To implement a policy of empowerment, the organization will restructure so that:

Select one:
a. employees assume more responsibility.
b. an entire level of management is removed from the organization.
c. workers agree to work overtime without extra pay.
d. managers have more responsibility and employees learn to follow directions.
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The correct answer is: employees assume more responsibility.
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One difference between partnerships and sole proprietorships is that partnerships:
Select one:
a. have the advantage of limited liability.
b. take less work to form.
c. are managed by an elected board of directors.
d. have a greater chance of long-term survival due to the accountability of each partner to the
other.
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The correct answer is: have a greater chance of long-term survival due to the accountability
of each partner to the other.
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___________ is a measure of the general well-being and satisfaction derived from a variety
of factors including political freedom, safety, education, and a clean environment.
Select one:
a. Standard of living
b. Social satisfaction index
c. Quality of life
d. Gross national income
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The correct answer is: Quality of life
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General and divisional managers, plant managers, and deans and department heads at
colleges are classified as:
Select one:
a. top management.
b. nominal management.
c. supervisory management.
d. middle management.
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The correct answer is: middle management.
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___________ involves recruiting, hiring, motivating, and retaining the best people available
to accomplish the company's objectives.
Select one:
a. Leading
b. Staffing
c. Planning
d. Directing
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The correct answer is: Staffing
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Amanda, a regional manager for Flairol Cosmetics, has just seen a report showing that
sales in her region are trending lower than anticipated for the third quarter. Her next task is
to determine the reason for the disappointing results and find a way to get sales up to their
desired level. Amanda's efforts are part of the ____________ function of management.
Select one:
a. directing
b. organizing
c. planning
d. controlling
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The correct answer is: controlling
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Economics was known as the "Dismal Science" because:
Select one:
a. the world population was growing slower than expected in the 1700s, leading economists to
call it a dismal period of time.
b. it was a very complex area of study based on mathematics.
c. there were too many old people and not enough young people to care for them.
d. too many people would result in food shortages and shortages of other resources.
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The correct answer is: too many people would result in food shortages and shortages of
other resources.
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 Question text
Which of the following is the most accurate statement about the impact of business on
society?
Select one:
a. While businesses often improve the standard of living within a society, they can do little to
improve the quality of life.
b. Businesses can have a positive impact on both the standard of living and the quality of life
within a society.
c. When businesses earn a profit for their owners, they usually do so at the expense of the rest
of society, which proves it is never a win-win situation.
d. Businesses often improve the quality of life, but can do little to improve the standard of living
of most people due to inflation.
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The correct answer is: Businesses can have a positive impact on both the standard of living
and the quality of life within a society.
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How is it that people working in their own self-interest produce goods, services, and wealth
for others?
Select one:
a. Entrepreneurs tend to include themselves in a group of people who need charitable support.
b. By taking advantage of a vast supply of labor, people working in their own self-interest could
hire others at very low wages.
c. The government pays entrepreneurs in the U.S. to produce goods, services, and wealth for
others.
d. In order to earn money and produce goods that improve lives, self-directed gain would
provide jobs, and subsequently wages for others.
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The correct answer is: In order to earn money and produce goods that improve lives, self-
directed gain would provide jobs, and subsequently wages for others.
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Empowerment means:
Select one:
a. giving employees the authority to make decisions.
b. hiring employees that do not require training due to the costly nature of this activity.
c. making certain that employees always defer to management when making decisions.
d. asking employees to write the policies which govern their jobs.
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The correct answer is: giving employees the authority to make decisions.
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Emily wants to open a chain of hair styling salons and hopes to attract investors to help
finance growth. She considered forming a C corporation, but wants to have more flexibility
about how the new business will be taxed. She also wants to offer investors/owners limited

liability. Emily can satisfy her objectives by setting up a :

Select one:
a. limited liability company.
b. alien corporation.
c. S corporation.
d. general partnership.
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The correct answer is: limited liability company.
