MGMT 2150 FINAL EXAM QUESTIONS AND CORRECT
ANSWERS
The Benefits of Studying Business - Answers - (1) More fulfilling careers
(2) Improved management skills
(3) Greater customer insights
(4) Stronger communities
The Benefits of Business to Society - Answers - (1) Offering valuable goods and
services - satisfies customer needs
(2) Provides employment - creates jobs
(3) Improving the quality of life - producing products customers need
Concerns about the impact of business - Answers - (1) Health and Safety Risks - unsafe
materials
(2) Environmental Damage - unsustainable use of resources
(3) Social Disruption - business profits at expense of precarious work
5 Factors of the business environment - Answers - (1) Economic - size and health of
economy must be considered when making decisions
(2) Competitive - high levels of competition force businesses to cut costs, develop new
products, increase marketing efforts
(3) Global - access to global markets increase competition and need to enhance skills
(4) Technology - technological advances have changed how business produce and
distribute goods
(5) Social - changes in demographics influence what companies offer
Types of Economic Systems - Answers - Capitalism: individuals own and operate
majority of businesses
Free-Market Economy: businesses and individuals decide what to produce and buy
- the market determines price and quantities sold
Mixed Economy: most land and businesses are privately owned but with various levels
of government intervention
, Command Economy: the government decides what goods and products will be
produced
Socialism: key industries are owned and controlled by the government
Communism: all property and profits are owned by the government, which then decides
what goods and services will be produced
Degrees of Competition - Answers - Perfect Competition: many sellers and buyers, no
one is powerful enough to affect prices
- ex. corn, wheat, peanuts
Monopolistic Competition: many buyers with a large number of sellers, the strategy is
product differentiation
- ex. clothing, shoes
Oligopoly: few sellers but they are large, large investments are required to enter into the
market
- ex. automobiles, cereal
Monopoly: only one seller
- ex. software protected by copyright, public utilities
Business Cycle Phases - Answers - (1) Peak
(2) Recession
(3) Trough
(4) Expansion
Three Components of Business Ethics - Answers - (1) Competing fairly and honestly -
obey all laws and regulations
(2) Avoiding conflict of interest - occurs when an employee takes advantage of a
situation for their own personal interest
(3) Being transparent - free flow of information inside and outside the company
Factors that affect the level of ethical behaviour - Answers - (1) Individual factors
- knowledge of an issue
- personal values and goals
(2) Social factors
- the law
- cultural norms
(3) Opportunity
- competitive environment
ANSWERS
The Benefits of Studying Business - Answers - (1) More fulfilling careers
(2) Improved management skills
(3) Greater customer insights
(4) Stronger communities
The Benefits of Business to Society - Answers - (1) Offering valuable goods and
services - satisfies customer needs
(2) Provides employment - creates jobs
(3) Improving the quality of life - producing products customers need
Concerns about the impact of business - Answers - (1) Health and Safety Risks - unsafe
materials
(2) Environmental Damage - unsustainable use of resources
(3) Social Disruption - business profits at expense of precarious work
5 Factors of the business environment - Answers - (1) Economic - size and health of
economy must be considered when making decisions
(2) Competitive - high levels of competition force businesses to cut costs, develop new
products, increase marketing efforts
(3) Global - access to global markets increase competition and need to enhance skills
(4) Technology - technological advances have changed how business produce and
distribute goods
(5) Social - changes in demographics influence what companies offer
Types of Economic Systems - Answers - Capitalism: individuals own and operate
majority of businesses
Free-Market Economy: businesses and individuals decide what to produce and buy
- the market determines price and quantities sold
Mixed Economy: most land and businesses are privately owned but with various levels
of government intervention
, Command Economy: the government decides what goods and products will be
produced
Socialism: key industries are owned and controlled by the government
Communism: all property and profits are owned by the government, which then decides
what goods and services will be produced
Degrees of Competition - Answers - Perfect Competition: many sellers and buyers, no
one is powerful enough to affect prices
- ex. corn, wheat, peanuts
Monopolistic Competition: many buyers with a large number of sellers, the strategy is
product differentiation
- ex. clothing, shoes
Oligopoly: few sellers but they are large, large investments are required to enter into the
market
- ex. automobiles, cereal
Monopoly: only one seller
- ex. software protected by copyright, public utilities
Business Cycle Phases - Answers - (1) Peak
(2) Recession
(3) Trough
(4) Expansion
Three Components of Business Ethics - Answers - (1) Competing fairly and honestly -
obey all laws and regulations
(2) Avoiding conflict of interest - occurs when an employee takes advantage of a
situation for their own personal interest
(3) Being transparent - free flow of information inside and outside the company
Factors that affect the level of ethical behaviour - Answers - (1) Individual factors
- knowledge of an issue
- personal values and goals
(2) Social factors
- the law
- cultural norms
(3) Opportunity
- competitive environment
