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Question 1

A controllable variable is also called a:

decision variable.

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measurable quantity.


mathematical model.

none of the above


Question 2

Data for a particular subdivision near downtown Houston indicate that the average price per square foot for a home is $100 with a standard deviation of $5 (normally distributed). What is the probability that the average price per square foot for a home is greater than $90?





None of the above


Question 3

An air conditioning and heating repair firm conducted a study to determine if the average outside temperature could be used to predict the cost of an electric bill for homes during the winter months in Houston, Texas. The resulting regression equation was:

Y = 227.19 – 1.45X, where Y = monthly cost, X = average outside air temperature

If the temperature averaged 38 degrees during January, what is the forecasted cost of January’s electric bill?




None of the above


Question 4


levels for finished goods are a direct function of demand.

includes raw materials, work-in-process, and finished goods.

is any stored resource used to satisfy current or future need.

needs from raw materials through finished goods can be reasonably determined, once finished goods demand is determined.

all of the above


Question 5

R. C. Barker makes purchasing decisions for his company. One product that he buys costs $50 per unit when the order quantity is less than 500. When the quantity ordered is 500 or more, the price per unit drops to $48. The ordering cost is $30 per order and the annual demand is 7,500 units. The holding cost is 10 percent of the purchase cost. If R. C. orders 500 units each time he places an order, what would the total annual holding cost be?





None of the above


Question 6

Consider the linear programming problem.The maximum possible value for the objective function is:





None of the above


Question 7

According to Table below, there are five activities in a PERT project. Which activities are on the critical path?







Question 8

A vendor selling newspapers on a street corner is an example of a:

multichannel, single-phase system.

single-channel, single-phase system.

multichannel, multiphase system.

single-channel, multiphase system.

none of the above


Question 9

Refer to the Table below. Bags of chocolate candy are sampled to ensure proper weight. The overall average for the samples is 36 ounces. Each sample contains twelve bags. The average range is 1.3 ounces. The upper control chart limit for the sample averages would be:






Question 10

Customers enter the waiting line to pay for food as they leave a cafeteria on a first-come, first-served basis. The arrival rate follows a Poisson distribution, while service times follow an exponential distribution. If the average number of arrivals is four per minute and the average service rate of a single server is seven per minute, what proportion of the time is the server busy?







Question 11

The Marketing Director for Terrible Tours just bought a series of commercials on the Today Show and a run of print ads in the AARP magazine. Which part of the marketing mix best describes this activity?






Question 12

Casey has finally finished his Saturday chores and is preparing for a little “me time” away from the house and family. He and his wife have agreed on a budget of $50 for his weekly Saturday outings with his buddies. They are debating whether to play golf, watch the game at the local sports bar, or visit the car show as they only have funds for one of these. What environmental force are Casey and his friends experiencing?






Question 13

___________ segmentation refers to dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item.






Question 14

Which of the following is true of market-penetration pricing?

It involves setting a high price for a new product to appeal to the elite in society.

It results in the company making fewer and less profitable sales.

It should be used when the product’s quality and image support a high price.

It is best used in conjunction with a market-skimming pricing strategy.

It results in drawing in large numbers of buyers quickly, winning a large market share.

Question 15

Greater consumer control means that companies can no longer rely on ____________.

promoting brand-consumer interaction

marketing by attraction

marketing by intrusion

creating market offerings and messages that involve consumers

developing marketing concepts with an outside-in perspective

Question 16

Which of the following is the aim of the product concept?

Focus on making continuous product improvements

Market only those products with high customer appeal

Focus on the target market and make products that meet those customers’ demands

Ensure that product promotion has the highest priority

Improve the marketing of a firm’s best products

Question 17

A firm that uses the selling concept takes a(n) __________ approach.


niche marketing



societal marketing

Question 18

Canine Couture is launching a new line of hand-stitched doggy duds made from silk, cashmere, and linen. Couture has intentionally limited production and set prices for the new line at about four times the average price for other pet clothes in hopes of creating a prestige line. What pricing strategy is Canine Couture using?


