File: ch01, Chapter 1: The Power of Principles: A Historical Perspective
Multiple Choice
1. Which of the following did not contribute to the high transaction related risks for U.S. potato
sales in 1840?
a) Infrequency of transactions
b) Changing transaction partners
c) Lack of availability of sales and prices for comparable goods
d) Competition from European merchants
e) Geographic distance between buyers and sellers
Ans: d
Heading: The World in 1840 – Doing Business in 1840
Level: Medium
2. What was a key contribution to the dominance of the family-run small business in 1840?
a) Factories
b) Infrastructure
c) Raw Materials
d) Management
,e) Laws
Ans: b
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure
Level: Easy
3. Matchmakers between manufacturers and sellers are called:
a) Agents
b) Factors
c) Brokers
d) Merchants
e) None of the Above
Ans: c
Heading: Doing Business in 1840
Level: Easy
4. What significant transportation event brought about the first significant growth of the Great
Lakes region?
a) Harnessing of the steam engine
b) Invention of the screw propeller
c) Opening of the Erie Canal
d) Integration of railway system
,e) Invention of the railway system
Ans: c
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure – Transportation
Level: Medium
5. What is throughput?
a) The movement of inputs and outputs through a production process
b) Assets that assist in the production or distribution of goods and services
c) A condition that determines the horizontal and vertical boundaries of business firms
d) An investment in the acquisition of raw materials
e) The amount of time for a good to travel between metropolitan areas
Ans: a
Heading: Example 4.1 – The Emergence of Chicago
Level: Hard
6. What mode of long-distance communication first laid the groundwork for today’s modern
communication forms?
a) U.S. Postal Service
b) Private mail service
c) Telegraph
, d) Telephone
e) Railroad
Ans: d
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure – Communications
Level: Easy
7. What was the major role of private banks in the early 1800s?
a) Serve as an institution for deposits
b) Issue credit
c) Reduce the risk of price fluctuation
d) Create futures markets
e) Sell stocks
Ans: b
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure – Finance
Level: Medium
8. What was one of the first plant/factory types to use the “American System” of manufacturing?
a) Firearms
b) Steel
Multiple Choice
1. Which of the following did not contribute to the high transaction related risks for U.S. potato
sales in 1840?
a) Infrequency of transactions
b) Changing transaction partners
c) Lack of availability of sales and prices for comparable goods
d) Competition from European merchants
e) Geographic distance between buyers and sellers
Ans: d
Heading: The World in 1840 – Doing Business in 1840
Level: Medium
2. What was a key contribution to the dominance of the family-run small business in 1840?
a) Factories
b) Infrastructure
c) Raw Materials
d) Management
,e) Laws
Ans: b
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure
Level: Easy
3. Matchmakers between manufacturers and sellers are called:
a) Agents
b) Factors
c) Brokers
d) Merchants
e) None of the Above
Ans: c
Heading: Doing Business in 1840
Level: Easy
4. What significant transportation event brought about the first significant growth of the Great
Lakes region?
a) Harnessing of the steam engine
b) Invention of the screw propeller
c) Opening of the Erie Canal
d) Integration of railway system
,e) Invention of the railway system
Ans: c
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure – Transportation
Level: Medium
5. What is throughput?
a) The movement of inputs and outputs through a production process
b) Assets that assist in the production or distribution of goods and services
c) A condition that determines the horizontal and vertical boundaries of business firms
d) An investment in the acquisition of raw materials
e) The amount of time for a good to travel between metropolitan areas
Ans: a
Heading: Example 4.1 – The Emergence of Chicago
Level: Hard
6. What mode of long-distance communication first laid the groundwork for today’s modern
communication forms?
a) U.S. Postal Service
b) Private mail service
c) Telegraph
, d) Telephone
e) Railroad
Ans: d
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure – Communications
Level: Easy
7. What was the major role of private banks in the early 1800s?
a) Serve as an institution for deposits
b) Issue credit
c) Reduce the risk of price fluctuation
d) Create futures markets
e) Sell stocks
Ans: b
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern
Infrastructure – Finance
Level: Medium
8. What was one of the first plant/factory types to use the “American System” of manufacturing?
a) Firearms
b) Steel
