BUS/211 FOUNDATIONS OF BUSINESS

BUS 211 Week 1 quizThe Latest Version A+ Study Guide

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Your answers : 33/33 (100%) 1What 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. 2What 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 supplyLaw of demandLaw of market systemsLaw of market price 3Which of the following best describes a partnership?All employees are stockholders to promote loyalty to the companySkilled professionals who pool their talents and resources to share general capital costsFamilies who work and live together to reduce costsFriends who share new business interests by sharing rent costs 4What measures how efficient a company uses its capital and resources to generate returns for its investors?ProfitProfitabilityRevenuesSales 5Who assumes all liability for debt created in a sole proprietorship?The stockholdersThe business partnersThe bankThe business owner 6What is an obstacle that professionals avoid in a sole proprietorship?DebtDisputesRiskCompetition 7What will most likely increase the demand for better quality goods and services?Increasing specializationIncrease in self-interestDecrease in profitabilityDecreasing demand 8What 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 utilityLaw of demandLaw of market increaseLaw of supply 9Imagine 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 BProfitability cannot be determined from the information givenCompany AThey have the same profitability 10In 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. 11Capital, land, enterprise, and labor are all costs associated with making and selling goods. What do they determine?Operating costsValueCompetitive advantageSales revenue 12In economics, what principle indicates the value placed on a product lessens as consumption increases?

Scarcity valueDemand valueDiminishing marginal utilitySupply utility 13Which 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. 14Information technology, e-commerce, human resource management, and procurement are included in what type of value chain function in a business?Secondary value functionPrimary value functionTertiary functionComplimentary function 15Enterprise, as a main component of business,requires which of the following?

Operating from an appropriate facilityInputs, machinery and computersEmploying the right people for the tasksForesight, drive, knowledge, and ingenuity 16What was the original purpose of the limited liability company?To encourage investors to take financial risks to ensure a business successTo control specialization of new businessesTo favor creditors with the ability to seek recovery of assets to repay debt To limit financial risk exposure and encourage formation of new businesses 17This is the point at which the supply of the product just meets the demand for it.MarketSupply curveDemand curveMargin 18What 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) 19Which 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. 20Which of the following businesses best matches the definition of a sole proprietorship?Professors, nurses, or taxi driversLawyers, bankers, or accountantsBus drivers, hotel managers, or paintersDentists, carpenters, or plumbers 21Which term refers to the total money or assets of a business?WealthCapitalSales revenueCompetitive advantage 22What is defined as the absolute monetary difference between sales revenues and operating costs?ProfitProfitabilityDemandSupply 23If a business partnership grows, what is usually added over time?Increased stock percentage for partnersNew professional members adding capital into the businessMore revenue allocated to managementManagement control 24Which 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 processCompetitive advantageProductive resourcesBusiness 25Which 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) 26How 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. 27If 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 28What defines a group of companies that have similar products and business activities?IndustryBusiness systemField of interestBusiness model 29Which 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 RentalPrudential InsuranceWal-MartJoes Neighborhood Pet Store 30Which of the following is the best example of a business partnership?Politicians who share expenses for a campaignRestaurant owners who share the same cuisine in a common geographic areaEmployees of a large computer manufacturerA group of similar professionals who start a company together 31What are the four productive resources that make a business possible?Land, labor, capital, enterpriseSupply, demand, land, laborSales, profit, profitability, supplyCapital, labor, supply, demand 32What are the three components that make up a business system?Business commerce, business organization, business occupationBusiness organization, business management, business exchangeBusiness commerce, business organization, business marketBusiness market, business management, business organization 33Which 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 riskCreditors are entitled to recover outstanding debt beyond the financial assets of the business.The stockholders financial liability is limited to a fixed investment amount.