FULL TEST BANK FOR 2j 2j 2j
Business In Action 8th Edition Courtland Bovee 2j 2j 2j 2j 2j 2j
Business in Action, 8e (Bovee) 2j 2j 2j 2j
Chapter 1 Developing a Business Mindset2j 2 j 2 j 2j 2j 2j
1) is money that an organization brings in through the sale of its goods and services.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) Competitive advantage 2j
B) Revenue
C) Sales
D) Capital investment 2j
E) Finance 2j
Answer: B 2 j
Explanation: Revenue is the money a company brings in through the sale of goods and services. Difficu
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
lty: 1: Easy
2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
2) The risk and reward relationship
2j . 2j 2j 2j 2j
A) is a key aspect of social responsibility
2j 2j 2j 2j 2j 2j
B) applies only to service-intensive businesses 2j 2j 2j 2j
C) is essential to the counter-cyclical business model
2j 2j 2j 2j 2j 2j
D) is fundamental to businesses in every modern economy
2j 2j 2j 2j 2j 2j 2j
E) is an outdated concept that's been replaced by corporate sustainability A
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
nswer: D 2 j
Explanation: A company needs to see some promise of reward before it will decide to accept the ri
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
sks involved in creating and selling products. However, to ensure responsible behavior, these risks
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
need to stay attached to those decisions, meaning that if the decisions turn out bad, that company s
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
hould suffer the consequences.
2j 2j 2j
Difficulty: 1: Easy 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
3) A(n) is a framework of how a business intends to generate revenue.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) business model 2j
B) strategic management tool 2j 2j
C) profitability analysis 2j
D) competitive advantage 2j
E) entrepreneurial mindset 2j 2j
Answer: A 2 j
Explanation: A company's business model is a clear, simple outline of how the business intends to
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
generate revenue. 2j
Difficulty: 1: Easy 2 j 2j
1
Copyright © 2017 Pearson Education, Inc.
,AACSB: Analytical thinking
2 j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
2
Copyright © 2017 Pearson Education, Inc.
,4) is the term used to describe the difference between revenue and expenses.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) Revenue
B) Interest
C) Sales
D) Owner's equity 2j
E) Profit A 2j
nswer: E 2 j
Explanation: Profit is the amount of money left over after all the costs involved in doing business,
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
have been deducted from revenue.
2j 2j 2j 2j
Difficulty: 1: Easy 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
5) refers to some aspect of a product or company that makes it more appealing to ta 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
rget customers.
2j
A) Competitive advantage 2j
B) Economies of scale 2j 2j
C) Horizontal integration 2j
D) Vertical integration 2j
E) Barrier to entry advantage 2j 2j 2j 2j
Answer: A 2 j
Explanation: Competitive advantage refers to some aspect of a product or company that makes it more
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
appealing to target customers. 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
6) An organization that seeks to operate efficiently and effectively to achieve its goals without fo
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
cusing on profit as a motive is a
2j 2j . 2j 2j 2j 2j 2j 2j
A) business intermediary 2j
B) nonprofit organization 2j
C) service business 2j
D) government-owned corporation 2j
E) goods-
producing business Answer: 2j 2j 2 j
B
Explanation: Not-for- 2 j
profit organizations (also known as nonprofit organizations) such as museums, most universities, a
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
nd charities do not have a profit motive.
2j 2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
3
Copyright © 2017 Pearson Education, Inc.
, 7) If individuals and companies believe they can pursue rewards without facing the risks that sh
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
ould be attached to those pursuits, they are more likely to engage in irresponsible and even unet
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
hical behavior. This situation is known as a(n)
2j . 2j 2j 2j 2j 2j 2j 2j
A) ethical dilemma 2j
B) professional dilemma 2j
C) barrier to entry 2j 2j
D) competitive advantage 2j
E) moral hazard 2j 2j
Answer: E 2 j
Explanation: If individuals and companies believe they can pursue rewards without facing the risk
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
s that should be attached to those pursuits, they are more likely to engage in irresponsible and even u
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
nethical behavior–a situation known as moral hazard.
2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Ethical understanding and reasoning 2 j 2j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
8) A creates value by performing activities that provide benefit to the customer.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) goods-producing business 2j
B) manufacturing business 2j
C) service business 2j
D) merchandising business 2j
E) not-for-
profit organization Answer: 2j 2j 2 j
C
Explanation: Service businesses create value by performing activities that deliver some benefit t
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
o the customer, such as finance, insurance, transportation, construction, utilities, wholesale and ret
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
ail trade, banking, entertainment, health care, maintenance and repair, and information.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of bu
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
sinesses.
9) Businesses that need very large amounts of money, equipment, or other material resources in or
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
der to get started are
2j 2jbusinesses. 2j 2j 2j
A) service sector 2j
B) labor-intensive
C) competitively-advantaged
D) not-for-profit
E) capital-
intensive Answer: 2j 2 j
E
Explanation: Because they require large amounts of money, equipment, land, and other resources
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
to get started and to operate, goods-producing businesses are often capital-intensive businesses.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
4
Copyright © 2017 Pearson Education, Inc.
