1) To protect against lawsuits brought by anyone injured by your product, you will need to buy ________.

A) casualty insurance
B) business insurance
C) liability insurance

2) Which is not a potential penalty for breaking a contract?

A) A court may order you to pay damages to the other party who signed the contract.
B) You may be sued in a court of law by the other party who signed the contract.
C) You may lose a share of the ownership of your business to the other party who signed the contract.

3) ________ are the building blocks of business.

A) Personal relationships
B) Contracts
C) Letters of agreements

4) The form of protection offered under U.S. law to the authors of "original works of authorship" is a(n) ________.

A) patent.
B) electronic right.
C) copyright.

5) A good contract will spell out ________, or unforeseeable "acts of God" beyond anyone's control, for which neither party is responsible.

A) amendments
B) liabilities
C) contingencies

6) In a corporation, all profits go to ________.

A) the stockholders as salaries
B) the owners and the shareholders
C) reduce the surplus
D) the partners according to the terms of the agreement

7) Every corporation is recognized and treated under the law as ________.

A) an entity, much like a person, that has expenses and earnings
B) a large business
C) a small business
D) if it were its owners and employees

8) Obtain a trademark in order to ________.

A) protect your logo
B) protect all your intellectual property
C) register your business name

9) What is used to identify and distinguish the source of a service rather than a product?

A) sales mark
B) trademark
C) service mark

10) If you invent something and don't patent it, it falls into the public domain, meaning that ________.

A) you can sell the right to manufacture the invention
B) anyone can manufacture your invention and profit from selling it without paying the you
C) you can sell your invention publicly without paying the U.S. Patent Office

11) Infringement of intellectual property is ________.

A) profitable
B) a crime
C) a business tactic

12) The number of stockholders in a Subchapter S Corporation is limited to ________.

A) 75
B) 12
C) 50
D) 250

13) Engineers from what company developed Six Sigma in the 1980s?

A) Intel
B) Motorola
C) General Motors

14) Which of the following is given by the President of the United States?

A) Benchmarking Excellence Award
B) ISO9000:2001
C) Malcolm Baldrige National Quality Award

15) A measure of quality that may be used in Total Quality Management (TQM) is ________.

A) return rates
B) on-time delivery
C) compliance with product specifications
D) All of the above.

16) ________ is the management of sourcing, procuring, production, and logistics to go from rawmaterials to end consumers across multiple intermediate steps.

A) Supply Chain Management
B) Total Quality Management
C) The Production-Distribution chain

17) Within Six Sigma, the statistical methods are designed to eliminate defects to a failure rate of ________ defects per one million opportunities , or a 99.9997% success rate.

A) 34
B) 0.34
C) 3.4

18) Factors to consider when selecting a ________ include conformance to quality standards, extension of trade credit and timely delivery.

A) customer
B) supplier
C) sales representative

19) The set of actions that produce goods and services is called ________.

A) shipping
B) operations
C) manufacturing

20) ________, an American economist, argued that business should focus on making quality products instead of maximizing profits -- and that profits would follow.

A) Conrad Hilton
B) Paul Samuelson
C) W. Edwards Deming

21) Retail point-of-sales systems, restaurant menu order systems, and concert venue ticketing systems are all examples of ________.

A) industry-specific technology
B) systems for large businesses
C) custom software applications

22) A tool that can assist an entrepreneur in time management is a PERT chart. The acronym stands for ________.

A) Project Estimation and Review Technique
B) Process Emulation and Review Test
C) Program Evaluation and Review Technique

23) Which is not an effective way to protect yourself from a wrongful termination suit brought by an employee whom you have fired?

A) I can conduct regular reviews of employee performance.
B) I can hire a lawyer to protect me from lawsuits.
C) I can keep documentation of all my reasons for firing the employee to prove that he/she violated company ethics or was not performing his/her duties.

24) Research indicates that ________ is the most important characteristic required for successful leadership.

A) drive
B) intelligence
C) business knowledge
D) self esteem

25) Employees who feel used by their company ________.

A) may exhibit negative behaviors to customers
B) may quit the business
C) will not do their best
D) All of the above.

26) One of the most important things you can do when you start a business is to learn how to manage your ________ so that you can get more done with efficiency.

A) time
B) sales
C) costs
D) None of the above.

27) Why are entrepreneurs not always the best managers for their businesses?

