Test Bank for
Understanding Business, 13th Edition, William Nickels
Chapter 1-20 Answers are at the end of Each chapter
Chapter 1
Student name:__________
1) Describe three ways that governments can foster entrepreneurship and encourage the
creation of wealth
2) Describe how businesses can use technology to be more responsive to customers.
3) Competition among businesses has never been greater. Identify and describe two ways
that businesses can become more competitive.
4) What is demography? Identify two demographic trends in the United States and discuss
how they will impactUnited States businesses.
5) Describe what we mean by greening and thinking green. List five ways that people and
businesses are participating in the green movement. List business opportunities that may emerge
from this movement.
6) Trace the evolution of American business. Identify the key trends, and discuss the
implications these trends have for the future.
,7) An entity that seeks to earn a profit by providing a good or service is known as a(n)
A) industry.
B) corporation.
C) business.
D) service.
8) __________ is the amount a business earns after deducting what it spends for salaries and
other expenses.
A) Profit
B) Revenue
C) Interest
D) Dividends
9) A business incurs a __________ if its costs and expenses exceed its revenues.
A) loss
B) liability
C) debit
D) dividend
10) __________ is the chance a business owner will lose the time and money invested in a
business that proves to be unprofitable.
A) Depreciation
B) Risk
C) Opportunity
D) Redundancy
11) The total amount of money that businesses take in by selling goods and services is called
, A) profit.
B) revenue.
C) loss.
D) retained earnings.
12) A(n) __________ is a person who assumes the risk of starting a business.
A) manager
B) entrepreneur
C) employee
D) stakeholder
13) Starting a business always involves
A) profit.
B) loss.
C) revenue.
D) risk
14) Often in business the greater the risk, the
A) greater the potential reward.
B) lower the expected revenues.
C) lower the value provided to society.
D) greater the number of stakeholders.
15) __________ is a measure of the general well-being and satisfaction derived from a
variety of factors including political freedom, safety, education, and a clean environment.
A) Standard of living
B) Quality of life
C) Gross national income
D) Social satisfaction
, 16) The amount of goods and services people can buy with the money they have is called
their
A) nominal income.
B) consumer price index.
C) profit margin.
D) standard of living.
17) The customers, employees, stockholders, suppliers, creditors, and others who stand to
gain or lose by the policies and activities of a business represent the firm's
A) market makers.
B) economic environment.
C) stakeholders.
D) social environment.
18) The most important difference between for-profit businesses and nonprofit organizations
is that
A) for-profit businesses do not benefit society.
B) nonprofit organizations seek to make a profit for their owners and organizers.
C) nonprofit organizations do not seek a profit for their owners or organizers.
D) nonprofit organizations do not answer to stakeholders.
19) A common characteristic of most entrepreneurs is that they
A) accept the risks involved in starting and managing a business.
B) have a high level of scientific and technical expertise.
C) possess a great deal of personal wealth.
D) have experience in running large, complex organizations.
Understanding Business, 13th Edition, William Nickels
Chapter 1-20 Answers are at the end of Each chapter
Chapter 1
Student name:__________
1) Describe three ways that governments can foster entrepreneurship and encourage the
creation of wealth
2) Describe how businesses can use technology to be more responsive to customers.
3) Competition among businesses has never been greater. Identify and describe two ways
that businesses can become more competitive.
4) What is demography? Identify two demographic trends in the United States and discuss
how they will impactUnited States businesses.
5) Describe what we mean by greening and thinking green. List five ways that people and
businesses are participating in the green movement. List business opportunities that may emerge
from this movement.
6) Trace the evolution of American business. Identify the key trends, and discuss the
implications these trends have for the future.
,7) An entity that seeks to earn a profit by providing a good or service is known as a(n)
A) industry.
B) corporation.
C) business.
D) service.
8) __________ is the amount a business earns after deducting what it spends for salaries and
other expenses.
A) Profit
B) Revenue
C) Interest
D) Dividends
9) A business incurs a __________ if its costs and expenses exceed its revenues.
A) loss
B) liability
C) debit
D) dividend
10) __________ is the chance a business owner will lose the time and money invested in a
business that proves to be unprofitable.
A) Depreciation
B) Risk
C) Opportunity
D) Redundancy
11) The total amount of money that businesses take in by selling goods and services is called
, A) profit.
B) revenue.
C) loss.
D) retained earnings.
12) A(n) __________ is a person who assumes the risk of starting a business.
A) manager
B) entrepreneur
C) employee
D) stakeholder
13) Starting a business always involves
A) profit.
B) loss.
C) revenue.
D) risk
14) Often in business the greater the risk, the
A) greater the potential reward.
B) lower the expected revenues.
C) lower the value provided to society.
D) greater the number of stakeholders.
15) __________ is a measure of the general well-being and satisfaction derived from a
variety of factors including political freedom, safety, education, and a clean environment.
A) Standard of living
B) Quality of life
C) Gross national income
D) Social satisfaction
, 16) The amount of goods and services people can buy with the money they have is called
their
A) nominal income.
B) consumer price index.
C) profit margin.
D) standard of living.
17) The customers, employees, stockholders, suppliers, creditors, and others who stand to
gain or lose by the policies and activities of a business represent the firm's
A) market makers.
B) economic environment.
C) stakeholders.
D) social environment.
18) The most important difference between for-profit businesses and nonprofit organizations
is that
A) for-profit businesses do not benefit society.
B) nonprofit organizations seek to make a profit for their owners and organizers.
C) nonprofit organizations do not seek a profit for their owners or organizers.
D) nonprofit organizations do not answer to stakeholders.
19) A common characteristic of most entrepreneurs is that they
A) accept the risks involved in starting and managing a business.
B) have a high level of scientific and technical expertise.
C) possess a great deal of personal wealth.
D) have experience in running large, complex organizations.
