GMETRIX UNIVERSAL EXAM 1 with
Verified Solutions
A law is passed increasing the minimum wage from $10 to $15 per hour. A gourmet
pizza restaurant is popular for obta the pizza restaurant is forced to raise the average
price of her pizzas by 30%. Customers are complaining about the price.
Which two factors are most responsible for the price increase? - ANS-- Increased raw
material costs
- Increased labor costs
What is a primary benefit of starting a new business without purchasing a franchise or
buying an existing business? - ANS-Developing your own rules
The owner of an online retail business dropships merchandise from her wholesale
suppliers directly to her retail customers .
Which expense of her business is a variable? - ANS-Cost of shipping
Match the business legal structure to it's unique characteristic.
1. SOLE PROP
2. General or Limited Partnership
3. C Corporation
4. S Corporation
5. Non-Profit Corporation
6. Limited Liability Corporation - ANS-1. Easy to set up, but has unlimited liability
2. Terminates upon death of partner
3. Double-taxed, but best for international businesses
4. Similar to a C corporation but taxed at a lower rate
5. Owned by no one; pays no U.S federal tax
6. Best for a single member seeking low risk
Which of the following should be addressed in the description section of a business
plan? - ANS-Target markets
Match each persona; characteristic of successful entrepreneurs to it's corresponding
meaning.
1. Accepts goals that are not reached overnight
2. is able to adapt and willing to change
3. Takes risks in spite of possible loses
4. Is sensitive to the thoughts and feelings of others. - ANS-1. Patience
2. Flexibility
, 3. Courage
4. Empathy
After a self-assessment, a potential entrepreneur has learned that she has a very low
risk tolerance. Based upon this finding, which approach might be less stressful for the
entrepreneur to have her own business? - ANS-Buy an existing business that is already
successful
An entrepreneur has been working for a flooring business in a neighboring town. He
feels he is ready to open his own flooding business in his local community.
Which should be emphasized in marketing to attract customers to his new business? -
ANS-Lower prices
Gabe has worked as a journeyman electrician for an employer for the past 16 years. He
is paid a good salary. His only dissatisfaction is the hours are long and often when he
requests time off he is denied because of customer workload. Recently, two new
electricians were hired to do sloppy work and don't get along well with Gabe. As a
result, Gabe decides to go into business for himself.
Which benefit of entrepreneurship will Gabe most enjoy? - ANS-Autonomy
Based upon the education and skills gained from the years of vocational training as an
auto mechanic, as well as having grown up in a family of entrepreneurs, a young adult
decides to open an auto mechanic shop.
Which customer group will this new auto mechanic business support? - ANS-
Businesses
an individual starts a babysitting business with a loan of $1000. The loan is for 2 years
at a 5% COMPOUND interest rate.
How much will the individual owe by the end of the loan assuming nothing is paid until
the end of the 2 year term (future value of a loan) - ANS-$1,102.50
A software development consultant works with several clients. Some of the clients are
competitors. What is a consequence if the consultant violates confidentiality by
discussing a client's project with another client - ANS-Loss of clients and possible
lawsuit
Match the business exit strategy to it's result.
1. Harvesting
2. Management Buyout
3. Employee Stoc Ownership Plan
4. Initial Public Offering - ANS-1. Exchanging ownership for cash, either by acquisition
or merger
2. Transferring ownership to people who already operate the business
Verified Solutions
A law is passed increasing the minimum wage from $10 to $15 per hour. A gourmet
pizza restaurant is popular for obta the pizza restaurant is forced to raise the average
price of her pizzas by 30%. Customers are complaining about the price.
Which two factors are most responsible for the price increase? - ANS-- Increased raw
material costs
- Increased labor costs
What is a primary benefit of starting a new business without purchasing a franchise or
buying an existing business? - ANS-Developing your own rules
The owner of an online retail business dropships merchandise from her wholesale
suppliers directly to her retail customers .
Which expense of her business is a variable? - ANS-Cost of shipping
Match the business legal structure to it's unique characteristic.
1. SOLE PROP
2. General or Limited Partnership
3. C Corporation
4. S Corporation
5. Non-Profit Corporation
6. Limited Liability Corporation - ANS-1. Easy to set up, but has unlimited liability
2. Terminates upon death of partner
3. Double-taxed, but best for international businesses
4. Similar to a C corporation but taxed at a lower rate
5. Owned by no one; pays no U.S federal tax
6. Best for a single member seeking low risk
Which of the following should be addressed in the description section of a business
plan? - ANS-Target markets
Match each persona; characteristic of successful entrepreneurs to it's corresponding
meaning.
1. Accepts goals that are not reached overnight
2. is able to adapt and willing to change
3. Takes risks in spite of possible loses
4. Is sensitive to the thoughts and feelings of others. - ANS-1. Patience
2. Flexibility
, 3. Courage
4. Empathy
After a self-assessment, a potential entrepreneur has learned that she has a very low
risk tolerance. Based upon this finding, which approach might be less stressful for the
entrepreneur to have her own business? - ANS-Buy an existing business that is already
successful
An entrepreneur has been working for a flooring business in a neighboring town. He
feels he is ready to open his own flooding business in his local community.
Which should be emphasized in marketing to attract customers to his new business? -
ANS-Lower prices
Gabe has worked as a journeyman electrician for an employer for the past 16 years. He
is paid a good salary. His only dissatisfaction is the hours are long and often when he
requests time off he is denied because of customer workload. Recently, two new
electricians were hired to do sloppy work and don't get along well with Gabe. As a
result, Gabe decides to go into business for himself.
Which benefit of entrepreneurship will Gabe most enjoy? - ANS-Autonomy
Based upon the education and skills gained from the years of vocational training as an
auto mechanic, as well as having grown up in a family of entrepreneurs, a young adult
decides to open an auto mechanic shop.
Which customer group will this new auto mechanic business support? - ANS-
Businesses
an individual starts a babysitting business with a loan of $1000. The loan is for 2 years
at a 5% COMPOUND interest rate.
How much will the individual owe by the end of the loan assuming nothing is paid until
the end of the 2 year term (future value of a loan) - ANS-$1,102.50
A software development consultant works with several clients. Some of the clients are
competitors. What is a consequence if the consultant violates confidentiality by
discussing a client's project with another client - ANS-Loss of clients and possible
lawsuit
Match the business exit strategy to it's result.
1. Harvesting
2. Management Buyout
3. Employee Stoc Ownership Plan
4. Initial Public Offering - ANS-1. Exchanging ownership for cash, either by acquisition
or merger
2. Transferring ownership to people who already operate the business