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Employees often work with managers to develop a  __________ that outlines the
fundamental purposes of their organization.
 Select one:
a. PERT diagram
b. value statement
c. organization chart
d. mission statement
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The correct answer is: mission statement
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How are managers today different from managers in the past?
Select one:
a. Managers in the past were less loyal to their employer.
b. Managers today are more likely to reprimand workers.
c. Managers in the past would use praise and gentle suggestions.
d. Managers today emphasize teamwork.
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The correct answer is: Managers today emphasize teamwork.
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A  _________ occurs when one company buys the property and obligations of another
company.
Select one:
a. leveraged buyout
b. acquisition
c. hostile takeover
d. cooperative
 Feedback
The correct answer is: acquisition
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__________ planning prepares alternative courses of action that may be used if the primary
plans are not achieving objectives.
Select one:
a. Contingency
b. Tactical
c. Strategic
d. Alternative
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The correct answer is: Contingency
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In recent years, countries with communist economic and political systems have:
Select one:
a. experienced severe economic depression.
b. placed even more importance on individual ownership of businesses.
c. grown very slowly, but have avoided the severe problems that have plagued some capitalist
economies in Asia and Europe.
d. enjoyed periods of great prosperity.
Feedback
The correct answer is: experienced severe economic depression.
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 Question text
Efforts are under way to serve the needs of a diverse population. Diversity means:
Select one:
a. selling products to immigrants.
b. providing government programs such as free health care for illegal and legal immigrants.
c. meeting employment quotas so that diverse groups are always represented in your
workforce.
d. dealing sensitively with workers and cultures around the world.
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The correct answer is: dealing sensitively with workers and cultures around the world.
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__________ is the management function that involves determining whether an organization
is progressing toward its goals, rewarding employees for doing a good job, and taking
corrective action when they are not.
Select one:
a. Leading
b. Officiating
c. Organizing
d. Controlling
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The correct answer is: Controlling
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The downsizing that has occurred in recent years has __________ middle managers in
many organizations.
Select one:
a. eliminated the jobs of some
b. increased the number of
c. increased the importance of
d. strengthened the control of
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The correct answer is: eliminated the jobs of some
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A basic difference between goals and objectives is that goals are:
Select one:
a. concerned with broad, long-term accomplishments, while objectives focus on specific short-
term details.
b. set by tactical plans, while objectives are set by strategic plans.
c. precise, while objectives are vague.
d. set by middle management, while objectives are set by first-line managers.
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The correct answer is: concerned with broad, long-term accomplishments, while objectives
focus on specific short-term details.
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Eve and her three college friends enjoy perfumes. As a special gift to each of them last
holiday season, she found a way to make scented candles with each friend's favorite
perfume scent. The three friends loved her gift idea and encouraged Eve to create more
and sell them online. Recently, she is filling orders from her website, and turning a profit.
Eve is proof that:
Select one:
a. the Internet is a way to distribute just about anything.
b. the cost of supplies to make candles is relatively cheap.
c. me-too businesses work.
d. when you successfully fill a market need, you can make money.
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The correct answer is: when you successfully fill a market need, you can make money.
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In a limited liability partnership, each partner's risk of losing personal assets is:
Select one:
a. limited to losses that result from his/her own acts and omissions and the acts and omissions
of those who work under his/her supervision.
b. nonexistent.
c. unlimited.
d. determined entirely by the maximum loss provision established by the articles of co-
partnership.
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The correct answer is: limited to losses that result from his/her own acts and omissions and
the acts and omissions of those who work under his/her supervision.
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_________ is the name of a free-market economic system in which most of the factors of
production and distribution—such as land, factories, railroads, and stores—are owned by
individuals.
Select one:
a. Marginalism
b. Capitalism
c. Communism
d. Socialism
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The correct answer is: Socialism
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Which of the following is a basic right under capitalism?
Select one:
a. The right to vote.
b. The right to compete.
c. Freedom of collusion.
d. Freedom from taxation.
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The correct answer is: The right to compete.
