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Midterm Exam Assessment – The equilibrium price is represented


Midterm Exam Assessment

Spring 2017

Introduction to Business

Format: This
assessment consists of both multiple choice and True/False questions.

• True/False:
20 questions

• multiple
choice: 30 questions

Marks: The total marks for this assessment are out of 100
points. The overall weighing of this assessment is 30% of the course final

Time allowed: 60 minutes

Answer Sheet

1 11 21 31 41

2 12 22 32 42

3 13 23 33 43

4 14 24 34 44

5 15 25 35 45

6 16 26 36 46

7 17 27 37 47

8 18 28 38 48

9 19 29 39 49

10 20 30 40 50

Extra Question 1:

Extra Question 2:

Session 1 True/False Questions

The equilibrium price is represented by the point where a product’s
supply and demand curves intersect.

All business decisions cannot be judged as right or wrong, ethical or

A consistent increase in a country’s imports has a favorable impact on
its production and employment.

The Webb-Pomerene Export Trade Act allows selected U.S. firms willing to
enter international trade to form monopolies to compete with foreign
monopolistic organizations and also to operate as monopolies within the United

Protective tariffs raise the price of foreign goods to allow expensive
domestic goods to compete with foreign ones.

A common reason for establishing quotas or tariffs is to encourage

Political unrest in countries often creates a hostile environment for
foreign businesses and can act as a barrier to international trade.

True____False____8. Sociocultural differences, such as
variations in body language and personal space, usually have almost negligible
impact on international business.

The General Agreement on Tariffs and Trade was a precursor to the World
Trade Organization and provided a forum for tariff negotiations.

The World Trade Organization agreements are the optional ground rules
for international commerce.

The Association of Southeast Asian Nations (ASEAN) effectively united
Singapore, Britain, and Japan into one market.

The International Monetary Fund promotes trade among member nations by
eliminating trade barriers and fostering financial cooperation.

In most countries, participation in international business is restricted
to large corporations.

True____False____14. Licensing allows a company to enter the
international marketplace without spending large amounts of money abroad.

True____False____15. A strategic alliance is a partnership formed
to create competitive advantage on a worldwide basis.

True____False____16. Direct investment gives lesser power and is
the least expensive way to participate in foreign trade.

Multinational corporations (MNCs) are often criticized on the grounds that
they adversely affect production in the host countries and also contribute to
higher unemployment.

True____False____18. Companies doing business internationally
have traditionally used a globalization strategy.

True____False____19. A multinational strategy involves customizing
products, promotion, and distribution according to cultural, technological,
regional, and national differences.

True____False____20. Even when products are standardized,
advertising often has to be modified to adapt to local cultures.

Session 2 Multiple Choice Questions

21. Which of the following is an advantage of a sole

A. It is heavily regulated by the government.

B. It has limited liability for the debts incurred by the

C. It is hard to dissolve.

D. It is unaffected by the death or withdrawal of its owner.

E. It is easy and inexpensive to form.

22. Catalina owns a
small restaurant and is solely responsible for its debts and liabilities. She
is also entitled to all the profits the restaurant makes after paying off taxes
and other expenses. Her business is an example of a(n):

A. joint venture.

B. S corporation.

C. sole

D. partnership.

E. C corporation.

23. A _____ has been
defined as “an association of two or more persons who carry on as
co-owners of a business for profit.

A. partnership

B. sole

C. C corporation

D. cooperative

E. quasi-public

24. Josh has been asked to be a part of a new business
venture that develops wind energy technologies. Since the business involves
high risk, he does not want to be held completely liable for the firm’s debts
if the project fails. In this case, Josh is most likely to prefer to
participate as a(n):

A. member of a cooperative.

B. limited partner.

C. general partner.

D. owner of an S corporation.

E. sole proprietor.

25. The decision-making process in a partnership tends to be
faster when:

A. there are numerous partners, who all want to solely
control the management of the business.

B. there are two partners and both of them are involved in
the day-to-day activities of the business.

C. the partnership is a foreign corporation that conducts its
business outside the state in which it was incorporated.

D. the partnership is a domestic corporation with numerous

E. there are numerous partners and the firm has issued
public stock.

26. Megha is a taekwondo expert who starts her own martial
arts training academy. She conducts taekwondo classes for women and teaches
them the art of self-defense. Megha can be regarded as a(n):

A. shareholder.

B. entrepreneur.

C. investor.

D. intrapreneur.

E. inventor.

27. The _____ style
of leadership can be a powerful motivator because it demonstrates a great deal
of trust and confidence in an employee and allows employees to meet their work
demands with little or no interference.

A. free-rein

B. autocratic

C. authoritarian

D. repressive

E. totalitarian

28. Salma owns a Lebanese restaurant that employs around 25
people. She is solely responsible for the management of the restaurant. Her
business has to compete with a larger chain of restaurants that offer the same
cuisine. Salma’s restaurant can be classified as a:

A. multinational corporation.

B. conglomerate.

C. franchise.

D. public sector holding.

E. small business.

29. Which of the following is an advantage of small
businesses over larger firms?

A. Unlike larger firms, small businesses can quickly make
and execute business decisions.

B. Unlike larger firms, small businesses have access to a
diverse and large workforce.

C. Unlike larger firms, small businesses are not required to
pay any taxes.

D. Small businesses are better equipped than larger
businesses to cope with growth.

E. Small businesses have better access to highly trained and
competent staff than larger firms.

30. A precise statement of the rationale for a business and
a step-by-step explanation of how it will achieve its goals is known as a(n)

A. promissory note

B. article of incorporation

C. business plan

D. business agreement

E. article of partnership

31. To make profits from a small business, the owner must
first provide or obtain _____ to start the business and keep it running

A. products

B. employees

C. profits

D. supplies

E. capital

32. The act of financing one’s business by using real
personal assets is known as:

A. debt financing.

B. factoring.

C. franchising.

D. equity financing.

E. bootlegging.

33. Persons or
organizations that agree to provide some funds for a new business in exchange
for ownership interest or stock are called _____.

