance.
56. If a company pays its workers additional compensation at
the end of the year as a "thank you" for
good work, this monetary reward would most likely be
categorized as:
A. wages.
B. commission.
C. a salary.

D. a benefit.
E. a bonus.
57. Which of the following forms of compensation includes an
employee stock ownership plan?
A. Wages
B. Bonuses
C. Profit sharing
D. Salaries
E. Commissions
58. Which of the following statements is true of employee stock
ownership plans?
A. They encourage employees to become involved in
strikebreaking.
B. They create a sense of partnership between a firm and its
employees.
C. They reduce employee morale and productivity.
D. They increase the possibility of lockouts.
E. They are applicable only to senior employees of a firm.
59. Which of the following forms of compensation is NOT a

benefit?
A. Paid vacation
B. Health insurance
C. Pension plans
D. Commissions
E. Child care
60. Employee organizations formed to deal with employers for
achieving better pay, hours, and
working conditions are known as:
A. workforce groups.
B. cooperatives.
C. working groups.
D. labor unions.
E. quality circles.
61. Which of the following objectives do labor unions strive to
achieve?
A. Reduced pay
B. Increased job security
C. Less safe working conditions

D. Increased work hours
E. Increased lockouts
62. One reason for deterioration of union growth is because:
A. traditional union members lack organization.
B. of the shift from a service to a manufacturing economy.
C. the unions are not backed by the power of a large group.
D. the proportion of blue-collar jobs is increasing.
E. of the increasing automation of factories.
63. The formal, written document that spells out the relationship
between the union and management
for a specified period of time is called a:
A. conciliation dossier.
B. labor contract.
C. turnover file.
D. arbitration report.
E. job specification.
64. In a labor contract, the _____ clause calls for automatic

wage increases during periods of inflation
to protect the "real" income of the employees.
A. non-compete
B. giveback
C. arbitration
D. cost-of-living escalator
E. wage-salary
65. Which of the following statements is true of a strike?
A. It prevents people from purchasing a company's products.
B. It is started by the management.
C. It halts or disrupts the normal working of a firm.
D. It is one of the least effective labor weapons.
E. It seldom disrupts normal working conditions.
66. A boycott takes place when:
A. a union and management negotiate a labor contract with the
help of a mediator.
B. employees of a company refuse to work as a protest against
unfair management practices.
C. management closes a work site so that employees cannot go
to work.

D. union members protest against management practices by
marching outside the employer's
work site.
E. union members are asked to refrain from purchasing the
products of a company whose
policies do not favor union members.
67. If a union strike partly shuts down a company's operations
and the management closes down the
rest of the plant so that none of its employees can go to work, it
represents a(n):
A. injunction.
B. embargo.
C. boycott.
D. lockout.
E. picket.
68. If the negotiations between a union and the management
representatives come to a standstill and
a third party is brought in to make suggestions or propose
solutions to help resolve the impasse,
though the solutions are not binding on the parties, then the

third party would most likely be a(n):
A. arbitrator.
B. mediator.
C. scab.
D. picketing agent.
E. conciliator.
69. If a neutral party is brought in to settle a labor-management
dispute and if his or her solution is
legally binding and enforceable, the neutral party is most likely
to be involved in ____.
A. conciliation
B. picketing
C. mediation
D. arbitration
E. strikebreaking
70. The difference between an arbitrator and a mediator is that:
A. a mediator is a neutral third party, while an arbitrator is a
member of the union.
B. a mediator's solution to a labor dispute is enforceable.

C. an arbitrator's decision is binding on the participants in a
dispute while a mediator's is not.
D. an arbitrator is a neutral third party, while a mediator is a
representative of management.
E. a mediator merely facilitates discussions between the union
and management, but does not
suggest solutions.
71. Which of the following is a primary diversity characteristic?
A. Gender
B. Income
C. Marital status
D. Religion
E. Military experience
Age, gender, race, ethnicity, abilities, and sexual orientation
represent primary characteristics of
diversity that are inborn and cannot be changed.
72. Which of the following represents a secondary characteristic
of diversity?
A. Income
B. Age

C. Race
D. Gender
E. Abilities
73. ____, is a primary characteristic of diversity.
A. Age
B. Work background
C. Religious belief
D. Geographic location
E. Income
74. If an organization fosters and values workforce diversity:
A. it makes less productive use of the organization's resources.
B. it reduces conflict among employees of different cultural
groups.
C. it decreases sharing of organizational goals among diverse
employees.
D. it reduces innovation and creativity of the employees.
E. it decreases the ability to serve the needs of a diverse
customer base.
75. Which of the following factors is a reason why affirmative

action plans became politically
questionable?
A. Increased reverse discrimination
B. High planned obsolescence
C. High level of lockout
D. Increased picketing
E. Frequent boycotts
Breaking Bad
When Going Gets Tough, a Not-So-Tough Turns to Meth
By ALESSANDRA STANLEY
Published: January 18, 2008
“Breaking Bad,” a new seven-part series on AMC about a
middle-aged chemistry teacher in Albuquerque who becomes a
methamphetamine dealer, wants no part of that Hollywood
formula. Walt White’s decision to turn to crime — part midlife
crisis, part D.I.Y. estate planning — almost instantly lands him
neck-deep in a morass of trouble without his ever experiencing
the slightest shiver of a thrill.
The series has a slight vein of black humor, but it is very, very
dark: “Thelma & Louise” as seen by Dostoyevsky.
The gloom is understandable, of course. The economy and the
political landscape today are weighed down with the steady
lowering of middle-class expectations. The young know better
than to assume that they will be better off than their parents; the
old cling to the railing, fearful of falling beyond the reach of
pensions and Social Security payments.
And crime is a particularly tempting fantasy. Be it the new
movie “Mad Money,” in which Diane Keaton plays a bourgeois

