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University of Saskatchewan
Edwards School of Business
COMM 101 (02) & (04) Decision Making 1
25 marks
Midterm Exam March 1st 2010
1 Hour 20 mins.
You must return this signed question sheet with your answer sheet in order to receive a grade
Multiple Choice
Identify on the attached OPSCAN sheet the choice that best completes the statement or answers the question.
1. A manager in the life insurance industry would be looking at her company's ____ environment if she were
examining the national level of personal income, the unemployment rate, interest rates, inflation, and death
statistics.
a. fiscal economic
b. national economic
c. macroeconomic
d. competitive
e. microeconomic
2. The most basic measure of economic growth is the:
a. consumer price index
b. gross domestic product
c. producer price index
d. total of all goods and services produced
e. combined producer and consumer price indices
3. Guatamala can grow and sell cut flowers used in the florist trade, more easily and more cheaply than most other
countries. This is because of their climate, labour supply, government trade policies, and transportation
infrastructure. When it comes to the commodity of cut flowers, Guatamala has:
a. an advantageous competency
b. a comparative advantage
c. a core strength
d. an absolute advantage
e. a total advantage
4. All of the following are components of the consumer price index EXCEPT:
a. cars bought by young families
b. food bought by a mother to serve her family
c. x-rays for people who play weekend sports
d. trips to Disneyland, Six Flags, and other amusement parks
e. iron ore used by the steel industry
5. When the government raises taxes on consumers and businesses, it is dealing with ____ policy.
a. fiscal
b. monetary
c. inflationary
d. recessionary
e. expansionary
6. The slope of the supply curve is:
a. downward and to the right
b. upward and to the right
c. downward and to the left
d. downward and to the right
e. horizontal
7. Which of the following products has the most inelastic demand curve?
a. beer
b. televisions
c. iPods
d. flowers
e. flour
8. In perfect competition, there is:
a. only one producer
b. a large number of buyers and few sellers
c. no relationship between supply and demand
d. a large number of sellers producing nearly identical products
e. a large number of buyers who demand low prices
Page 2 of 8 9. For a time, only Xerox could produce dry-paper copiers because Xerox held all the patents on the process. Until
the patent expires, Xerox could be said to operate in a(n) ____ market structure.
a. monopolistic
b. non-competitive oligopoly
c. purely competitive
d. imperfect competitive
e. utilitarianistic
10. An individual who is thinking of buying a Wendy's franchise in London, Ontario, would be interested in ____ if
he were to examine the employment statistics, area income levels, and local competition.
a. area economics
b. microeconomics
c. aggregated economics
d. regional monetary policy
e. macroeconomics
11. The country of Azerbaijan, a former Soviet republic, has imports of $1.8 billion and has a favourable balance of
trade. This means that Azerbaijan has:
a. less than $1.8 billion in exports
b. exactly $1.8 billion in exports
c. more than $1.8 billion in exports
d. low inflation
e. an unfavourable exchange rate
12. ____ is the reduction of a currency's value relative to another currency.
a. Evaluation
b. Devaluation
c. Currency leveling
d. Deregulation
e. Exchange depreciation
13. China imposes a 45 percent tax on the market value of all chickens that are imported from other countries into
China. Another name for this type of tax is a(n):
a. embargo
b. boycott
c. subsidy
d. quota
e. tariff
14. In 1997, Russia and Ukraine exported carbon steel plate into Canada at a price much lower than the countries
were found guilty of charging the identical steel in their home markets. Russia and Ukraine were engaged in:
a. export pricing
b. dumping
c. unloading
d. dunking
e. add-on pricing
15. Which of the following items is NOT essential as one of the 5 elements needed for a valid business contract in
Canada?
