BUS 211 Week 1 quiz

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BUS 211 Week 1 quiz

Instructions

Your answers : 33/33 (100%)
• 1
What is the best way to raise funding for a joint-stock company?
o
Secure an investment bank loan.
o
Pool money from partners.
o
Issue stock certificates for investors.

Raise capital from interested stakeholders.
• 2
What law shows that there is a direct relationship between the price of a product and the amount that is supplied in the market?
o
Law of supply
o
Law of demand
o
Law of market systems
o
Law of market price
• 3
Which of the following best describes a partnership?
o
All employees are stockholders to promote loyalty to the company
o
Skilled professionals who pool their talents and resources to share general capital costs
o
Families who work and live together to reduce costs
o
Friends who share new business interests by sharing rent costs
• 4
What measures how efficient a company uses its capital and resources to generate returns for its investors?
o
Profit

Profitability
o
Revenues
o
Sales
• 5
Who assumes all liability for debt created in a sole proprietorship?
o
The stockholders
o
The business partners
o
The bank
o
The business owner
• 6
What is an obstacle that professionals avoid in a sole proprietorship?
o
Debt
o
Disputes
o
Risk
o
Competition
• 7
What will most likely increase the demand for better quality goods and services?
o
Increasing specialization
o
Increase in self-interest
o
Decrease in profitability
o
Decreasing demand
• 8
What law refers to the tendency of people to buy more of a product when the price is lower and less of it when its price is higher?
o
Law of diminishing marginal utility
o
Law of demand
o
Law of market increase
o
Law of supply
• 9
Imagine Company A has a total profit of $40 million and that it invested $400 million in the course of a year. Company B has a total profit of $20 million and has invested $80 million over the course of the year. Which company has the greater profitability?

Company B

Profitability cannot be determined from the information given
o
Company A
o
They have the same profitability
• 10
In general, the more a particular product is valued, the more it is demanded. Which is true in regard to this statement?
o
The higher the demand, the higher the price and the product is easy to find.
o
The higher the demand, the lower the price and the product is easy to find.
o
The higher the demand, the lower the price and the product is harder to find.
o
The higher the demand, the higher the price and the product is harder to find.
• 11
Capital, land, enterprise, and labor are all costs associated with making and selling goods. What do they determine?
o
Operating costs
o
Value
o
Competitive advantage
o
Sales revenue
• 12
In economics, what principle indicates the value placed on a product lessens as consumption increases?
o
Scarcity value
o
Demand value
o
Diminishing marginal utility
o
Supply utility
• 13
Which of the following is the best advantage of a joint-stock company?
o
Investors determine the venture the company is required to pursue.
o
The investor limits the risk to the percentage of stock ownership.
o
The business is resilient to poor management.
o
Investors have limited liability from creditors.
• 14
Information technology, e-commerce, human resource management, and procurement are included in what type of value chain function in a business?
o
Secondary value function
o
Primary value function
o
Tertiary function
o
Complimentary function
• 15
Enterprise, as a main component of business, requires which of the following?
o
Operating from an appropriate facility
o
Inputs, machinery and computers
o
Employing the right people for the tasks
o
Foresight, drive, knowledge, and ingenuity
• 16
What was the original purpose of the limited liability company?
o
To encourage investors to take financial risks to ensure a business’ success
o
To control specialization of new businesses
o
To favor creditors with the ability to seek recovery of assets to repay debt
o
To limit financial risk exposure and encourage formation of new businesses
• 17
This is the point at which the supply of the product just meets the demand for it.
o
Market
o
Supply curve
o
Demand curve
o
Margin
• 18
What equation correctly shows how profit is calculated?
o
Profit = (Total Operating Costs) – (Total Sales)
o
Profit = (Purchases) – (Total Sales Revenues)
o
Profit = (Total Sales) – (Purchases)
o
Profit = (Total Sales) – (Total Operating Costs)
• 19
Which of the following best describes a joint-stock company structure?
o
Stock ownership creates unlimited liability if the business fails.
o
An entrepreneur raises capital by issuing stock ownership for others to share the risk.
o
Multiple professionals share general costs and management leadership.
o
One person assumes the liability for the business venture.
• 20
Which of the following businesses best matches the definition of a sole proprietorship?
o
Professors, nurses, or taxi drivers
o
Lawyers, bankers, or accountants
o
Bus drivers, hotel managers, or painters
o
Dentists, carpenters, or plumbers
• 21
Which term refers to the total money or assets of a business?
o
Wealth
o
Capital
o
Sales revenue
o
Competitive advantage
• 22
What is defined as the absolute monetary difference between sales revenues and operating costs?
o
Profit
o
Profitability
o
Demand
o
Supply
• 23
If a business partnership grows, what is usually added over time?
o
Increased stock percentage for partners
o
New professional members adding capital into the business
o
More revenue allocated to management
o
Management control
• 24
Which of the following best describes a system through which goods or services are exchanged for capital with the aim of making a profit?
o
Value-creation process
o
Competitive advantage

Productive resources

Business
• 25
Which equation correctly shows how to calculate profitability?
o
Profitability = (Total Profit) / (Total Amount of Capital Invested)
o
Profitability = (Total Profit) – (Total Amount of Capital Invested)
o
Profitability = (Total Amount of Capital Invested) – (Total Profit)
o
Profitability = (Total Amount of Capital Invested) / (Total Profit)
• 26
How does specialization assist a business in becoming more productive?
o
Better equipment aids employees in increasing their output.
o
Employees become more skilled at specific tasks.
o
Product management is more efficient and easier to maintain.
o
Sunk costs are eliminated by reinvesting into new product lines.
• 27
If a company were to have a total sales revenue of $50 and a total operating cost of $37, what is the total profit?
o
$13
o
$87

$37
o
$ -13
• 28
What defines a group of companies that have similar products and business activities?
o
Industry
o
Business system
o
Field of interest
o
Business model
• 29
Which of the following businesses is the best example of when to set up a limited liability company in order to control financial risk of the stockholder(s)?
o
Hertz Car Rental
o
Prudential Insurance
o
Wal-Mart
o
Joe’s Neighborhood Pet Store
• 30
Which of the following is the best example of a business partnership?
o
Politicians who share expenses for a campaign
o
Restaurant owners who share the same cuisine in a common geographic area
o
Employees of a large computer manufacturer
o
A group of similar professionals who start a company together
• 31
What are the four productive resources that make a business possible?
o
Land, labor, capital, enterprise
o
Supply, demand, land, labor
o
Sales, profit, profitability, supply
o
Capital, labor, supply, demand
• 32
What are the three components that make up a business system?
o
Business commerce, business organization, business occupation
o
Business organization, business management, business exchange
o
Business commerce, business organization, business market
o
Business market, business management, business organization
• 33
Which of the following best describes limited liability as it relates to a business?
o
Limited liability discourages entrepreneurs to start new businesses.
o
If the business fails, personal assets of the owner(s) are at risk
o
Creditors are entitled to recover outstanding debt beyond the financial assets of the business.
o
The stockholder’s financial liability is limited to a fixed investment amount.
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