housewife forced to work as a janitor when her husband is laid
off, or “Breaking Bad,” films and television increasingly tap
into that sense of economic and social backsliding, finding
humor and pathos in the white-collar world’s undignified
struggle for dignity.
It’s the pacing that makes “Breaking Bad” more of a hard slog
than a cautionary joy ride. It has good acting, particularly by
Bryan Cranston (“Malcolm in the Middle”), who blends Walt’s
sad-sack passivity with glints of wry self-awareness. But the
misadventures of Walt and his slacker sidekick, Jesse (Aaron
Paul), are a picaresque comedy filmed at the speed of a tragic
opera — jokes, visual and verbal, are slowed down from 78
r.p.m. to 33 1/3 by an underlying earnestness, as if it were a
foreign art film set in the American Southwest.
This is the first series offered by AMC since its heady offering
last summer, the hit “Mad Men.” And the network’s next may
well be much better. Television follows the same pattern as
fiction and families: The second novel and the middle child
almost never live up to the expectations stoked by the first.
“Breaking Bad,” created by Vince Gilligan, a writer and
executive producer of “The X-Files,” couldn’t be more different
from “Mad Men,” but it also lacks that series’s originality and
sparkle. This crime story is in many ways a bleaker male
version of “Weeds,” Showtime’s comedy about a widowed
soccer mom who sells pot to keep up with the Joneses.
Walt’s slide into the crime lane is perhaps easier to understand.
He has just turned 50; his wife, Skyler (Anna Gunn), is
pregnant; their teenage son has cerebral palsy; and his teaching
salary is so small that he works a second job in a car wash. Fate
doesn’t leave it at that: after collapsing at the car wash, Walt
discovers that he has a fatal disease. “Are you a smoker?” the
paramedic examining him in the ambulance asks.
“No, never,” Walt replies, almost indignantly. The paramedic
remains silent.
That Walt once held promise and high expectations is signaled
early on. In the first episode he is already awake when his alarm

clock rings at 5 a.m., and he dutifully rises and begins trudging
on an indoor stepper, one of those cheap exercise gizmos sold
on late-night cable, and stares into space. The camera travels to
the wall in front of him and lingers on a framed certificate, an
acknowledgment of his contribution to a Nobel Prize in
chemistry. (Skyler, who writes short stories, has her own set of
disappointments.)
Walt doesn’t tell his wife or friends about his condition,
possibly because he rarely gets a word in edgewise. His wife is
kindly but briskly overbearing, checking to see if he took his
echinacea and scolding him for buying fax paper at Staples with
the wrong credit card.
And Walt’s in-laws are the kind who would drive even a
stronger man crazy. Skyler’s sister, Marie, played deliciously
by Betsy Brandt, is a narcissist and busybody, categories that
should cancel each other out but rarely do, and Marie’s
husband, Hank (Dean Norris), is a swaggering D.E.A. agent who
has vast reserves of self-regard and who inadvertently gives
Walt his criminal start.
“The Wire,” on HBO, is the rare series that takes its criminals
from the criminal class — drug dealers are second- and third-
generation felons with no connection to the outside world. Most
shows prefer comic contrasts, the “Trading Places” conceit: a
P.T.A. mom turns pot dealer on “Weeds”; a New Jersey mobster
is a suburban dad on “The Sopranos.”
The Whites are a middle-class couple trapped in a lower-
middle-class struggle — with creditors, health-insurance
brokers, employers and the lifeless bedroom community they
call home. They are upstanding citizens with outstanding debts,
and when life deals them an insurmountable blow, Walt strikes
back by joining the underworld.

Chapter 05
26.
_____ is the process of creating and managing a business to
achieve desired objectives.
A.
Entrepreneurship
B.
Bootstrapping
C.
Intrapreneuship
D.
Innovation
E.
Brainstorming
.
27.
A _____ is best described as any independently owned and
operated business that is not dominant in its competitive area
and does not employ more than 500 people.
A.
publicly owned business
B.
limited liability company

C.
small business
D.
publicly traded company
E.
for-profit corporation
28.
A small business is any independently owned business that
employs not more than _____ people.
A.
100
B.
500
C.
300
D.
200
E.
20

29.
Vernon runs Buzz, his own event management company, which
frequently organizes large corporate events. Vernon has
established a good reputation for organizing corporate events
with a fair degree of professionalism at reasonable costs.
Vernon works out of his old house with a staff of about 55
employees. Vernon's company is most likely to be categorized
as a(n):
A.
multinational corporation.
B.
limited liability company.
C.
franchise.
D.
public sector holding.
E.
small business.
30.
The Small Business Administration (SBA) is a(n):
A.
body established by the U.S. Chamber of Commerce to
encourage the intrapreneurial spirit in small businesses.
B.
independent agency of the federal government that offers

managerial and financial assistance to small businesses.
C.
independent agency created under the GATT to protect small
businesses against competition from larger companies.
D.
division of the federal government that is responsible for
ensuring that newly formed businesses adhere to the law.
E.
U.S. Congressional agency that regulates the issue of stocks by
small businesses.
31.
Which of the following is an advantage for small businesses
that choose to enter the retailing industry?
A.
Retailing is relatively difficult field to gain entry.
B.
Retailing requires a large capital investment in the initial
stages.
C.
Retailing allows small business to focus on specific groups of
consumers.
D.
Retailing requires sophisticated machinery and technical
expertise.
E.

Retailing suffers from heavy competition and losses only in the
initial stages.
32.
Which of the following reasons makes retailing an attractive
industry for small businesses?
A.
Retailing eliminates the need for any entrepreneurial skills.
B.
Retailing offers high barriers to entry.
C.
Retailing eliminates the need to engage in active interactions
with the final customers.
D.
Retailing requires low initial financing.
E.
Retailing limits a firm's need to focus on specific groups of
consumers.
33.
Which of the following best illustrates a small business
operating in a retail industry as opposed to wholesaling its
products?