Business In Action 8th Edition Courtland Bovee 2j 2j 2j 2j 2j 2j
Business in Action, 8e (Bovee) 2j 2j 2j 2j
Chapter 1 Developing a Business Mindset2j 2 j 2 j 2j 2j 2j
1) is money that an organization brings in through the sale of its goods and services.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) Competitive advantage 2j
B) Revenue
C) Sales
D) Capital investment 2j
E) Finance 2j
Answer: B 2 j
Explanation: Revenue is the money a company brings in through the sale of goods and services. Difficu
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
lty: 1: Easy
2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
2) The risk and reward relationship
2j . 2j 2j 2j 2j
A) is a key aspect of social responsibility
2j 2j 2j 2j 2j 2j
B) applies only to service-intensive businesses 2j 2j 2j 2j
C) is essential to the counter-cyclical business model
2j 2j 2j 2j 2j 2j
D) is fundamental to businesses in every modern economy
2j 2j 2j 2j 2j 2j 2j
E) is an outdated concept that's been replaced by corporate sustainability A
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
nswer: D 2 j
Explanation: A company needs to see some promise of reward before it will decide to accept the ri
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
sks involved in creating and selling products. However, to ensure responsible behavior, these risks
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
need to stay attached to those decisions, meaning that if the decisions turn out bad, that company s
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
hould suffer the consequences.
2j 2j 2j
Difficulty: 1: Easy 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
3) A(n) is a framework of how a business intends to generate revenue.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) business model 2j
B) strategic management tool 2j 2j
C) profitability analysis 2j
D) competitive advantage 2j
E) entrepreneurial mindset 2j 2j
Answer: A 2 j
Explanation: A company's business model is a clear, simple outline of how the business intends to
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
generate revenue. 2j
Difficulty: 1: Easy 2 j 2j
1
Copyright © 2017 Pearson Education, Inc.
,AACSB: Analytical thinking
2 j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
2
Copyright © 2017 Pearson Education, Inc.
,4) is the term used to describe the difference between revenue and expenses.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) Revenue
B) Interest
C) Sales
D) Owner's equity 2j
E) Profit A 2j
nswer: E 2 j
Explanation: Profit is the amount of money left over after all the costs involved in doing business,
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
have been deducted from revenue.
2j 2j 2j 2j
Difficulty: 1: Easy 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
5) refers to some aspect of a product or company that makes it more appealing to ta 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
rget customers.
2j
A) Competitive advantage 2j
B) Economies of scale 2j 2j
C) Horizontal integration 2j
D) Vertical integration 2j
E) Barrier to entry advantage 2j 2j 2j 2j
Answer: A 2 j
Explanation: Competitive advantage refers to some aspect of a product or company that makes it more
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
appealing to target customers. 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
6) An organization that seeks to operate efficiently and effectively to achieve its goals without fo
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
cusing on profit as a motive is a
2j 2j . 2j 2j 2j 2j 2j 2j
A) business intermediary 2j
B) nonprofit organization 2j
C) service business 2j
D) government-owned corporation 2j
E) goods-
producing business Answer: 2j 2j 2 j
B
Explanation: Not-for- 2 j
profit organizations (also known as nonprofit organizations) such as museums, most universities, a
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
nd charities do not have a profit motive.
2j 2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
3
Copyright © 2017 Pearson Education, Inc.
, 7) If individuals and companies believe they can pursue rewards without facing the risks that sh
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
ould be attached to those pursuits, they are more likely to engage in irresponsible and even unet
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
hical behavior. This situation is known as a(n)
2j . 2j 2j 2j 2j 2j 2j 2j
A) ethical dilemma 2j
B) professional dilemma 2j
C) barrier to entry 2j 2j
D) competitive advantage 2j
E) moral hazard 2j 2j
Answer: E 2 j
Explanation: If individuals and companies believe they can pursue rewards without facing the risk
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
s that should be attached to those pursuits, they are more likely to engage in irresponsible and even u
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
nethical behavior–a situation known as moral hazard.
2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Ethical understanding and reasoning 2 j 2j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
es.
8) A creates value by performing activities that provide benefit to the customer.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
A) goods-producing business 2j
B) manufacturing business 2j
C) service business 2j
D) merchandising business 2j
E) not-for-
profit organization Answer: 2j 2j 2 j
C
Explanation: Service businesses create value by performing activities that deliver some benefit t
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
o the customer, such as finance, insurance, transportation, construction, utilities, wholesale and ret
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
ail trade, banking, entertainment, health care, maintenance and repair, and information.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of bu
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
sinesses.
9) Businesses that need very large amounts of money, equipment, or other material resources in or
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
der to get started are
2j 2jbusinesses. 2j 2j 2j
A) service sector 2j
B) labor-intensive
C) competitively-advantaged
D) not-for-profit
E) capital-
intensive Answer: 2j 2 j
E
Explanation: Because they require large amounts of money, equipment, land, and other resources
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
to get started and to operate, goods-producing businesses are often capital-intensive businesses.
2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
Difficulty: 2: Moderate 2 j 2j
AACSB: Application of knowledge 2 j 2j 2j
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of business
2 j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j 2j
4
Copyright © 2017 Pearson Education, Inc.
