MGT 100 Exam 1
Question: Q11. The global business environment encompasses many international
forces that influence the outcomes of companies doing busine
... [Show More] ss in foreign countries.
Which of the following scenarios would best count as evidence of globalization?
Correct Answer: b. A natural disaster disables factories in Country X that produce
computer chips for Company Y. Company Y reduces the number of employee shifts and
raises the price of its products.
Given Answer: c. Farmers in Country X have lost most of their wheat crops due to
a drought. The market price for wheat triples and the government pays the farmers for a
percentage of the lost wheat.
Question: Q14. A city of 150,000 people has a large commercial sector bringing in
businesses from the surrounding region. In 2010, there was 2.75 million square feet of
commercial space available. Five years later, after a building boom, there was 5.5 million
square feet of commercial space available. Which effect will most likely occur?
Correct Answer: c. The price of commercial real estate will decrease, absent a
dramatic increase in demand.
Given Answer: e. The increase in supply will cause a corresponding increase in
demand.
Question: Q26. The CEO of Perry's Pizzeria, a rapidly growing restaurant chain, is
committed to a high level of corporate social responsibility along with continued business
success. Which action by the CEO would most enhance the company's reputation for
social responsibility?
Correct Answer: a. using more nutritious, but more expensive, ingredients
Given Answer: e. taking steps that would cause competitors to close their doors
MGT 100 Exam 2
Question: Q12. What type of departments is linked to the production and sales of
specific products?
Correct Answer: c. line departments
Given Answer: e. entrepreneurial departments
Question: Q15. Which of the following organizational systems is represented by
organization chart and the formal assignment of authority?
Correct Answer: b. formal organization
Given Answer: c. informal organization
Question: Q23. Positive reinforcement is used when a company or manager provides
a reward when employee exhibit desired behaviors.
Correct Answer: a. True
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Given Answer: b. False
MGT 100 Exam 4
Question: Q10. Greg feels comfortable that no one can open and read his e-mails.
What does Greg have installed in his computer?
Correct Answer: c. encryption software
Given Answer: d. a Trojan horse
1) The customs, values, and demographic characteristics of the society in which an
organization functions are the principal elements of the political-legal environment.
Answer: FALSE
Explanation: These are the main considerations of the sociocultural environment. The
political-legal environment reflects the relationship between business and government,
usually in the form of government regulation of business.
Page Ref: 5
Difficulty: Easy
Objective: 1.2
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
2) Physical resources include the data and other information used by businesses.
Answer: FALSE
Explanation: Physical resources are the tangible resources that organizations use to
conduct their business such as natural resources, raw materials, offices, storage and
production facilities, parts and supplies, computers and peripherals, and a variety of other
equipment.
Page Ref: 8
Difficulty: Easy
Objective: 1.3
Learning Outcome: Identify the different types of technologies used in business and
describe their uses
Skill: Concept
3) Economic systems differ in how factors of production are used.
Answer: TRUE
Explanation: Different types of economic systems manage the factors of production
differently. In capitalism, for instance, they are managed by private individuals with
capital resources, while in a command economy the government manages the factors of
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production.
Page Ref: 9
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
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4) The point at which the supply curve and the demand curve intersect is the market
price.
Answer: TRUE
Explanation: When demand and supply curves are plotted on the same graph, the point
at which they intersect is the point at which demand matches supply, which determines
the market price.
Page Ref: 12
Difficulty: Easy
AACSB: Analytic skills
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
5) Aggregate output refers to a company's annual production of goods or services.
Answer: FALSE
Explanation: Aggregate output is the total quantity of goods and services produced by
an economic system during a given period.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
6) The United States government manages the collection and spending of its revenues
through monetary policy.
Answer: FALSE
Explanation: The United States government manages the collection and spending of its
revenues through fiscal policy.
Page Ref: 23
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
7) The pursuit of profits is how a business differs from organizations such as most
universities, hospitals, and government agencies.
Answer: TRUE
Explanation: The pursuit of profits distinguishes a business from those
organizations—such as most universities, hospitals, and government agencies—that run
in much the same way but that generally don't seek profits.
Page Ref: 4
Difficulty: Easy
Objective: 1.1
Learning Outcome: Explain the entrepreneurship process
Skill: Concept
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8) The technological environment includes only electronics and telecommunications used
to perform business activities.
Answer: FALSE
Explanation: Technology includes human knowledge, work methods, physical
equipment, electronics and telecommunications, and various processing systems that are
used to perform business activities.
Page Ref: 6
Difficulty: Moderate
AACSB: Analytic skills
Objective: 1.2
Learning Outcome: Identify the different types of technologies used in business and
describe their uses
Skill: Concept
9) One of the four elements that are necessary for private enterprise to be carried out is
reasonable prices.
Answer: FALSE
Explanation: The four elements that must be present in private enterprise are private
property rights, freedom of choice, profits, and competition.
Page Ref: 14
Difficulty: Moderate
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
10) In typical modern oligopolies, the large capital investment necessary to enter the
market discourages new competitors.
Answer: TRUE
Explanation: A major factor discouraging new competitors in current oligopolistic
industries such as automobiles and large commercial aircraft is the huge capital
investment that would be needed to start a new company.
Page Ref: 15
Difficulty: Moderate
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
11) Natural monopolies exist partly because duplication of effort and resources would be
wasteful in some cases.