a. agreement
b. capacity
c. consideration
d. legal purpose
e. written signature
16. When demand and supply meet, the price of the product or service is established. This is the point of:
a. price equality
b. equity
c. interaction
d. equilibrium
e. price stabilization
17. The least costly and least risky method for selling a product on the global market is:
a. licensing
b. contract manufacturing
c. importing
d. franchising
e. exporting
Page 3 of 8 18. An enterprise in which two or more firms or investors (including governments) share ownership of a business and
its property rights is called a(n):
a. cooperative
b. international partnership
c. joint venture
d. cartel
e. limited partnership
19. A country’s ____ is the set of beliefs, values, and social norms shared by members of a society that determines
what is socially acceptable.
a. regulations
b. traditions
c. laws
d. culture
e. standards
20. ____ move resources, goods, services, and skills across national boundaries without regard to the country in
which they are headquartered.
a. Multinational corporations
b. Borderless corporations
c. International monopolies
d. Cartels
e. Oligopolies
21. ____ is the study of people’s vital statistics, such as their age, race and ethnicity, and location.
a. Dogmatism
b. Delineation
c. Derivation
d. Demographics
e. Demandacity
22. Using the P.E.S.T. method of compartmentalising the various elements in the business environment, which of the
following trends does not fall into the “S” catagory:
a. having a tattoo
b. skydiving
c. skateboarding
d. liquid crystal displays
e. cosmetic surgery
23. The eHealth project was established to create electronic health records for the residents of the Province of
Ontario. It is an example of:
a. forward vertical integration by a computer company
b. the successful integration of minority employees
c. a huge IT project gone wrong
d. the difficulties involved in running a large ad campaign
e. none of the above
24. ____ is a philosophy that focuses on the consequences of an action, to determine if it is right or wrong. This
philosophy expresses the idea that anything that negatively affects the majority of people in a situation is morally
wrong.
a. Distributive justice
b. Preconventional morality
c. Social responsibility
d. Utilitarianism
e. Consumerism
25. ____ ethics represents the stage of development expected in mature adults.
a. Preconventional
b. Ego-centered
c. Conventional
d. Socially defined
e. Postconventional
26. The highest level of the corporate social responsibility “pyramid” is:
a. legal responsibilities
b. economic responsibilities
c. philanthropic (charitable) responsibilities
d. responsibilities to stakeholders
e. ethical responsibilities
Page 4 of 8 27. One of the keys to ethical business behaviour is:
a. how many mature workers are in the company
b. how many levels of the company are involved in decision-making
c. the perception of company rules by employees
d. the number of rules, regulations and guidelines provided by the company
e. how the company’s senior management behaves
28. Paul Thomas was going to leave the gas station without paying for the gas he had just put into his car, when he
noticed a police car pull up at one of the other pumps. He went into the cashier and paid because he was afraid he
would get caught if he tried to get away without paying. Thomas is in the following stage of ethical development:
a. postconventional ethics
b. conventional ethics
c. ego-centered development
d. self-defined ethics
e. preconventional ethics
29. Under Rawl’s Theory of Justice, you would distribute the harms and benefits across the affected stakeholders
a. by making an announcement in a newspaper first
b. so as to preserve the welfare rights of every stakeholder
c. using a Utilitarian approach
d. without knowing in advance who you would be
e. equally so that no one would get any advantage
30. ____ are all of the individuals or groups to whom a business has a responsibility.
a. Shareholders
b. Consumers
c. Lobby groups
d. Stakeholders
e. Investors
31. The building store company, Home Depot, supplies all the materials and the labour expertise for “Habitat for
Humanity”, a charitable home-building program. Senior management believes that this type of philanthropy better
reflects the company’s commitment to the community than simply donating money to charitable causes. This is an
example of:
a. social philanthropy
b. social investing
c. strategic giving
d. strategic paternalism
e. consumer-based giving
32. ____ refers to all of the equipment and techniques needed to manage and process information.