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When we think of successful music entertainment groups of the past 60 years, the Beatles
almost always appear in the top 5! In the early days, the entertainment group's life cycle
could have ended as so many other rock groups do—here today, gone tomorrow. The four
musicians were definitely creative and passionate about their craft and genre of music. As
the informal leader of the group, John Lennon _____________ the others to make
important compositional contributions. All four members had the opportunity to create
musical compositions and receive copyright credit for their contributions.
Select one:
a. transformed
b. commanded
c. empowered
d. enabled
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The correct answer is: empowered
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Middle managers are responsible for:
Select one:
a. establishing the vision for the organization.
b. devising the organization's strategic plan.
c. assigning specific jobs and evaluating the daily performance of workers.
d. developing tactical plans and controlling.
Feedback
The correct answer is: developing tactical plans and controlling.
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Ho Han has just spent two hours going over quality reports to determine whether his
department is meeting quality standards he set for the current month. Ho's efforts are part of
the ___________ function of management.
Select one:
a. organizing
b. directing
c. planning
d. controlling
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The correct answer is: controlling
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Which of the following activities is part of the organizing function of management?
Select one:
a. Going over a spreadsheet to analyze some financial data
b. Developing a broad general strategy to help the organization meet its long-term growth
objectives
c. Giving front-line workers additional resources needed to provide faster and better service to
customers
d. Teaching a new employee how to use a piece of office equipment
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The correct answer is: Giving front-line workers additional resources needed to provide
faster and better service to customers
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The type of planning that is concerned with developing detailed short-term actions about
what is to be done, who is to do it, and how it is to be done is known as __________
planning.
Select one:
a. strategic
b. first-line
c. tactical
d. contingency
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The correct answer is: tactical
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The Adapting to Change box reflects upon the use of Twitter and other social media
sources to measure customer satisfaction. GM employees scanned various social media
sites to stay current with customer perceptions and complaints. It is important that
customers perceive that products and services are meeting or exceeding the standards that
companies set. The _____________ of management involves the monitoring of product and
service performance.
Select one:
a. planning process
b. control process
c. organizing process
d. leadership process
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The correct answer is: control process
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One difference between managers and leaders is that:
Select one:
a. managers work to achieve stability while leaders embrace change.
b. managers use an autocratic approach while leaders embrace a democratic style.
c. all employees can manage, but only top managers can lead.
d. managers are found in businesses while leaders operate in nonprofit organizations.
Feedback
The correct answer is: managers work to achieve stability while leaders embrace change.
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A simple supply curve shows a relationship between the:
Select one:
a. amount of a good a firm produces and the amount demanded by consumers.
b. price of a good and the quantity of that good sellers are willing to offer for sale at a specific
point in time.
c. amount of labor a firm hires and the amount of output it can produce.
d. amount of time required to produce a good and the relevant production costs.
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The correct answer is: price of a good and the quantity of that good sellers are willing to
offer for sale at a specific point in time.
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Emily recently quit her job at a major corporation because she saw little chance for
advancement. Although she is still searching for a new position, Emily believes the
economy is healthy and she hears that several firms are hiring people with her
qualifications. Which of the following statements about Emily's current situation is most
accurate? Emily is:
Select one:
a. an example of cyclical unemployment.
b. an example of frictional unemployment.
c. likely to find employment quickly if she seeks training in a different field.
d. not considered unemployed because she voluntarily quit her job.
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The correct answer is: an example of frictional unemployment.
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Maria recently purchased 100 shares of stock in Idle Time Gaming, Inc. Maria is a  
______________ of this company.
Select one:
a. creditor
b. manager
c. partner
d. owner
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The correct answer is: owner
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When two companies in the same industry agree to become one firm, the result is called a:
Select one:
a. joint venture.
b. horizontal merger
c. vertical merger.
d. monopoly.
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The correct answer is: horizontal merger
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Which of the following would be a topic emphasized in a macroeconomics course?
