BUS 416 Test-Bank-for-Business-A-Practical-Introduction-by-Williams

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BUS 416 Test-Bank-for-Business-A-Practical-Introduction-by-Williams Business: A Practical Introduction (Williams/Sawyer/Berston) Chapter 1 Starting Out 1) A nonprofit organization is a business. A... nswer: FALSE Explanation: A business is an organization focused on earning profits, so a nonprofit organization does not fit the definition of a business. Page Ref: 4 Difficulty: Easy Objective: 1.1 What is business, and how are profits made? Classification: Concept 2) Global outsourcing is the practice of using suppliers outside the United States to provide labor, goods, or services for an American business. Answer: TRUE Explanation: Global outsourcing is also known as offshoring, and has contributed to the decline in American manufacturing. Page Ref: 6 Difficulty: Easy Objective: 1.1 What is business, and how are profits made? Classification: Concept AACSB: Dynamics of the Global Economy 3) Only nonprofit organizations provide benefits to society. Answer: FALSE Explanation: Business organizations offer many societal benefits, including an improved quality of life and financial support for government services. Page Ref: 7 Difficulty: Easy Objective: 1.2 How can business benefit society? Classification: Concept 4) Innovation is one factor used to measure a society's quality of life. Answer: TRUE Explanation: Quality of life is measured by standard of living, health care, education, freedom, happiness, art, environmental health, and innovation. Page Ref: 7 Difficulty: Easy Objective: 1.2 How can business benefit society? Classification: Concept 5) Taxes paid to the government by both a business and its employees provide an important social benefit. Answer: TRUE Explanation: Local, state, and federal governments use tax revenues to pay for important public services such as education, safety, and health. Page Ref: 8 Difficulty: Easy Objective: 1.2 How can business benefit society? Classification: Concept 6) Donating goods or services to a community group will cause a business to become a nonprofit. Answer: FALSE Explanation: A business can earn profits and still provide direct social benefits through donations. Page Ref: 8 Learning Outcome: Discuss the roles of ethics and corporate responsibility in business Difficulty: Easy Objective: 1.2 How can business benefit society? Classification: Synthesis AACSB: Ethical Understanding and Reasoning 7) People who are self-employed are more likely to be wealthy than people working in a salaried position. Answer: TRUE Explanation: Researchers Stanley and Danko found that self-employed people are four times more likely to be millionaires than salaried workers. Page Ref: 9 Learning Outcome: Explain the entrepreneurship process Difficulty: Easy Objective: 1.3 What are the main sources of wealth? Classification: Concept 8) Higher degrees of wealth are always generated by high-end businesses such as jewelers and lush seaside resorts. Answer: FALSE Explanation: Business type is not a predictor of wealth. Many self-employed millionaires are engaged in agriculture, pest control, and other "unglamorous" fields. Page Ref: 9 Learning Outcome: Explain the entrepreneurship process Difficulty: Easy Objective: 1.3 What are the main sources of wealth? Classification: Concept 9) Compared to entrepreneurs, salaried employees face no risk in their ability to earn a living and generate wealth. Answer: FALSE Explanation: Entrepreneurs face the risk of a business not earning profit, but salaried employees are at risk of losing their job due to outsourcing, economic conditions, and other factors. Page Ref: 10 Difficulty: Easy Objective: 1.3 What are the main sources of wealth? Classification: Concept 10) Businesses in the high-tech sector have no need for natural resource factors of production. Answer: FALSE Explanation: A technology-based business may utilize land for facilities, water to cool machinery, and sunlight to generate power. Page Ref: 10 Difficulty: Moderate Objective: 1.3 What are the main sources of wealth? Classification: Concept 11) Businesses that only provide services do not rely on factors of production. Answer: FALSE Explanation: The word production does not imply manufactured goods. Service businesses rely on natural resources, capital, human resources, entrepreneurship, and knowledge—the factors of production. Page Ref: 10 Difficulty: Easy Objective: 1.3 What are the main sources of wealth? Classification: Concept 12) Most natural resource factors of production cannot be created by a business. Answer: TRUE Explanation: Most of these resources are created by nature and must be mined, harvested, harnessed, or purified. Page Ref: 10 Difficulty: Easy Objective: 1.3 What are the main sources of wealth? Classification: Concept 13) Money is not considered a factor of production. Answer: TRUE Explanation: Within the definition of factors of production, the term capital includes buildings, machines, tools, and technology used to produce goods and services. Page Ref: 11 Difficulty: Moderate Objective: 1.3 What are the main sources of wealth? Classification: Concept 14) Taking risks to create a new business is considered a factor of production. [Show More]

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