Introduction to Business Midterm Exam
Course Introduction
Introduction to Business provides students with a foundational understanding of the modern business environment and its key components. This course explores the various forms of business ownership, principles of management, marketing, finance, operations, and human resources. Students will examine how businesses are structured, how they operate in local and global economies, and the ethical and social responsibilities they face. Through real-world case studies and interactive projects, learners will develop essential skills for analyzing business strategies and gain insights into the dynamic challenges and opportunities present in todays business world.
Recommended Textbook
Business Eighth Canadian Edition by Ricky W. Griffin
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19 Chapters
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Page 2
Chapter 1: Understanding the Canadian Business System
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Sample Questions
Q1) The equilibrium price is the profit-maximizing point at which the quantity demanded equals the quantity supplied.
A)True
B)False
Answer: True
Q2) A motive to start a business is ________,while ________ creates the need to run the business efficiently.
A) profit; government
B) money; government
C) profit; pride
D) profit; competition
E) competition; profit
Answer: D
Q3) In a market with perfect competition
A) buyers and sellers do not know the price structure of the market.
B) price is set by supply and demand.
C) there are very few sellers.
D) firms are relatively large.
E) products have very few similarities.
Answer: B
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Chapter 2: Understanding the Environments of Business
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Sample Questions
Q1) The advent of the iPod saw an increase in the downloading of music from the internet.Music artists are noticing a decrease in the sales of their CDs,which is an effect of which dimension of the external environment?
A) Technological
B) Economic
C) Socio-cultural
D) Political
E) Global
Answer: A
Q2) Viral marketing uses word of mouth to spread information from customer to customer.
A)True
B)False Answer: True
Q3) What is outsourcing? Give an example of outsourcing.
Answer: Outsourcing is the strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials and services.A large bank might outsource an ancillary service such as food service.Other firms outsource payroll,training,and research and development functions.
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Page 4
Chapter 3: Conducting Business Ethically and Responsibly
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Sample Questions
Q1) When evaluating a decision based on the ethical norm of rights,a manager will consider which of the following questions?
A) Does the decision optimize the satisfaction of all constituencies?
B) Is the decision consistent with what we regard as fair?
C) Does the decision respect the rights of the individuals involved?
D) Is the decision consistent with people's responsibilities to each other?
E) How much will the decision cost if it is wrong?
Answer: C
Q2) What is the first step in making ethical judgments?
Answer: The first step in making ethical judgments is to gather the relevant factual information.
Q3) Give three arguments in favour and three arguments against the social responsibility of business.
Answer: - in favour: corporations need to help improve our lives; should help alleviate the problems they created; it pays off for the firm; and high financial performance - against: cost and loss of profit; businesses may gain too much control over how social concerns are addressed; they lack the expertise needed; and dilution of primary mission
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Page 5
Chapter 4: Understanding Entrepreneurship, small
Business, and New Venture Creation
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Sample Questions
Q1) The most common source of equity financing for small businesses is a bank loan. A)True
B)False
Q2) Judy is a graduate from a denturist program.Normally,graduates start up their own business,much like dentists and doctors.She has the choice of starting on her own or buying an existing practice.What is an advantage for her of starting a new business from scratch?
A) No suffering from prior owner's errors
B) Odds are better to succeed
C) Relationship with suppliers already established
D) Needs and desires of customers known
E) The risks are lower than if she were to buy an existing practice
Q3) Trade credit from suppliers is a form of barter between supplier and retailer. A)True B)False
Q4) Why is there such a difference between the failure rates of small businesses in general and franchising operations in particular?
Q5) Why is it important to have a business plan?
Q6) Define a new venture.
Q7) Where do the majority of entrepreneurial ideas come from? Page 6
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Page 7
Chapter 5: The Global Context of Business
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Sample Questions
Q1) The absolute advantage form of competitive advantage means
A) that a country does not belong to any free trade agreements.
B) that a country can produce everything better or more cheaply than any other country.
C) that a country can produce some products better or more cheaply than it can others.
D) that a country is the sole supplier of a product or service.
E) that a country can produce something better or more cheaply than any other country.
Q2) The purpose of GATT was to
A) improve trade balances in developing countries.
B) reduce or eliminate trade barriers such as quotas and tariffs.
C) stop the practice of "dumping."
D) encourage governments to increase the protection for their domestic industries.
E) all of these.
Q3) The best way to achieve foreign direct investment is to use independent agents.
A)True
B)False
Q4) What is an exporter?
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8
Chapter 6: Managing the Business Enterprise
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Sample Questions
Q1) The textbook describes five different key functional areas which managers work in.Identify and briefly describe each of the five.
Q2) Because many managers are paid large sums of money,the ________ skill is particularly important.
A) conceptual
B) technical
C) human relations
D) decision-making
E) time-management
Q3) Lynne Smith,chief financial officer for Web Industries,is working on a broad set of organizational plans for implementing the decisions made for achieving organizational goals.Lynne is developing a ________ for Web Industries.
A) formula
B) blueprint
C) function
D) strategy
E) mission
Q4) List the three types of strategy.
