144 test bank for contemporary business 16th edition

66 Test Bank for Contemporary Business 16th Edition
by Boone Multiple Choice Questions
61 Free Test Bank True – False Questions
17 Free Test Bank Text Questions
Capitalism is founded on _____.
1.
2.

a.the social changes that followed the Industrial Revolution
b.the idea that 80 percent of a nation’s wealth should be owned by no more than
20 percent of its people

3.

c.the principles of a private enterprise system

4.

d.the idea that government must own all factors of production

The Gyvenopolis County Library provides a wide variety of library
services to its neighborhood. It also provides free online support to its
members, and any fee collected from its members goes directly to charity.
The library is an example of a(n) _____.
1.

a.not-for-profit organization

2.

b.corporate organization

3.

c.offshore unit

4.

d.business conglomerate

In colonial society, the economic focus was centered on _____.
1.

a.metropolitan areas

2.

b.areas west of the Mississippi River

3.

c.rural areas

4.

d.cities

All of the following are typically part of the not-for-profit sector EXCEPT
_____.

1.

a.labor unions

2.

b.religious organizations

3.

c.hotels

4.

d.museums

Namesh recently sold his Ford Taurus to a personal friend. Namesh’s sale
of his automobile illustrates the right to _____.
1.

a.freedom of choice

2.

b.private property

3.

c.profit making

4.

d.set ground rules for competitive activity

Which of the following is a benefit of entrepreneurship?
1.

a.Low risk

2.

b.Flexibility

3.

c.Guaranteed profit

4.

d.Reduced competition

Businesses that operate in an environment where success or failure is
determined by how well they match and counter the offerings of
competitors are operating under _____.
1.

a.the private enterprise system

2.

b.a social democracy

3.

c.a monopoly

4.

d.state ownership

Which of the following statements is NOT true regarding businesses?
1.

a.Successful businesses seek to meet their social and ethical responsibilities.

2.

b.Businesses provide goods and services necessary to an economic system.


3.

c.Businesses are the economic pulse of a nation.

4.

d.Businesses are nonprofit organizations that provide services to the public.

In his book The Wealth of Nations, the economist Adam Smith was the
first person to describe _____.

1.

a.socialism

2.

b.communism

3.

c.capitalism

4.

d.entrepreneurship

Ingle is a new recruit at an IT firm. He feels that his compensation is below
industry standards, and his colleagues at other firms urge him to switch
his employment with a company that pays a better salary. Instead of
changing his job, he forms a trade union to ensure fair wages in the firm.
Which of the following rights has Ingle exercised?
1.

a.Right to private property

2.

b.Right to competition

3.

c.Right to profits

4.

d.Right to freedom of choice

The American Industrial Revolution did not make real progress until
_____.
1.

a.a railroad system was built, providing fast, economical transportation

2.

b.a good relationship was formed with England

3.

c.an introduction of the automobile occurred

4.

d.a reliable system of telephonic communication was established


_____ are essential because it serves as a primary incentive for people to
start companies, expand them, and provide consistently high-quality
competitive goods and services.
1.

a.Coupons

2.

b.Profits

3.

c.Discounts

4.

d.Rebates

Timber Trails, a northwest lumber company, utilizes _____ as its primary
production factor.
1.

a.human resources

2.

b.Entrepreneurship

3.

c.Capital

4.

d.natural resources

A company that values employees as sources of ideas and innovation is
utilizing its _____.
1.

a.entrepreneurship

2.

b.natural resources

3.

c.capital

4.

d.human resources

By offering a lifetime warranty on its products, Warner Electronics has set
itself apart from its competitors. This difference is known as Warner
Electronics’ _____.
1.

a.private enterprise system

2.

b.competitive differentiation

3.

c.capitalism

4.

d.checkoff


Technology, tools, information, and physical facilities for the operation of
a business are examples of _____.
1.

a.profits

2.

b.wages

3.

c.capital

4.

d.liability

The factors of production in an economic system are _____.

1.

a.land, rent, capital, and human resources

2.

b.capital, perseverance, natural resources, and human resources

3.

c.rent, wages, interest, and profit

4.

d.natural resources, human resources, capital, and entrepreneurship

All of the following are rights granted to citizens and to the government in
a private enterprise system EXCEPT the right to _____.
1.

a.fair competition

2.

b.permit price discrimination

3.

c.select from among a variety of goods and services

4.

d.own property

Which of the following statements is true about the private enterprise
system? _____.
1.

a.private property

2.

b.credit

3.

c.profit

4.

d.freedom of choice


Inventors such as Robert McCormick and Eli Whitney were part of the
_____.
1.

a.marketing era

2.

b.colonial era

3.

c.marketing era

4.

d.age of industrial entrepreneurs

In accounting terms, profits are _____.
1.

a.the difference between revenues and expenses

2.

b.the sum of commissions earned and receipts

3.

c.the difference between sales and expenses

4.

d.the sum of sales and expenses

In the U.S. economy, _____ are considered the reward for the risk of
entering a business.

1.

a.revenues

2.

b.concessions

3.

c.profits

4.

d.sales

When Greenlawn Inc. finds itself losing contracts because Instillite Inc.
charges less money, Greenlawn responds by lowering its bids. According
to Adam Smith, this reaction demon-strates _____.
1.

a.the invisible hand of competition

2.

b.collision

3.

c.the right to private property

4.

d.social responsibility


Which of the following is a public sector, not-for-profit organization?
1.

a.Library

2.

b.Museum

3.

c.Charitable group

4.

d.Labor union

Tarek, a former middle manager from Alexander Manufacturing, owns and
operates a Subway franchise. Tarek is demonstrating _____.
1.

a.social responsibility

2.

b.socialism

3.

c.entrepreneurship

4.

d.pure competition

The Industrial Revolution in England transformed America’s economy by
introducing _____.
1.

a.the concept of each worker producing one complete product

2.

b.the concept labor unions

3.

c.the factory system

4.

d.the continuously moving assembly line

Dizzel Inc. is a small-scale mining company that started its business in

2001. By the year 2008, the firm had to close its operations. The company
had been continuously laying off its employees since 2006, which led to
the further downsizing of the firm. The decline in the availability of
minerals in its operating region since 2004 has contributed vastly to its
downfall and also reduced the need to inject new capital since then.
Which of the following factors of production has primarily caused the firm
to e
1.

a.Natural resources


2.

b.Capital

3.

c.Human resources

4.

d.Entrepreneurship

Which of the following is considered to be the most fundamental right of
the private enterprise system?
1.

a.The right to private property

2.

b.The right to guaranteed profits

3.

c.The right to exercise price discrimination

4.

d.The right to fair competition

The human resources of a firm refers to _____.
1.

a.household consumers

2.

b.everyone who works for the business

3.

c.full-time employees

4.

d.top management executives

Which of the following are primarily organized for profit and provide

goods and services?
1.

a.Businesses

2.

b.Public schools

3.

c.Government

4.

d.Churches

All of the following are basic rights within a private enterprise system
EXCEPT _____.
1.

a.right to private property

2.

b.right to profits before tax deduction

3.

c.freedom of choice of investment

4.

d.freedom of choice of employment

The right to profit means that the _____.
1.

a.owner is legally guaranteed the right to all profits (after taxes) that are earned by
a business

2.

b.right to such profits without any form of deduction

3.

c.government will guarantee a profit

4.

d.firm has to earn only profits

66 Free Test Bank for Contemporary Business 16th
Edition by Boone Multiple Choice Questions - Page 2
When a business employs an outside company to handle all customer
correspondence and phone calls, the business is _____ its customer
service department.
1.

a.outsourcing

2.

b.branding

3.

c.cybersquatting

4.

d.shrinking

When Google opened offices in Tokyo, London, and Sydney, it was
utilizing _____ by relocating business activities to lower-cost locations
overseas.
1.

a.nearshoring

2.

