Test Bank for
7) An entity that seeks to earn a profit by providing a good or service is known as a(n)
Understanding Business, 13th Edition, William Nickels
A) industry.
Chapter 1-20 Answers are at the end of Each chapter
B) corporation.
Chapter 1 C) business.
D) service.
Student name:__________
1) Describe three ways that governments can foster entrepreneurship and encourage the
creation of wealth
8) __________ is the amount a business earns after deducting what it spends for salaries and
other expenses.
2) Describe how businesses can use technology to be more responsive to customers. A) Profit
B) Revenue
C) Interest
D) Dividends
3) Competition among businesses has never been greater. Identify and describe two ways
that businesses can become more competitive. 9) A business incurs a __________ if its costs and expenses exceed its revenues.
A) loss
B) liability
C) debit
4) What is demography? Identify two demographic trends in the United States and discuss D) dividend
how they will impactUnited States businesses.
10) __________ is the chance a business owner will lose the time and money invested in a
business that proves to be unprofitable.
A) Depreciation
5) Describe what we mean by greening and thinking green. List five ways that people and B) Risk
businesses are participating in the green movement. List business opportunities that may emerge C) Opportunity
from this movement. D) Redundancy
11) The total amount of money that businesses take in by selling goods and services is called
6) Trace the evolution of American business. Identify the key trends, and discuss the
implications these trends have for the future.
, 16) The amount of goods and services people can buy with the money they have is called
A) profit. their
B) revenue.
C) loss. A) nominal income.
D) retained earnings. B) consumer price index.
C) profit margin.
D) standard of living.
12) A(n) __________ is a person who assumes the risk of starting a business.
A) manager 17) The customers, employees, stockholders, suppliers, creditors, and others who stand to
B) entrepreneur gain or lose by the policies and activities of a business represent the firm's
C) employee
D) stakeholder A) market makers.
B) economic environment.
13) Starting a business always involves C) stakeholders.
D) social environment.
A) profit.
B) loss.
C) revenue.
D) risk
18) The most important difference between for-profit businesses and nonprofit organizations
is that
14) Often in business the greater the risk, the A) for-profit businesses do not benefit society.
B) nonprofit organizations seek to make a profit for their owners and organizers.
A) greater the potential reward. C) nonprofit organizations do not seek a profit for their owners or organizers.
B) lower the expected revenues. D) nonprofit organizations do not answer to stakeholders.
C) lower the value provided to society.
D) greater the number of stakeholders.
15) __________ is a measure of the general well-being and satisfaction derived from a
19) A common characteristic of most entrepreneurs is that they
variety of factors including political freedom, safety, education, and a clean environment.
A) accept the risks involved in starting and managing a business.
A) Standard of living
B) have a high level of scientific and technical expertise.
B) Quality of life
C) possess a great deal of personal wealth.
C) Gross national income
D) have experience in running large, complex organizations.
D) Social satisfaction
, A) have the same goals as for-profit businesses.
20) What is the best example of a business whose goal is to earn a profit? B) do not seek to earn a profit.
C) provide goods rather than services.
A) a community college D) do not have any stakeholders.
B) American Red Cross
C) League of Women Voters
D) Amazon
24) For-profit businesses and nonprofit organizations are similar in that they both
A) contribute to the welfare of society.
21) In order to make an intelligent investment decision, entrepreneurs should B) seek to earn a profit.
C) have a limited life.
A) limit their options to those business investments that are backed by the U.S. D) must be controlled by a board of directors.
government.
B) invest in businesses that have generated a stable rate of profit for at least the past 10
years.
C) invest only in business opportunities where it is possible to take an active role in
25) The standard of living for a nation's people depends mainly on
management.
D) compare the risks of potential investments to their expected profits and find the right
A) the quality of the natural environment.
balance between profit and risk.
B) how much political freedom they have.
C) their income and the prices of the goods and services they can buy.
D) the amount of labor and capital available employed in the manufacturing sector.
22) Honda and Hyundai have insourced for years to design and manufacture cars in the
United States. What statement is accurate about this practice?
A) Insourcing helps offset the number of jobs being outsourced. 26) Today’s businesses attempt to meet the needs of
B) Insourcing increases the number of jobs being outsourced.
C) Insourcing damages the United States economy. A) their customers, even if it comes at the expense of employees and other stakeholders.
D) Insourcing causes jobs to be lost to overseas competitors. B) their employees, even if it means shortchanging customers by charging higher prices.
C) all stakeholders.
D) exclusively their owners, since they are ultimately the ones who pay the bills.
23) Public schools, charities, and government agencies generally
27) What is the most accurate statement about the impact of business on society?