A) Entrepreneurs are lazy.
B) Managers are better at coming up with fresh ideas for new businesses than entrepreneurs are.
C) Entrepreneurs tend to be creative types who get bored with the day-to-day details of running a business.

28) Many companies staff their human resources organizations using a ratio of one HR executive per ________ employees.

A) 50 - 200
B) 250 - 1000
C) 50 -100
D) 10 - 50

29) Ways to value a business include comparison to other firms, benchmarking, or looking at a multiple of net earnings. Any of the methods is an attempt to arrive at a ________.

A) fair market value
B) profit maximizing price
C) net present value
D) future value

30) Which of the following is a harvest strategy, not an exit strategy?

A) IPO (initial public offering)
B) franchising
C) acquisition
D) merger

31) A brand is a combination of name, logo, design that ________.

A) expresses the philanthropic intentions of a company to consumers
B) becomes associated in the minds of consumers with the products or services of a company
C) identifies the owner of a company

32) To take a business public means to sell its stock on the stock market. The first offering of a business' stock has been acronymed ________.

A) IPO
B) FIFO
C) IMPO
D) ALPO

33) It typically requires at least ________ years to develop a company worth harvesting.

A) five
B) twenty
C) ten

34) A(n) ________ is the amount of loss or damage that you agree to cover before any insurance coverage takes over.

A) premium
B) deductible
C) carrying cost

35) If you purchase $250,000 worth of insurance to protect your restaurant, with a $10,000 deductible, how much money are you entitled to receive as a payout if a fire destroys your store which is valued at $250,000?

A) $250,000
B) $10,000
C) $240,000

36) Some contracts specify that conflicts may be settle through ________ instead of court.

A) coercion
B) arbitration
C) negotiation
D) None of the above.

37) Tax-exempt, nonprofit corporations ________.

A) do not have boards of directors
B) pay dividends more often than for-profit corporations
C) are set-up with a specific mission to improve society
D) do not have legal liability

38) A(n) ________ is a model or pattern that serves as an example of how a product would look and operate if it were manufactured.

A) prototype
B) blueprint
C) specification

39) Which of the following is not a step in the production-distribution chain?

A) A retailer buys 6 rings.
B) A consumer wears jewelry to work.
C) A goldsmith crafts 10 rings.
D) A consumer enters a jewelry shop and buys a ring.

40) One sub-methodology employed in Six Sigma is DMAIC which stands for ________.

A) define, minimize, assess, improve, and collect
B) describe, measure, assess, improve, and control
C) define, measure, analyze, improve, and control

41) Make sure your business is run in an ethical manner by ________.

A) create an advisory board
B) keep accurate records and use financial controls
C) never take company profits just to pay yourself
D) All of the above.

42) Which is not an effective method for a manager to motivate employees?

A) threatening employees with disciplinary action.
B) recognizing outstanding employee contributions.
C) rewarding achievements by employees.
D) involving employees in decisions.

43) In order to be successful, an entrepreneur must choose ________.

A) the level of risk that he/she can comfortably tolerate
B) a high level of risk
C) a moderate level of risk, but no more than a quantifiable 10%

44) One of the advantages of an Employee Stock Ownership Plan is that ________.

A) employees will likely quit and leave
B) ESOPs offer tax breaks to the company
C) the owner will have to look for buyers in the general public
D) it will prevent employees from having control of the company

45) A ________ is an official document that gives you the right to carry out a specific activity, such as an outdoor festival.

A) certificate
B) permit
C) license

46) ________ are the amounts of inventory or raw materials and work-in-process kept to guarantee service levels.

A) Safety stock levels
B) Sufficiency levels
C) Minimum lots

47) What is the difference between strategic planning and operational planning?

A) Strategic plans are for one year or less and have very specific objectives, while operational plans are more vague and long-term.
B) Strategic planning covers the short-term day-to-day workings of a business, while operational planning sets out long-term goals.
C) Strategic planning sets out strategies for the business to achieve long-term growth and other goals, while operational planning covers the day-to-day operations of the business.

48) Why are franchisees typically assigned territories?

A) so that they are not placed in direct competition with other franchises from the same company
B) to avoid conflict with franchises from different companies
C) so they can be assigned to managers

49) Which of the following are not usually not-for-profit organizations?

A) trade associations
B) churches
C) book stores
D) charitable foundations

50) Lost sales and goodwill are potentially significant costs that may arise from ________.

A) too little inventory
B) too much inventory
C) Both A and B