- Description
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?
Secure an investment bank loan.
Pool money from partners.
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?
Law of supply
Law of demand
Law of market systems
Law of market price
- 3
Which of the following best describes a partnership?
All employees are stockholders to promote loyalty to the company
Skilled professionals who pool their talents and resources to share general capital costs
Families who work and live together to reduce costs
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?
Profit
Profitability
Revenues
Sales
- 5
Who assumes all liability for debt created in a sole proprietorship?
The stockholders
The business partners
The bank
The business owner
- 6
What is an obstacle that professionals avoid in a sole proprietorship?
Debt
Disputes
Risk
Competition
- 7
What will most likely increase the demand for better quality goods and services?
Increasing specialization
Increase in self-interest
Decrease in profitability
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?
Law of diminishing marginal utility
Law of demand
Law of market increase
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
Company A
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?
The higher the demand, the higher the price and the product is easy to find.
The higher the demand, the lower the price and the product is easy to find.
The higher the demand, the lower the price and the product is harder to find.
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?
Operating costs
Value
Competitive advantage
Sales revenue
- 12
In economics, what principle indicates the value placed on a product lessens as consumption increases?
Scarcity value
Demand value
Diminishing marginal utility
Supply utility
- 13
Which of the following is the best advantage of a joint-stock company?
Investors determine the venture the company is required to pursue.
The investor limits the risk to the percentage of stock ownership.
The business is resilient to poor management.
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?
Secondary value function
Primary value function
Tertiary function
Complimentary function
- 15
Enterprise, as a main component of business, requires which of the following?
Operating from an appropriate facility
Inputs, machinery and computers
Employing the right people for the tasks
Foresight, drive, knowledge, and ingenuity
- 16
What was the original purpose of the limited liability company?
To encourage investors to take financial risks to ensure a business’ success
To control specialization of new businesses
To favor creditors with the ability to seek recovery of assets to repay debt
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.
Market
Supply curve
Demand curve
Margin
- 18
What equation correctly shows how profit is calculated?
Profit = (Total Operating Costs) – (Total Sales)
Profit = (Purchases) – (Total Sales Revenues)
Profit = (Total Sales) – (Purchases)
Profit = (Total Sales) – (Total Operating Costs)
- 19
Which of the following best describes a joint-stock company structure?
Stock ownership creates unlimited liability if the business fails.
An entrepreneur raises capital by issuing stock ownership for others to share the risk.
Multiple professionals share general costs and management leadership.
One person assumes the liability for the business venture.
- 20
Which of the following businesses best matches the definition of a sole proprietorship?
Professors, nurses, or taxi drivers
Lawyers, bankers, or accountants
Bus drivers, hotel managers, or painters
Dentists, carpenters, or plumbers
- 21
Which term refers to the total money or assets of a business?
Wealth
Capital
Sales revenue
Competitive advantage
- 22
What is defined as the absolute monetary difference between sales revenues and operating costs?
Profit
Profitability
Demand
Supply
- 23
If a business partnership grows, what is usually added over time?
Increased stock percentage for partners
New professional members adding capital into the business
More revenue allocated to management
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?
Value-creation process
Competitive advantage
Productive resources
Business
- 25
Which equation correctly shows how to calculate profitability?
Profitability = (Total Profit) / (Total Amount of Capital Invested)
Profitability = (Total Profit) – (Total Amount of Capital Invested)
Profitability = (Total Amount of Capital Invested) – (Total Profit)
Profitability = (Total Amount of Capital Invested) / (Total Profit)
- 26
How does specialization assist a business in becoming more productive?
Better equipment aids employees in increasing their output.
Employees become more skilled at specific tasks.
Product management is more efficient and easier to maintain.
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?
$13
$87
$37
$ -13
- 28
What defines a group of companies that have similar products and business activities?
Industry
Business system
Field of interest
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)?
Hertz Car Rental
Prudential Insurance
Wal-Mart
Joe’s Neighborhood Pet Store
- 30
Which of the following is the best example of a business partnership?
Politicians who share expenses for a campaign
Restaurant owners who share the same cuisine in a common geographic area
Employees of a large computer manufacturer
A group of similar professionals who start a company together
- 31
What are the four productive resources that make a business possible?
Land, labor, capital, enterprise
Supply, demand, land, labor
Sales, profit, profitability, supply
Capital, labor, supply, demand
- 32
What are the three components that make up a business system?
Business commerce, business organization, business occupation
Business organization, business management, business exchange
Business commerce, business organization, business market
Business market, business management, business organization
- 33
Which of the following best describes limited liability as it relates to a business?
Limited liability discourages entrepreneurs to start new businesses.
If the business fails, personal assets of the owner(s) are at risk
Creditors are entitled to recover outstanding debt beyond the financial assets of the business.
The stockholder’s financial liability is limited to a fixed investment amount.