Q5) What are the purposes of having a strong corporate culture?
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Chapter 8: Managing Human Resources
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Sample Questions
Q1) When managers conduct a job analysis,they may use this information to A) establish performance appraisal systems.
B) develop appropriate selection methods.
C) set equitable compensation rates.
D) start planning for the organization's future HR needs.
E) all of these.
Q2) At higher levels of the organization,the technique most commonly used to plan for specific people and positions is the replacement chart.
A)True
B)False
Q3) Planning for human resources involves an analysis of the job and recruitment of a pool of job applicants.
A)True
B)False
Q4) The federal government requires that employers provide incentive programs such as retirement benefits.
A)True
B)False
Q5) What is recruitment?
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Chapter 9: Understanding Labourmanagement Relations
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Sample Questions
Q1) Originally courts ruled against unions on the basis that
A) they were communist conspiracies.
B) they would increase prices of goods.
C) they were collecting dues without a licence.
D) they were conspiring to restrain trade.
E) they were not incorporated.
Q2) Which term identifies a union organized at the level of a single company,plant,or small geographic region?
A) Local union
B) National union
C) Company union
D) County union
E) International union
Q3) One of the challenges facing unions is employment growth in service industries,where union power has traditionally not been strong.
A)True
B)False
Q4) Explain the two factors that help to explain the decline in union membership.
Q5) List the four options available to unions if contract negotiations break down.
Page 11
Q6) What three issues are typically most important to union negotiations?
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Chapter 10: Motivating and Leading Employees
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Sample Questions
Q1) Merrick,a manager,believes that because leadership is the ability to influence others to help the organization achieve its goals,any person can be a leader,even entry-level employees.How is Merrick's reasoning open to criticism?
A) It does not account for the possibility that people who lack authority can still be leaders.
B) His definition of leadership is the most commonly used definition of leadership.
C) His definition is a variation of the most popular definition of leadership.
D) The company's goals were not chosen well.
E) It ignores the effect that managerial authority has on one's ability to influence others.
Q2) When Maple Leaf Sports & Entertainment gives out "good job" cards to employees who do outstanding work,this is an example of what reinforcement strategy?
A) Punishment
B) Omission
C) Positive reinforcement
D) Negative reinforcement
E) None of these
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Chapter 11: Producing Goods and Services
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Sample Questions
Q1) A low-contact service operation like the mail-processing facility at UPS or Federal Express looks very much like a product layout in a factory.
A)True
B)False
Q2) Which of the following statements regarding production operations is true?
A) The first industrial revolution occurred in England in the 1800s and the second in China during the 1990s.
B) The factory is no longer the centrepiece for manufacturing.
C) The development of 3-D printing illustrates the third industrial revolution.
D) Production operations remain environmentally unfriendly.
E) All of these statements are true.
Q3) Tyson Co.reduces whole chickens into packaged parts through a(n)________ process.
A) chemical
B) fabrication
C) synthetic
D) analytic
E) assembly
Q4) Discuss the current concept of "production" including recent trends.
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Chapter 12: Increasing Productivity and Quality
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Sample Questions
Q1) Gerry is a production manager.If she wants to increase the uniformity of outputs by understanding the sources of variation,she would use
A) statistical process control.
B) internal failure analysis.
C) quality/cost study.
D) quality circles.
E) upper/lower control limit analysis.
Q2) When new versions of software include features not in previous editions,the vendors are demonstrating
A) quality assurance.
B) quality ownership.
C) quality reliability.
D) quality control.
E) performance quality.
Q3) The quality program that is being adopted by many multinational firms is
A) QC 2000.
B) ROQ.
C) ISO 9000.
D) IQS 8000.
E) TQM 2001.
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Chapter 13: Managing Information Systems and Communication Technology
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Sample Questions
Q1) Why is software important to a computer's functioning?
A) It allows for spreadsheet operations.
B) It shows information on the screen of a video display terminal.
C) It is the printed copy of the computer's output.
D) It is the primary storage unit for the computer.
E) It contains the instructions that tell the computer what to do.
Q2) Mel says that developments in information technology have had a huge impact in communication and in access to data.Marla agrees that information is important,but thinks that how it is used is even more important,and she cites the dramatic developments in online selling as an example.What is Mel assuming?
A) Every business now uses information technology for communications and the gathering of information.
B) Very few businesses sell products online.
C) More information is available now than was available before the information technology revolution.
D) Consumers prefer to buy from businesses that use the latest information technology.
E) Selling online is relatively unimportant to most businesses.
Q3) Describe the ways that organizations try to protect their IT systems.
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Chapter 14: Understanding Accounting Issues
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Sample Questions
Q1) Explain the accounting principles of revenue recognition and matching.
Q2) Which of the following is correct with respect to generally accepted accounting principles?
A) Public and private businesses can no longer use generally accepted accounting principles.
B) They are used in many foreign countries but not in Canada.
C) Public companies in Canada have moved away from using generally accepted accounting principles and have adopted International Financial Reporting Standards (IFRS).
D) Private companies must use the new International Financial Reporting Standards (IFRS).