A.
Janet bakes cakes and sells them to other restaurants and cafes
in malls.
B.
BC Inc. manufactures stationery and sells it in bulk to book
shops and supermarkets.
C.
Pink Cult, an apparel company, sells its merchandise through
OMG!.com.
D.
Neon Love Inc. imports candles and directly sells them to
customers through kiosks.
E.
Auto Line Inc. manufactures component parts of cars and sells
them to automobile companies.
34.
Many service providers are considered retailers because they:
A.
require a high initial start-up cost.
B.
provide their services directly to ultimate consumers.
C.
sell their services from a single store location.

D.
focus on large market segments and institutional buyers.
E.
employ only a small number of people.
35.
Which of the following traits will help entrepreneurs succeed?
A.
Risk aversion
B.
Intolerance
C.
Frugality
D.
Impulsivity
E.
Neuroticism
36.
One of the major reasons people want to own and operate their
own business is to:
A.

avoid the risk of competition.
B.
be their own boss.
C.
avoid multi-tasking.
D.
reduce stress levels.
E.
avoid direct responsibility of the operations.
37.
Which of the following is an advantage of a small business?
A.
Greater adaptability to changing market demands
B.
Highly trained and competent staff
C.
Low levels of stress in managing the business
D.
Diverse and large workforce
E.
High success rates

38.
Red Carpet Inc. is a small apparel store started by an aspiring
designer. The store needs to compete against larger, well-
established multinational brands. Which of the following
strategies will most help Red Carpet Inc. avoid competition
from larger firms?
A.
Red Carpet Inc. should have multiple levels of management like
the larger firms.
B.
Red Carpet Inc. should target large market segments that the
competitors serve.
C.
Red Carpet Inc. should expand the scale of production to enjoy
greater economies of scale.
D.
Red Carpet Inc. should start to work with customers only when
the products are ready for sale.
E.
Red Carpet Inc. should focus on and target small market niches
or product needs.
39.
Small businesses usually have only one layer of management.
Which of the following is an implication of this?
A.

Small businesses face a low risk of failure.
B.
Small businesses have great flexibility to adapt to changing
market conditions.
C.
The decision-making process is lengthy in small businesses.
D.
Small businesses have better access to managerial experience
and skills than larger firms.
E.
Small business owners have a limited amount of direct
authority.
40.
Which of the following is a disadvantage of small-business
ownership?
A.
High cost of formation
B.
Bureaucratic decision-making process
C.
Ability to focus upon specific groups of customers
D.
Worries about employee problems or competition

E.
Limited scope for innovation
41.
Which of the following is a reason behind the failure of small
businesses?
A.
Overcapitalization
B.
Reputation
C.
Managerial experience
D.
Poor business concept
E.
High costs of start-up
42.
Carol has recently opened a restaurant in her neighborhood.
Which of the following is NOT likely to be a source of stress?
A.

Competition
B.
Reputation
C.
Rent increases
D.
Employee issues
E.
Changing market demand
43.
_____ is best described as the lack of funds to operate a
business normally.
A.
Debt financing
B.
Trade credit
C.
Franchising
D.
Trade deficit
E.
Undercapitalization

44.
Gerald started a business using the savings from his previous
job. He planned to run his business on the revenue generated
from sales. However, a few months later, Gerald found it
difficult to pay his staff, rent, and other expenses. Seasonal
sales and inability to secure sufficient credit from local banks
made it difficult for Gerald to operate the business normally.
Which of the following causes of small business failure does
this scenario best illustrate?
A.
Undercapitalization
B.
Trade credit
C.
Economies of scale
D.
Debt financing
E.
Debt factoring
45.
Which of the following is the shortest path to business failure?

A.
Overcapitalization
B.
Undercapitalization
C.
Rent increases
D.
Competition
E.
Changing market demand
46.
The principal immediate threats to small and mid-sized
businesses include:
A.
rapidly advancing technology.
B.
rising entrepreneurial spirit.
C.
reducing imports.
D.
escalating costs.

E.
increasing exports.
47.
A business plan should do all of the following EXCEPT:
A.
provide the rationale for the business.
B.
include estimates of income and expenses.
C.
establish a strategy for acquiring sufficient funds.
D.
include an analysis of the competition.
E.
limit the business's flexibility and decision-making ability.
48.
Arnold approached a bank to get a loan for a business he
planned to launch later in that year. He explained his business
idea and its capital requirements to the bank manager. The
manager listened to the plan and asked Arnold to provide a
formal document that included a rationale for the business, an
explanation of how it will achieve its goals, an analysis of the
competition, and estimates of income and expenses among other
information. Which of the following documents does the bank
expect from Arnold in this scenario?

A.
A business plan
B.
A cash flow statement
C.
A promissory note
D.
A balance sheet
E.
A marketing plan
49.
In the process of starting a business, the step that immediately
succeeds the development of a business plan involves:
A.
organizing resources like labor and supplies.
B.
developing some general business ideas.
C.
deciding an appropriate legal form of business ownership.
D.
promoting the business to the customers.

E.
filing for tax returns for the business with the Internal Revenue
Service.
50.
To make profits from a small business, the owner must first
provide or obtain _____ to start the business and keep it running
smoothly.
A.
products
B.
employees
C.
profits
D.
supplies
E.
capital
51.
Which of the following is NOT a source of equity financing?

A.
Reinvesting profits into the business
B.
Selling personal assets to raise funds
C.
Bringing in useful personal assets such as a computer into the
business
D.
Securing long-term loans from a family member
E.
Selling stock in the business to family members or friends
52.
Walter sold a piece of land he inherited from his grandparents
and started a business with the proceeds. Which of the
following sources has Walter used to raise funds for his
business?
A.
Equity financing
B.
Debt financing
C.
Venture capital
D.