Product line




Question 19

Making more sales to current customers without changing a firm’s products is known as ____________.

product development


product diversification

market segmentation

market penetration

Question 20

Physicians Sales and Service (PSS) is a large US commercial organization in the business of meeting the needs of doctors’ offices and small clinics while maximizing profits for itself and its shareholders. Primary products resold by PSS include a broad range of equipment and supplies common to the office/clinic environment. PSS boasts physical branches and outside salespeople throughout the country serving clinicians in both rural and urban environments. The organization’s domestic success relies heavily upon the close personal relationship developed and maintained between the PSS salesperson and his/her clients. Recently, PSS has leveraged its reputation and begun to serve the needs of overseas doctors and clinics through its e-commerce (e-business) website. PSS is primarily involved in the marketing function known as:






Question 21

Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. What is the total manufacturing cost per ceiling fan?





Question 22

Which of the following sections from the statement of cash flows includes activities that affect net income on the income statement?

Activities that affect net income on the income statement are not included in any of the above-mentioned sections.

Activities that affect net income on the income statement are included in the financing section.

Activities that affect net income on the income statement are included in the operating section.

Activities that affect net income on the income statement are included in the investing section.

Question 23

A statement of cash flows is generated to show:

the revenues the company has earned.

the expenses the company incurred during the time period.

the inflow and outflow of cash during the time period.

how profits were generated.

Question 24

Which of the following is not a use of international accounting standards?

As standards to be violated to improve intercountry comparability

By regulatory authorities for domestic and foreign companies

As an international benchmark for those countries that develop their own requirements

As national requirements

Question 25

The information below pertains to Bright Toy Company’s operating activities for 2009. The company sells light box toys and sold 10,000 units in 2009. What is the cost of goods available for sale for 2009?





Question 26

Global Engineering’s actual operating income for the current year is $50,000. The flexible budget operating income for actual volume achieved is $40,000, while the static budget operating income is $53,000. What is the sales volume variance for operating income?

$13,000 favorable

$13,000 unfavorable

$10,000 unfavorable

$10,000 favorable

Question 27

Which of the following is true about a statement of cash flows?

The statement of cash flows may be combined with the income statement.

The statement of cash flows is prepared at the option of management.

The statement of cash flows is required by generally-accepted accounting principles.

The statement of cash flows does not have to be completed if an income statement is prepared.

Question 28

A merchandising company’s:

expenses include only product costs.

expenses include both period costs and product costs.

income statement doesn’t include gross margin.

expenses include only period costs.

Question 29

Which of the following financial statements reports an entity’s cash receipts and cash payments during the period?

The balance sheet

The statement of cash flows

The statement of retained earnings

The income statement

Question 30

Under which of the following categories would Accounts payable appear?

Current liabilities

Current assets

Long-term liabilities

Long-term assets


Question 31

The demand for labor is:

derived from the satisfaction that hiring the inputs provides the owner or manager of the firm more


totally unrelated to the demand curve for the final product.

derived from a utility maximizing process similar to that used to derive the demand curve for goods and


derived from the demand for the final product being produced.

Question 32

A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that:

profits are positive for a monopolistically competitive firm and zero for a perfectly competitive firm.

profits are zero for a monopolistically competitive firm and positive for a perfectly competitive firm.

the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal.

marginal cost equals the market price for a monopolistically competitive firm but not for a perfectly competitive firm.

Question 33

Which one of the following statements is false?

AFC = TFC divided by Q


MC = TC divided by Q


Question 34

When money is accepted as payment in a market transaction, it is functioning as a:

store of value.

unit of accounting.

unit of investment.

medium of exchange.

Question 35

Which one of the following individuals is not counted as unemployed?

