Chapter 3-Theory Building: True/False

Chapter 3—Theory Building
TRUE/FALSE
1. A theory is an abstract, untestable explanation of some events.
ANS: F
A theory is testable.
PTS: 1 DIF: Moderate REF: p. 38 OBJ: LO: 03-01
NAT: AACSB Reflective Thinking| CB&E Model Research| Blooms Comprehension
2. Knowledge and confirmation are the two purposes of theory.
ANS: F
Understanding and predicting are the two purposes of theory.
3. Theories allow researchers to build on previous knowledge.
ANS: T PTS: 1 DIF: Easy REF: p. 39
OBJ: LO: 03-02
4. A concept is a generalized idea about a class of objects, attributes, or occurrences.
OBJ: LO: 03-03
NAT: AACSB Reflective Thinking| CB&E Model Research| Blooms Knowledge
5. Risk aversion is an example of a construct.
ANS: T PTS: 1 DIF: Hard REF: p. 39
OBJ: LO: 03-03
NAT: AACSB Reflective Thinking| CB&E Model Research| Blooms Application
6. The hierarchy of theory organizes concepts in sequence from the most concrete and individual to the
most general.
ANS: F
This is the ladder of abstraction.
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7. As concepts become more abstract, the easier it is to measure them.
ANS: F
As concepts become more abstract, they are less amenable to measurement.
PTS: 1 DIF: Easy REF: p. 40 OBJ: LO: 03-03
8. The empirical level of the ladder of abstraction is the level of knowledge that is verifiable by
experience or observation.
ANS: T PTS: 1 DIF: Moderate REF: p. 40
OBJ: LO: 03-03
9. The basic or scientific business researcher operates at two levels: on the abstract level of concepts (and
hypotheses) and on the empirical level of variables ( and propositions).
ANS: F
The abstract level is represented by propositions, and the empirical level represents hypotheses.
PTS: 1 DIF: Hard REF: p. 40 OBJ: LO: 03-03
10. The term inherent construct refers to a concept that is not directly observable or measurable.
ANS: F
This is a latent construct.
11. In its simplest form, a research hypothesis is a “guess” about the outcome of a research study.
OBJ: LO: 03-03
12. Empirical testing means that something has been examined against reality using data.
OBJ: LO: 03-03
13. A concept is a formal statement explaining some outcome.
ANS: F
This is a hypothesis.
14. Statistics can be used to prove that a research hypothesis is true.
ANS: F
Statistics cannot prove a hypothesis is true. Because our results are based on statistics, there is always
the possibility that our conclusion is wrong.
15. The process of identifying the actual measurement scales to asses the variables of interest is known as
operationalizing.
OBJ: LO: 03-03
16. In most scientific situations there is typically only one theory to explain certain phenomena.
ANS: F
In most scientific situations there are alternative theories to explain certain phenomena.
17. Theories are derived from deductive reasoning and selective reasoning.
ANS: F
Theories are derived from deductive reasoning and inductive reasoning.
18. Deductive reasoning derives a conclusion about a general knowledge based on specific instances.
ANS: F
This is more descriptive of inductive reasoning. Deductive reasoning derives a conclusion about a
specific instance based on general knowledge.
19. The scientific method is a set of prescribed procedures for establishing and connecting theoretical
statements about events, for analyzing empirical evidence, and for predicting events yet unknown.
OBJ: LO: 03-05
20. The first step in the scientific method is to formulate concepts and propositions.
ANS: F
This is the second step. The first step is the assessment of relevant existing knowledge of a
phenomenon.
MULTIPLE CHOICE
1. A formal, logical explanation of some events that includes descriptions of how things relate to one
another is called a(n) _____.
a. hypothesis
b. theory
c. causal statement
d. empirical study
ANS: B PTS: 1 DIF: Moderate REF: p. 38
OBJ: LO: 03-01
2. Psychologists explain that humans’ better recall of information that is presented visually compared to
information presented verbally is due to the fact that the information is stored both visually and
verbally. Because it is stored using this dual-coding process, it is easier to retrieve from memory.
This formal logical explanation of this phenomenon is an example of a(n) _____.
a. theory
b. construct
c. operationalization
d. abstraction
ANS: A PTS: 1 DIF: Hard REF: p. 38
OBJ: LO: 03-01
3. What are the two goals of theory?
a. speculating and confirming
b. understanding and predicting
c. deducting and inducting
d. abstracting and concretizing
OBJ: LO: 03-02
4. A(n) ____ is a generalized idea about a class of objects that has been given a name.
a. variable
b. theory
c. node
d. construct
ANS: D PTS: 1 DIF: Moderate REF: p. 39
OBJ: LO: 03-03
5. Which of the following is considered the basic unit for theory development?
a. concept
b. proposition
c. hypothesis
d. variable
ANS: A PTS: 1 DIF: Moderate REF: p. 39
OBJ: LO: 03-03
6. Self-efficacy, which is a generalized idea about how humans perceive their own abilities, is an
example of a(n) _____.