Select one:
a. How a consumer chooses which goods to buy.
b. How a firm decides the amount it will charge for one of its products.
c. Factors that determine how fast a nation's economy is growing.
d. The determinants of the wage rate for labor in the auto industry.
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The correct answer is: Factors that determine how fast a nation's economy is growing.
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Which of the following strategies may have a net effect on inflation?
Select one:
a. Proportionately increasing wages and increasing prices.
b. Decreasing prices and decreasing taxes.
c. Decreasing interest rates and decreasing taxes.
d. Proportionately increasing prices and decreasing wages.
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The correct answer is: Proportionately increasing wages and increasing prices.
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The board of directors for a corporation is elected by its:
Select one:
a. stockholders.
b. employees.
c. creditors.
d. managers.
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The correct answer is: stockholders.
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Pam is a sales manager for Paradise Beauty Products. She has told her sales people that
she expects each of them to increase their customer contacts by at least 5% in the next

month. Pam has set a :

Select one:
a. policy guide.
b. functional objective.
c. procedural policy.
d. performance standard.
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The correct answer is: performance standard.
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The organizational structure of a corporation permits:
Select one:
a. employees (by committee) to elect the officers of the company.
b. the company management to elect the Board of Directors.
c. stockholders to elect the officers and management team.
d. stockholders to elect the Board of Directors.
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The correct answer is: stockholders to elect the Board of Directors.
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The growth of Hispanic-owned businesses:
Select one:
a. increased dramatically in recent years.
b. decreased slightly compared to other minority groups who have started businesses.
c. slowly increased during the past decade.
d. remained relatively constant during the past decade.
Feedback
The correct answer is: increased dramatically in recent years.
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The standard of living for a nation's people depends mainly on:
Select one:
a. how much political freedom they have.
b. the quality of the natural environment.
c. the amount of labor and capital available employed in the manufacturing sector.
d. their income and the prices of the goods and services they buy.
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The correct answer is: their income and the prices of the goods and services they buy.
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Which of the following is involved in setting work standards and schedules needed to
implement the firm's tactical objectives?
Select one:
a. Mission statement
b. Contingency planning
c. Tactical planning
d. Operational planning
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The correct answer is: Operational planning
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Empowerment requires that managers focus more on __________ lower-level employees.
Select one:
a. controlling and correcting
b. training
c. simplifying the jobs of
d. directly supervising
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The correct answer is: training
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A meaningful mission statement should address topics such as the organization's:
Select one:
a. advertising strategy and distribution plan.
b. tactical plans and contingency plans.
c. form of ownership and methods of financing.
d. self-concept and company philosophy.
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The correct answer is: self-concept and company philosophy.
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Technology affects people in:
Select one:
a. all industries.
b. primarily high income countries.
c. information technology industries with the exception of agriculture.
d. most industries.
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The correct answer is: all industries.
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A type of partnership called a ___________ acts much like a corporation and is traded on
stock exchanges, but it is taxed like a partnership with profits passing through to the owners
and taxed as the owner's personal income.
Select one:
a. combined general partnership
b. cooperative partnership
c. limited partnership
d. master limited partnership
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The correct answer is: master limited partnership
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Jermaine is a manager with Drevil Industries. Part of his job is to make specific short-term
decisions about what his department must do to achieve Drevil's long-term success.
Jermaine is involved in:
Select one:
a. tactical planning.
b. complimentary planning.
c. contingency planning.
d. strategic planning.
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The correct answer is: tactical planning.
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__________ is the market situation in which there are many sellers in a market and no
seller is large enough to dictate the price of a product.
Select one:
a. Perfect competition
b. Microeconomic competition
c. Oligopoly
d. Monopolistic competition
 Feedback
The correct answer is: Perfect competition
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Which of the following is normally considered a disadvantage of the corporate form of
business?
Select one:
a. Unlimited liability of owners.
b. Difficult transfer of ownership.
c. Double taxation of earnings.
d. Limited life.
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The correct answer is: Double taxation of earnings.