Business Fundamentals Unit 1 Quiz
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Questions and Answers

What is the primary reason businesses exist?

  • To increase taxes
  • To provide goods and services (correct)
  • To eliminate competition
  • To minimize expenses

    • A need is something that is not essential for survival.

    False

    What is the equation for calculating profit?

    Profit = Revenue - Expenses

    The income that remains after taxes and mandatory charges is called ______.

    <p>disposable income</p> Signup and view all the answers

    Match the term with its definition:

    <p>Demand = Willingness to spend on products at a given price Law of Demand = As price decreases, demand increases Price Sensitivity = Demand response to price changes Substitute Goods = Products that can replace one another</p> Signup and view all the answers

    Which factor is NOT considered a pricing factor that affects demand?

    <p>Quality of service</p> Signup and view all the answers

    Demand is the driving force of our economy.

    <p>True</p> Signup and view all the answers

    Define Discretionary Buying Power.

    <p>The amount of money available for spending on non-essential items after necessary expenses.</p> Signup and view all the answers

    What factor does NOT directly affect demand?

    <p>Total Assets</p> Signup and view all the answers

    New technology always increases demand for existing products.

    <p>False</p> Signup and view all the answers

    What is disposable personal income?

    <p>The income remaining after taxes and compulsory deductions have been taken off a paycheck.</p> Signup and view all the answers

    The law of supply states that as the price goes up, the supply goes _____ and as the price goes down, supply goes _____ .

    <p>up; down</p> Signup and view all the answers

    Which of the following is a non-pricing factor that affects supply?

    <p>New technology</p> Signup and view all the answers

    Match the following forms of business ownership with their definitions:

    <p>Corporation = Acts as a separate entity from its owners. Sole Proprietorship = Owned and managed by a single individual. Partnership = Business owned by two or more individuals. Franchise = A joint venture between a franchisor and franchisee.</p> Signup and view all the answers

    Non-profit organizations can run without any form of financial support.

    <p>False</p> Signup and view all the answers

    What is the break-even point?

    <p>The point at which total cost and total revenue are equal.</p> Signup and view all the answers

    The state in which market supply and demand balance each other is called the _____ point.

    <p>equilibrium</p> Signup and view all the answers

    Which of the following is NOT a characteristic of a co-operative?

    <p>Profit-oriented business model</p> Signup and view all the answers

    Define market forces.

    <p>Factors that influence the price and quantity of goods and services in a market.</p> Signup and view all the answers

    Which option includes a characteristic of secondary industries?

    <p>Converting raw materials into usable products</p> Signup and view all the answers

    A business that runs off donations is known as a _____ organization.

    <p>non-profit</p> Signup and view all the answers

    What is the primary function of a tertiary industry?

    <p>Providing services rather than goods.</p> Signup and view all the answers

    Which of the following best defines Corporate Social Responsibility (CSR)?

    <p>Principles and practices aimed at enhancing community well-being</p> Signup and view all the answers

    Ethical behavior means acting in a way that is dishonest and unfair.

    <p>False</p> Signup and view all the answers

    What does B2C stand for?

    <p>Business to Consumer</p> Signup and view all the answers

    _______ is the act of offering money for special treatment.

    <p>Bribery</p> Signup and view all the answers

    Match the terms with their definitions:

    <p>Ethics = Moral principles that guide behavior Oligopoly = Market structure dominated by a few large sellers Outsourcing = Hiring services from countries with lower labor costs Monopolistic Competition = Many companies competing with differentiated products</p> Signup and view all the answers

    Which of the following is an example of an unethical business practice?

    <p>Bait and switch tactics</p> Signup and view all the answers

    Perfect competition is characterized by one seller dominating the market.

    <p>False</p> Signup and view all the answers

    What are the social costs of international trade?

    <p>Offshore outsourcing, human rights/labor abuses, environmental degradation</p> Signup and view all the answers

    A ________ is a person of interest in a business and can be affected by or affect that business.

    <p>stakeholder</p> Signup and view all the answers

    What is one main reason some people consider business ethics to be an oxymoron?

    <p>Profit-driven motives can lead to unethical behavior.</p> Signup and view all the answers

    Theft is defined as the act of deceiving another party to gain financially.