Initial public offering
E.
Angel Investment
53.
Janice works in a factory that manufactures decorative
accessories for office spaces, hotels, and designer homes. She
wants to start her own business because she believes that the
market for decorative products has a great growth potential.
However, she does not want to depend on anyone else for the
procuring the initial capital and would like to raise the amount
herself. In this scenario, which of the following methods would
Janice adopt to raise funds through equity financing?
A.
Janice would secure a mortgage from a family member or
friend.
B.
Janice would secure a loan from the Small Business
Administration (SBA).
C.
Janice would ask for a line of credit from her previous bank.
D.
Janice would invest her savings in the new business.
E.
Janice would ask suppliers for a longer trade credit.

54.
Jacob and Harry are business partners in a company that
manufactures portable solar panels. They initially started the
business with their savings. However, now the company plans to
expand its operations and the required amount of capital cannot
be raised through savings or by reinvesting profits. Thus, the
partners have decided to sell stock in their business to family
members, friends, and employees. Which of the following
sources of capital have Jacob and Harry planned to use for the
expansion of their business?
A.
Debt financing
B.
Bootstrapping
C.
Equity financing
D.
Mortgaging
E.
Factoring
55.
Persons or organizations that agree to provide some funds for a
new business in exchange for ownership interest or stock are

called ____.
A.
intrapreneurs
B.
category captains
C.
venture capitalists
D.
trade debtors
E.
franchisers
56.
Securing a mortgage from a bank for a new business venture is
an example of:
A.
equity financing.
B.
venture capitalism.
C.
debt financing.
D.

trade credits.
E.
collaterals.
57.
When an entrepreneur takes out a loan from a bank, the bank
will require him to put up _____, which is a financial interest in
the property or fixtures of the business, to guarantee payment of
the loan.
A.
collateral
B.
venture capital
C.
trade credit
D.
business plan
E.
cash flow statement
58.
Lara, a single mother, borrowed some capital for her business
from Women Progress Council (WPC) at an extremely low rate

of interest. Which of the following forms of funding a new
small business does this scenario best illustrate?
A.
Trade credit
B.
Equity financing
C.
Venture capital
D.
Debt financing
E.
Crowdsourcing
59.
Andrew, a pharmacist, realized that he should stock extra
supplies of a particular medicine to respond to an outbreak of a
particular infection in the city. Lacking sufficient capital to
purchase the extra inventory, he turned to his bank and asked to
borrow a predetermined sum of money. Which of the following
sources of funding does this scenario best illustrate?
A.
Trade credit
B.
Initial public offering

C.
Venture capital
D.
Equity financing
E.
Line of credit
60.
A license to sell another's products or to use another's name in
business, or both, is called a ____.
A.
franchise
B.
cartel
C.
collateral
D.
mortgage
E.
collusion

61.
Since Eva Carl has decided to use her savings to purchase the
rights to own and operate a McDonald's fast-food restaurant
rather than starting her own restaurant, she is probably a(n)
____.
A.
trade creditor
B.
franchisee
C.
franchiser
D.
intrapreneur
E.
venture capitalist
62.
Nathan started the first outlet of Dynamix Gym in New York
City in 1995. The business expanded over time, and Nathan
became the owner of a chain of gyms in New York State.
Though the business had potential to expand outside New York,
Nathan did not want to take the risk or responsibility. Hence, he
decided to sell the license to own and operate gyms in the name
of Dynamix Gym to independent owners. In return, he charged
them an initial fee and a small share in the monthly profits. In
this scenario, Nathan is a(n) ____.

A.
franchisee
B.
intrapreneur
C.
angel investor
D.
franchiser
E.
venture capitalist
63.
Which of the following statements accurately brings out the
difference between franchising and building an independent
business from scratch?
A.
The time required to set up an independent business is much
lower than obtaining a franchise.
B.
A franchise outlet often reaches the break-even point faster than
an independent business would.
C.
A franchisee would experience more flexibility in decision
making than the owner of an independent business.

D.
The quality of goods and services needs to be more standardized
and uniform in independent business than in franchises.
E.
Access to managerial and financial assistance is more limited in
franchises than in independent businesses.
64.
Which of the following is an advantage that purchasers of a
popular franchise experience?
A.
They get access to the already established brand name or brand
equity.
B.
They have great flexibility to make decisions for their
individual franchise outlets.
C.
They can enjoy their total profits without having to share
anything with the franchisers.
D.
They can easily add or delete a good or service from the
existing product line.
E.
They are free to vary their operational processes based on their
needs and constraints.

65.
One of the main drawbacks of franchising is that it requires the
franchisee to:
A.
invest a lot of time and effort in setting up the business.
B.
take sole responsibility for all decisions in the business.
C.
share the profits of the business with the franchiser.
D.
build the brand appeal for the franchise outlet on his or her
own.
E.
invest considerable capital in national and local advertising
programs.
66.
Paul has recently quit his job as an investment banker. He plans
to open a restaurant. He has two options: he can either start his
own new restaurant from scratch or purchase a franchise from
an already established restaurant or fast food chain. His wife,
Lisa, supports the former plan. Which of the following
statements strengthens the argument in favor of Lisa's choice of

opening a restaurant independently?
A.
It is easier and faster to build a business from scratch.
B.
It is easier to reach the break-even point through an independent
business.
C.
It is more difficult to attract customers in a franchise business
as the entrepreneur has to personally build the brand appeal.
D.
It is easier and more flexible to make and execute decisions in
an independent business.
E.
It is easier to succeed in a business built from scratch as the
products and the business format are already proven.
67.
Millennials number around 75 million and represent a huge
business opportunity in the United States. Which of the
following is a defining feature of the millennials?
A.
Baby boomers above the age 50
B.
First generation immigrants

C.
People born at the turn of the millennium between 1999 and
2001
D.
People from immigrant communities who migrated to U.S.
between 1946 and 1964
E.
People born between 1977 and 1994
68.
Sally is a human resource manager at a company. A survey of
the company's employees revealed that more than 80 percent of
the employees belonged to the demographic segment Generation
Y. In this scenario, which of the following HR strategies should
Sally implement in order to best serve the needs of the
employees?
A.
Sally should solely use financial rewards to motivate the
employees to improve their productivity.
B.
Sally should keep the training sessions highly formal with no
scope for entertainment.
C.
Sally should restrict the employees from using work from home
or telecommuting options.

