FINAL EXAM-BUSINESS X100 QUESTIONS AND
ANSWERS
Define business. - CORRECT ANSWER✅✅✅The organized effort of individuals & organizations to
produce & sell for a profit goods and services to customers that satisfy a society's needs.
What are the four fundamental business resources? - CORRECT ANSWER✅✅✅Human, Material,
Informational, and Financial.
What are the three economic systems? - CORRECT ANSWER✅✅✅Capitalism, Socialism, and
Communism.
What is a free enterprise? - CORRECT ANSWER✅✅✅System of business in which the individuals are
free to decide what to produce, how to produce it and what to sell it for.
What are the four types of competition? - CORRECT ANSWER✅✅✅Perfect Competition,
Monopolistic, Oligopoly, and Monopoly.
Which competition uses product differentiation? - CORRECT ANSWER✅✅✅Monopolistic
Competition.
What are the two tariff barriers? - CORRECT ANSWER✅✅✅Import duty (tariff) and dumping.
What are the non-tariff barriers? - CORRECT ANSWER✅✅✅Embargo, import quota, foreign
exchange control, currency devaluation, bureaucratic "red tape".
What are the methods of entering international business? - CORRECT ANSWER✅✅✅Trading
Companies, Exporting & Importing, Counter Trade, Foreign Licensing, Franchising, Strategic Alliances,
Production Agreements, Joint Ventures, Totally Owned Facilities, and Multinational Companies. (Look at
definitions)
International trade now accounts for ___% of the global income. - CORRECT ANSWER✅✅✅20
,What are the four general categories of business ownership? - CORRECT ANSWER✅✅✅Sole
proprietorship, Partnership, Corporations, and LLCs.
What is the order of the Hierarchy of Corporate Structure? - CORRECT
ANSWER✅✅✅Owners/Stockholders, Board of Directors, Officers, Managers, Employees.
What kind of economy does a capitalistic economic system have? - CORRECT ANSWER✅✅✅Mixed
economy.
In which economic system do individuals own and operate the majority of businesses? - CORRECT
ANSWER✅✅✅Capitalism.
What economy does a socialistic and communistic economic system have? - CORRECT
ANSWER✅✅✅Command economy.
What is absolute advantage? - CORRECT ANSWER✅✅✅The ability to produce a specific product
more efficiently than any other nation.
What is comparative advantage? - CORRECT ANSWER✅✅✅The ability to produce a specific product
more efficiently than any other product.
Which form of business is the most popular and is owned by a single person? - CORRECT
ANSWER✅✅✅Sole Proprietorship
What is a corporation known as if it is in the state it is incorporated in? - CORRECT
ANSWER✅✅✅Domestic Corporation.
What is a corporation known as in other states that it does business in? - CORRECT
ANSWER✅✅✅Foreign Corporation.
, What is a corporation called when it is chartered by another government and conducting business in the
U.S.? - CORRECT ANSWER✅✅✅Alien Corporation.
Which form of business is simple, owned by one person, and has limited liability for the owner? -
CORRECT ANSWER✅✅✅LLC
What is a small business? - CORRECT ANSWER✅✅✅A business that is independently owned &
operated for profit and is not dominant in its field.
What three industries are small businesses included in? - CORRECT ANSWER✅✅✅Service (48%),
Distribution (33%), and Production (19%).
What are the advantages of having a small business? - CORRECT ANSWER✅✅✅Flexibility,
independence, service, simplified, and specialization.
What are the disadvantages of having a small business? - CORRECT ANSWER✅✅✅Risk of failure,
limited potential, limited ability to raise capital, and little "power".
What are the characteristics of a successful entrepreneur? - CORRECT ANSWER✅✅✅Vision, High
energy level, Self-confidence, Optimism, Creativity, Tolerance for uncertainty, Tolerance for failure.
Statistically, over ____% of new businesses can be expected to fail within their first ten years. - CORRECT
ANSWER✅✅✅70
What is franchising? (Know difference between a franchisor and a franchisee) - CORRECT
ANSWER✅✅✅An agreement between a franchisor & a franchisee, to market, sell or license
products, services or concepts. franchisee pays fees to the franchisor.
What are the five steps of the management process? - CORRECT ANSWER✅✅✅Planning,
Organizing, Leading & Motivating, Controlling, and Review & Modify.
