Marketing Cluster Exam - Krizan Classroom...

Competency-Based Competitive Events *Written Exam*

Test Number 1021 Booklet Number _____

Marketing Cluster Exam

INSTRUCTIONS: This is a timed, comprehensive exam for the occupational area identified above. Do not open this booklet until instructed to do so by the testing monitor. You will have _____ minutes to complete all questions.

CAUTION: Posting these materials on a website is a copyright violation unless specifically authorized by MBAResearch. This comprehensive exam was developed by the MBAResearch Center. Items have been randomly selected from the MBAResearch Test-Item Bank and represent a variety of instructional areas. Performance Indicators for this exam are at the prerequisite, career-sustaining, and marketing specialist levels. A descriptive test key, including question sources and answer rationale, has been provided the state DECA advisor. Copyright © 2010 by Marketing & Business Administration Research and Curriculum Center®, Columbus, Ohio Each individual test item contained herein is the exclusive property of MBAResearch. Items are licensed only for use as configured within this exam, in its entirety. Use of individual items for any purpose other than as specifically authorized in writing by MBAResearch is prohibited. This exam, without modification, is licensed for one-time use on a date specified by the licensee (state DECA advisor or designee), on or before MARCH 31, 2010. Possession of this exam, without written authorization, under any other circumstances is a copyright violation. Posting to inter- or intranet sites is specifically forbidden unless written permission is obtained prior to posting. Report violations to MBAResearch at 800.448.0398.

Test 1021 MARKETING CLUSTER EXAM 1

Copyright © 2010 by MBA Research and Curriculum Center®, Columbus, Ohio

1. One of the main functions of the legal procedure is to A. establish laws. C. resolve disputes. B. enact legislation. D. regulate business.

2. Jason would like to start a small business which he could operate from his home. His business would not

cost a great deal to start, and he has experience and interest in that type of business. What form of ownership should he consider?

A. Monopoly C. Sole proprietorship B. Partnership D. Corporation

3. What marketing function is concerned with obtaining information about the preferences, opinions, habits,

trends, and plans of current and potential customers? A. Selling C. Marketing-information management B. Product/Service management D. Promotion

4. What type of intermediary would purchase baseball bats from one producer, mitts from another, and balls

from still another, and then sell an assortment to sporting goods stores? A. Retailer C. Producer B. Agent D. Wholesaler

5. Electronic billing, purchase-order verification, bar-code technology, and image processing are examples

of A. horizontal channel integration. C. functions of the finance department. B. integrated data between channel members. D. vertical channel integration.

6. Branch locations of a business that operate in the same city and target the same customers may

experience __________ channel conflict. A. community C. vertical B. horizontal D. dominant

7. The systematic gathering, recording, and analyzing of data about problems related to the marketing of

goods and services is known as A. marketing research. C. information flow. B. secondary data. D. situation analysis.

8. When Jeremy extended his hand toward Hank as they were introduced, Hank said, "Hello, Jeremy," but

he ignored Jeremy's hand and kept his own hands in his pockets. What kind of nonverbal message was Hank sending?

A. We have a lot in common. C. I don't want to know you. B. I am glad to meet you. D. We have met before.

9. Which of the following is a general guideline for answering the telephone in a businesslike manner:

A. Identify the firm or department and yourself B. