Business Studies
Chapter Exam Questions
Course Introduction
Business Studies is an interdisciplinary course that explores the fundamental principles and practices involved in the operation and management of businesses. Students are introduced to key concepts such as management, marketing, finance, operations, human resources, and entrepreneurship. The course examines both the internal and external environments of businesses, analyzing how factors like competition, globalization, technology, and ethical considerations impact decision-making and strategy. By combining theoretical frameworks with practical case studies, Business Studies equips students with the analytical, problem-solving, and communication skills necessary to succeed in the dynamic world of commerce and industry.
Recommended Textbook
Business Essentials 8th Canadian Edition by
Ronald J. Ebert
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2
Chapter 1: Understanding the Canadian Business System
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Q1) How does Canada's supply management system work?
Answer: In Canada's supply management system, production quotas are established for commodities like dairy products, maple syrup, eggs, chickens, and turkeys. Producers of these commodities are not allowed to produce more than the quota they have been granted. To discourage foreign competitors from entering the market, high tariffs are charged on imports of these commodities.
Q2) What is "supply management"?
A) A system that ensures there are no shortages in consumer products and service
B) A system that ensures companies producing products like automobiles do not artificially restrict supply in order to drive up the price of their products
C) A system that establishes domestic production quotas for commodities like dairy products, maple syrup, eggs, chickens, and turkeys
D) A system that is designed to create perfect competition in certain industries
Answer: C
Q3) An economic system allocates a nation's resources among its citizens.
A)True
B)False
Answer: True
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Chapter 2: The Environment of Business
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Q1) New Vermont underwent a recession two years ago. How might New Vermont's aggregate output have been affected?
Answer: A recession is defined as a period during which aggregate output, as measured by GDP, declines. Therefore, New Vermont's aggregate output would have declined.
Q2) What is cyclical unemployment?
Answer: Cyclical unemployment is unemployment that results from a downturn in the business cycle.
Q3) Canada's GDP in 2014 was about
A) $275 billion.
B) $950 billion.
C) $1.8 trillion.
D) $3.6 trillion.
E) $8.3 trillion.
Answer: C
Q4) How does cyclical unemployment differ from frictional unemployment?
Answer: Cyclical unemployment results from a downturn in the business cycle, while frictional unemployment refers to people who are out of work temporarily while they are looking for a new job, irrespective of which phase the business cycle is in.
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4
Chapter 3: Conducting Business Ethically and Responsibly
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Sample Questions
Q1) Identify four issues of ethics in advertising.
Answer: Truth-in-advertising, advertising of counterfeit brands, stealth advertising, and morally objectionable advertising
Q2) Ethics are both individually and culturally defined.
A)True
B)False
Answer: True
Q3) What is the relationship between social responsibility and ethics?
Answer: Ethics affect individual behaviour in the workplace, while social responsibility refers to the overall way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment.
Q4) Is downloading music ethical or unethical?
Answer: Answers will vary because different individuals have different beliefs about what is right or wrong. The fact that individuals have different beliefs about practices such as downloading music makes it very difficult to get agreement on whether a given behaviour is ethical or unethical.
Q5) List five general categories of organizational stakeholders.
Answer: Customers, employees, investors, suppliers, and local communities
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Chapter 4: Entrepreneurship, Small Business, and New Venture Creation
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Q1) Which type of business is legally considered a separate entity from its owners and is liable for its own debts?
A) Sole proprietorship
B) Corporation
C) Limited partnership
D) Co-operative
E) General partnership
Q2) What is a business incubator?
Q3) What are the most common sources of equity financing?
Q4) Manufacturing businesses are the largest and fastest growing segment of small business enterprise.
A)True
B)False
Q5) Which of the following statements is accurate?
A) Love money is a form of debt financing.
B) Borrowing money reduces the potential for higher returns when a business is performing well.
C) Debt financing refers to money invested by the owner in the company.
D) Banks are typically risk averse.
E) Suppliers typically provide long term-financing.
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Chapter 5: The Global Context of Business
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Q1) Marketing a specific product to two or more countries is relatively easy since it is increasingly the case with globalization that the same marketing strategy will usually work for both countries.
A)True
B)False
Q2) With regard to the BRIC countries, it is correct to say that
A) they all emphasize the export of raw materials.
B) they all have a low level of industrialization at the moment, but are progressing rapidly.
