Title: Role of Business
Course: Question Banks

Q: An organization that provides goods or services for the purpose of making a profit is called a(n):
- market.
- industry.
- environment.
- business.
A: business.

Q: Glenda opened a tax accounting business where she works with small businesses to manage their finances and prepare their records for tax season. Glenda's primary objective when she opened her business was:
- educating businesses on tax law.
- improving personal skills.
- changing the tax code.
- making a profit.
A: making a profit.

Q: Linda opened a coffee shop that sells coffee and pastries. Linda’s primary objective when she opened her business was to:
- practice personal business skills.
- increase the coffee consumption in the community.
- help the environment.
- make a profit.
A: make a profit.

Q: The amount a business earns after deducting what it spends for rent, salaries, and other expenses is:
- revenue.
- interest.
- value.
- profit.
A: profit.

Q: A business incurs a ________ if its costs associated with the operation of the business exceed the total sales revenue.
- profit
- income
- change
- loss
A: loss

Q: ________ is the relationship between the price a customer pays for the good or service and perceived benefits the customer receives.
- Profit
- Income
- Loss
- Value
A: Value

Q: A motel provides both services and goods. Which of the following is an example of a good provided by a motel?
- offering rooms for rent
- offering free sample size shampoo and soap
- providing a clean environment
- offering a bathrobe that you can purchase to take home with you
A: offering a bathrobe that you can purchase to take home with you

Q: When a guest in a hotel purchases a toothbrush and toothpaste from the gift shop, the guest has purchased what from the hotel?
- a service
- a good and a service
- neither a good nor a service
- a good
A: a good

Q: Kim goes to Hot Heads at the beginning of March and asks her stylist to cut her hair shorter and change her hair color to green for St Patrick’s Day. What has the hair salon provided Kim?
- a good
- a good and a service
- neither a good nor a service
- a service
A: a service

Q: For a for-profit business, the primary goal is to:
- contribute to society.
- fulfill its mission.
- create a service.
- maximize profits for owners.
A: maximize profits for owners.

Q: Which of the following is an example of a for-profit business?
- Internal Revenue Service
- Make-a-Wish Foundation
- Goodwill
- Walmart
A: Walmart

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

Q: The primary goal of a nonprofit business is to:
- maximize profits for owners.
- invest in its employees’ development of new skills.
- create additional revenue for the government.
- use its revenues to provide a public service.
A: use its revenues to provide a public service.

Q: Which of the following is an example of a nonprofit organization?
- eBay
- Netflix
- Starbucks
- United Way
A: United Way

Q: The Susan G. Komen organization raises money for breast cancer research by asking for donations, organizing races, and selling t-shirts and other merchandise. Susan G. Komen does not return its profits to the owners, but uses them to provide a public service. For this reason, the Susan G. Komen organization is:
- unsuccessful.
- publicly held.
- a for-profit business.
- a nonprofit business.
A: a nonprofit business.

Q: Both kinds of organizations, nonprofit and for-profit:
- can have a charitable tax status.
- can have shareholders.
- are exempt from taxation.
- can earn revenues.
A: can earn revenues.

Q: A for-profit business exists to maximize profits for owners. In contrast, what type of business uses its profits to provide a public service?
- unsuccessful
- publicly held
- privately held
- a nonprofit business
A: a nonprofit business

Q: Many ________ organizations are governed by board of trustees
- for-profit
- entrepreneurial
- government
- nonprofit
A: nonprofit

Q: Which of the following is one of the factors of production?
- money
- shares of stock
- business
- natural resources
A: natural resources

Q: Natural resources would include which of the following?
- unleaded gasoline
- steel
- labor
- wind
A: wind

Q: Capital is the only resource that:
- grows naturally.
- requires bank financing.
- is used to produce other resources.
- has been produced.
A: has been produced.

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

Q: Human intellect and creativity falls into which of the following four factors of production?
- natural resources
- capital
- business
- human resources
A: human resources

Q: A person who seeks to earn profits by assuming the risk of owning and running a business is a(n):
- employee.
- manager.
- supervisor.
- entrepreneur.
A: entrepreneur.

Q: When an entrepreneur owns and runs a business, they assume risks that are offset by the potential of:
- helping the community.
- becoming famous.
- providing a service.
- earning a profit.
A: earning a profit.