E) None of these statements in correct.
Q3) Under which condition is owners' equity positive?
A) Assets are greater than liabilities.
B) Assets and liabilities are equal.
C) Net profit is greater than 10 percent of sales.
D) Liabilities are greater than assets.
E) Debits exceed credits.
Q4) Identify an activity ratio and what it measures.
Q5) What is the difference between financial and managerial accounting?
Page 16
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Chapter 15: Understanding Marketing Processes and Consumer Behaviour
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Sample Questions
Q1) Lextel Ltd.is involved in a market research study.They have already studied the current situation to determine which needs exist.Their next step is to begin collecting data.
A)True
B)False
Q2) Describe the difference between consumer goods and industrial goods.
Q3) Which of the following is not true of the small business marketing mix?
A) A clever marketing campaign will create success for a product that few consumers want or need.
B) A small business must have a clear picture of their target market's needs and wants.
C) Small business pricing errors usually result from a failure to estimate operating expenses accurately.
D) Smaller companies may have advantages over larger companies in distribution.
E) Successful small businesses plan for promotional expenses as a part of start-up costs.
Q4) Small business don't generally fail because of location problems.
A)True
B)False
Q5) What is the first step in the consumer buying process?
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Chapter 16: Developing and Promoting Goods and Services
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Sample Questions
Q1) Relatively inexpensive consumer products that are generally consumed rapidly are known as
A) luxury goods.
B) industrial goods.
C) specialty goods.
D) convenience goods.
E) shopping goods.
Q2) Bentley Corp.is involved in the new product development process.Their first step was to solicit ideas for a new product from the company's sales force,the research and development group,and the engineering department.Their next step is to use market research to solicit consumers' input about the ideas they are working on.
A)True
B)False
Q3) Advertisements for Crest toothpaste are brand advertising because they promote a specific company brand,but advertisements like the "Got Milk?" advertisements are classified as institutional advertising because they promote a generic type of product without reference to a brand name.
A)True
B)False
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Page 18
Chapter 17: Pricing and Distributing Goods and Services
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Sample Questions
Q1) Identify three types of product line retailers.
Q2) ________ differ from most bargain retailers in that they do not feature low prices.They do,however,offer speedy service and accessible locations.
A) Warehouse clubs
B) Catalogue showrooms
C) Factory outlets
D) Convenience stores
E) Wholesale clubs
Q3) Like merchant wholesalers,agents or brokers take title to the goods,but they just don't take actual possession of the goods.
A)True
B)False
Q4) Retailers sell products to other businesses who in turn resell them to the final consumer.
A)True
B)False
Q5) What is containerization?
Q6) Describe the advantages of pipelines as a mode of transportation.
Q7) Identify the two most common pricing objectives.
Page 19
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Chapter 18: Understanding Money and Banking
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Sample Questions
Q1) Which of the following do not make loans to business firms?
A) Sales finance companies
B) The Business Development Bank of Canada
C) Credit unions
D) Consumer finance companies
E) All of these do make loans to business firms
Q2) A pool of funds managed to provide retirement income for its members is called a(n)
A) trust service.
B) insurance company.
C) finance company.
D) factoring company.
E) pension fund.
Q3) A venture capital firm may do all but which of the following?
A) Demand a seat on the board of directors
B) Provide financing to new or expanding firms with growth potential
C) Earn a higher than normal return on their investment
D) Provide pension services to new businesses
E) Demand an ownership stake
Q4) Describe the two types of financial corporations.
Page 20
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Chapter 19: Understanding Securities and Investments
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Sample Questions
Q1) Why would an investor wish to purchase a blue-chip stock?
Q2) The book value of a company's common stock is determined by A) what buyers are willing to invest in a firm.
B) dividing total assets by the number of outstanding shares.
C) dividing total shareholders' equity by the number of outstanding shares.
D) dividing net profit by the number of outstanding shares.
E) stockbrokers' opinions and ratings.
Q3) Assume that you order your broker to sell short 100 shares of a company whose stock is trading at $38 per share.If the company's price later falls to $32 per share and you buy 100 shares,you will make a $600 profit (before brokers' commissions).
A)True
B)False
Q4) Bonds that receive poor ratings are likely to
A) be registered.
B) not be issued.
C) pay higher interest rates.
D) require more underwriting.
E) reduce the total amount issued.
Q5) What is a short sale?
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Chapter 20: Financial Decisions and Risk Management
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Sample Questions
Q1) A company that pledges accounts receivable is probably in financial difficulty.
A)True
B)False
Q2) Along with a computer,Mega Computers has sent a document that states the promised payment date and amount.The buyer must sign it before taking the computer.This is a(n)
A) open-book credit.
B) trade draft.
C) revolving credit agreement.
D) promissory note.
E) line of credit.
Q3) Accurate information about current cash status ensures good cash management.
A)True
B)False
Q4) Financial managers must pay more attention to accounts receivable than accounts payable because accounts receivable provides the funds the company needs to stay in business.
A)True B)False
Q5) What are the four responsibilities of finance (corporate finance)?
Page 22
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