A. entrepreneurs

B. category captains

C. venture capitalists

D. trade debtors

E. franchisers

34. When an entrepreneur takes out a loan from a bank, the
bank will require him or her to put up _____, 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

35. Banks and other financial institutions can grant a small
business a _____, which is an agreement by which a financial institution
promises to lend a business a predetermined sum on demand.

A. line of credit

B. trade credit

C. mutual fund

D. non-recourse loan

E. trust fund

36. Which of the following is one of the commonly reported
advantages of franchising?

A. Flexibility in decision making

B. No restrictions on purchasing

C. Management training and support

D. No standardized procedures of operations

E. Decentralized buying power

37. Which of the following statements is true of authentic

A. Authentic leaders display all the characteristics of
autocratic leaders.

B. Authentic leaders make all the relevant decisions and
inform employees what they have to do and how.

C. Authentic leaders are an exclusive group of leaders whose
leadership behaviors are distinctive from democratic and free-rein leaders.

D. Authentic leaders are identified by the way in which they
conduct themselves with stakeholders.

E. Authentic leaders are concerned about the task at hand
rather than establishing lasting relationships with stakeholders.

38. If a manager is concerned about doing the work in such a
manner that it yields the desired result, then his or her primary managerial
concern is:

A. efficiency.

B. effectiveness.

C. standardization.

D. innovation.

E. expertise.

39. Lara was less educationally qualified and experienced
than her colleagues when she joined Aurora Systems Inc. However, due to her
ability to negotiate effectively with clients, convince her team members to
work harder, and understand their needs, she is a senior-level manager today.
Which of the following skills can be most attributed to Lara’s success in this

A. Technical skills

B. Cognitive skills

C. Human relations skills

D. Critical thinking skills

E. Psychomotor skills

40. Melanie is one of the senior managers in the consumer
electronics department of a large company. She is part of a team that
determines the objectives of the department based on future trends in the
industry and decides how to accomplish them. Melanie is involved in the
management function of:

A. staffing.

B. recruiting.

C. planning.

D. crowdsourcing.

E. factoring.

41. Managers at Sprocket Inc. have recognized declining
sales on their water purifier and must decide upon what has to be done to
improve it. Which of the following would be their next step?

A. Defining the situation

B. Developing options

C. Analyzing options

D. Selecting the best option

E. Implementing the decision

42. A declaration of an organization’s fundamental purpose
and basic philosophy is known as a(n):

A. protocol.

B. mission.

C. referendum.

D. agenda.

E. target.

43. The top management of Dusk Automobiles Inc. has decided
that the company’s objective for the next two years will be to expand the
overall business internationally. This is an example of _____.

A. functional planning

B. static planning

C. strategic planning

D. tactical planning

E. operational planning

44. Tactical plans usually cover a period of:

A. five years or more.

B. one year or less.

C. three years.

D. one week or less.

E. ten years.

45. _____ are very short-term plans that specify what
actions individuals, work groups, or departments need to accomplish in order to
achieve an organization’s tactical plan and ultimately the strategic plan.

A. Operational plans

B. Protocols

C. Static plans

D. Referendums

E. Executive-level plans

46. _____ is an element in planning that deals with
potential disasters such as product tampering, oil spills, fire, earthquake,
computer viruses, or airplane crash.

A. Supply chain management

B. Crisis management

C. Value chain management

D. Enterprise resource planning

E. Material requirements planning

47. Which of the following statements is true of the
management function of organizing?

A. Organizing is the process of evaluating and correcting
activities to keep a business on course.

B. Organizing involves determining and administering
appropriate rewards and recognition for employees in an organization.

C. Organizing is a management function that leads to the
duplication of resources.

D. Organizing is the last step in the process of managing a

E. Organizing helps create synergy, whereby the effect of a
whole system equals more than that of its parts.

48. Maria and Harold have just finished interviewing four
candidates for a job position in Jackson Office Supplies Inc., a large company
based in Houston. In which of the following management functions are Maria and
Harold involved?

A. Downsizing

B. Benchmarking

C. Staffing

D. Controlling

E. Directing

49. When Betsy informed her supervisor that the furniture
assemblers at their manufacturing plant were using 20 percent more raw
materials in the current month when compared to the preceding months, she was
involved in the management function of:

A. planning.

B. structuring.

C. staffing.

D. controlling.

E. benchmarking.

50. In businesses, _____ include the president and other top
executives, such as the chief executive officer, chief financial officer, and
chief operations officer, who have overall responsibility for an organization.

A. first-line managers

B. top managers

C. trade creditors

D. external auditors

E. middle managers

Extra question 1.

Which of the following has been a recent trend with regard
to the different levels of management within an organization?

A. With technological advances accelerating, the role of
privacy officers has declined within organizations.

B. The top management of most organizations spends most of
its time directing and controlling workers’ daily performance on the job.

C. Effective managers at enlightened corporations have found
that diversity is detrimental for workers and for the bottom line.

D. The ranks of middle managers have been shrinking as more
and more companies downsize to be more productive.

E. Most stakeholders support the perks and special treatment
the top management of an organization gets.

Extra question 2.

Janet works as a manager at Unicorn Infra Inc. Janet and her
team members are primarily responsible for procuring the funds needed for the
successful operation of the organization and investing that money to pursue
organizational goals. Thus, Janet is a _____.

A. financial manager

B. production manager

C. sales manager

D. human resource manager

E. marketing manager

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