Answer: TRUE
Explanation: Many electric companies, for example, are natural monopolies because
they can supply all the power needed in a local area.
Page Ref: 16
Difficulty: Moderate
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
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12) Economic indicators help to assess the performance of an economy.
Answer: TRUE
Explanation: Specifically, economic growth is measured via aggregate output, standard
of living, gross domestic product, and productivity; stability is reflected through levels of
inflation and unemployment.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
13) The primary measure of growth in the business cycle is inflation.
Answer: FALSE
Explanation: The primary measure of growth in the business cycle is aggregate output.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
14) Gross domestic product (GDP) refers to the total value of goods and services
produced by a national economy within a given period regardless of where the factors of
production are located.
Answer: FALSE
Explanation: GDP refers to the total value of all goods and services produced within a
given period by a national economy through domestic factors of production.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
15) Inflation results in increased purchasing power for the consumer.
Answer: FALSE
Explanation: Inflation occurs when the amount of money injected into an economy
exceeds the increase in actual output. When this happens, people will have more money
to spend, but there will still be the same quantity of products available for them to buy.
As they compete to buy available products, prices go up.
Page Ref: 22
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
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16) Tax increases and decreases are a form of fiscal policy.
Answer: TRUE
Explanation: Tax rates can play an important role in fiscal policies, helping to manage
the economy.
Page Ref: 23
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
17) The government can influence the availability of capital by working through the
Federal Reserve System.
Answer: TRUE
Explanation: The interest rates set by the Federal Reserve System can influence the
ability and willingness of banks throughout the country to lend money.
Page Ref: 23
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Application
18) Stabilization policy is made up of both monetary and fiscal policy.
Answer: TRUE
Explanation: The purpose of monetary and fiscal policy is to smooth out fluctuations in
output and unemployment and to stabilize prices.
Page Ref: 23
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
19) Product differentiation is common in a market characterized by monopolistic
competition.
Answer: TRUE
Explanation: Product differentiation also gives sellers some control over prices.
Page Ref: 15
Difficulty: Easy
Objective: 1.4
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
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20) In a natural monopoly, prices tend to be government-regulated.
Answer: TRUE
Explanation: Natural monopolies occur in industries in which one company can
efficiently supply all needed goods or services. Since they have little or no competition,
their prices have to be regulated so that consumers do not have to pay overly high prices.
Page Ref: 16
Difficulty: Moderate
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Application
21) The main measure of growth in the business cycle is aggregate output.
Answer: TRUE
Explanation: Aggregate output is the total quantity of goods and services produced by
an economic system during a given period. When it increases, the economy is considered
to be in a growth cycle.
Page Ref: 17
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
22) Deflation, an indication that the economy is contracting, is characterized by price
stabilization of goods.
Answer: FALSE
Explanation: Deflation occurs when there are widespread price cuts. Deflation
generally means that the overall economy is shrinking.
Page Ref: 22
Difficulty: Easy
Objective: 1.5
Learning Outcome: Explain how economic performance is monitored
Skill: Concept
23) If productivity increases, prices charged to consumers will tend to increase as well.
Answer: FALSE
Explanation: If productivity increases, it's likely that prices of products will decrease
and the standard of living will increase.
Page Ref: 19
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
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24) The consumer price index is expressed as a percentage of prices as compared to a
base period.
Answer: TRUE
Explanation: The current base period used to measure inflation is 1982-1984.
Page Ref: 22
Difficulty: Moderate
Objective: 1.5
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
25) Which environment is NOT an important dimension of a business organization's
external environment?
A) the political-legal environment
B) the sociocultural environment
C) the technological environment
D) the corporate cultural environment
E) the global business environment
Answer: D
Explanation: D) The external environment consists of everything outside an
organization's boundaries that might affect it. The corporate cultural environment is
internal to the organization.
Page Ref: 6-7
Difficulty: Easy
Objective: 1.2
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
26) What term denotes a nation's basis for allocating its resources among its citizens?
A) capital structure
B) economic system
C) ownership processes
D) distribution network
E) national regulations
Answer: B
Explanation: B) An economic system is a nation's system for allocating its resources
among its citizens, both individuals and organizations.
Page Ref: 7
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
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27) What is the process for converting government enterprises into individually owned
firms known as?
A) production allocation
B) privatization
C) entrepreneurship
D) demand assessment
E) profit maximization
Answer: B
Explanation: B) Privatization is the process of converting government enterprises into
privately owned companies, which will then have the right to run such a business for
profit.
Page Ref: 10
Difficulty: Easy
Objective: 1.3
Learning Outcome: Compare and contrast different economic systems
Skill: Concept
28) What is the point at which the supply curve and the demand curve intersect on a
graph?
A) equilibrium price
B) decision point
C) surplus price
D) perfect price
E) parity point
Answer: A
Explanation: A) The equilibrium price is determined by the shape of the supply curve
and the demand curve when plotted by amount available and price. The equilibrium price
is set at the point at which the supply curve and the demand curve intersect.
Page Ref: 12
Difficulty: Easy
Objective: 1.4
Learning Outcome: Discuss strategies for setting and adjusting prices
Skill: Concept
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29) What is the price at which the quantity of goods demanded and the quantity of goods
supplied are equal?
A) the going rate
B) the margin rate
C) the market price
D) the optimum price
E) the cost price
Answer: C
Explanation: C) The market price is set by the demand and supply for a given good. It
is defined as th [Show Less]