, A) When businesses earn a profit for their owners, they usually do so at the expense of A) will have to invest overseas.
the rest of society, which proves it is never a win-win situation. B) should only invest in a long-standing business.
B) While businesses often improve the standard of living within a society, they can do C) will probably have to accept a higher level of risk.
little to improve the quality of life. D) will probably have to engage in illegal activities.
C) Businesses often improve the quality of life, but can do little to improve the standard
of living for most people.
D) Businesses can have a positive impact on both the standard of living and the quality
of life within a society.
31) Though the prices of things she buys have gone up, Maya's income has remained stable
over the past few years. Nevertheless, Maya feels better off because the environment is cleaner,
the crime rate has dropped, she has more relaxation time, and the quality of medical care has
improved. If Maya's experience is typical, we can assume that the standard of living has
28) Last year, Jensen Consulting reported revenues of $34 million while its total expenses
were $10 million. Based on this information, Jensen reported A) increased, but the quality of life has decreased.
B) increased, and so has the quality of life.
A) profits of $24 million. C) declined, but the quality of life has increased.
B) profits of $34 million. D) declined, and so has the quality of life.
C) losses of $24 million.
D) losses of $34 million.
32) Hyun and her three college friends enjoy perfumes. As a special gift to each of them last
holiday season, Hyun found a way to make scented candles with each friend's favorite perfume
29) Taylor recently started selling her invention: A bed that looks like it floats in mid-air. The scent. The three friends loved her gift idea and encouraged Hyun to create more and sell them
bed is actually suspended by magnetic forces. Taylor is a(n) online. Recently, she is filling orders from her website, and turning a profit. Hyun is proof that
A) arbitrageur. A) personalized products will always be successful.
B) entrepreneur. B) when you successfully fill a market need, you can make money.
C) speculator. C) the Internet is a way to distribute just about anything.
D) account manager. D) the cost of supplies to make candles is relatively cheap.
30) Roman wants to invest some money that he just inherited. His friend Jon wants him to 33) Miranda wants to operate a small catering business out of her home, located in a quiet
invest in his new food truck business, promising Roman a better return on his investment than a residential neighborhood. She asks for input from her neighbors, the homeowner's association,
traditional savings account. Roman should keep in mind that to earn a higher return on his her suppliers, and the zoning commission about issues including parking, noise, safety concerns,
money he and operating hours. Before officially opening, Miranda adjusts her business plan based on the
feedback she received. Miranda has discovered that
7) An entity that seeks to earn a profit by providing a good or service is known as a(n)
Understanding Business, 13th Edition, William Nickels
A) industry.
Chapter 1-20 Answers are at the end of Each chapter
B) corporation.
Chapter 1 C) business.
D) service.
Student name:__________
1) Describe three ways that governments can foster entrepreneurship and encourage the
creation of wealth
8) __________ is the amount a business earns after deducting what it spends for salaries and
other expenses.
2) Describe how businesses can use technology to be more responsive to customers. A) Profit
B) Revenue
C) Interest
D) Dividends
3) Competition among businesses has never been greater. Identify and describe two ways
that businesses can become more competitive. 9) A business incurs a __________ if its costs and expenses exceed its revenues.
A) loss
B) liability
C) debit
4) What is demography? Identify two demographic trends in the United States and discuss D) dividend
how they will impactUnited States businesses.
10) __________ is the chance a business owner will lose the time and money invested in a
business that proves to be unprofitable.
A) Depreciation
5) Describe what we mean by greening and thinking green. List five ways that people and B) Risk
businesses are participating in the green movement. List business opportunities that may emerge C) Opportunity
from this movement. D) Redundancy
11) The total amount of money that businesses take in by selling goods and services is called
6) Trace the evolution of American business. Identify the key trends, and discuss the
implications these trends have for the future.
, 16) The amount of goods and services people can buy with the money they have is called
A) profit. their
B) revenue.
C) loss. A) nominal income.
D) retained earnings. B) consumer price index.
C) profit margin.
D) standard of living.
12) A(n) __________ is a person who assumes the risk of starting a business.
A) manager 17) The customers, employees, stockholders, suppliers, creditors, and others who stand to
B) entrepreneur gain or lose by the policies and activities of a business represent the firm's
C) employee
D) stakeholder A) market makers.
B) economic environment.
13) Starting a business always involves C) stakeholders.
D) social environment.
A) profit.
B) loss.
C) revenue.
D) risk
18) The most important difference between for-profit businesses and nonprofit organizations
is that
14) Often in business the greater the risk, the A) for-profit businesses do not benefit society.
B) nonprofit organizations seek to make a profit for their owners and organizers.
A) greater the potential reward. C) nonprofit organizations do not seek a profit for their owners or organizers.
B) lower the expected revenues. D) nonprofit organizations do not answer to stakeholders.
