BUS 110 Exam 1 2026 Questions and
Answers
How do we define the term "business"? - Correct answer-A business is any activity
that provides a good or service to customers for the purpose of making a profit.
The terms "profit," "loss," and "value" can be described by the following,
respectively: - Correct answer-When revenue exceeds costs; When costs exceed
revenue; the perceived benefits by a customer of price to the time and money
spent.
Alice takes her car to the dealership for a routine scheduled maintenance i.e., oil
change, filter change, lubrication, and tire rotation. Alice receives a call from the
dealership later that day stating that the technician discovered serious wear in her
two front tires during the rotation and recommends replacing the tires. Alice agrees
and tells the dealership that she will purchase two new tires and asks if they can be
installed by the time she picks up her vehicle. Has the dealership provided a good
or a service for Alice? - Correct answer-The dealership has provided both a good
and a service.
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,Glenda opened a tax accounting business where she works with small businesses to
manage their finances and prepare their records for tax season. Glenda's primary
objective when she opened her business was: - Correct answer-making a profit
The amount a business earns after deducting what it spends for rent, salaries, and
other expenses is: - Correct answer-profit
Kim goes to Hot Heads at the beginning of March and asks her stylist to cut her
hair shorter and change her hair color to green for St Patrick's Day. What has the
hair salon provided Kim? - Correct answer-a service
The purpose of a for-profit business is: - Correct answer-Return profits to the
owners of the business.
The purpose of a nonprofit business is: - Correct answer-Direct any and all profits
to a charitable cause, service, or organization dedicated to helping others.
Cathy starts a mobile car detailing business. After some initial growth, she hires
two workers to help her keep up with customer demand. Cathy supplies the
materials (soap, wax, etc.) for the operation which, in addition to paying the
employees, constitutes her operating expenses. Cathy's revenues exceed her
expenses and she donates 10% of her profits from her bank account to the local
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,Humane Society. Is Cathy's business a for-profit or nonprofit? - Correct answer-
For-profit
Which of the following is an example of a for-profit business? - Correct answer-
Walmart
Which of the following is an example of a nonprofit organization? - Correct
answer-United Way
The Susan G. Komen organization raises money for breast cancer research by
asking for donations, organizing races, and selling t-shirts and other merchandise.
Susan G. Komen does not return its profits to the owners, but uses them to provide
a public service. For this reason, the Susan G. Komen organization is: - Correct
answer-a Non-profit business
What are the four factors of production needed by business to operate? - Correct
answer-Natural resources, labor, capital, and entrepreneurship
Caitlin is a gourmet chef who operates a seaside organic restaurant. Caitlin prefers
to utilize only ingredients that she grows herself and she has decided to produce
her own sea salt for her recipes. This would require the following four factors of
production: Labor, in the form of her staff gathering and boiling; capital, in the
form of buckets, filters, jars and stoves; entrepreneurship, in the form of Caitlin
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, initiating the production of her own sea salt, and; ________, in the form of sea
water and sun. - Correct answer-natural resources
Natural resources would include which of the following? - Correct answer-wind
A person who seeks to earn profits by assuming the risk of owning and running a
business is a(n): - Correct answer-entrepreneur
When an entrepreneur owns and runs a business, they assume risks that are offset
by the potential of: - Correct answer-earning a profit
Which functional area of a business is responsible for converting the factors of
production into goods and services? - Correct answer-operations
Sea-Worthy is an ocean-shipping company. The company decided to develop their
own internal ERP (Enterprise Resource Management) system since none of the
existing commercial packages met the specific needs of their unique business
segment. Halfway into development by their IT department, the company came to
the realization that this system could be licensed to their competitors to offset their
development cost and fund future enhancements. Which functional area of the
company would be responsible for creating revenue from this internal system? -
Correct answer-marketing
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Answers
How do we define the term "business"? - Correct answer-A business is any activity
that provides a good or service to customers for the purpose of making a profit.
The terms "profit," "loss," and "value" can be described by the following,
respectively: - Correct answer-When revenue exceeds costs; When costs exceed
revenue; the perceived benefits by a customer of price to the time and money
spent.
Alice takes her car to the dealership for a routine scheduled maintenance i.e., oil
change, filter change, lubrication, and tire rotation. Alice receives a call from the
dealership later that day stating that the technician discovered serious wear in her
two front tires during the rotation and recommends replacing the tires. Alice agrees
and tells the dealership that she will purchase two new tires and asks if they can be
installed by the time she picks up her vehicle. Has the dealership provided a good
or a service for Alice? - Correct answer-The dealership has provided both a good
and a service.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Glenda opened a tax accounting business where she works with small businesses to
manage their finances and prepare their records for tax season. Glenda's primary
objective when she opened her business was: - Correct answer-making a profit
The amount a business earns after deducting what it spends for rent, salaries, and
other expenses is: - Correct answer-profit
Kim goes to Hot Heads at the beginning of March and asks her stylist to cut her
hair shorter and change her hair color to green for St Patrick's Day. What has the
hair salon provided Kim? - Correct answer-a service
The purpose of a for-profit business is: - Correct answer-Return profits to the
owners of the business.
The purpose of a nonprofit business is: - Correct answer-Direct any and all profits
to a charitable cause, service, or organization dedicated to helping others.
Cathy starts a mobile car detailing business. After some initial growth, she hires
two workers to help her keep up with customer demand. Cathy supplies the
materials (soap, wax, etc.) for the operation which, in addition to paying the
employees, constitutes her operating expenses. Cathy's revenues exceed her
expenses and she donates 10% of her profits from her bank account to the local
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,Humane Society. Is Cathy's business a for-profit or nonprofit? - Correct answer-
For-profit
Which of the following is an example of a for-profit business? - Correct answer-
Walmart
Which of the following is an example of a nonprofit organization? - Correct
answer-United Way
The Susan G. Komen organization raises money for breast cancer research by
asking for donations, organizing races, and selling t-shirts and other merchandise.
Susan G. Komen does not return its profits to the owners, but uses them to provide
a public service. For this reason, the Susan G. Komen organization is: - Correct
answer-a Non-profit business
What are the four factors of production needed by business to operate? - Correct
answer-Natural resources, labor, capital, and entrepreneurship
Caitlin is a gourmet chef who operates a seaside organic restaurant. Caitlin prefers
to utilize only ingredients that she grows herself and she has decided to produce
her own sea salt for her recipes. This would require the following four factors of
production: Labor, in the form of her staff gathering and boiling; capital, in the
form of buckets, filters, jars and stoves; entrepreneurship, in the form of Caitlin
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, initiating the production of her own sea salt, and; ________, in the form of sea
water and sun. - Correct answer-natural resources
Natural resources would include which of the following? - Correct answer-wind
A person who seeks to earn profits by assuming the risk of owning and running a
business is a(n): - Correct answer-entrepreneur
When an entrepreneur owns and runs a business, they assume risks that are offset
by the potential of: - Correct answer-earning a profit
Which functional area of a business is responsible for converting the factors of
production into goods and services? - Correct answer-operations
Sea-Worthy is an ocean-shipping company. The company decided to develop their
own internal ERP (Enterprise Resource Management) system since none of the
existing commercial packages met the specific needs of their unique business
segment. Halfway into development by their IT department, the company came to
the realization that this system could be licensed to their competitors to offset their
development cost and fund future enhancements. Which functional area of the
company would be responsible for creating revenue from this internal system? -
Correct answer-marketing
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