    <p>False</p> Signup and view all the answers

    Name one principle of Corporate Social Responsibility (CSR).

    <p>Providing a safe and healthy work environment</p> Signup and view all the answers

    A ________ market structure has many sellers, each offering slightly different products.

    <p>monopolistic</p> Signup and view all the answers

    Match the market structures with their correct definitions:

    <p>Monopoly = Market with one seller and high barriers to entry Oligopoly = Market dominated by a few large firms Perfect Competition = Market with many sellers of identical products Monopolistic Competition = Many firms offering differentiated products</p> Signup and view all the answers

    What is the purpose of price ceilings implemented by governments?

    <p>To help consumers afford needs and essentials</p> Signup and view all the answers

    Market failures occur only when there is a lack of supply in the market.

    <p>False</p> Signup and view all the answers

    What are the three duties of a project manager?

    <p>Planning, organizing, and leading</p> Signup and view all the answers

    Governments may use __________ to support the income of producers while allowing the market to determine prices.

    <p>subsidies</p> Signup and view all the answers

    Which of the following is NOT a level of management?

    <p>Executive</p> Signup and view all the answers

    Autocratic leaders allow employees to participate in decision making.

    <p>False</p> Signup and view all the answers

    What is market failure and when does it occur?

    <p>Market failure is when the unregulated market fails to allocate resources efficiently, leading to issues like high prices or inadequate supply.</p> Signup and view all the answers

    The three management duties are planning, __________, and controlling.

    <p>organizing</p> Signup and view all the answers

    Match the management duties with their descriptions:

    <p>Planning = Setting specific objectives Organizing = Ensuring efficiency in meeting goals Leading = Providing direction to employees Controlling = Ensuring goals are met</p> Signup and view all the answers

    What strategy do governments use to provide targeted assistance without imposing price ceilings?

    <p>Vouchers and targeted assistance</p> Signup and view all the answers

    Investing in technology does not impact productivity in production processes.

    <p>False</p> Signup and view all the answers

    What are the six factors of production?

    <p>Natural resources, raw materials, labor, capital, information, management</p> Signup and view all the answers

    The steps in the production process include purchasing, grading, ______________, and quality control.

    <p>processing</p> Signup and view all the answers

    When do governments typically set price floors?

    <p>To ensure producers receive fair income for their products</p> Signup and view all the answers

    What is the definition of project management?

    <p>The planning and organizing of a company's resources to move a specific task or event toward completion.</p> Signup and view all the answers

    Which of the following is NOT a way to make production more ethical or sustainable?

    <p>Ignoring workers' rights</p> Signup and view all the answers

    Demographics include characteristics like income level and age.

    <p>True</p> Signup and view all the answers

    What are indirect competitors?

    <p>Companies selling different products but still competing for the same consumers' money.</p> Signup and view all the answers

    A unique selling proposition (USP) defines a product's __________ that sets it apart from competitors.

    <p>uniqueness</p> Signup and view all the answers

    Match the following HR functions with their descriptions:

    <p>Recruitment = Planning for staffing needs Performance Appraisal = Formal assessment of employee work Compensation = Benefits and pay for employees DEI = Promoting fair treatment in the workplace</p> Signup and view all the answers

    Which term describes the segment of consumers a business targets?

    <p>Target market</p> Signup and view all the answers

    Performance reviews should only document positive feedback for employees.

    <p>False</p> Signup and view all the answers

    What does break-even analysis compare?

    <p>It compares income from sales to fixed costs.</p> Signup and view all the answers

    In financial accounting, the main purpose is to __________ transactions from business operations.

    <p>record</p> Signup and view all the answers

    Match the following marketing mix elements with their definitions:

    <p>Product = Tangible and intangible offerings Price = Cost to consumers Promotion = Methods to advertise Place = Distribution channels</p> Signup and view all the answers

    Which of the following represents a direct competitor?

    <p>A cafe offering the same coffee and pastries</p> Signup and view all the answers

    Employees should never be involved in the performance appraisal process.

    <p>False</p> Signup and view all the answers

    List two key components of a performance appraisal plan.

    <p>Skill assessment, productivity evaluation</p> Signup and view all the answers

    To increase market share, a business can either increase the overall market size or take sales away from __________.

