Business Exam 1 Questions and
Answers
Sole proprietorship - correct answer-A form of business ownership with a single owner
who usually actively manages the company.
Partnership - correct answer-A voluntary agreement under which two or more people
act as co-owners of a business for profit.
Corporation - correct answer-A form of business ownership in which the business is
considered a legal entity that is separate and distinct from its owners
LLC (limited liability company) - correct answer-A form of business ownership that offers
both limited liability to its owners and flexible tax treatment
Franchise - correct answer-A licensing arrangement under which a franchisor allows
franchisees to use its name, trademark, products, business methods, and other property
in exchange for monetary payments and other considerations
Entrepreneur - correct answer-People who risk their time, money, and other resources
to start and manage a business
Entrepreneurial Traits/Characteristics- - correct answer-these are specific
characteristics that entrepreneurs should have include vision, self-reliance, energy,
confidence, tolerance of uncertainly and tolerance of failure.
Market Niche - correct answer-A small segment of a market with fewer competitors than
the market as a whole. Market niches tend to be quite attractive to small firms.
Market Research - correct answer-The process of gathering, interpreting, and applying
information to uncover marketing opportunities and challenges, and to make better
marketing decisions.
Unsought products - correct answer-good or services that hold little interest or even
negative interest for consumers.
Wholesalers - correct answer-Distributors that buy products from producers and sell
them to other businesses or nonfinal users such as hospitals, nonprofits, and the
government.
, Wheel of Retailing - correct answer-A classic distribution theory that suggests that retail
firms and retail categories become more upscale as they go through their life cycles
Supply Chain Management - correct answer-Planning and coordinating the movement
of products along the supply chain, from the raw materials to the final consumers
Net profit - correct answer-the amount by which income from sales is larger than all
expenditure
Net loss - correct answer-amount by which total cost and expenses exceeds total
revenue In an account period
Economics - correct answer-The study of the choices that people, companies, and
governments make in allocating society's resources
Macroeconomics - correct answer-The study of a country's overall economic dynamics,
such as the employment rate, the gross domestic product, and taxation policies.
Microeconomics - correct answer-The study of smaller economic units such as
individual consumers, families, and individual businesses
Balance of Trade - correct answer-a basic measure of the difference in value between a
nations exports, including both good and services.
Exports - correct answer-Selling products in foreign nations that have been produced or
grown domestically
Consumer products - correct answer-Products purchased for personal use or
consumption
Business products - correct answer-Products purchased to use either directly or
indirectly in the production of other products.
Personal selling - correct answer-The person-to-person presentation of products to
potential buyers.
Direct channel - correct answer-A distribution process that links the producer and the
customer with no intermediaries
4 Factors of Production - correct answer-Four fundamental elements—natural
resources, capital, human resources, and entrepreneurship—that businesses need to
achieve their objectives.
Publicity - correct answer-Unpaid stories in the media that influence perceptions about a
company or its products
Answers
Sole proprietorship - correct answer-A form of business ownership with a single owner
who usually actively manages the company.
Partnership - correct answer-A voluntary agreement under which two or more people
act as co-owners of a business for profit.
Corporation - correct answer-A form of business ownership in which the business is
considered a legal entity that is separate and distinct from its owners
LLC (limited liability company) - correct answer-A form of business ownership that offers
both limited liability to its owners and flexible tax treatment
Franchise - correct answer-A licensing arrangement under which a franchisor allows
franchisees to use its name, trademark, products, business methods, and other property
in exchange for monetary payments and other considerations
Entrepreneur - correct answer-People who risk their time, money, and other resources
to start and manage a business
Entrepreneurial Traits/Characteristics- - correct answer-these are specific
characteristics that entrepreneurs should have include vision, self-reliance, energy,
confidence, tolerance of uncertainly and tolerance of failure.
Market Niche - correct answer-A small segment of a market with fewer competitors than
the market as a whole. Market niches tend to be quite attractive to small firms.
Market Research - correct answer-The process of gathering, interpreting, and applying
information to uncover marketing opportunities and challenges, and to make better
marketing decisions.
Unsought products - correct answer-good or services that hold little interest or even
negative interest for consumers.
Wholesalers - correct answer-Distributors that buy products from producers and sell
them to other businesses or nonfinal users such as hospitals, nonprofits, and the
government.
, Wheel of Retailing - correct answer-A classic distribution theory that suggests that retail
firms and retail categories become more upscale as they go through their life cycles
Supply Chain Management - correct answer-Planning and coordinating the movement
of products along the supply chain, from the raw materials to the final consumers
Net profit - correct answer-the amount by which income from sales is larger than all
expenditure
Net loss - correct answer-amount by which total cost and expenses exceeds total
revenue In an account period
Economics - correct answer-The study of the choices that people, companies, and
governments make in allocating society's resources
Macroeconomics - correct answer-The study of a country's overall economic dynamics,
such as the employment rate, the gross domestic product, and taxation policies.
Microeconomics - correct answer-The study of smaller economic units such as
individual consumers, families, and individual businesses
Balance of Trade - correct answer-a basic measure of the difference in value between a
nations exports, including both good and services.
Exports - correct answer-Selling products in foreign nations that have been produced or
grown domestically
Consumer products - correct answer-Products purchased for personal use or
consumption
Business products - correct answer-Products purchased to use either directly or
indirectly in the production of other products.
Personal selling - correct answer-The person-to-person presentation of products to
potential buyers.
Direct channel - correct answer-A distribution process that links the producer and the
customer with no intermediaries
4 Factors of Production - correct answer-Four fundamental elements—natural
resources, capital, human resources, and entrepreneurship—that businesses need to
achieve their objectives.
Publicity - correct answer-Unpaid stories in the media that influence perceptions about a
company or its products
