1
Copyright © 2017 Pearson Education, Inc.
ib ib ib ib ib
,BusinessInAction8thEdition CourtlandBovee ib ib ib ib ib ib
Business in Action, 8e (Bovee) ib ib ib ib
Chapter 1 Developing a Business Mindset ib ib ib ib
1) is money that an organization brings in through the sale of its goods and services.
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A) Competitiveadvantage ib
B) Revenue
C) Sales
D) Capital investment ib
E) Finance ib
Answer: B ib
Explanation: Revenue is the money a company brings in through the sale ofgoods and services. Diffi culty:
i b ib ib ib ib ib ib ib ib 1a ib ib ib ib ib ib ib i b
1: Easy
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AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
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s.
2) The risk and reward relationship
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A) is a key aspect of social responsibility
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B) applies only to service-intensive businesses ib ib ib ib
C) is essential to the counter-cyclical business model
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D) is fundamentalto businesses in every modern economy
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E) is an outdated concept that's been replaced by corporate sustainability A
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nswer: D i b
Explanation: A company needs to see some promise of reward before it willdecide to accept the ris
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
ks involved in creating and selling products. However, to ensure responsible behavior, these ri sks n
ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
eed to stay attached to those decisions, meaning that if the decisions turn out bad, that comp any shou
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ld suffer the consequences.
ib ib ib
Difficulty: 1: Easy i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
3) A(n) is a framework of how a business intends to generate revenue.
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A) business model ib
B) strategic management tool ib ib
C) profitability analysis ib
D) competitiveadvantage
E) entrepreneurial mindset ib 1
Answer: A
i b i b
Explanation: A company's business model is a clear, simple outline ofhow the business intends t o g
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
enerate revenue. ib
Difficulty: 1: Easy i b ib
2
Copyright © 2017 Pearson Education, Inc. ib ib ib ib ib
,AACSB: Analytical thinking
i b ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
3
Copyright © 2017 Pearson Education, Inc.
ib ib ib ib ib
, 4) is the term used to describe the difference between revenue and expenses. ib ib ib ib ib ib ib ib ib ib ib
A) Revenue
B) Interest
C) Sales
D) Owner's equity ib
E) Profit A ib i
nswer: E
b i b
Explanation: Profit is the amount of money left over after all the costs involved in doing business
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
, have been deducted from revenue.
ib ib ib ib ib ib
Difficulty: 1: Easy i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
5) refers to some aspect ofa product or company that makes it more appealing to t arg ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
et customers.
ib
A) Competitiveadvantage ib
B) Economies of scale ib ib
C) Horizontal integration ib
D) Vertical integration ib
E) Barriertoentryadvantage ib ib ib
Answer: A i b
Explanation: Competitive advantage refers to some aspect ofa product or companythat makes it mor e a
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
ppealing to target customers. ib ib ib
Difficulty: 2: Moderate i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
6) An organization that seeks to operate efficiently and effectivelyto achieve its goals without f ocu
ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
sing on profit as a motive is a
ib ib . ib ib ib ib ib ib
A) business intermediary ib
B) nonprofit organization ib
C) service business ib
D) government-owned corporation ib
E) goods-
producing business Answer: ib ib
B
Explanation: Not-for- i b
profit organizations (also known as nonprofit organizations) such as museums, most universities, and
ib ib ib ib ib ib ib ib ib ib ib ib i
charities do not have a profit motive.
b ib ib ib ib ib ib
Difficulty: 2: Moderate i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
4
Copyright © 2017 Pearson Education, Inc. ib ib ib ib ib
Copyright © 2017 Pearson Education, Inc.
ib ib ib ib ib
,BusinessInAction8thEdition CourtlandBovee ib ib ib ib ib ib
Business in Action, 8e (Bovee) ib ib ib ib
Chapter 1 Developing a Business Mindset ib ib ib ib
1) is money that an organization brings in through the sale of its goods and services.
ib ib ib ib ib ib ib ib ib ib ib ib ib ib
A) Competitiveadvantage ib
B) Revenue
C) Sales
D) Capital investment ib
E) Finance ib
Answer: B ib
Explanation: Revenue is the money a company brings in through the sale ofgoods and services. Diffi culty:
i b ib ib ib ib ib ib ib ib 1a ib ib ib ib ib ib ib i b
1: Easy
ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
2) The risk and reward relationship
ib . ib ib ib ib
A) is a key aspect of social responsibility
ib ib ib ib ib ib
B) applies only to service-intensive businesses ib ib ib ib
C) is essential to the counter-cyclical business model
ib ib ib ib ib ib
D) is fundamentalto businesses in every modern economy
ib ib ib ib ib ib ib
E) is an outdated concept that's been replaced by corporate sustainability A
ib ib ib ib ib ib ib ib ib ib
nswer: D i b
Explanation: A company needs to see some promise of reward before it willdecide to accept the ris
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
ks involved in creating and selling products. However, to ensure responsible behavior, these ri sks n
ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
eed to stay attached to those decisions, meaning that if the decisions turn out bad, that comp any shou
ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
ld suffer the consequences.
ib ib ib
Difficulty: 1: Easy i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
3) A(n) is a framework of how a business intends to generate revenue.
ib ib ib ib ib ib ib ib ib ib ib
A) business model ib
B) strategic management tool ib ib
C) profitability analysis ib
D) competitiveadvantage
E) entrepreneurial mindset ib 1
Answer: A
i b i b
Explanation: A company's business model is a clear, simple outline ofhow the business intends t o g
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
enerate revenue. ib
Difficulty: 1: Easy i b ib
2
Copyright © 2017 Pearson Education, Inc. ib ib ib ib ib
,AACSB: Analytical thinking
i b ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
3
Copyright © 2017 Pearson Education, Inc.
ib ib ib ib ib
, 4) is the term used to describe the difference between revenue and expenses. ib ib ib ib ib ib ib ib ib ib ib
A) Revenue
B) Interest
C) Sales
D) Owner's equity ib
E) Profit A ib i
nswer: E
b i b
Explanation: Profit is the amount of money left over after all the costs involved in doing business
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
, have been deducted from revenue.
ib ib ib ib ib ib
Difficulty: 1: Easy i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
5) refers to some aspect ofa product or company that makes it more appealing to t arg ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
et customers.
ib
A) Competitiveadvantage ib
B) Economies of scale ib ib
C) Horizontal integration ib
D) Vertical integration ib
E) Barriertoentryadvantage ib ib ib
Answer: A i b
Explanation: Competitive advantage refers to some aspect ofa product or companythat makes it mor e a
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
ppealing to target customers. ib ib ib
Difficulty: 2: Moderate i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
6) An organization that seeks to operate efficiently and effectivelyto achieve its goals without f ocu
ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
sing on profit as a motive is a
ib ib . ib ib ib ib ib ib
A) business intermediary ib
B) nonprofit organization ib
C) service business ib
D) government-owned corporation ib
E) goods-
producing business Answer: ib ib
B
Explanation: Not-for- i b
profit organizations (also known as nonprofit organizations) such as museums, most universities, and
ib ib ib ib ib ib ib ib ib ib ib ib i
charities do not have a profit motive.
b ib ib ib ib ib ib
Difficulty: 2: Moderate i b ib
AACSB: Application of knowledge i b i b ib ib
LO: 1.1: Explain the concept ofadding value in a business, and identifythe major types of busine sse
i b ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib ib
s.
4
Copyright © 2017 Pearson Education, Inc. ib ib ib ib ib