    <p>competitors</p> Signup and view all the answers

    What is one benefit of having a DEI department in a business?

    <p>Reducing turnover rates</p> Signup and view all the answers

    Study Notes

    Unit 1: Business Fundamentals

    • Needs vs. Wants: Needs are essential for survival (water, shelter, food), while wants are desires that can be deferred.

    • Profit Equation: Profit = Revenue - Expenses. For kilt pins, profit is $1.06 ($3 - $1.94).

    • Business Existence: Businesses exist to provide goods/services and generate profit. Some businesses are not-for-profit.

    Unit 1, Lesson 1.2: Demand

    • Disposable Income: Income remaining after taxes and mandatory deductions.

    • Discretionary Buying Power: The amount of disposable income left for non-essential items.

    • Demand: Consumer willingness to spend money on products/services at a given price.

    • Law of Demand : Price drops = demand rises—and vice versa.

    • Pricing Factors Affecting Demand: Price positioning (luxury vs. discount), price sensitivity (how demand reacts to price), and substitutes (alternative products).

    • Non-Pricing Factors Affecting Demand: Personal/household income, new technology, advertising/promotion, and trends/fads impact demand for products.

    Unit 1, Lesson 1.3: Supply

    • Supply: The quantity a business is willing/able to provide at various prices.

    • Law of Supply: Price increases = supply increases; price decreases = supply decreases.

    • Pricing Factors Affecting Supply: Improved procedures, loss leader pricing, bundled pricing to improve overall sales.

    • Non-Pricing Factors Affecting Supply: Capacity (limit on production), material shortages.

    • Equilibrium Point: Supply and demand meet; prices are stable.

    • Break-Even Point: Total costs = total revenue.

    Unit 1, Lesson 1.4: Types of Businesses

    • Profit vs. Not-for-Profit: Profit businesses aim for profit, while not-for-profit organizations use income for their stated purposes.

    • Not-for-profit Funding: Donations and potentially government funding.

    • Profit Purpose: All businesses do not necessarily aim for profit.

    Unit 1, Lesson 1.5: Market Forces

    • Market Forces: Factors influencing prices and quantities, including competition, consumer preferences, technology, economic factors, and government regulations.

    Unit 1, Lesson 1.6: Types of Business Ownership

    • Corporation: Separate legal entity, limited liability for owners.

    • Sole Proprietorship: Business owned by one person; full control, simple to operate.

    • Partnership: Business owned by two or more people; shared responsibility & resources.

    • Franchise: Business model where a franchisee buys the rights to sell an established brand.

    • Co-operative: Business owned and controlled by its members; each member has one vote.

    • Subcategories of Business Ownership: Crown corporations (government-owned), public corporations (publicly traded shares), private corporations (private or close ownership).

    Unit 1, Lesson 1.7: What Businesses Do?

    • Primary Industries: Extract natural resources (fishing, farming).

    • Secondary/Processing Industries: Transform raw materials into finished products (steelmaking).

    • Tertiary/Service Industries: Offer services (accounting, logistics).

    • Business Services: Services for other businesses (accounting, legal).

    • Consumer Services: Services directly for consumers (restaurants, retail).

    • B2B: Business sells to another business;

    • B2C: Business sells to consumer/end user

    • Wholesale: Buy from producers, sell to retailers.

    • Importers: Bring products from other countries into a country.

    • Retailers: Sell directly to consumers.

    Unit 1, Lesson 1.8: Introduction to Business Ethics

    • Ethics/Ethical Behaviour: Moral principles/acting honestly and justly.

    Unit 1, Lesson 1.9: Business Ethics (Continued)

    • Unethical Business Practices: Bait-and-switch, misleading advertising, faulty products, pressure sales, and exploitation.

    • Bribery/Theft/Fraud: Defined as intentional unethical activities.

    • Reprimanding Unethical Behavior: Varies from dismissal/counseling to prosecution.

    Unit 1, Lesson 1.10: Corporate Social Responsibility (CSR)

    • CSR: Principles and practices to enhance community well-being.

    • Stakeholder: Anyone affected by or affecting a business.

    • CSR Movement Starting: Desire from businesses for increased social responsibility.