C) Russia is the strongest in terms of manufacturing.
D) Brazil is strong in agriculture and commodities.
E) All of these statements are correct.
Q3) Give an example of an absolute advantage.
Q4) How might socio-cultural differences affect the sales of Nokia phones outside Finland?
Q5) Define licensing arrangements and strategic alliances and discuss their relative merits.
Q6) What are the three major marketplaces in the contemporary world economy?
Q7) What is a tariff?
Q8) What is an independent agent?
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Chapter 6: Managing the Business Enterprise
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Sample Questions
Q1) Which of the following outlines how an organization intends to meet its mission statement goals and includes the firm's responsiveness to new challenges and needs?
A) Goal setting
B) Controlling
C) Strategy
D) Tactics
E) Research and development
Q2) List the five basic management skills.
Q3) The control process starts with establishing standards, then measuring performance, and then analyzing the differences to see if the standards or performance need to be changed.
A)True
B)False
Q4) Contingency planning is an organization's method for dealing with emergencies.
A)True
B)False
Q5) What is the difference between a "purpose" and a "mission"?
Q6) What is intuition?
Q7) Summarize the difference between conceptual skills and technical skills.
Page 8
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Chapter 7: Organizing the Business Enterprise
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Sample Questions
Q1) At Roger's company, new products are developed using a team approach. The vice-presidents of production, marketing, finance, and engineering meet weekly to cover topics of common interest and new products are usually on the agenda. Recently, there have been numerous delays in the launching of most of the new products and along with the delays has come much finger-pointing. Which of the following items is lacking in this situation and probably a major cause for the poor performance?
A) Authority
B) Span of control
C) Responsibility
D) Delegation
E) Accountability
Q2) Organizational structure refers to
A) the process that is used to develop an organizational chart.
B) determining which employees report to whom.
C) the specification of the jobs to be done within a business and how those jobs relate to one another.
D) determining how best to use available material resources.
E) structuring the necessary resources to complete a particular task.
Q3) What are the advantages and disadvantages of specialization?
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Page 9
Chapter 8: Managing Human Resources and Labour Relations
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Q1) Forecasting demand may result in plans to hire additional employees or plans to reduce the size of the workforce.
A)True
B)False
Q2) The ________ recognized the right of employees to bargain collectively.
A) Industrial Disputes Investigation Act
B) Canadian Labour Congress
C) Privy Council Order 1003
D) Constitution Act (1867)
E) Canada Labour Code
Q3) The starting point in assessing training and development is
A) vestibule training.
B) job analysis.
C) needs analysis.
D) an assessment centre.
E) mentoring.
Q4) Discuss four methods that are commonly used to appraise employee performance.
Q5) Describe the major legislation that impacts labour management relations.
Q6) How has union membership (as a percentage of the total workforce) changed over the past 40 years? Page 10
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Chapter 9: Motivating, Satisfying, and Leading Employees
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Sample Questions
Q1) List the five levels of needs in Maslow's hierarchy of needs, from lowest to highest.
Q2) The employees in Barry's department pay a lot of attention to what he says because they value "what he stands for." Barry most likely possesses what kind of power?
A) Reward power
B) Coercive power
C) Expert power
D) Referent power
E) Legitimate power
Q3) What are the key features of the psychological contract?
Q4) A Globe and Mail web poll showed that more than one-quarter of the 2331 respondents had never received a compliment from their boss.
A)True
B)False
Q5) How do the trait and behavioural approaches differ?
Q6) List the three basic managerial styles.
Q7) Briefly describe job redesign and identify the three major ways of implementing it.
Q8) What is meant by emotional intelligence?
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Chapter 10: Operations Management, Productivity, and Quality
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Q1) Ken is a production operator who plots a sample of the product and finds that it is outside the upper or lower specification limits on the control chart. What should he do?
A) Continue with production and analyze why the problem might be occurring
B) Do nothing; wait to see if the next sample is within the control limits
C) Tell co-workers "the sky is falling!"
D) Correct the problem (e.g., people, equipment, materials, or work methods)
E) Shut down the machine and have a manager investigate the problem
Q2) In a ________ system, the customer is an active participant, but in a ________ system, the customer is not an active participant.
A) low-contact; high-contact
B) active; inactive
C) high-contact; low-contact
D) high-interaction; low-interaction
E) low-interaction; high-interaction
Q3) What is operations capability?