A recent college graduate currently without any employment and looking for her first full-time job

A 50-year-old woman laid off from her former job because of a downturn in the company’s sales and

looking for another job

A 22-year-old aspiring actress currently without any show business employment, but working

temporarily as a waitress while she auditions for acting jobs

A 35-year-old woman fired from her prior work because of poor performance and looking for another


Question 36

When the price of a good falls, there will be

a movement along the good’s demand curve.

both an outward shift in the good’s demand curve and a movement along the good’s demand curve.

no change in quantity demanded.

an outward shift in the good’s demand curve.

Question 37

In the long run, the price for a perfectly competitive firm:

will be determined by the firm’s supply and demand curves.

will allow for positive economic profits.

will equal the minimum average total cost.

will equal marginal cost where marginal cost is at a minimum.

Question 38

If firms in a monopolistically competitive industry are operating with economic losses, over time we would see:

the firms working together to increase price and everyone’s profitability.

firms alter their advertising rates until they made at least normal profits.

some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right.

some firms exiting the industry, causing the market supply curve to shift to the left, raising price.

Question 39

According to Keynesian economics, if there are unutilized resources in the economy and aggregate demand increases:

real GDP will rise and price level will fall.

real GDP will rise and price level will rise.

real GDP will fall and price level will remain constant.

real GDP will rise and price level will remain constant.

Question 40

Strategic behavior and game theory are features of which market structure?


Monopolistic competition


Perfect competition


Question 41

Unsystematic risk:

can be eliminated through diversification.

was eliminated by Sarbannes-Oxley.

cannot be eliminated through diversification.

is the same for all firms.

Question 42

__________ leverage magnifies the effect of changes in sales on earnings before interest and taxes.




Total or Combined

Question 43

In relation to investments made by the firm, retained earnings:

are sunk costs.

have the lowest cost of all financing sources.

have an opportunity cost associated with them.

have no costs since they are owned by the firm.

Question 44

At a given sales level, a firm has a degree of operating leverage of 1.2 and a degree of financial leverage of 2.0. What is the firm’s degree of total (or combined) leverage?





Question 45

Firms evaluate and select long-term investment projects using the __________ process.

capital structure

efficient market

stock analysis

capital budgeting

Question 46

Project A has an NPV of $500 and project B has an NPV of $800. Management should:

choose project A only if they are mutually exclusive projects.

choose both projects if they are mutually exclusive projects.

choose project B only if they are independent projects..

choose both projects if they are independent projects.

Question 47

The future value of $100 today earning 6% for three years is:





Question 48

Typically investors and corporate managers require greater return when risk increases. This is called being:


indifferent to risk.


investment grade.

Question 49

In the U.S., about 75% of all businesses are:

limited partnerships.

sole proprietorships



Question 50

What should be the primary goal of a financial manager?

Maximizing shareholder wealth

Maximizing earnings

Maximizing cash flow

Minimizing risk


Question 51

An agreement is not binding when:

both parties make a mistake regarding a material fact.

both parties make a mistake of law.

one party makes a mistake regarding a material fact.

one party makes a mistake of law.

Question 52

Smalltown is a small municipality within the state of Florida. Smalltown derives its lawful authority from:

its charter.

the state of Florida.

all of the above.

the U.S. Constitution.

Question 53

A party to a contract allowing the other party to continue without objecting that the

performance does not meet the contract is an example of a:

anticipatory repudiation.




Question 54

Which of the following could be a tort and/or a crime?

Wrongful interference with another’s business rights

Assault and battery

Battery but no assault


Question 55

A customer of Redbank wants to pay a bill in English pounds to a company in the U.K. The customer may:

request a wire transfer of the funds to the U. K. company.

request that Redbank draw a bank check payable in pounds on its account in a London bank and send the check to the U.K. company.

either A or B.

none of the above.

Question 56

An acceptance occurs when:

a particular form of words is stated to the offeror.

a particular mode of expression is made to the offeror.

the offeree reserves the right to reject the offer.

a clear expression of acceptance occurs.

Question 57

Sally agrees to buy Will’s motorcycle for $300.00. This is a:

unilateral contract since it is only one motorcycle.

bilateral contract.

unilateral contract since it is only one transaction.

any of the above.