D.
Sally should avoid giving regular, direct feedback to the
employees.
E.
Sally should use recognition and advancement as the driving
forces to motivate employees.
69.
Which of the following demographic segments should small
retailers specializing in ethnic products and small service
providers target?
A.
Immigrants
B.
Echo boomers
C.
Baby boomers
D.
Generation X
E.
Drivers
70.

Which of the following demographic trends has made health
care and financial planning industries attractive for small
businesses in the United States?
A.
Decreasing population of millennials
B.
Increasing income among generation X
C.
Aging baby boomers who are wealthy
D.
Reducing entrepreneurial spirit among young generations
E.
Increasing imports into the economy
71.
Which of the following is an implication of technological
advances to small businesses?
A.
It fails to make any significant changes as small businesses
cannot afford to use sophisticated technology in their
operations.
B.
It reduces a small business's ability to adapt to changing trends
and market demands.

C.
It increases the ratio of baby boomers as employees in small
businesses.
D.
It provides new opportunities for small businesses to expand
their operations abroad.
E.
It reduces a small company's ability to customize their services
and products.
72.
Norton is a human resource manager at a large multinational
company. After a drastic drop in revenue, his company is
thinking of ways to correct the situation. At a meeting with the
top management, the CEO suggested that 20 percent of the
employees should be eliminated. This move would help the
company cut costs and continue functioning on the current
projects. In this scenario, which of the following strategies is
this MNC planning to use?
A.
Debt financing
B.
Intrapreneruship
C.
Crowdsourcing

D.
Franchising
E.
Downsizing
73.
Downsizing is an effective way to:
A.
gain the advantages of small businesses.
B.
increase organizational tasks.
C.
reduce entrepreneurial spirit among employees.
D.
increase the management layers.
E.
gain employee trust.
74.
Which of the following statements accurately describes
intrapreneurs?

A.
Employees who become a part of a company's board of directors
through internal promotions are referred to as intrapreneurs.
B.
Entrepreneurs who sell the rights to use their products to
independent owners are intrapreneurs.
C.
Entrepreneurs who are involved in international business are
referred to as intrapreneurs.
D.
Independent investors who help a company raise capital through
internal financing are intrapreneurs.
E.
Individuals in large firms who take responsibility for the
development of innovations within the organizations are
intrapreneurs.
75.
Which of the following is an ineffective practice in making big
businesses act small?
A.
Encouraging a spirit of entrepreneurship within the organization
B.
Increasing the layers of management within the organization
C.

Downsizing to reduce work tasks
D.
Keeping the growth vision long term
E.
Focusing on current customers rather than looking for new
customers
76.
George is an employee at a company that provides information
technology solutions to other firms. He has been developing a
new smart phone application from the resources of the company.
In this scenario, George best illustrates a(n) ____.
A.
franchiser
B.
venture capitalist
C.
intrapreneur
D.
entrepreneur
E.
trade creditor

Chapter 8
26.
If an employee is involved with transforming resources into
goods and services, then he is in:
A.
marketing.
B.
financing.
C.
human resources.
D.
operations management.
E.
budgeting.
27.
Irene is an employee associated with producing goods, services,
and ideas that satisfy the needs of customers. Thus, she works
most closely with:
A.
financing.

B.
budgeting.
C.
production.
D.
human resources.
E.
operations.
28.
Operations management has the primary responsibility for:
A.
employing computer-assisted manufacturing (CAM) exclusively
for all transformations.
B.
transforming goods and services into resources.
C.
creating products that satisfy customers.
D.
developing only such products which are intangible.
E.
converting outputs into inputs.

29.
Which of the following is true of the transformation process?
A.
It is the development and administration of activities that
transform resources into goods, services, and ideas.
B.
It is the conversion of human, financial, and physical resources
into goods, services, and ideas.
C.
It involves the assigning of labor, energy, and money for the
advertisement of services.
D.
It is associated with the promotion and pricing of goods and
services.
E.
It deals with the distribution and logistics of products.
30.
Viewed from the perspective of operations, the money used to
purchase a carpenter's tools and the electricity used to run his
power saw are:
A.
processes.

B.
outputs.
C.
stocks.
D.
inputs.
E.
maintenance costs.
31.
Viewed from the perspective of operations, the furniture items
produced by a carpenter are:
A.
variations.
B.
inputs.
C.
equipment.
D.
outputs.
E.
processes.

32.
From the perspective of operations, food sold at a restaurant and
services provided by a plumbing company are:
A.
processes.
B.
inputs.
C.
outputs.
D.
stocks.
E.
costs.
33.
How do operations managers ensure quality and efficiency
during the transformation process?
A.
They ensure that their products never use the modular design of
transforming because this process increases the cost of labor.
B.

They always employ computer-assisted manufacturing (CAM)
technologies to guide and control the transformation processes.
C.
They shift from material-requirements planning (MRP) to just-
in-time (JIT) inventory management.
D.
They keep the work cycling between two different batches of
labor in order to track any loopholes.
E.
They take feedback at various points in the transformation
process and compare them to established standards.
34.
Money, employees, time, and equipment are examples of an
airline's _____ to the transformation process.
A.
outputs
B.
intangibles
C.
products
D.
services
E.

inputs
35.
Which of the following is true of the transformation process?
A.
It does not occur in service companies.
B.
It occurs in all organizations, regardless of what they produce
or their objectives.
C.
It occurs only in manufacturing companies because they use
tangible inputs.
D.
It excludes fund-raising and promoting a cause.
E.
It is not a part of government agencies because they do not use
machineries for mass production.
36.
Which of the following is NOT a point of difference between
service providers and manufacturers?
A.

