Ap Macroeconomics Midterm Study Guide

							         STUDY GUIDE FOR MIDTERM EXAMINATION                      BU101 Introduction to Business

NAME:_________________________________SCORE:________________


Check the validity of the statement or sentenf

   1. Dentist offices are very likely to have fewer than 20 employees
      DIF: 1               REF: p. 158         OBJ: TYPE: KN

  2.     Innovation is a major small business advantage.

      DIF: 1             REF: p. 163       OBJ: TYPE: KN
   3. Entrepreneurs often assume that they will acquire needed business expertise on the
      job.

         DIF: 1             REF: p. 166         OBJ: TYPE: KN

   4. The most important task for an entrepreneur is to create a business plan.

         DIF: 1             REF: p. 168         OBJ: TYPE: KN

   5. Details on financing, including cash flow projections, are usually left out of an initial
      business plan.

         DIF: 1             REF: p. 169         OBJ: TYPE: KN

   6. Corporate giants rarely assist small businesses due to their high failure rates and
      limited promise of future purchase.

         DIF: 1             REF: p. 172         OBJ: TYPE: KN

    7.     One important advantage of franchising is its ability to provide business expertise
         for relatively inexperienced franchisees.

         DIF: 1             REF: p. 176         OBJ: TYPE: KN

   8. One of the main advantages of buying a franchise is name recognition.

         DIF: 1             REF: p. 178         OBJ: TYPE: KN

   9. Corporations are the most common forms of business organization.

         DIF: 1             REF: p. 180         OBJ: TYPE: KN

 10. Partnerships are most often created by professionals such as doctors and lawyers.

         DIF: 1             REF: p. 181         OBJ: TYPE: KN




         COM-FSM National Campus                                  Business and Accounting Division
    STUDY GUIDE FOR MIDTERM EXAMINATION                         BU101 Introduction to Business

II - COMPLETION

    A. Directions: Complete the following using these terms:

            A. profits
            B. private enterprise
            C. entrepreneur
            D. human resources
            E. productivity
            F. capital
            G. vision
            H. factors of production
            I. brand
            J. relationship management
            K. customer satisfaction
            L. value

 1. To operate effectively, certain inputs called ________ systems are required for all
    economic systems.

    DIF: 1              REF: p. 7           OBJ: TYPE: KN

 2. _________ refers to technology, tools, information, and physical facilities.

    DIF: 1              REF: p. 8           OBJ: TYPE: KN

 3. _________ are the difference between revenues and expenses.

    DIF: 1              REF: p. 6           OBJ: TYPE: KN

 4. Gains in ________ will result in higher living standards.

    DIF: 2              REF: p. 22          OBJ: TYPE: KN

 5. A ________ is a name, terms, sign, symbol, design, or combination that identifies
    the products of one firm.

    DIF: 1              REF: p. 15          OBJ: TYPE: KN

 6. A customer's perception of the balance between a product's positive traits and its
    price is called _____________.

    DIF: 1              REF: p. 19          OBJ: TYPE: KN

 7. _____________ is the ability of a product to meet or exceed a buyer's needs and
    expectations.

    DIF: 1              REF: p. 20          OBJ: TYPE: KN




    COM-FSM National Campus                                     Business and Accounting Division
   STUDY GUIDE FOR MIDTERM EXAMINATION                     BU101 Introduction to Business

   B. Directions: Complete the following using the terms listed.

      A. corporate philanthropy
      B. Occupational Safety and Health Administration
      C. consumerism
      D. integrity
      E. social audits
      F. social responsibility
      G. business ethics
      H. sexual harassment
      I. code of conduct
      J. conflict of interest
     K. product liability
     L. family leave
     M. boycott
     N. whistleblowing
     O. green marketing

1. A formal statement that defines how the organization expects and requires
   employees to resolve ethical questions: _________.

   DIF: 2             REF: p. 48          OBJ: TYPE: KN

2. The standards of conduct and moral values governing actions and decisions in the
   work environment: _________.

   DIF: 2             REF: p. 40          OBJ: TYPE: KN

3. A situation where a business decision may be influenced by the potential for personal
   gain: ________.

   DIF: 2             REF: p. 45          OBJ: TYPE: KN

4. Some firms measure social performance by conducting _________.

   DIF: 2             REF: p. 51          OBJ: TYPE: KN

5. Inappropriate actions of a sexual nature in the workplace: ________.

   DIF: 2              REF: p. 62    OBJ: TYPE: KN
6. Having _____________ means adhering to deeply felt ethical principles in all
   business situations.

   DIF: 2             REF: p. 45          OBJ: TYPE: KN

7. In a _____________, consumers refuse to buy a company's products.

   DIF: 2             REF: p. 51           OBJ: TYPE: KN
8. ______________ is an employee's disclosure to government authorities of illegal,
   immoral, or unethical practices of his or her employer.