a. hypothesis
b. proposition
c. concept
d. abstraction
ANS: C PTS: 1 DIF: Hard REF: p. 39
OBJ: LO: 03-03
7. The organization of concepts in sequence from the most concrete and individual to the most general
is called the _____.
a. conceptual hierarchy
b. ladder of abstraction
c. conceptual progression
d. operationalization of constructs
OBJ: LO: 03-03
8. In theory development, which of the following is the level of knowledge expressing a concept that
exists only as an idea or a quality apart from an object?
a. empirical level
b. primary level
c. conceptual level
d. abstract level
OBJ: LO: 03-03
9. At what level do we “experience” reality?
a. empirical level
b. abstract level
c. primary level
d. secondary level
OBJ: LO: 03-03
10. A concept that is not directly observable or measurable but can be estimated through proxy
measures is called a(n) _____.
a. indirect construct
b. secondary construct
c. higher order construct
d. latent construct
OBJ: LO: 03-03
11. Empathy is a concept that is not directly observable or measurable but is measured through other
measures, such as an individual’s thoughts and behaviors toward others. This is an example of a(n)
_____.
a. latent construct
b. empirical construct
c. secondary construct
d. higher order construct
OBJ: LO: 03-03
12. Which of the following is a statement explaining the logical linkage among certain concepts by
asserting a universal connection between concepts?
a. hypothesis
b. proposition
c. construct
d. theory
OBJ: LO: 03-03
13. “Employees dressed professionally will perform better than those dressed casually” is an example of
a _____.
a. theory
b. proposition
c. hypothesis
d. variation
ANS: C PTS: 1 DIF: Hard REF: p. 41
OBJ: LO: 03-03
14. Which of the following means that something has been examined against reality using data?
a. causality
b. manipulation
c. empirical testing
d. spurious association
ANS: C PTS: 1 DIF: Moderate REF: p. 41
OBJ: LO: 03-03
15. When a researcher collects data to test the hypothesis that consumers will be more satisfied if a
business offers compensation after the consumer complains, we say that _____ testing is being
conducted.
a. validation
b. confirmation
c. observational
d. empirical
ANS: D PTS: 1 DIF: Hard REF: p. 41
OBJ: LO: 03-03
16. Anything that may assume different numerical values is considered a(n) _____.
a. variable
b. construct
c. item
d. data point
OBJ: LO: 03-03
17. Which of the following is an empirical assessment of a concept?
a. hypothesis
b. variable
c. construct
d. item
OBJ: LO: 03-03
18. When the data from an empirical study are consistent with a research hypothesis, we say that the
hypothesis is _____.
a. confirmed
b. conclusive
c. supported
d. true
OBJ: LO: 03-03
19. The process of identifying the actual measurement scales to assess the variables of interest is called
_____.
a. operationalizing
b. synthesizing
c. verifying
d. conceptualizing
OBJ: LO: 03-03
20. _____ is the logical process of deriving a conclusion about a specific instance based on a known
general premise or something known to be true.
a. Deductive reasoning
b. Inductive reasoning
c. Latent reasoning
d. Abstract reasoning
OBJ: LO: 03-04
21. The logical process of establishing a general proposition on the basis of observation of particular facts
is known as _____.
a. deductive reasoning
b. generalized reasoning
c. inductive reasoning
d. conceptual reasoning
OBJ: LO: 03-04
22. If all the trees a person has seen in his life have been green and therefore he concludes that all trees
are green, which type of reasoning is he using?
a. deductive reasoning
b. inductive reasoning
c. generalized reasoning
d. conceptual reasoning
ANS: B PTS: 1 DIF: Hard REF: p. 44
OBJ: LO: 03-04
23. A researcher is testing the hypothesis stating a positive relationship between business owners’ level
of risk tolerance and the insurance coverage for the business. To test this, the researcher uses a set
of prescribed procedures for establishing and connecting theoretical statements about these two
constructs, for analyzing empirical evidence gathered through surveys, and for predicting future
behavior. This researcher is following the _____.
a. hypothetical method
b. scientific method
c. deductive method
d. inductive method
OBJ: LO: 03-05
24. Which of the following is a step involved in the application of the scientific method?
a. statement of hypotheses
b. formulation of concepts and propositions
c. analysis and evaluation of data
d. all of these choices
ANS: D PTS: 1 DIF: Easy REF: p. 44
OBJ: LO: 03-05
25. What is the LAST step in the application of the scientific method?
a. assessment of relevant existing knowledge of a phenomenon
b. proposal of an explanation of the phenomenon and statement of new problems raised by
the research
c. design of research to test the hypothesis
d. acquisition of meaningful empirical data
OBJ: LO: 03-05
COMPLETION
1. A formal, logical explanation of some events that includes predictions of how things relate to one
another is known as a(n) _____.