Services are more labor-intensive.
B.
Manufacturing has more uniform outputs.
C.
Services do not undergo a transformation process.
D.
Manufacturing productivity can be measured straightforwardly.
E.
Service providers have less control over the variability of their
inputs.
37.
For most organizations, the ultimate objective is for produced
outputs to be:
A.
easy to develop.
B.
tangible, hard goods.
C.
inexpensive.
D.
worth more than the cost of inputs.
E.

equal to the costs of input.
38.
The nature of the service provider's product requires:
A.
fewer employee inputs.
B.
a higher degree of customer contact.
C.
delayed consumption.
D.
more expensive inputs.
E.
more standardization.
39.
Actual performance of the service provider's product typically
occurs:
A.
several days after purchase.
B.

outside the service provider's facility.
C.
at the point of consumption.
D.
in the buyer's home.
E.
before the point of consumption.
40.
To receive a haircut, you generally have to go to a salon. This
information reflects the _____.
A.
uniformity of inputs
B.
uniformity of outputs
C.
labor required
D.
measurement of productivity
E.
nature and consumption of output

41.
The products of service providers tend to be more customized
than those of manufacturers because:
A.
different customers have different needs.
B.
the requirements of all customers are more or less the same.
C.
technological innovations have reduced variability.
D.
there is more capital required in service provision.
E.
the specific needs of individual customers get incorporated.
42.
The fact that a hairdresser gives each customer a different
haircut relates to the difference between service providers and
manufacturers in terms of:
A.
consumption of output.
B.
uniformity of inputs.

C.
labor required.
D.
measurement of productivity.
E.
uniformity of output.
43.
When compared to service providers, the products of
manufacturers are typically:
A.
more labor-intensive.
B.
less uniform.
C.
more difficult to store.
D.
more standardized.
E.
cheaper.
44.
Compared to service providers, manufacturers generally:

A.
are more labor-intensive.
B.
are more capital-intensive.
C.
customize their outputs.
D.
have difficulty measuring productivity.
E.
produce intangible outputs.
45.
Zedpro Computer Company is determining demand for its future
products and how much consumers are willing to pay. For this,
Zedpro should rely on:
A.
the economy.
B.
marketing research.
C.
its competitor's moves.
D.
successful past experiences.

E.
intuition.
46.
As a manufacturing process, the term standardization means:
A.
ensuring that each product is sold at the same price.
B.
that similar products, manufactured by different companies, all
operate in the same manner.
C.
making identical, interchangeable components or complete
products.
D.
making the exact product a particular customer needs or wants.
E.
making an item in self-contained units that can be interchanged
to create different products.
47.
A primary reason for using standardization is to:

A.
reduce production costs.
B.
increase consumer options.
C.
reduce product quality.
D.
increase variations.
E.
foster creativity.
48.
Building a computer so that the components can be installed in
different configurations to meet customers' needs is a result of:
A.
flexible manufacturing.
B.
modular design.
C.
customization.
D.
specialization.
E.

varied engineering.
49.
Facility location decisions are complex because:
A.
all customers want plants nearby.
B.
transportation costs are excessively high.
C.
speed of delivery is not very important.
D.
proximity to market or community characteristics are not
important factors.
E.
the firm must live with it once the decision has been made and
implemented.
50.
A company that manufactures large products, such as houses or
bridges, may require that all resources be brought to a central
location during production. This type of facility layout is
called:

A.
fixed-position layout.
B.
product layout.
C.
line layout.
D.
central control layout.
E.
assembly line layout.
51.
A company performing large, complex tasks such as
construction or exploration is called a(n):
A.
continuous manufacturing organization.
B.
intermittent organization.
C.
project organization.
D.
exploration company.
E.
survey company.

52.
A metal fabrication plant with a cutting department, a drilling
department, and a polishing department would likely use _____
layout.
A.
fixed-position
B.
horizontal-position
C.
process
D.
geographical
E.
customer-based
53.
A hospital having an X-ray unit, an obstetrics unit, few
emergency rooms, and other units would best be classified as
a(n):
A.

B.
C.
D.
fixed organization.
E.
assembly line organizations.
54.
An organization that creates many products with similar
characteristics, such as automobiles, television sets, or vacuum
cleaners, would most likely be categorized as a(n):
A.
B.
C.
D.
process layout organization.
E.
fixed-position organization.

55.
Which of the following statements is true?
A.
Organizations can start greening their supply chains by
increasing resource consumption and waste.
B.
The adoption of 100 percent wind-powered electricity increases
carbon emissions.
C.
Aluminum cans can be recycled an infinite number of times.
D.
It is mandatory for organizations to incorporate sustainability
into their business models.
E.
Balancing profitability and socially responsibility is impossible
for corporate organizations.
56.
Which of the following activities is NOT included in supply
chain management?
A.
Getting products to customers
B.

Obtaining and managing raw materials
C.
Managing finished products
D.
Packaging finished products
E.
Researching and developing products
57.
All activities involved in obtaining and managing raw materials
and component parts, managing finished products, packaging
them, and getting them to customers are part of:
A.
stock management.
B.
supply chain management.
C.
engineering.
D.
finance.
E.
strategic planning.

58.
Within organizations, purchasing is also referred to as:
A.
consumption.
B.
disposition.
C.
acquisition.
D.
procurement.
E.
budgeting.
59.
The buying of all materials needed by an organization is called:
A.
consumer behavior.
B.
capital expenditure.
C.
purchasing.

D.
standardization.
E.
just-in-time management.
60.
The term _____ refers to all raw materials, components,
completed or partially completed products, and pieces of
equipment a firm uses.
A.
inventory
B.
order quantities
C.
production
D.
raw materials inventory
E.
intangibles
61.
Materials that have been purchased to be used as inputs in

making other products are included in:
A.
finished inventory.
B.
partial inventory.
C.
raw materials inventory.
D.
supplier inventory.
E.
component parts inventory.
62.
The process of determining how many supplies and goods are
needed, keeping track of quantities on hand, each item's
location, and who is responsible for it is called:
A.
process layout.
B.
product layout.
C.
material-requirements planning.

