Name:
Surname:
INTRODUCTION TO BUSINESS
Fall Semester 2012
Mid-term exam (November 14th 2012)
___________________
___________________
Answer all the questions please!
1. Shortly write the definition and goals of business!
.....................................................................................................................................................................
.....................................................................................................................................................................
.....................................................................................................................................................................
2. Write the short explanation for each word:
Revenue is.............................................................................................................................................
Expense is..............................................................................................................................................
Profit is..................................................................................................................................................
Supply is................................................................................................................................................
Demand is..............................................................................................................................................
3. What is social responsibility?
.....................................................................................................................................................................
.....................................................................................................................................................................
.....................................................................................................................................................................
4. Describe the responsibilities of firms to their:
Customers………………………….…………….…………………………………………………….
Employees…………………………………….……………………………………………………….
Creditors……………………………………….………………………………………………………
5. Diversity takes many forms in the workplace. What are types of diversity?
...........................; ..............................; ............................; .............................; and ...................................
6. Interest rate is........................................................................................................................................
....................................................................................................................................................................
7. There are 4 types of unemployment. For each explanation please write the name!
………………...- unemployment because of poor economic conditions. For example, people who
get laid off from a factory due to lack of demand for products
………………...- when people are between jobs. For example, a person who has skills quits their
job, and then looks for another one.
…………………- unemployed because of a lack of required skills. For example, people who have
limited education might more easily become structurally unemployed.
……………...….- unemployment caused by change in seasonal demand. For e.g., a ski instructor
may not work in summer, while brick layers may not work in winter (in extremely cold climates).
1
8. They are two types of inflation. Cost-Push inflation and Demand-Pull Inflation. Please give shortly
definition of both types!
.....................................................................................................................................................................
.....................................................................................................................................................................
.....................................................................................................................................................................
.....................................................................................................................................................................
9. Write the definition of equilibrium point and draw the graph in order to support it!
........................................................................
........................................................................
........................................................................
........................................................................
........................................................................
.
........................................................................
10. There are two types of government policy that influence economic conditions, the first is
Monetary policy and the second one is Fiscal policy. Write the meaning of both policies!
.............................................................................................................................................................
.............................................................................................................................................................
.............................................................................................................................................................
11. Outsourcing is.............................................................................................................................
.............................................................................................................................................................
12. Economic systems impacts the way we do business in other countries. There are 3 types of
economic system, name them upon given explanation!
……………………- Allows private ownership of business. Entrepreneurship is allowed.
……………………- Involves public ownership of businesses. Entrepreneurs are restricted based
on the perceived needs or the people.
……………………- Contains some features of two systems. For example, some countries allow
people to own businesses and private property, but certain services (such as healthcare) are run by
the government and provided at a low cost.
13. In your opinion, what is corruption and do you approve it?
.............................................................................................................................................................
.............................................................................................................................................................
.............................................................................................................................................................
14. What are the common methods of owning existing businesses?
………..………....................; ………..…………………….; and …………………………………
14. A business plan is........................................................................................................................
.............................................................................................................................................................
and it includes..............................;.............................;..............................; and .................................
15. Write the functions of managers!
.................................; ................................; ..................................; and ............................................
16. Write the managerial skills!
.................................; ................................; ..................................; and ............................................
2
True or False
1. A firm’s earnings (or profit) are equal to its revenue plus its expenses.
2. The goal of a firm’s management is to maximize the firm’s value, which is in the best
interests of the firm’s owners.
3. Marketing managers are primarily responsible for providing accurate financial information
to creditors and investors.
4. The government protects consumer by regulating the quality of some products that firms
produce.
5. Macroeconomics is focused on a specific business or industry of concern.
Multiple Choice Questions:
1. The stakeholders of a firm include all of the following except:
a) owners.
b) creditors.
c) employees.
d) suppliers.
e) government officials.
2. Managers rely on ______to detect the inefficient use of resources:
a) owners
b) creditors
c) marketing research
d) marketing mix studies
e) accounting data.
3. Firms are responsible to their creditors by meeting their:
a) dividend payments.
b) financial obligations.
c) retained earnings.
d) stockholders' equity.
e) treasury stock.
4. If a firm exaggerates its estimates of revenues or earnings:
a) investors pay too much for the stock.
b) stock value initially declines.
c) equity is diluted.
d) insider trading is occurring.
e) the stock is illiquid.
5. An increase in the general level of prices of products and services over a specified period
of the time is called:
a) inflation.
b) stagflation.
c) unemployment.
d) disinflation.
e) equilibrium.
3