b.cybersquatting

3.

c.offshoring

4.

d.employee sourcing

“Newman’s Own” is a food product line that gives 100 percent of its aftertax profits to charity. This company is ____.
1.

a.evaluating its business ethics


2.

b.enacting upon its social responsibility

3.

c.creating customer satisfaction

4.

d.using creativity to promote sales

Which of the following generations is usually associated with the workcomes-first lifestyle?
1.

a.Baby Boomers

2.

b.Generation X

3.

c.Generation Y

4.

d.Millennials

_____ refers to standards of conduct and moral values of a firm.
1.

a.Creativity

2.

b.Business ethics

3.

c.A social audit

4.

d.A social responsibility

Which of the following BEST distinguishes the philosophy of the
marketing era from the philosophy of the production era?
1.

a.The marketing era was more consumer oriented.

2.

b.The production era occurred after World War II.

3.

c.The marketing era advocated price discrimination.

4.

d.The production era was more consumer oriented.

_____ is the ability to perceive marketplace needs and what an
organization must do to satisfy these needs.
1.

a.Critical thinking

2.

b.Social responsibility

3.

c.Vision


4.

d.Creativity

Henry Ford is noted in business history for introducing the moving
assembly line, which greatly reduced the cost of producing a car.
Assembly lines first became common during the _____.
1.

a.relationship era

2.

b.marketing era

3.

c.era of industrial revolution

4.

d.production era

Feedback from customers is an example of a(n) _____ that requires
organizational change.
1.

a.internal force

2.

b.external force

3.

c.change agent

4.

d.marketing issue

Blogs and social networking use _____ to manage relationships.
1.

a.strategic alliances

2.

b.marketing research analyses

3.

c.technology

4.

d.business etiquette

The business philosophy that advocates determining what consumers
want and need, and then designing products to satisfy those needs, is
known as _____.

1.

a.consumer orientation

2.

b.self-sufficiency

3.

c.work ethics


4.

d.production enhancement

When 3M managers decided to manufacture Post-it ® notes, a new
product was born. This was an example of _____ in action.
1.

a.critical-thinking skills

2.

b.vision

3.

c.social responsibility

4.

d.creativity

Which of the following statements is NOT correct?
1.

a.Workers change jobs less frequently today.

2.

b.The size of the labor pool is decreasing.

3.

c.The U.S. population is getting older.

4.

d.The U.S. population is becoming more diverse.

Which of the following is given the LEAST importance by managers of
today?
1.

a.The ability to work by strict rules

2.

b.The ability to envision the firm’s future

3.

c.The ability to think critically

4.

d.The ability to be creative

Outsourcing usually _____.
1.

a.reduces the diversity of the workforce

2.

b.makes a firm more competitive

3.

c.increases staffing requirements

4.

d.increases costs


When a U.S. company contracts work to a company inMexico, it is _____.
1.

a.nearshoring

2.

b.nearsourcing

3.

c.exporting

4.

d.offshoring

Apple iPods sold on Amazon’s Web site signify the formation of a _____
to increase profits.
1.

a.transaction alliance

2.

b.brand partnership

3.

c.strategic alliance

4.

d.marketing agreement

Winzer Corp. a multinational corporation located in Los Angeles is
planning to relocate its operations in Southern Asia. The firm has
identified that the labor cost and technology available in the region would
ensure optimum performance of its business operations. Which of the
following strategies has Winzer Corp. adopted?
1.

a.Exporting

2.

b.Offshoring

3.

c.Nearshoring

4.

d.Licensing

Which of the following is NOT an example of an internal force that
requires organizational change?
1.

a.Labor union demands

2.

b.Production problems

3.

c.New technologies

4.

d.New company goals


In business, _____ refers to the ability to see better and different ways of
doing business.
1.

a.critical thinking

2.

b.social responsibility

3.

c.creativity

4.

d.vision

When a company’s management decisions align with social and economic
issues, the company is _____.
1.

a.using creativity to ensure sustained growth

2.

