KOSSA Prep
____
1. In a command economy,
a. individuals are usually able to obtain exactly what they want
b. there is very little choice in what is available
c. production decisions are made by individuals
d. scarcity does not exist
____
2. The supply curve shows that the quantity produced of a good or service
a. decreases as price increases
b. is not affected by price
c. increases as price increases
d. increases as price decreases
____
3. Demand, an individual's need or desire for a product or service at a given price,
a. increases as price decreases
b. is not affected by price
c. increases as price increases
d. decreases as price decreases
____
4. A company that has a monopoly
a. controls all of a market
b. must be licensed
c. cannot compete in a market economy
d. can receive a subsidy from the government
____
5. The fixed costs of a business
a. are different each month
b. include interest on business loans
c. include the cost of production materials
d. are based on the quantity of goods produced
____
6. An entrepreneur uses the concept of marginal cost to
a. change a variable cost to a fixed cost
b. determine opportunity costs
c. reduce scarcity
d. decide whether a business change is desirable
____
7. If an entrepreneur decides to increase advertising rather than buy new equipment, the cost of the
advertising is
a. an opportunity cost
b. a variable cost
c. the value of the new equipment
d. all of these
____
8. Government influences production in a market economy by
a. determining what goods and services are to be produced
b. providing subsidies to producers of certain kinds of goods
c. selling goods and services
d. taxing monopolies at a high rate
____
9. In a market economy, the government may serve as a
a. regulator
b. redistributor of income
c. provider of social programs
d. all of these
____ 10. Public goods include all of the following except
a. schools
b. dams
c. day-care centers
d. armed forces
____ 11. Data that describe a group of people in terms of their tastes, opinions, personality traits, and lifestyle
habits are
a. demographics
b. demonstration data
c. psychographics
d. psychology data
____ 12. Market research is a system for collecting, recording, and analyzing information about
a. customers
b. competitors
c. goods and services
d. all of these
____ 13. The target market is the individuals or companies that are interested in a particular product or service
and
a. can afford to pay for it
b. are customers of the competition
c. are willing and able to pay for it
d. are located in the surrounding area
____ 14. A business that makes only a small amount of money selling the same or similar products or services
as another business is
a. indirect competition
b. direct competition
c. secondary competition
d. primary competition
____ 15. Information collected for the very first time to fit a specific purpose is
a. psychographics
b. primary data
c. secondary data
d. market data
____ 16. Focus groups
a. allow for in-depth discussion about a topic
b. are never used to collect primary data
c. should include your competitors
d. can help you interpret your data
____ 17. To prepare a pro forma cash flow statement, you must forecast your
a. losses
b. liabilities and assets
c. revenues and operating expenses
d. equity capital
____ 18. The liabilities section of a balance sheet includes
a. accounts receivable
b. loans payable
c. depreciation amounts
d. all of these
____ 19. Which of the following is not a financial statement needed for potential lenders and investors?
a. balance sheet
b. statement of operating expenses
c. income statement
d. cash flow statement
____ 20. The SBA helps small businesses by
a. buying fixed assets
b. providing collateral for loans
c. guaranteeing loans made by commercial banks
d. locating venture capitalists
____ 21. All of the following are reasons a bank may turn down your loan application except
a. a start-up business is more likely to default on a loan
b. you have adequate experience
c. your business plan is poorly conceived
d. you have invested too little of your own money
____ 22. Which of the following is not an important type of insurance for your business?
a. life insurance
b. workers' compensation
c. bankruptcy insurance
d. property insurance
____ 23. Alternatives to hiring permanent employees include
a. trainees
b. interns
c. freestyle workers
d. all of these
____ 24. During the job interview, you should
a. try to put the job candidate at ease
b. make a list of the questions you want to ask
c. review the job applicant's resume
d. write a summary of your impression of the candidate
____ 25. As part of their benefits, almost all employers offer
a. health benefits
b. dental insurance
c. paid sick leave
d. pension plans
____ 26. A fixed amount of pay for a certain time period is a
a. wage
b. commission
c. bonus
d. salary
____ 27. All of the following are ways to motivate your employees except
a. treat everyone the same
b. praise them publicly for good work
c. give them less responsibility
d. pay them well
____ 28. To be a good leader, you need to
a. listen, speak, and write effectively
b. hire appropriate employees
c. delegate responsibility
d. all of these
____ 29. To improve your cash flow, you can
a. decrease accounts payable
b. increase accounts receivable
c. decrease cash receipts
d. decrease disbursements
____ 30. You can improve your cash flow by
a. increasing the number of hours employees work each week
b. reducing some of your fixed expenses
c. reducing your inventory
d. all of these
____ 31. If annual sales for Department A are $55,900 and total sales are $93,600, what percent of sales come
from Department A?