D.
inventory control.
E.
continuous manufacturing control.
63.
A model of inventory management that identifies the optimum
number of items to order to minimize the costs of managing
them is called the:
A.
just-in-time management model.
B.
flexible scheduling model.
C.
material requirements planning model.
D.
economic order quantity model.
E.
logistics model.
64.
Minimizing inventory by providing an almost continuous flow
of items from suppliers to the production facility is referred to

as:
A.
just-in-time inventory management.
B.
flexible scheduling.
C.
D.
logistics.
E.
the economic order quantity model.
65.
A planning system that schedules the precise quantity of
materials needed to make a product is called:
A.
just-in-time management.
B.
C.
economic order quantities.
D.
flexible scheduling.

E.
cycle-time management.
66.
One popular method of scheduling is the _____ which identifies
all the major activities or events required to complete a project,
arranges them in a sequence or path, determines the critical
path, and estimates the time required for each event.
A.
computer-assisted manufacturing (CAM)
B.
Program Evaluation and Review Technique (PERT)
C.
Critical Path Method (CPM)
D.
economic order quantity (EOQ) model
E.
material-requirements planning (MRP)
67.
The system in which management collects and analyzes
information about the production process to pinpoint quality
problems in the production system is called:

A.
total quality management.
B.
statistical process control.
C.
Program Evaluation and Review Technique (PERT).
D.
operations control.
E.
production control.
68.
Which of the following is true about quality?
A.
It is a concern only for manufacturing companies.
B.
It is a concern only for service providers.
C.
It always indicates the price charged for a product.
D.
It is a critical element of operations management.
E.

Its definition should vary from employee to employee.
69.
The degree to which a good or service meets the demands and
requirements of customers is called:
A.
efficiency.
B.
productivity.
C.
quality.
D.
effectiveness.
E.
customer satisfaction.
70.
It is especially difficult to measure quality characteristics
when:
A.
a firm uses ISO 9000.
B.
a firm has a total quality management program.

C.
the product is a good.
D.
the product is a service.
E.
a firm uses statistical process control.
71.
_____ refers to the processes an organization uses to maintain
its established quality standards.
A.
Quality control
B.
Implementation
C.
Continuous manufacturing
D.
Fixed-position layout
E.
Logistics
72.
_____ is a philosophy that uniform commitment to quality in all

areas of an organization will promote a culture that meets
customers' perceptions of quality.
A.
The marketing concept
B.
Total quality manufacturing
C.
ISO 9000
D.
Statistical process control
E.
Total quality management
73.
The first step in quality control for any organization is:
A.
undertaking inspections.
B.
establishing standards.
C.
sampling products.
D.

implementing services.
E.
initiating corrections.
74.
Sampling is likely to be used:
A.
when inspection tests are destructive.
B.
when every product must be tested because of human life and
safety.
C.
to assess the quality of services.
D.
sampling is the most expensive option.
E.
testing takes a few minutes to complete.
75.
It is desirable to test only a sample of the product in all of the
following circumstances EXCEPT when:
A.
inspection procedures are expensive.

B.
elaborate testing equipment is required.
C.
testing takes a significant number of hours to complete.
D.
the product is destroyed by sampling.
E.
sampling does not destroy the product.
Chapter 10
26.
All of the following are activities performed by human
resources managers EXCEPT:
A.
planning.
B.
recruiting.
C.
selling.

D.
training.
E.
compensating.
27.
A human resources manager deciding how many new employees
an organization will need to fill vacant positions in the near
future is engaging in the activity of ____.
A.
recruiting
B.
planning
C.
training
D.
selling
E.
compensating
28.
_____ involves determining, through observation and study, the
specific tasks that comprise a job and the knowledge, skills, and
abilities necessary to perform the job.

A.
Job description
B.
Job specification
C.
Job design
D.
Job analysis
E.
Job appraisal
29.
An overview of a job's title, tasks, relationships with other jobs,
the physical and mental skills required, duties, responsibilities,
and working conditions is referred to as the:
A.
job appraisal.
B.
job portfolio.
C.
job description.
D.
job analysis.

E.
job specification.
30.
The qualifications necessary for a specific job, in terms of
education, experience, and personal and physical characteristics
are spelled out in the ____.
A.
job evaluation
B.
job specification
C.
job analysis
D.
job description
E.
job assessment
31.
______ refers to forming a pool of qualified applicants from
which management can select new employees.
A.
Planning

B.
Training
C.
Compensating
D.
Appraising
E.
Recruiting
32.
When compared to the external sources of recruitment,
recruiting from internal sources:
A.
results in higher turnover.
B.
incurs higher costs.
C.
increases the possibility of lockouts.
D.
decreases picketing.
E.
improves employee morale.