b.following its business ethics

3.

c.working towards social welfare

4.

d.enacting upon its social responsibility

The new employer-employee partnership has led to all of the following
EXCEPT _____.
1.

a.increased job security

2.

b.sharing of financial information with employees

3.

c.increased emphasis on listening to and respecting employees

4.

d.helping employees improve skills and knowledge

Which of the following is most likely to result from the use of technology
in a firm?
1.

a.Reduced production

2.

b.Guaranteed profits

3.

c.Hybrid products

4.

d.Business inefficiency


Concentrating on building and promoting products in hopes that enough
customers will buy them in order to cover costs and earn acceptable
profits is called _____.
1.

a.relationship management

2.

b.marketing management

3.

c.decoy effect

4.

d.transaction management

The number of people of ages 65 and over will _____ by 2030.
1.

a.decrease drastically

2.

b.double

3.

c.increase

4.

d.remain constant

A partnership is _____.
1.

a.a category of relationship management

2.

b.an affiliation of two or more companies

3.

c.outside the scope of e-business management

4.

d.helpful in eliminating competitive advantage

The concept of branding first emerged during the _____.
1.

a.production era

2.

b.relationship era

3.

c.age of the industrial entrepreneur

4.

d.marketing era


Alejandro is seeking to revitalize his graphic design company with new
innovations and has called for a brainstorming meeting with his top
designers. Alejandro is _____.
1.

a.enacting his company’s vision

2.

b.improving his productivity

3.

c.thinking critically

4.

d.utilizing his creativity

Emily works for a pharmaceutical company and gives a presentation on
the need to expand the company’s geriatric division within the next 10
years. Emily is focussing primarily on establishing the company’s _____.
1.

a.morales

2.

b.ethics

3.

c.vision

4.

d.codes

Nurturing customer loyalty by gathering knowledge of customer needs
and preferences is an approach known as _____.
1.

a.relationship management

2.

b.transaction management

3.

c.financial management

4.

d.marketing management

Evlis uses a weblog to sell his products. His blog has generated massive
sales for his products. His capital expenditure was the lowest in
comparison to most of the other online firms. Which of the following eras
is he most likely to be originating from?
1.

a.Production era

2.

b.Social era


3.

c.Industrial era

4.

d.Marketing era

Diverse employee teams tend to perform _____ and develop _____ than do
homogeneous employee groups.
1.

a.less effectively; better solutions

2.

b.more effectively; better solutions

3.

c.less effectively; worse solutions

4.

d.more effectively; worse solutions

Social responsibility would include all of the following EXCEPT _____.
1.

a.supporting the local United Way

2.

b.buying goods and services from minority-owned vendors

3.

4.

c.making campaign contributions to politicians in the hope of obtaining a
government contract
d.making contributions to the local public radio station

When management adheres to a set of standards involving the right and

wrong actions arising in the work environment, the management is _____.
1.

a.enacting upon its social responsibility

2.

b.following its business ethics

3.

c.working towards social welfare

4.

d.using creativity to encourage team spirit

One factor that led to the Industrial Revolution was the mechanization of
agriculture.
1.

True

2.

False


In order to remain viable, not-for-profit organizations need to focus on
profits even more than the public service they provide.

1.

True

2.

False

During the era of Industrial Revolution, the focus was on agriculture and
other rural activities.
1.

True

2.

False

Large corporations are defined as businesses, whereas small companies
are more of an investment.
1.

True

2.

False

Finding unique ways to use the factors of production is a common
characteristic of most entrepreneurs.

1.

True

2.

False

The Industrial Revolution introduced a strong emphasis on the factory
system.
1.

True

2.

False

In the private enterprise system, government has no role to play in
ensuring fair competition.
1.

True

2.

False


Technology is considered to be a form of capital.

1.

True

2.

False

The private enterprise system is enhanced by maximized government
participation.
1.

True

2.

False

The Industrial Revolution began in Germany and quickly spread to the rest
of Europe.
1.

True

2.