C) lower the value provided to society.
D) greater the number of stakeholders.
15) __________ is a measure of the general well-being and satisfaction derived from a
19) A common characteristic of most entrepreneurs is that they
variety of factors including political freedom, safety, education, and a clean environment.
A) accept the risks involved in starting and managing a business.
A) Standard of living
B) have a high level of scientific and technical expertise.
B) Quality of life
C) possess a great deal of personal wealth.
C) Gross national income
D) have experience in running large, complex organizations.
D) Social satisfaction
, A) have the same goals as for-profit businesses.
20) What is the best example of a business whose goal is to earn a profit? B) do not seek to earn a profit.
C) provide goods rather than services.
A) a community college D) do not have any stakeholders.
B) American Red Cross
C) League of Women Voters
D) Amazon
24) For-profit businesses and nonprofit organizations are similar in that they both
A) contribute to the welfare of society.
21) In order to make an intelligent investment decision, entrepreneurs should B) seek to earn a profit.
C) have a limited life.
A) limit their options to those business investments that are backed by the U.S. D) must be controlled by a board of directors.
government.
B) invest in businesses that have generated a stable rate of profit for at least the past 10
years.
C) invest only in business opportunities where it is possible to take an active role in
25) The standard of living for a nation's people depends mainly on
management.
D) compare the risks of potential investments to their expected profits and find the right
A) the quality of the natural environment.
balance between profit and risk.
B) how much political freedom they have.
C) their income and the prices of the goods and services they can buy.
D) the amount of labor and capital available employed in the manufacturing sector.
22) Honda and Hyundai have insourced for years to design and manufacture cars in the
United States. What statement is accurate about this practice?
A) Insourcing helps offset the number of jobs being outsourced. 26) Today’s businesses attempt to meet the needs of
B) Insourcing increases the number of jobs being outsourced.
C) Insourcing damages the United States economy. A) their customers, even if it comes at the expense of employees and other stakeholders.
D) Insourcing causes jobs to be lost to overseas competitors. B) their employees, even if it means shortchanging customers by charging higher prices.
C) all stakeholders.
D) exclusively their owners, since they are ultimately the ones who pay the bills.
23) Public schools, charities, and government agencies generally
27) What is the most accurate statement about the impact of business on society?
, A) When businesses earn a profit for their owners, they usually do so at the expense of A) will have to invest overseas.
the rest of society, which proves it is never a win-win situation. B) should only invest in a long-standing business.
B) While businesses often improve the standard of living within a society, they can do C) will probably have to accept a higher level of risk.
little to improve the quality of life. D) will probably have to engage in illegal activities.
C) Businesses often improve the quality of life, but can do little to improve the standard
of living for most people.
D) Businesses can have a positive impact on both the standard of living and the quality
of life within a society.
31) Though the prices of things she buys have gone up, Maya's income has remained stable
over the past few years. Nevertheless, Maya feels better off because the environment is cleaner,
the crime rate has dropped, she has more relaxation time, and the quality of medical care has
improved. If Maya's experience is typical, we can assume that the standard of living has
28) Last year, Jensen Consulting reported revenues of $34 million while its total expenses
were $10 million. Based on this information, Jensen reported A) increased, but the quality of life has decreased.
B) increased, and so has the quality of life.
A) profits of $24 million. C) declined, but the quality of life has increased.
B) profits of $34 million. D) declined, and so has the quality of life.
C) losses of $24 million.
D) losses of $34 million.
32) Hyun and her three college friends enjoy perfumes. As a special gift to each of them last
holiday season, Hyun found a way to make scented candles with each friend's favorite perfume
29) Taylor recently started selling her invention: A bed that looks like it floats in mid-air. The scent. The three friends loved her gift idea and encouraged Hyun to create more and sell them
bed is actually suspended by magnetic forces. Taylor is a(n) online. Recently, she is filling orders from her website, and turning a profit. Hyun is proof that
A) arbitrageur. A) personalized products will always be successful.
B) entrepreneur. B) when you successfully fill a market need, you can make money.
C) speculator. C) the Internet is a way to distribute just about anything.
D) account manager. D) the cost of supplies to make candles is relatively cheap.
30) Roman wants to invest some money that he just inherited. His friend Jon wants him to 33) Miranda wants to operate a small catering business out of her home, located in a quiet
invest in his new food truck business, promising Roman a better return on his investment than a residential neighborhood. She asks for input from her neighbors, the homeowner's association,
traditional savings account. Roman should keep in mind that to earn a higher return on his her suppliers, and the zoning commission about issues including parking, noise, safety concerns,
money he and operating hours. Before officially opening, Miranda adjusts her business plan based on the
feedback she received. Miranda has discovered that