Question 58

A checks and balances system applies only:

when Congress vetoes a presidential decision.

when Congress balances the federal budget.

when the separate branches of government exercise a check on the actions of the others.

all of the above.

Question 59

Damages in case of default that are specified in a contract are called:

contract damages.

nominal damages.

breach payments.

liquidated damages.

Question 60

Sam is an employee of Big Time Industries, Inc. He constantly uses high-pressure tactics when selling Big Time’s products. Mark, his boss, finds out about these tactics. In order to maintain an ethical workplace, Mark will most likely:

discharge Sam for unethical behavior.

congratulate Sam for achieving profits.

look the other way.

encourage other employees to use these tactics.


Question 61

Planning is defined by which of the following?

Conceptual, personal, and social

Goal definition, strategy development, coordination of activities

Interpersonal, informational, and decisional

None of the above

Question 62

Performance-based pay is also known as __________.

benefit pay

skill-based pay

intensive pay

variable pay

administrative pay

Question 63

Which scenario depicts a barrier to adequate operations management?

A manager ignores all efforts to raise the costs on consumers.

A manager is somewhat involved in the selection of future managers.

A manager makes sure his staff takes most responsibility for failures.

A manager takes an active interest in converting organizational culture.

A company refuses to spend funds in technological development.

Question 64

An office manager is appointing one member of his team to the position of acting manager, a position that gives him the limited possibility to make unilateral decisions. What management function is the office manager conducting?






Question 65

__________ departmentalization is based on territory or the physical location of employees or customers.





Question 66

Consider the relationship between workplace actions that are efficient and those that are effective. Which statement best describes this relationship as it relates to management?

Effectiveness is not necessary for effective tasks and actions.

Actions that are efficient without being effective should not be performed.

No action can be either efficient or effective; they must be both or neither.

The effectiveness of an action, unlike the efficiency, cannot be accurately measured.

Actions do not need to be efficient if they are effective.

Question 67

A large company pays most of its staff based on how well they perform their specified job

tasks and the efficiency they display in doing so. What is this an example of?

Variable pay

Tenure-based pay

Objective pay

Skill-based pay

Functional pay

Question 68

Which of the following managerial activities is more associated with lower-level managers than upper-level managers?

Direct supervision of others

Planning future activities

Resource accrual

Designing organizational structures

Political activities

Question 69

Which of the following is most likely a structured problem?

How to load a new program on your computer

How to find the best software for your computer

How to prevent your computer from crashing

How to create a blog on your computer that is popular

How to purchase the computer that is right for you

Question 70

Which scenario describes a manager filling an interpersonal role?

A manager motivates employees to complete delegated tasks.

A manager discusses company profits with major shareholders.

A manager reads over reports produced by a development team.

A manager selects his team for a new company project.

A manager settles a dispute between two employees.


Question 71

Mark is transferring funds online through the website of a reputed bank. Which of the following will be displayed in the address bar of his browser that will let him know that the bank is using the SSL protocol?





Question 72

The traditional process for developing information systems is __________.

the spiral approach

the V-model

the systems development life cycle

rapid application development cycle

Question 73

What name best describes a semiconducting device that contains all of the components of a CPU?



Integrated circuit


Question 74

__________ occurs when a hacker breaks into a DNS server and redirects all attempts to access a particular website to the hacker’s spoofed site.





Question 75

DSL is a type of an Internet __________.





Question 76

C++ and Java are examples of __________.

high-level language

assembly language

machine language

low-level language

Question 77

Which of the following is the largest unit of measurement?





Question 78

The main purpose of a Management Information System to an organization is to:

help decision makers in achieving organizational goals.

process data in real time.

provide Internet access.

provide timely information to its clients.

Question 79

Protecting equipment from physical damage from power surges is:

internal security

physical security.

operational security.

external security.

Question 80

A(n) __________ is a collection of data that has a name and is stored in a computer.





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