a. A data processing system
b. A transaction system
c. Information technology
d. A relational network
e. An intranet
33. A network that connects computers at different sites via telecommunications media is called a(n):
a. local area network
b. Web-based network
c. long-distance communications system
d. wide area network
e. in-house communications computer system
34. General Electric saves $1.6 billion per year by using its private corporate network that links its 340,000
employees. Another name for this network that operates behind a firewall is:
a. intranet
b. functional network
c. specialized network
d. extranet
e. information system
35. A retail manager who wants to know how his store’s sales would be affected if he reduces the number of different
national brands the store carries would use what type of information system?
a. transaction processing system
b. decision support system
c. information reporting system
d. expert system
e. office automation system
Page 5 of 8 36. A(n) ____ is an internal Web site that provides proprietary corporate information to a defined user group.
a. work station
b. internal network
c. virtual network
d. enterprise portal
e. knowledge manager
37. The most common form of business organization is the:
a. general partnership
b. corporation
c. sole proprietorship
d. cooperative
e. limited partnership
38. A term that means that business damages and/or debts can also be attached to the personal assets of the owners is
____ liability.
a. limited
b. informal
c. funding
d. unlimited
e. asset
39. Al Tomlin and Wilson Nkata recently closed their picture framing shop because they could not pay the
outstanding business debts. Since Tomlin and Nkata are both liable for the debts, their business was a(n):
a. general partnership
b. private corporation
c. limited partnership
d. open partnership
e. general corporation
40. A corporation’s board of directors:
a. is appointed by the Toronto Stock Exchange
b. is selected by the agency that chartered the corporation
c. acts as organizational figureheads
d. sets major corporate goals and policies
e. should never have more than seven members
41. Double taxation in a corporation means:
a. the corporation must pay taxes twice a year
b. earnings of the corporation and dividends of the shareholders both are taxed
c. corporations can double their earnings without higher taxes
d. corporations must pay both provincial and federal taxes
e. none of the above
42. Isadore Alfonse is considering the purchase of a Bonus Building Care franchise. Alfonse is NOT likely to get
assistance from the commercial cleaning franchisor in which of the following areas?
a. employee training
b. accounting procedures
c. permission to use company logo in advertising
d. site selection
e. start-up costs
43. A ____ merger brings together companies in unrelated businesses to reduce risk.
a. conglomerate
b. combination
c. horizontal
d. vertical
e. cooperative
44. Which of the following is a guideline a company should use to identify potentially successful mergers?
a. a buyer who wants to pay in stock (shares)
b. a company with a strong organizational culture
c. a premium price
d. a target that is significantly smaller than the buyer
e. all of the above
Page 6 of 8 45. In class we looked at a newspaper item about a new type of men’s underwear that an entrepreneur had developed.
It was special because it was:
a. disposable
b. left-handed
c. self-warming
d. self-cleaning
e. part of a new form of business activity index
46. The ____ is an agency of the federal government that offers both managerial and financial assistance to small
businesses.
a. Business Incubator Agency (BIA)
b. Federal Aid Program (FAP)
c. Business Welfare Administration (BWA)
d. Business Development Bank of Canada (BDC)
e. Canadian Council for Small Business (CCSB)
47. A ____ is a formal written statement that describes in detail the idea for a new business and how it will be carried
out.
a. mission statement
b. vision
c. business plan
d. statement of purpose
e. venture plan
48. The group that is most significant in new business start-up ventures in recent times is:
a. the children of entrepreneurs
b. women
c. retired executives
d. young men 18-25 years old
e. immigrants under 30 years old
49. The two forms of business financing are ____ (borrowed funds) and ____ (ownership funds).
a. credit; leverage
b. equity; debt
c. debt; equity
d. equity; leverage
e. debt; credit
50. ____ is financing obtained from investment firms that specialize in financing small, high-growth companies and
receive an ownership interest and a voice in management in return for their money.