False

All factors of production are found in equal amounts in all businesses.
1.

True

2.

False

Adam Smith’s “invisible hand” refers to the battle among businesses for
consumer acceptance.
1.

True

2.

False

Capital usually includes entrepreneurs, buildings, and human resources.
1.

True

2.

False

The private enterprise system encourages government intervention.
1.

True

2.

False


Competitive differentiation is discouraged for a business to be
successful.
1.

True

2.

False

Companies are not required to be ethical to succeed in the long run.
1.

True

2.

False

In consumer orientation, a company creates a product first and then
determines if a consumer is likely to purchase the product.
1.

True

2.

False

Entrepreneurship is synonymous with “risk-taking.”
1.

True

2.

False

A key element of the production era was the use of consumer research.
1.

True

2.

False

When government sets ground rules for competitive activity, the intent is
to reduce “cutthroat” competition.
1.

True

2.

False

The right to private property is considered the most basic right in the
private enterprise system.
1.

True


2.

False

Assembly lines were introduced during the production era.
1.

True

2.

False

Technology and capital are considered as two separate factors of
production.
1.

True

2.

False

The private enterprise system is also referred to as capitalism.
1.

True

2.

False

Entrepreneurs are very conservative and usually invest only in sure
winners.
1.

True

2.

False

Not-for-profit organizations are commonly exempt from federal, state, and
local taxes.
1.

True

2.

False

When farmers rent land in order to increase crop production, they are
acquiring capital.
1.

True

2.

False


Just as with a for-profit business, the first priority for a not-for-profit
organization is making a profit.
1.

True

2.

False

Natural resources are linked to the factor payment of rent.
1.

True

2.

False

When customers enter a supermarket and select their favorite brand of
laundry detergent, they are exercising their right to freedom of choice.
1.

True

2.

False

61 Free Test Bank for Contemporary Business 16th
Edition by Boone True - False Questions - Page 2
If Motorola and Microsoft work on developing a new cell phone that also is
a PDA, then such a merger would be an example of a strategic alliance.
1.

True

2.

False

Critical thinking skills and creativity are essential qualities for today’s
managers.
1.

True

2.

False

Physical exercise releases endorphins, which can help a manager come
up with creative ideas.
1.

True

2.

False


Outsourcing is the use of outside vendors to produce goods or fulfill
services and functions that were previously handled in-house or incountry.
1.

True

2.

False

The number of companies forming partnerships and strategic alliances
has grown in recent years.
1.

True

2.

False

The need to develop environmentally friendly products and processes is
becoming a major new force in business today.
1.

True

2.

False

Technology has revolutionized business communications.
1.

True

2.

False

Creativity is the capacity to develop well-tested solutions to common
organizational problems.
1.

True

2.

False

By supporting local charities, a firm is demonstrating social
responsibility.
1.

True

2.

False


Relationship management refers to ongoing, mutually beneficial ties
between an organization and its customers.
1.

True

2.

False

Transaction management was introduced during the era of Industrial
Revolution.
1.

True

2.

False

Managers are beginning to recognize the different needs of workers of
different ages.
1.

True

2.

False

Participating in nonprofit programs is an example of exhibiting social
responsibility.
1.

True

2.

False

Feedback from customers is an example of an internal force that would
require change.
1.

True

2.

False

Hispanics and Asians represent the fastest-growing segments of the U.S.
population.
1.

True

2.

False


A strategic alliance is a partnership formed to create a competitive
advantage for the businesses involved.
1.

True

2.

False

In business, creativity refers to the ability to see better and different ways
of doing business..
1.

True

2.

False

The supply for jobs is slowly becoming greater than the demand for
workers.
1.

True

2.

False

Amazon is an example of a successful e-business.
1.

True

2.

False

Relationship management concentrates on short-term interactions with
customers.
1.

True

2.

False

Research indicates that work teams consisting of a diverse group of
individuals often are more productive than less diverse work teams.
1.

True

2.

False

The Nike swoosh is an example of a brand.
1.

True