   DIF: 2             REF: p. 46          OBJ: TYPE: KN




   COM-FSM National Campus                                 Business and Accounting Division
   STUDY GUIDE FOR MIDTERM EXAMINATION                     BU101 Introduction to Business

   C. Directions: Complete the following using the terms listed.

      A. exporting
      B. balance of trade
      C. joint venture
      D. dumping
      E. import
      F. tariff
      G. countertrade
      H. subcontracting
      I. free trade area
      J. devaluation
      K. exchange rate
      L. absolute advantage
      M. global strategy
      N. multi-domestic strategy
      O. comparative advantage

1. A(n) _____ is a tax levied on imported products.
   DIF: 2             REF: p. 119        OBJ: TYPE: KN

2. _______ refers to selling goods abroad at a price lower than that charged in the
   domestic market.
   DIF: 2             REF: p. 120        OBJ: TYPE: KN

3. Purchasing a foreign product is a(n) _____________.
   DIF: 2             REF: p. 105         OBJ: TYPE: KN

4. _______ involves contracting production to outside firms.
   DIF: 2            REF: p. 128        OBJ: TYPE: KN

5. Selling U.S. soybeans to Japan is an example of a U.S. ________.
   DIF: 2             REF: p. 105         OBJ: TYPE: KN

6. A(n) ________________ allows a company to share risks, costs, profits, and
   management responsibilities with another company.
   DIF: 2          REF: p. 129          OBJ: TYPE: KN

7. ________ requires an exporter to buy something from the exporter's customer.
   DIF: 2            REF: p. 127        OBJ: TYPE: KN

8. A country's _____ is the difference between its exports and imports.
   DIF: 2             REF: p. 109         OBJ: TYPE: KN

9. A(n) __________________ develops and markets products to serve different needs
   and tastes of separate national markets.
   DIF: 2             REF: p. 131        OBJ: TYPE: KN




   COM-FSM National Campus                                 Business and Accounting Division
       STUDY GUIDE FOR MIDTERM EXAMINATION                     BU101 Introduction to Business

II – Choose the best answers

  1.    Which of the following fields is concerned with understanding the choices people
       make in using scarce resources?
       a. Statistics
       b. Psychology
       c. Accounting
       d. Economics
       DIF: 1             REF: p. 72           OBJ: TYPE: KN

  2. Individual and business decisions are _________ by economic conditions and, in
     turn, economic conditions are ___________ by their decisions.
     a. affected; not affected
     b. affected; affected
     c. not affected; not affected
     d. not affected; affected
     DIF: 3              REF: p. 73         OBJ: TYPE: AP

  3. The curve that shows the relationship between different prices and the quantity
     demanded at each price is the ______.
     a. equilibrium curve
     b. supply curve
     c. buying curve
     d. demand curve
     DIF: 1             REF: p. 74         OBJ: TYPE: KN

  4. Which of the following factors will result in a shift in the demand curve?
     a. A change in the number of suppliers
     b. A change in the price of substitute goods
     c. Cost savings resulting from new technology
     d. A change in the costs of labor
     DIF: 2              REF: p. 76           OBJ: TYPE: KN

  5. Holding demand steady and decreasing supply will cause __________.
     a. higher prices and fewer units sold
     b. higher prices and more units sold
     c. lower prices and more units sold
     d. lower prices and fewer units sold
     DIF: 2             REF: p. 78         OBJ: TYPE: AP

  6. The three major types of economic systems are ______.
     a. capitalism, planned economies, and mixed economies
     b. capitalism, pure competition, and planned economies
     c. capitalism, monopoly, and mixed economies
     d. capitalism, oligopoly, and planned economies
     DIF: 1              REF: p. 79        OBJ: TYPE: KN

  7. Public enterprises would be strongest in which type of economic system?
     a. Socialism
     b. Communism
     c. Mixed economy
     d. Capitalist economy
     DIF: 1              REF: p. 84         OBJ: TYPE: KN



       COM-FSM National Campus                                 Business and Accounting Division
    STUDY GUIDE FOR MIDTERM EXAMINATION                      BU101 Introduction to Business

 8. Consumers can choose from hundreds of different kinds and producers of cheese,
    each with a slightly different flavor and texture. This type of market structure is
    known as ____________.
    a. pure competition
    b. monopolistic competition
    c. monopoly
    d. primarily a French and Wisconsin oligopoly
    DIF: 3              REF: p. 80           OBJ: TYPE: AP

 9. _________ is a commonly-used measure of productivity.
    a. GDP (Gross Domestic Product)
    b. Prosperity
    c. The business cycle
    d. The average wage
    DIF: 2            REF: p. 86      OBJ: TYPE: KN