    Unit 2, Lesson 2.1: International Business

    • Exploitation: Taking unfair advantage of vulnerable people for profit.

    • Sustainable Development: Using resources wisely without harming future generations.

    • Containerization: Shipping goods in standardized containers.

    • Outsourcing: Hiring outside service providers for specific tasks.

    • Benefits of International Trade: Access to markets, lower labor costs, more diverse products.

    • Social Costs of International Trade: Offshore outsourcing, labor abuse, and environmental damage.

    Unit 2, Lesson 2.2: Competitive Market Structures

    • Market Structures: Perfect Competition (many similar products), Monopoly (one seller), Monopolistic Competition (many differentiated products), Oligopoly (few large sellers).

    Unit 2, Lesson 2.3: Government Intervention in Markets

    • Price Floors: Minimum prices to protect producers.

    • Price Ceilings: Maximum prices to benefit consumers.

    • Minimum Wage Laws: Mandated minimum hourly wage.

    • Market Failure: Inefficient resource allocation in a market.

    • Government Intervention Strategies: Subsidies, targeted assistance, and progressive taxation.

    Unit 3: Business Leadership and Project Management

    • Management Levels: Corporate, Middle, Department. Each exercises distinct powers.

    • Management Categories: Planning, organizing, leading, and controlling.

    • Leadership Styles : Laissez-faire, democratic, autocratic.

    Unit 3, Lesson 3.2: Project Management

    • Project Management: Planning and organizing resources for task completion.

    • KPI: Key Performance Indicator

    Unit 4: The Functions of a Business

    Unit 4, Lesson 4.1: Factors of Production

    • Factors of Production: Natural Resources, Labour, Capital, Information, and Management. Describe each component.

    Unit 4, Lesson 4.2: Production Steps & Productivity

    • Production Steps: Purchasing, grading, processing, and quality control.

    • Improving Productivity: Capital investment, technology upgrades, inventory systems (JIT), and employee training.

    • Ethical/Sustainable Production: Eco-friendly materials, waste reduction, and fair labor practices.

    Unit 4, Lesson 4.3: The Marketing Concept (2 Cs)

    • Consumers: People interested in a company's goods/services. Demographics/Psychographics affect consumer behavior.

    • Competitors: Businesses vying for the same customers. Indirect/direct competitors compete in different/same categories. Market share reflects success.

    Unit 4, Lesson 4.4: Marketing (4 Ps)

    • Marketing Mix: Product, price, promotion, and place considerations for effective marketing.

    • Target Market: Specific customer groups a business aims to reach.

    • Product Characteristics: Tangible/Intangible, USP (unique selling proposition), market research.

    • Place Details: Various channels e.g. online/physical stores

    • Promotion: Advertising, sales promotions, discounts, direct marketing, social media, influencers.

    Unit 4, Lesson 4.5: HR Functions & Rights/Responsibilities

    • HR Duties: Recruitment, staffing planning, employee development.

    • Performance Appraisal: Formal evaluations documenting employee performance & providing feedback (employee improvements & promotions).

    • Employee Retention: Compensation, health/safety, wellness programs, development opportunities.

    • HR Role in Departures/Dismissals/Retirement: Managing transitions.

    • DEI Department: Promoting ethical practices by fostering fairness and respect.

    • Employer Rights/Responsibilities: Minimum wage, hours, vacation pay/provide safe working environment, employee engagement.

    Unit 5: Finance

    Unit 5, Lesson 5.1: Accounting and Break-Even Analysis

    • Financial vs. Managerial Accounting: Financial accounting reports on past transactions; managerial accounting reports for future decision making.
    • Break-Even Analysis: Cost analysis showing the point where total revenue equals total expenses.

    Unit 5, Lesson 5.2: Income Statements

    • Income Statement: Financial statement reflecting business profit (or loss) over a specific time period (week/month/quarter/year).
    • Revenue: Inflow of funds from sales.
    • Expenses: Outflows of funds spent on operational needs.

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    Description

    Test your knowledge on the basics of business, including the differences between needs and wants, the profit equation, and the demand factors that affect consumer behavior. This quiz covers essential concepts from Unit 1, Lesson 1.2: Demand.

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