Q: Jose opens a small graphic design firm in his hometown. As his business grows, he is fortunate to have a steady client base and a great location in the downtown business district. However, he is concerned that his current staff has run out of great ideas. John advertises for a new graphic designer with experience in the industry and a high degree of creativity. John is acquiring which factor of production?
- natural resources
- entrepreneurship
- capital
- human resources
A: human resources

Q: Denice invented a small, portable purse hook that allows a purse to be hung from a table and not touch the floor. She knows that there is a market for her purse hook and takes a loan out on her home to finance a small start-up company in Rock Creek, WI. As an entrepreneur, Denice's primary motivation for opening the business is:
- the potential to improve the community if the business succeeds.
- the potential of improving personal skills.
- the potential of providing a service to people who own purses.
- the potential of making a profit if the business succeeds.
A: the potential of making a profit if the business succeeds.

Q: What business function is responsible for making sure that organizational strategies and goals are aligned with staffing plans?
- operations
- marketing/sales
- finance
- management
A: management

Q: What function is responsible for ensuring that products and services which are produced or provided meet high quality standards?
- finance
- marketing/sales
- management
- operations
A: operations

Q: A function is responsible for aligning products and services to customer needs. Which function is driving this alignment?
- management
- operations
- finance
- marketing/sales
A: marketing/sales

Q: Financial reports are created and used to evaluate the financial performance of the business. Which function is responsible for creating the reports?
- management
- marketing/sales
- operations
- finance
A: finance

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

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

Q: Wilderness Canine is a gourmet dog food company founded in 2012. Wilderness Canine’s founders believe that fresh, frozen dog food is healthier than dog food in bags or pouches, but the company struggled to get its product into the freezer section in grocery stores. The consumer was not accustomed to looking in the freezer for dog food. Which function was responsible for understanding consumer behavior and aligning product to consumer preferences?
- finance
- management
- operations
- marketing/sales
A: marketing/sales

Q: ________ are people who have an interest in the performance of a business and work directly within the business.
- Shareholders
- External stakeholders
- Creditors
- Internal stakeholders
A: Internal stakeholders

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

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

Q: When a business makes decisions, which group outside of the business is affected in some way?
- employees
- owners
- government
- customers
A: customers

Q: When a company decides it will cut vacation time and increase production hours, which stakeholders will be most directly impacted?
- competitors
- industry associations
- customers
- employees
A: employees

Q: The Micram company, which makes plastic containers, decides to relocate its operations to another state. The company is moving because the new state offers new business investment credits. Which external stakeholders will be affected by Micram closing its current location?
- the production workers
- the managers of the business
- the employees
- the local government
A: the local government

Q: External forces that affect businesses include:
- motivated employees.
- the company mission.
- capable leaders.
- advances in technology.
A: advances in technology.

Q: Sasha, a business manager, must consider many external factors that could affect her business. As she considers the low cost of labor in other countries around the globe when making business decisions, Sasha is considering:
- the social business environment.
- the technological business environment.
- the secondary business environment.
- the global business environment.
A: the global business environment.

Q: What type of environment impacts a business if low interest rates and government incentives are offered to open or expand businesses?
- the social environment
- the technological environment
- the legal environment
- the economic environment
A: the economic environment

Q: If a company adjust its processes to offer good service and high-quality products at competitive prices, they are responding to which external force?
- the economic environment
- the technological environment
- the global environment
- the competitive environment
A: the competitive environment

Q: A business collects demographic information about what potential and current customers purchase, where they live, and how they spend their time. This business is responding to the:
- economic environment.
- competitive environment.
- political environment.
- social environment.
A: social environment.

Q: When a local business offers more products and extended hours after a large national retailer moves into the area, this business is reacting to changes in what type of environment?
- the economic environment
- the social environment
- the global environment
- the competitive environment
A: the competitive environment

Q: Rock Oil Corporation has been polluting the air. Local activists start to hold protest rallies at the front gate of the company, demanding Rock Oil stop polluting and clean up its processes. When the company addresses these issues, the management at Rock Oil will be reacting to changes in the:
- economic environment.
- competitive environment.
- legal environment.
- social environment.
A: social environment.

Q: A business established a website. Now their customers can order products online without visiting the store, they are engaged in:
- unfair trade practices.
- personal selling.
- online trading.
- e-commerce.
A: e-commerce.

Q: A business established a website and now has customers order products online without visiting their store, they are responding to changes in the:
- economic environment.
- social environment.
- global environment.
- technological environment.
A: technological environment.