ANS: theory
2. The two purpose of theory are understanding and _____.
ANS: predicting
3. _____ are the building blocks of theory.
ANS: Concepts
4. The organization of concepts in sequence from the most concrete and individual to the most general is
called the _____.
ANS: ladder of abstraction
5. In theory development, the level of knowledge expressing a concept that exists only as an idea or a
quality apart from an object is the ____ level.
ANS: abstract
6. A concept that is not directly observable or measurable, but can be estimated through a proxy measure
is known as a(n) _____ construct.
ANS: latent
7. Statements explaining the logical linkage among certain concepts by asserting a universal connection
between concepts are called _____.
ANS: propositions
8. A(n) _____ is a formal statement explaining some outcome and is testable.
ANS: hypothesis
9. _____ involves applying statistics to data to test hypotheses.
ANS: Empirical testing
10. When the data are inconsistent with a hypothesis, we say the hypothesis is _____,
ANS: not supported
11. If it is hypothesized that higher levels of compensation will positively influence workers’ intention to
stay with a company, level of compensation measured in dollars and intentions to stay using a scale are
examples of _____.
ANS: variables
12. A researcher is using income, education, and zip code as an indication of social class. This process of
identifying the actual measurement scales to assess social class is called _____.
ANS: operationalizing
13. Going from the general to the specific is done in _____ reasoning.
ANS: deductive
14. _____ reasoning establishes a general proposition on the basis of observation of particular facts.
ANS: Inductive
15. A set of prescribed procedures for establishing and connecting theoretical statements about events, for
analyzing empirical evidence, and for predicting events yet unknown is called the _____.
ANS: scientific method
ESSAY
1. What is a theory and a hypothesis, and what role do they play in marketing research?
ANS:
A theory is a formal, logical explanation of some events that includes predictions of how things relate
to one another. The two purposes of theory are understanding and predicting. Accomplishing the first
goal allows the theorist to gain an understanding of the relationship among various phenomena. Thus
a theory enables us to predict the behavior or characteristics of one phenomenon from the knowledge
of another phenomenon.
A hypothesis is a formal statement explaining some outcome. Hypotheses must be testable and
should be written as propositions. We often apply statistics to data to empirically test hypotheses.
When the data are consistent with a hypothesis, we say the hypothesis is supported. When the data are
inconsistent with the hypothesis, we say the hypothesis is not supported. Because our results are based
on statistics, there is always the possibility that our conclusion is wrong, so from an absolute
perspective, statistics cannot prove a hypothesis is true.
PTS: 1 DIF: Moderate REF: p. 38| p. 41 OBJ: LO: 03-01| LO: 03-03
NAT: AACSB Communication| CB&E Model Research| Blooms Comprehension
2. Explain the difference between a concept and a variable and give an example of each.
ANS:
A concept (or construct) is a generalized idea about a class of objects, attributes, occurrences, or
processes that has been given a name. Supervisory behavior or risk aversion are examples of concepts.
A variable is anything that may assume different numerical values and is the empirical assessment of
a concept. For example, supervisory behavior may be assessed through variables such as amount of
time spent training employees, number of employees supervised, and degree to which employees are
involved in decision-making.
PTS: 1 DIF: Moderate REF: p. 39| p. 42 OBJ: LO: 03-03
3. How does a hypothesis differ from a proposition? Give an example of each.
ANS:
Propositions are statements explaining the logical linkage among certain concepts by asserting a
universal connection between concepts. An example of a proposition might be: Changes in tax law
will influence individuals’ charitable giving. A hypothesis is a formal statement of an unproven
proposition that is empirically testable. An example of a hypothesis might be: Tax laws limiting the
deductibility of charitable contributions will decrease charitable giving.
4. Discuss the types of reasoning researchers use to build theories.
ANS:
At the abstract, conceptual level, a theory may be developed with deductive reasoning by going from a
general statement to a specific assertion. Deductive reasoning is the logical process of deriving a
conclusion about a specific instance, based on a known general premise or something known to be
true. At the empirical level, a theory may be developed with inductive reasoning, which is the logical
process of establishing a general proposition on the basis of observation of particular facts.
5. List the steps a researcher will likely follow when applying the scientific method to develop and test
theories
ANS:
1. Assessment of relevant existing knowledge of a phenomenon
2. Formulation of concepts and propositions
3. Statement of hypotheses
4. Design of research to test the hypotheses
5. Acquisition of meaningful empirical data
6. Analysis and evaluation of data
7. Proposal of an explanation of the phenomenon and statement of new problems raised by the
research
NAT: AACSB Communication| CB&E Model Research| Blooms Knowledge

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Chapter 3—Theory Building

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