Homework answers / question archive / 1)When referring to risk, which of the following statements is reasonable? Although risk means taking a chance at losing, your business is likely to always turn a profit

1)When referring to risk, which of the following statements is reasonable? Although risk means taking a chance at losing, your business is likely to always turn a profit

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1)When referring to risk, which of the following statements is reasonable?

Although risk means taking a chance at losing, your business is likely to always turn a profit.

 

Good business strategy encourages less risk, because the least risky ventures usually make more profit.

 

X Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities.

 

Although risk means taking a chance, a start-up will usually manage to get off the ground faster if the stakes are high.

 

 

2. Profits equal _______.

the owner’s annual salary

 

the sales dollars that a business acquires, over time

 

revenues plus expenses, less taxes

 

X the funds available for business growth, after expenses and salaries are paid

 

Comments: Profits are what the firm earns above and beyond what it pays out for expenses and salaries.

 

  

3 Which of the following circumstances is most likely to reduce one’s standard of living?

X An increase in the cost of some goods such as escalating gasoline prices

 

A decrease in the cost of some goods such as a decrease in housing prices

 

Stable prices and an increase in employee wages

 

Losing your job, but gaining a sizeable inheritance

4 When developing and maintaining good stakeholder relationships, companies find that _______. it’s almost always best to continue to keep costs low, even if it means outsourcing most of the production   insourcing is always a good trade-off to outsourcing   X most often, they must balance the needs of the stakeholders with the need to make profits   caring for the environment comes before caring for the well-being of employees        5 Judy started a business called Music and Memories™. She recognized that music, socialization, and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time. Though she strives for a financial gain, she uses the excess funds for enriching her programs instead of a personal profit. Her organization is classified as:   X nonprofit insourced profit-seeking outsourced       6 The number of businesses owned by immigrants, minority groups, and women has ________ in recent years.   declined stabilized X grown dramatically decreased      7 Which of the following is (are) not considered a factor of production? Knowledge Land Capital X Taxes      8 Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which two other factors of production does he need to succeed?   Capital and land   Labor and knowledge   Entrepreneurship and capital   X Entrepreneurship and knowledge

 

 

9 To encourage entrepreneurial growth, governments might _______.

 

X pass laws that enable businesspeople to write contracts that are enforceable in court

 

establish a high tax rate to support loans for small businesses

 

take over ownership of small businesses when they are first getting started

 

reduce the value of their currency to encourage foreign investment

 

 

 

10 Juan has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. In this case, challenges in the _________________ environment increase the risk of Juan starting a business.

 

technological

competitive

X economic and legal

social

 

  

11 When corruption is evident in governments:

 

the news media attempts to keep it quiet in order to minimize bad publicity.

 

it’s easier to open a store without a permit.

 

minimum wages are lower.

 

X factories are more difficult to build without obtaining a permit through bribery of public officials.

 

  

12 One of the most serious negative results of the increased use of databases by companies has been:

 

a decrease in the amount of “junk mail” received by consumers.

 

X an increase in identity theft.

 

increased failure rates by e-companies.

 

changes in the organizational structures of companies leading to loss of jobs.

 

 

 

13 At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many copies of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.

 

staying ahead of the competition by routinely secret shopping the competition’s shelves

 

X using technology to stay responsive to customer needs

 

maintaining a low inventory turnover because it will keep costs down

 

changing demographics

 

 

14  Blake wanted to offer high-quality meals in his restaurant. His motto was “the best darn meat and potatoes for miles around.” The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake’s motto stated the business’s competitive advantage, your accurate advice to Blake would be _______.

 

the challenge now must be to tackle the social entrepreneurial aspect of running a business

service has become the number one consideration of customers; the restaurant must focus a little less on quality and a little more on service

X the winning competitive advantage is one that addresses quality and service

the rule of thumb is to always stick to what you do best—if you’re good at it, your customers will respond with loyalty

 

 

 

 

15 Lance and Laurie live on three acres of land in North Carolina, with two llamas, five goats, six chickens, and two dogs. The goats provide milk, cheese, yogurt and even fiber that is woven into yarn; the chickens provide free-range eggs; and the llamas serve as protection for the other animals. Although Lance and Laurie have other professional jobs, their home lifestyle represents _______.

X a growing trend in the social environment to have more control of the food they eat and where it comes from

a need to challenge the competitive environments of big businesses that sell the same products

a desire to pay less sales tax on foods and other staple products at the larger stores

an aversion to technological advancement leading to a slower and less productive life

16.     Among the changes resulting from increased global trade are: less need for efficient distribution systems. less global competition as companies set up manufacturing systems in foreign countries. less need for employees to update skills as workers conform to U.S. standards. X improved living standards around the world.

 

17.

 

 

The impact of war and terrorism on U.S. business is that:

fewer jobs will be created in the United States.

X companies have grown more slowly as money has been diverted to the war effort.

there is less global trade.

there are lower organizational costs for security personnel and equipment as firms are depending upon the government to provide those items.

18.

 

The following chart describes opportunities and challenges in the external environments that surround businesses. Which of the following statements best characterize and fit in the empty cells?

 

Business Environment	Opportunity	Challenge
Economic & Legal	Freedom to choose and start your own business	High taxes
Technological	The Internet
Social	Wealthy senior citizens	Decrease in Social Security contributions
Global		War and Terrorism

Identity theft remains a technological environment challenge, while war and terrorism satisfy opportunities in the global environment due to the fact that they remain a small cost to society.

Databases present themselves as a challenge and threat in the technological environment; while globalization has provided for anincrease in the standard of living in the global environment.

E-commerce is a costly technological environment challenge, while the leisure time of seniors creates an opportunity in the global environment.

X Identity theft is a challenge in the technological environment of businesses, while the desire for green living presents opportunities for new businesses in the global environment.

 

19.

 

The new era of business will:

probably see a major decline in productivity.

be an information-based global revolution that will impact all sectors of the economy.

X be dominated by an increase in the manufacturing sector as global markets grow.

see a rise in the agricultural sector.

20.     Today, high-paying service-sector jobs in the U.S. can be found in ___________________. the automobile industry X accounting farming machine tools production