ANSWERS
Define business. - CORRECT ANSWER✅✅✅The organized effort of individuals & organizations to
produce & sell for a profit goods and services to customers that satisfy a society's needs.
What are the four fundamental business resources? - CORRECT ANSWER✅✅✅Human, Material,
Informational, and Financial.
What are the three economic systems? - CORRECT ANSWER✅✅✅Capitalism, Socialism, and
Communism.
What is a free enterprise? - CORRECT ANSWER✅✅✅System of business in which the individuals are
free to decide what to produce, how to produce it and what to sell it for.
What are the four types of competition? - CORRECT ANSWER✅✅✅Perfect Competition,
Monopolistic, Oligopoly, and Monopoly.
Which competition uses product differentiation? - CORRECT ANSWER✅✅✅Monopolistic
Competition.
What are the two tariff barriers? - CORRECT ANSWER✅✅✅Import duty (tariff) and dumping.
What are the non-tariff barriers? - CORRECT ANSWER✅✅✅Embargo, import quota, foreign
exchange control, currency devaluation, bureaucratic "red tape".
What are the methods of entering international business? - CORRECT ANSWER✅✅✅Trading
Companies, Exporting & Importing, Counter Trade, Foreign Licensing, Franchising, Strategic Alliances,
Production Agreements, Joint Ventures, Totally Owned Facilities, and Multinational Companies. (Look at
definitions)
International trade now accounts for ___% of the global income. - CORRECT ANSWER✅✅✅20
,What are the four general categories of business ownership? - CORRECT ANSWER✅✅✅Sole
proprietorship, Partnership, Corporations, and LLCs.
What is the order of the Hierarchy of Corporate Structure? - CORRECT
ANSWER✅✅✅Owners/Stockholders, Board of Directors, Officers, Managers, Employees.
What kind of economy does a capitalistic economic system have? - CORRECT ANSWER✅✅✅Mixed
economy.
In which economic system do individuals own and operate the majority of businesses? - CORRECT
ANSWER✅✅✅Capitalism.
What economy does a socialistic and communistic economic system have? - CORRECT
ANSWER✅✅✅Command economy.
What is absolute advantage? - CORRECT ANSWER✅✅✅The ability to produce a specific product
more efficiently than any other nation.
What is comparative advantage? - CORRECT ANSWER✅✅✅The ability to produce a specific product
more efficiently than any other product.
Which form of business is the most popular and is owned by a single person? - CORRECT
ANSWER✅✅✅Sole Proprietorship
What is a corporation known as if it is in the state it is incorporated in? - CORRECT
ANSWER✅✅✅Domestic Corporation.
What is a corporation known as in other states that it does business in? - CORRECT
ANSWER✅✅✅Foreign Corporation.
, What is a corporation called when it is chartered by another government and conducting business in the
U.S.? - CORRECT ANSWER✅✅✅Alien Corporation.
Which form of business is simple, owned by one person, and has limited liability for the owner? -
CORRECT ANSWER✅✅✅LLC
What is a small business? - CORRECT ANSWER✅✅✅A business that is independently owned &
operated for profit and is not dominant in its field.
What three industries are small businesses included in? - CORRECT ANSWER✅✅✅Service (48%),
Distribution (33%), and Production (19%).
What are the advantages of having a small business? - CORRECT ANSWER✅✅✅Flexibility,
independence, service, simplified, and specialization.
What are the disadvantages of having a small business? - CORRECT ANSWER✅✅✅Risk of failure,
limited potential, limited ability to raise capital, and little "power".
What are the characteristics of a successful entrepreneur? - CORRECT ANSWER✅✅✅Vision, High
energy level, Self-confidence, Optimism, Creativity, Tolerance for uncertainty, Tolerance for failure.
Statistically, over ____% of new businesses can be expected to fail within their first ten years. - CORRECT
ANSWER✅✅✅70
What is franchising? (Know difference between a franchisor and a franchisee) - CORRECT
ANSWER✅✅✅An agreement between a franchisor & a franchisee, to market, sell or license
products, services or concepts. franchisee pays fees to the franchisor.
What are the five steps of the management process? - CORRECT ANSWER✅✅✅Planning,
Organizing, Leading & Motivating, Controlling, and Review & Modify.