33.
Which of the following is an internal source of recruitment for
an organization?
A.
Vocational schools
B.
Current employees
C.
Social networking sites
D.
Competing firms
E.
Colleges
34.
A characteristic of search firms known as headhunters is that
they:
A.
focus on internal rather than external sources of recruitment.
B.
specialize in recruiting employees for entry-level jobs.
C.
look for qualified candidates who are working for other

companies.
D.
undertake training for unusual job requirements or skillsets.
E.
operate as career planners for employees within organizations.
35.
An employer beginning the selection process for new employees
would begin with ____.
A.
training
B.
reference checking
C.
testing
D.
the application form
E.
orientation
36.
Which stage of the employee selection process allows

management to obtain detailed information about an applicant's
experience and skills, reasons for changing jobs, and an idea of
whether the person would fit in with the company?
A.
Orientation
B.
Training
C.
Testing
D.
Reference checking
E.
Interviewing
37.
During which stage of the selection process is a candidate
expected to undergo physical examinations to determine his or
her suitability for a specific job?
A.
Orientation
B.
Reference checking
C.
Interviewing

D.
Filling out the application form
E.
Testing
38.
At which stage in the selection process is an employer likely to
make use of the Myers-Briggs Type Indicator?
A.
Interviewing
B.
Reference checking
C.
Orientation
D.
Training
E.
Testing
39.
Reference checking usually involves:

A.
monitoring the working conditions in a firm.
B.
checking a company's compliance with its policies.
C.
assessing an applicant's potential for a job.
D.
checking the previous work experience of a candidate.
E.
identifying possible sources for recruitment.
40.
The _____ is a federal agency established by the Civil Rights
Act of 1964 and dedicated to increasing job opportunities for
women and minorities and eliminating job discrimination based
on race, religion, color, sex, national origin, or handicap.
A.
National Center for Civil and Human Rights
B.
United States Commission on Civil Rights
C.
Equal Employment Opportunity Commission
D.
Pension Benefit Guaranty Corporation

E.
National Association for the Advancement of Colored People
41.
Orientation is the human resources function that:
A.
includes building tours, introductions, and socialization.
B.
provides on-the-job training to employees.
C.
appraises employees subjectively.
D.
teaches employees to do specific job tasks.
E.
occurs after the employee is on the job for several months.
42.
An orientation includes all of the following EXCEPT:
A.
on-the-job training.
B.
a tour of the building.
C.
introductions to supervisors.

D.
description of company benefits.
E.
distribution of organizational manuals.
43.
Vikram is an employee of the Monsanto research lab. In an
effort to improve his managerial skills and prepare him for a
promotion, his company sends him on a series of experiential
management training exercises at company expense. By helping
him increase his knowledge, Vikram's company is involved in:
A.
development.
B.
orientation.
C.
testing.
D.
grade assignment.
E.
performance appraisal.

44.
A(n) _____ is a performance appraisal method that provides
feedback from a panel that typically includes superiors, peers,
and subordinates.
A.
ranking
B.
grade assignment
C.
polygraph
D.
360-degree feedback system
E.
behavioral checklist
45.
When Sophia Smith moved to a new job that involved more
responsibility and an increase in compensation, the move would
typically be considered a(n):
A.
transfer.
B.
conciliation.

C.
separation.
D.
arbitration.
E.
promotion.
46.
Joe was recently moved to a new position in his company that
involved learning new skills and undertaking work assignments.
However, he received no salary raise. Joe's change in position
can best be described as a(n):
A.
promotion.
B.
lockout.
C.
separation.
D.
arbitration.
E.
transfer.

47.
Which of the following statements is true of a separation?
A.
It is an employee's departure from an organization due to
termination or some other reason.
B.
It is an employment change that involves demotion.
C.
It is an advancement to a higher-level job.
D.
It is a temporary suspension of employment due to violation of
work rules.
E.
It is a horizontal move from one job to another within the same
company.
48.
Socorro was terminated from her job by her employer because
she was repeatedly late to work. She contributes to her
company's turnover through:
A.
conciliation.
B.

demotion.
C.
transfer.
D.
separation.
E.
arbitration.
49.
Which of the following is likely to be an unacceptable reason
for firing an employee?
A.
Violation of company rules
B.
Excessive absenteeism
C.
Frequent tardiness
D.
Being a union organizer
E.
Poor performance
50.

Human resources departments strive to:
A.
increase lockouts.
B.
avoid arbitration to resolve third party issues.
C.
minimize losses due to separations and transfers.
D.
discourage strikebreaking.
E.
fire employees because of their race, religion, gender, or age.
51.
Financial compensation falls into two general categories:
A.
time wages and piece wages.
B.
wages and salaries.
C.
wages and benefits.
D.
commissions and incentives.
E.

salaries and benefits.
52.
A wage/salary survey indicates:
A.
how much employees in a company need to earn in order to
meet their financial needs.
B.
how much compensation similar firms are paying for jobs that
the firms have in common.
C.
the proportion of compensation that can be paid through non-
financial methods.
D.
how satisfied employees are with the compensation they receive
from their employers.
E.
the differences between the salaries of men and women
performing the same jobs.
53.
Which of the following statements is true of payment using time
wages?

A.
It encourages employees to be more productive.
B.
It provides incentives to increase productivity.
C.
It is primarily used for skilled craftworkers.
D.
It is appropriate when employees are continually interrupted.
E.
It is used when quantity is more important than quality.
54.
In a sales company, employees are paid a percentage of their
sales in order to motivate them to sell as much as they can. The
company incorporates _____ as an incentive system.
A.
commissions
B.
time wages
C.
profit sharing
D.
salaries

E.
bonuses
55.
Which of the following statements is true of salary as employee
compensation?
A.
It involves distributing a percentage of company profits.
B.
It is a nonfinancial reward.
C.
It is associated with white-collar workers.
D.
It involves paying a percentage of an employee's sales.
E.
It a monetary reward for exceptional performance.
56.
If a company pays its workers additional compensation at the
end of the year as a "thank you" for good work, this monetary
reward would most likely be categorized as:

A.
wages.
B.
commission.
C.
a salary.
D.
a benefit.
E.
a bonus.
57.
Which of the following forms of compensation includes an
employee stock ownership plan?
A.
Wages
B.
Bonuses
C.
Profit sharing
D.
Salaries
E.
Commissions

58.
Which of the following statements is true of employee stock
ownership plans?
A.
They encourage employees to become involved in
strikebreaking.
B.
They create a sense of partnership between a firm and its
employees.
C.
They reduce employee morale and productivity.
D.
They increase the possibility of lockouts.
E.
They are applicable only to senior employees of a firm.
59.
Which of the following forms of compensation is NOT a
benefit?
A.
Paid vacation

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