1
Copyright © 2017 Pearson Education, Inc.
1a 1a 1a 1a 1a
,Business In Action 8th Edition Courtland Bovee 1a 1a 1a 1a 1a 1a
Business in Action, 8e (Bovee) 1a 1a 1a 1a
Chapter 1 Developing a Business Mindset
1a 1 a 1 a 1a 1a 1a
1) is money that an organization brings in through the sale of its goods and services.
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
A) Competitive advantage 1a
B) Revenue
C) Sales
D) Capital investment 1a
E) Finance 1a
Answer: B 1 a
Explanation: Revenue is the money a company brings in through the sale of goods and services. Diffi
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
culty: 1: Easy 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
2) The risk and reward relationship
1a . 1a 1a 1a 1a
A) is a key aspect of social responsibility
1a 1a 1a 1a 1a 1a
B) applies only to service-intensive businesses
1a 1a 1a 1a
C) is essential to the counter-cyclical business model
1a 1a 1a 1a 1a 1a
D) is fundamental to businesses in every modern economy
1a 1a 1a 1a 1a 1a 1a
E) is an outdated concept that's been replaced by corporate sustainability
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
Answer: D 1 a
Explanation: A company needs to see some promise of reward before it will decide to accept the
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
risks involved in creating and selling products. However, to ensure responsible behavior, these ri
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sks need to stay attached to those decisions, meaning that if the decisions turn out bad, that comp
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
any should suffer the consequences.
1a 1a 1a 1a
Difficulty: 1: Easy 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
3) A(n) is a framework of how a business intends to generate revenue.
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
A) business model 1a
B) strategic management tool 1a 1a
C) profitability analysis 1a
D) competitive advantage 1a
E) entrepreneurial mindset 1a 1
Answer: A
a 1 a
Explanation: A company's business model is a clear, simple outline of how the business intends t
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
o generate revenue.
1a 1a
Difficulty: 1: Easy 1 a 1a
2
Copyright © 2017 Pearson Education, Inc. 1a 1a 1a 1a 1a
,AACSB: Analytical thinking
1 a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
3
Copyright © 2017 Pearson Education, Inc.
1a 1a 1a 1a 1a
, 4) is the term used to describe the difference between revenue and expenses.
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
A) Revenue
B) Interest
C) Sales
D) Owner's equity 1a
E) Profit A 1a
nswer: E 1 a
Explanation: Profit is the amount of money left over after all the costs involved in doing business
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
, have been deducted from revenue.
1a 1a 1a 1a 1a
Difficulty: 1: Easy 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
5) refers to some aspect of a product or company that makes it more appealing to t1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
arget customers.
1a
A) Competitive advantage 1a
B) Economies of scale 1a 1a
C) Horizontal integration 1a
D) Vertical integration 1a
E) Barrier to entry advantage 1a 1a 1a 1a
Answer: A 1 a
Explanation: Competitive advantage refers to some aspect of a product or company that makes it mor
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
e appealing to target customers.
1a 1a 1a 1a
Difficulty: 2: Moderate 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
6) An organization that seeks to operate efficiently and effectively to achieve its goals without f
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
ocusing on profit as a motive is a
1a . 1a 1a 1a 1a 1a 1a 1a
A) business intermediary 1a
B) nonprofit organization 1a
C) service business 1a
D) government-owned corporation 1a
E) goods-
producing business Answer: 1a 1a 1
aB
Explanation: Not-for- 1 a
profit organizations (also known as nonprofit organizations) such as museums, most universities,
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
and charities do not have a profit motive.
1a 1a 1a 1a 1a 1a 1a
Difficulty: 2: Moderate 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
4
Copyright © 2017 Pearson Education, Inc. 1a 1a 1a 1a 1a
Copyright © 2017 Pearson Education, Inc.
1a 1a 1a 1a 1a
,Business In Action 8th Edition Courtland Bovee 1a 1a 1a 1a 1a 1a
Business in Action, 8e (Bovee) 1a 1a 1a 1a
Chapter 1 Developing a Business Mindset
1a 1 a 1 a 1a 1a 1a
1) is money that an organization brings in through the sale of its goods and services.
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
A) Competitive advantage 1a
B) Revenue
C) Sales
D) Capital investment 1a
E) Finance 1a
Answer: B 1 a
Explanation: Revenue is the money a company brings in through the sale of goods and services. Diffi
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
culty: 1: Easy 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
2) The risk and reward relationship
1a . 1a 1a 1a 1a
A) is a key aspect of social responsibility
1a 1a 1a 1a 1a 1a
B) applies only to service-intensive businesses
1a 1a 1a 1a
C) is essential to the counter-cyclical business model
1a 1a 1a 1a 1a 1a
D) is fundamental to businesses in every modern economy
1a 1a 1a 1a 1a 1a 1a
E) is an outdated concept that's been replaced by corporate sustainability
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
Answer: D 1 a
Explanation: A company needs to see some promise of reward before it will decide to accept the
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
risks involved in creating and selling products. However, to ensure responsible behavior, these ri
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sks need to stay attached to those decisions, meaning that if the decisions turn out bad, that comp
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
any should suffer the consequences.
1a 1a 1a 1a
Difficulty: 1: Easy 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
3) A(n) is a framework of how a business intends to generate revenue.
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
A) business model 1a
B) strategic management tool 1a 1a
C) profitability analysis 1a
D) competitive advantage 1a
E) entrepreneurial mindset 1a 1
Answer: A
a 1 a
Explanation: A company's business model is a clear, simple outline of how the business intends t
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
o generate revenue.
1a 1a
Difficulty: 1: Easy 1 a 1a
2
Copyright © 2017 Pearson Education, Inc. 1a 1a 1a 1a 1a
,AACSB: Analytical thinking
1 a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
3
Copyright © 2017 Pearson Education, Inc.
1a 1a 1a 1a 1a
, 4) is the term used to describe the difference between revenue and expenses.
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
A) Revenue
B) Interest
C) Sales
D) Owner's equity 1a
E) Profit A 1a
nswer: E 1 a
Explanation: Profit is the amount of money left over after all the costs involved in doing business
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
, have been deducted from revenue.
1a 1a 1a 1a 1a
Difficulty: 1: Easy 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
5) refers to some aspect of a product or company that makes it more appealing to t1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
arget customers.
1a
A) Competitive advantage 1a
B) Economies of scale 1a 1a
C) Horizontal integration 1a
D) Vertical integration 1a
E) Barrier to entry advantage 1a 1a 1a 1a
Answer: A 1 a
Explanation: Competitive advantage refers to some aspect of a product or company that makes it mor
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
e appealing to target customers.
1a 1a 1a 1a
Difficulty: 2: Moderate 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
6) An organization that seeks to operate efficiently and effectively to achieve its goals without f
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
ocusing on profit as a motive is a
1a . 1a 1a 1a 1a 1a 1a 1a
A) business intermediary 1a
B) nonprofit organization 1a
C) service business 1a
D) government-owned corporation 1a
E) goods-
producing business Answer: 1a 1a 1
aB
Explanation: Not-for- 1 a
profit organizations (also known as nonprofit organizations) such as museums, most universities,
1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
and charities do not have a profit motive.
1a 1a 1a 1a 1a 1a 1a
Difficulty: 2: Moderate 1 a 1a
AACSB: Application of knowledge 1 a 1a 1a
LO: 1.1: Explain the concept of adding value in a business, and identify the major types of busine
1 a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a 1a
sses.
4
Copyright © 2017 Pearson Education, Inc. 1a 1a 1a 1a 1a