a. Debt financing
b. Venture capital
c. Equity financing
d. Entrepreneurial capital
e. Corporate stock financing
51. One of the primary reasons why women start their own businesses is:
a. to spend more time with their families
b. because of frustrations at work
c. to have better retirement plans and more medical benefits
d. to reduce government regulation of their lives
e. because of how easy it is to obtain venture capital
52. Which of the following is NOT one of the four functions of management?
a. planning
b. controlling
c. organizing
d. budgeting
e. leadership
53. Reader’s Digest Association, Inc. has published Reader’s Digest magazine for over 80 years, and many believe
the publication is dated and can no longer attract many readers. They believe ____ plans would be needed to
revamp the magazine’s content, editorial staff, and readership.
a. tactical
b. operational
c. contingency
d. strategic
e. functional
Page 7 of 8 54. Management needs to be prepared to deal with problems and seize opportunities as they arise. A company often
identifies alternative courses of action to be taken if events undercut a strategic or tactical plan. These are called
____ plans.
a. functional
b. participative
c. procedural
d. technical
e. contingency
55. At Burger King, the restaurant manager must coordinate tasks, positions, and work units with order-takers, food
preparers, and cleanup people. This function is called:
a. organizing
b. controlling
c. communicating
d. planning
e. leadership
56. The lowest level of management, which usually has the most people to manage, is called ____ management.
a. top
b. middle
c. strategic
d. supervisory
e. functional
57. ____ is the process of guiding and motivating others toward the achievement of organizational goals.
a. Leadership
b. Communications
c. Power
d. Influence
e. Management
58. Which of the following is NOT one of the five key types of power?
a. reward
b. expert
c. referent
d. legitimate
e. influential
59. The first step in controlling is to:
a. take corrective action
b. measure performance against standards
c. monitor goals
d. explain the meaning of goals
e. establish performance standards
60. The ability to view an organization as a whole, to understand how the various parts fit together, and how it relates
to other organizations is a(n) ____ skill.
a. conceptual
b. strategic
c. tactical
d. organizational
e. hierarchical
61. When WestJet branched out from its original business of just offering flights into the offering of holiday packages
combining flights and hotel rooms, then what kind of diversification was this?
a. Concentric diversification
b. Horizontal product expansion
c. Geographical diversification
d. Forward vertical integration
e. Unrelated diversification
62. Which of the following is NOT one of the five major building blocks that determine the design of an efficient and
effective organizational structure?
a. division of labour and specialization
b. departmentalization
c. span of control
d. functional structure
e. managerial hierarchy
Page 8 of 8 63. Charlie Li has been hired by Exide Technologies to be its legal counsel. Li will handle all of Exide's legal affairs.
Li is in a(n) ____ position.
a. line
b. staff
c. matrix
d. centralized
e. indirect power
64. When a person at a lower level skips a level in the organization chart and consults his or her boss's boss, that
person is said to be violating the:
a. chain of command
b. functional chain
c. chain of accountability
d. chain of order
e. structural chain
65. Among managers there are three distinctive leadership styles. They are:
a. autocratic, open-door, and democratic
b. competitive, autocratic, and group-centered
c. committee, open-door, and closed-door
d. autocratic, participative, and free-rein
e. free-rein, democratic, and group-centered
66. A company with few managerial levels and a short chain of command usually has a wide span of control. This is
called a ____ organizational structure.
a. matrix
b. tall
c. flat
d. narrow
e. mechanistic
67. ____ is the practice of giving a great deal of authority and decision-making freedom to lower-level managers.
a. Centralization
b. Decentralization
c. Autonomy
d. Functionalization
e. Subordination
68. ____ is the organization structure that brings people from different functional departments to work on special
projects.
a. A functional organization
b. Subordinated management
c. A committee structure
d. A networked organization
e. A matrix structure
69. An organic organization has:
a. a relatively high degree of job specialization
b. centralized decision making
c. narrow spans of control
d. a long chain of command
e. loose departmentalization
70. In a desperate attempt to try to make you recall something about this course some 10 years after you graduate, the
Professor in this class wears:
a. the same bow tie every day
b. inelastic underwear
c. mismatched socks
d. a different bow tie every day
e. Georgio Armani
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