Q4) What is TQM and why is it important?
Q5) Describe three ways that McDonald's restaurants create time utility for customers.
Q6) Describe the ways a business's operation processes can be classified.
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Chapter 11: Understanding Accounting
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Sample Questions
Q1) The inventory turnover ratio is calculated by
A) dividing cost of goods sold by revenues.
B) dividing average inventory by cost of goods sold.
C) dividing revenues by cost of goods sold.
D) dividing cost of goods sold by average inventory.
E) dividing revenues by average inventory.
Q2) ________ is the comprehensive information system for collecting, analyzing, and communicating financial information, while ________ is the recording of financial transactions.
A) Financial accounting; managerial accounting
B) Managerial accounting; financial accounting
C) Bookkeeping; accounting
D) Accounting; bookkeeping
E) Controlling; accounting
Q3) An activity ratio measures a firm's
A) sales per employee.
B) frequency of purchases.
C) level of inventory.
D) efficiency in using its assets.
E) sales per selling expense dollar.
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Chapter 12: Understanding Marketing Principles and Developing Products
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Sample Questions
Q1) Light bulbs, pencils, pads of paper, and lubricating oils for machines are examples of ________ purchased by companies that make other goods.
A) capital items
B) fixed expense goods
C) expense items
D) depreciation goods
E) impulse items
Q2) The blue jean market is quite varied, and people wear them for different reasons and for different purposes. There are fashion jeans, work jeans, truck-driving jeans, cowboy jeans, and so on. To serve this market better, many firms practise
A) mass marketing strategy.
B) regional marketing.
C) market segmentation.
D) diversified marketing.
E) multi-marketing.
Q3) Describe an example that demonstrates the riskiness of new product development.
Q4) What is the difference between consumer goods and industrial goods?
Q5) What is value?
Q6) What is brand equity?
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Chapter 13: Pricing, Promotion, and Distributing Products
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Q1) Where must all consumer product distribution channels begin?
A) The industrial user
B) The retailer
C) The government
D) The wholesaler
E) The manufacturer/producer
Q2) While the ultimate objective of any promotion is to increase sales, marketers may have other objectives. In particular, why would adding value to a product be seen as an important objective for a promotion team?
Q3) What is the purpose of point-of-sale displays?
Q4) How are price lining and psychological pricing used to determine prices of products?
Q5) If total fixed costs are $200 000, the product is sold for $30, and the variable cost is $16, the break-even point is 14 286 units.
A)True
B)False
Q6) List five sales promotion tools.
Q7) Why is water the least expensive mode of transportation?
Q8) Explain electronic retailing.
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Chapter 14: Money and Banking
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Sample Questions
Q1) Which of the following is a consequence of the divisibility characteristic of money?
A) Units of money do not expire after a certain time limit.
B) Units of money can be accurately matched with the value of goods.
C) Units of money are easily carried.
D) Units of money have relatively stable value.
E) Units of money of different nations are easily converted to other units of money.
Q2) Cynthia is concerned about electronic money because
A) power failures cause information to be lost.
B) hackers may break into e-cash systems and steal the money in them.
C) there are extensive rules and regulations dealing with e-money.
D) electronic money generates an extremely large amount of paper.
E) banks will generally not recognize this form of money.
Q3) Smart cards are credit card sized plastic cards that can be programmed with electronic money
A)True
B)False
Q4) What is the prime rate of interest?
Q5) Identify the components of the M-1 money supply.
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Chapter 15: Finacial Decisions and Risk Management
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Sample Questions
Q1) John has bought into a mutual fund that includes long-term municipal bonds, corporate bonds, and common stocks with good dividend-paying records. This mutual fund is emphasizing
A) stability.
B) safety.
C) high current income.
D) aggressive growth.
E) growth.
Q2) Discuss the methods by which bonds may be retired. Which method offers the greatest security for investors? Which method does the issuing firm prefer?
Q3) Suppose that in June 2013 you bought a call option that allows you to buy 100 shares of a certain stock for $20 before October 2013. If the market price of the stock at some point before October 2013 is $23, and you exercise your option, what will happen?
A) You will make a $30.00 profit.
B) You will make a $300.00 profit.
C) You will make a $3000.00 profit.
D) You will incur a loss of $30.00.
E) You will incur a loss of $300.00.
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