10. __________ is caused by increases in the prices of raw materials and other factors
    of production.
    a. The consumer price index (CPI)
    b. Demand-pull inflation
    c. Cost-push inflation
    d. A recession
    DIF: 2             REF: p. 87        OBJ: TYPE: KN

11. ____________ provides a running measure of consumer price changes.
    a. The consumer price index (CPI)
    b. Devaluation
    c. Per capita income
    d. The producer price index (PPI)
    DIF: 2             REF: p. 89     OBJ: TYPE: KN

12. Kim graduated from college in May and is looking for a job. She is ________
    unemployed.
    a. structurally
    b. cyclically
    c. seasonally
    d. frictionally
    DIF: 2            REF: p. 90         OBJ: TYPE: KN

13. Fiscal policy _________.
    a. reduces the money supply
    b. increases the money supply
    c. always results in increasing the national debt
    d. can be used to increase economic activity
    DIF: 3             REF: p. 91          OBJ: TYPE: AP

14. A balanced budget will occur when _________.
    a. all of the national debt is repaid
    b. taxes, fees, and borrowings are equal to government spending for the year
    c. taxes and fees equal all government spending except for capital expenditures
       which are financed by Treasury notes
    d. all federal taxes and fees equal all federal government spending
    DIF: 1              REF: p. 94           OBJ: TYPE: KN



    COM-FSM National Campus                                  Business and Accounting Division
      STUDY GUIDE FOR MIDTERM EXAMINATION                     BU101 Introduction to Business


 15. All of the following are key challenges facing business in the new century EXCEPT
     ___________.
     a. the shift toward a global information economy
     b. the aging of the workforce
     c. the surplus of college graduates
     d. improving quality and customer service
     DIF: 2               REF: p. 95          OBJ: TYPE: KN

 16. A businessperson is trying to decide how to price a new product. This is a focus of
     a. microeconomics.                        c. consumer behavior.
     b. macroeconomics.                        d. fiscal policy.
     DIF: 1             REF: p. 72          OBJ: TYPE: AP

 17. Assume the price of gasoline triples, what will likely happen to the demand for large
     SUVs? The demand curve will shift to the ________ and demand will _________.
     a. left; decrease.                        c. right; decrease.
     b. left; increase.                        d. right; increase.
     DIF: 3             REF: p. 77          OBJ: TYPE: AP


 18. During an economic recovery consumer spending ________ and unemployment
     ________.
     a. increases; increases.              c. decreases; increases.
     b. increases; decreases.              d. decreases; decreases.
     DIF: 1             REF: p. 85      OBJ: TYPE: KN

 19. Assume that the number of people wanting to buy homes increases sharply in your
     local area. The price of homes will likely _________ and this is an example of
     __________.
     a. increase; cost-push inflation.           c. increase; demand-pull inflation.
     b. decrease; cost-push inflation.           d. decrease; demand-pull inflation.
     DIF: 2              REF: p. 87          OBJ: TYPE: AP

 20. The federal government raises corporate income taxes in order to reduce the budget
     deficit. This change will likely _________ economic activity and is an example of
     ________ policy.
     a. decrease; monetary.                    c. increase; fiscal.
     b. increase; monetary.                    d. decrease; fiscal.
     DIF: 2             REF: p. 92           OBJ: TYPE: AP

21.A person who seeks a profitable opportunity and takes the necessary risks to set up and
      operate a business is a(n) ________.
      a. wealth generator
      b. entrepreneur
      c. stockholder
      d. business executive with a plan
      DIF: 1             REF: p. 196       OBJ: TYPE: KN

22.Which of the following best describes an entrepreneur?
     a. The owner of a small business
     b. An individual who creates a new business
     c. The investors in a new business
     d. A risk taker who seeks a profitable opportunity


      COM-FSM National Campus                                 Business and Accounting Division
      STUDY GUIDE FOR MIDTERM EXAMINATION                      BU101 Introduction to Business


      DIF: 2             REF: p. 196        OBJ: TYPE: KN

23.Jade has decided to start her own business in the construction of fine homes. Jade
      should be classified as a(n) _________.
      a. manager
      b. entrepreneur
      c. female executive
      d. investor and risk taker
      DIF: 1              REF: p. 196       OBJ: TYPE: AP

24.Maryna just purchased a BP gas station. Which of the following best describes her?
     a. Small business owner
     b. Entrepreneur
     c. Manager
     d. Employee
     DIF: 2             REF: p. 196        OBJ: TYPE: AP

25.Dell Computer founder Michael Dell and Microsoft co-founder Bill Gates are two well-
      known examples of __________.
      a. intrapreneurs
      b. change agents
      c. atypical entrepreneurs
      d. classic entrepreneurs
      DIF: 2             REF: p. 198       OBJ: TYPE: AP