a. 40.3%
b. 16.7%
c. 59.7%
____ 32. The antitrust law that makes it illegal for a business to require a customer to purchase one good in
order to be able to purchase another good is the
a. Sherman Act
b. Clayton Act
c. Robinson-Patman Act
d. Wheeler-Lea Act
____ 33. Activities the Federal Trade Commission monitors include all of the following except
a. false or misleading advertising
b. price setting by competitors
c. price discrimination
d. patent violations
____ 34. The legal right to exclusive publication, production, sale, or distribution of a literary or artistic work
is a
a. patent
b. trademark
c. copyright
d. license to publish
____ 35. The Consumer Product Safety Act sets safety standards for
a. food and drugs
b. products other than food and drugs
c. licensed products
d. businesses
____ 36. Regulations that protect employees involve
a. discrimination in the workplace
b. working conditions
c. minimum wages
d. all of these
____ 37. Ethics is the study of
a. moral choices and values
b. business behavior
c. different countries
d. consumer awareness
____ 38. A written code of ethics for your business
a. is not necessary if you have no employees
b. is required to get a license
c. will help your employees make ethical decisions
d. should be sent to your competitors
____ 39. As an entrepreneur, you have responsibilities to
a. your investors
b. your suppliers
c. your community
d. all of these
____ 40. If feasible, you should allow employees to
a. take time off from work to go shopping
b. work flexible hours
c. stay home during bad weather
d. all of these
____ 41. To meet your environmental responsibilities, you should
a. use nonrenewable resources
b. dispose of hazardous material improperly
c. recycle as many materials as possible
d. none of these
____ 42. Before you get involved in international trade, you should write a business plan that indicates
a. what your competition will be and why
b. who will manage your domestic business
c. what legal requirements you will need to meet to sell abroad
d. when you plan to begin exporting products
____ 43. A limit on the amount of a product that can be imported into a country over a particular period of
time is a
a. tariff
b. qualitative restriction
c. restrictive tax
d. quota
____ 44. Benefits of global competition include
a. increased sales
b. reduced costs
c. less dependence on current suppliers
d. all of these
____ 45. If you do business abroad, you will have to learn about the cultures of the countries in which you
plan to do business because
a. different cultures use different types of computer software
b. culture makes businesses more competitive
c. different cultures have different currencies
d. culture affects how people do business
____ 46. As an entrepreneur, you need to appreciate different cultures for all of the following reasons except
a. you will be able to market your business more effectively
b. the United States is a multicultural society
c. you may buy from and sell to people from different cultures
d. people from different cultures have the same needs and wants
Matching
Match each term to the correct definition below.
a. Customer profile
b. Customers
c. Demographics
d. Direct competition
e. Focus group
f. Indirect competition
g. Market research
h. Market segments
i. Observation
j. Primary data
k. Psychographics
l. Secondary data
m. Survey
n. Target market
____ 47. Data found in already published sources
____ 48. A system for collecting, recording, and analyzing information about customers, competitors, goods,
and services
____ 49. A description of the characteristics of the person or company that is likely to purchase a product or
service
____ 50. Data that describe a group of people in terms of their tastes, opinions, personality traits, and lifestyle
habits
____ 51. Groups of customers that share common characteristics
____ 52. The individuals or companies that are interested in a particular product or service and are willing and
able to pay for it
____ 53. Information collected for the very first time to fit a specific purpose
____ 54. Competition from a business that makes most of its money selling the same or similar products or
services as another business
____ 55. An interview with groups of target customers who provide valuable ideas on products or services
____ 56. Data that describe a group of people in terms of their age, marital status, family size, ethnicity,
gender, profession, education, and income
Match each term to the correct definition below.
a. commissioned
agents
b. culture
c. direct exporting
d. exports
e. geographic
expansion
f. imports
g. indirect exporting
h. market development
i. market penetration
j. qualitative
restriction
k. quota
l. sales representative
m. tariff
n. trade barriers
____ 57. Strategy for expanding the target market of a business
____ 58. Tax on imports
____ 59. The set of customs, beliefs, and social attitudes that characterize a particular group of people
____ 60. Products and services that are brought in from another country to be sold
____ 61. Standard of quality an imported product must meet before it can be sold
____ 62. Exporting goods and services by finding foreign buyers or distributors and then shipping products to
them
____ 63. Methods for keeping foreign businesses from competing with domestic producers
____ 64. Products and services that are produced in one country and sent to another to be sold
____ 65. Increasing market share for a product or service within a given market in a given area
____ 66. Limit on the amount of a product that can be imported into a country over a particular period of time
KOSSA Prep
Answer Section
MULTIPLE CHOICE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
B
C
A
A
B
D
D
B
D
C
C
D
C
A
B
A
C
B
B
C
B
C
B
A
C
D
C
A
D
C
C
B
D
C
B
D
A
C
D
B
C
C
D
D
D
D
MATCHING
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
L
G
A
K
H
N
J
D
E
C
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
H
M
B
F
J
C
N
D
I
K