26.__________ are people who seek to develop new products, ideas, or ventures within
     larger organizations.
     a. Classic entrepreneurs
     b. Change agents
     c. Atypical entrepreneurs
     d. Intrapreneurs
     DIF: 1              REF: p. 198     OBJ: TYPE: KN

27.Which age group has the highest percentage of people actively engaged in trying to
     start a business?
     a. Those between 18 and 24
     b. Those between 25 and 34
     c. Those between 35 and 44
     d. Those 45 years of age and older
     DIF: 2             REF: p. 199        OBJ: TYPE: KN

28.Corporate downsizing _____.
      a. has reduced the opportunities for entrepreneurs
      b. has resulted in a net loss of jobs
      c. has increased opportunities for entrepreneurs
      d. has had little impact on entrepreneurs
      DIF: 2              REF: p. 208        OBJ: TYPE: AP

29.Entrepreneurs offer _____.
      a. economic opportunities for women but not minorities
      b. economic opportunities for minorities but not women
      c. economic opportunities for women and minorities
      d. few opportunities for women and minorities
      DIF: 1             REF: p. 208        OBJ: TYPE: KN

      COM-FSM National Campus                                Business and Accounting Division
      STUDY GUIDE FOR MIDTERM EXAMINATION                      BU101 Introduction to Business



30.An overall idea for how to convert a business idea into a success is called ________.
      a. vision
      b. creativity
      c. internal locus of control
      d. tolerance for ambiguity
      DIF: 1              REF: p. 209        OBJ: TYPE: KN

31.When looking for new business opportunities, entrepreneurs should _____.
     a. stick to technology-based companies
     b. avoid technology-based companies
     c. focus only on the industries with the greatest growth potential
     d. not limit their sights to rapidly-growing industries
     DIF: 1               REF: p. 217        OBJ: TYPE: KN

32._____ are business organizations or groups of private individuals who invest in new or
     growing firms.
     a. Angel investors
     b. Entrepreneurs
     c. Intrapreneurs
     d. Venture capitalists
     DIF: 1             REF: p. 222        OBJ: TYPE: KN

33.Berta is trying to start a new business. A women's business network puts her in touch
      with an investor who is willing to invest in her company in exchange for an equity
      stake. This investor is a(n) __________.
      a. entrepreneur
      b. angel investor
      c. venture capitalist
      d. a franchiser
      DIF: 2               REF: p. 222        OBJ: TYPE: AP

34.Enrique wants to start a new business, but his bank will not lend him the money he
      needs. Enrique saw an advertisement sponsored by a business organization that
      provides financing for promising small companies. The organization sponsoring the
      advertisement would be considered a(n) _________.
      a. venture capitalist
      b. intrapreneur
      c. franchiser
      d. entrepreneur
      DIF: 2              REF: p. 222        OBJ: TYPE: AP

35.Which of the following statements best describes how entrepreneurs view failure?
     a. They view failure as a learning experience.
     b. They don't worry about failing because they are optimistic.
     c. They enjoy risk and gambling.
     d. They worry that if they fail they'll never get another opportunity.
     DIF: 2              REF: p. 213          OBJ: TYPE: KN

36.Paterno routinely bids on contracts even though most of the other bidders are
      extremely large firms. Paterno believes that his company offers better service at
      lower prices. He is exhibiting which personality trait common in entrepreneurs?
      a. Tolerance for failure
      b. Vision

      COM-FSM National Campus                                 Business and Accounting Division
      STUDY GUIDE FOR MIDTERM EXAMINATION                    BU101 Introduction to Business

      c. High-energy level
      d. Self-confidence
      DIF: 2             REF: p. 212       OBJ: TYPE: AP

37.Pham is the new CEO of Synergistic, Inc. Pham, acting as a(n) _____, has installed a
     new total quality management program, improved product quality, reduced delivery
     times, and launched some new product lines which have succeeded in reversing the
     recent downward sales trend.
     a. entrepreneur
     b. intrapreneur
     c. change agent
     d. venture capitalist
     DIF: 2             REF: p. 198         OBJ: TYPE: AP

38.Which of the following statements would you LEAST expect to hear from an
     entrepreneur?
     a. "I love being my own boss."
     b. "I enjoy a higher quality of life."
     c. "I'll never get wealthy working for someone else."
     d. "I love working fewer hours."
     DIF: 2              REF: p. 200         OBJ: TYPE: AP

39.Which of the following represents equity financing?
     a. Bank loans
     b. Credit card advances
     c. Venture capital
     d. Loan from a friend
     DIF: 2              REF: p. 221         OBJ: TYPE: KN

30.Which of the following companies has the longest and best-known record of
     encouraging intrapreneurship?
     a. IBM
     b. 3M Corporation
     c. General Motors Co.
     d. Microsoft Corporation
     DIF: 1              REF: p. 223        OBJ: TYPE: KN




      COM-FSM National Campus                                Business and Accounting Division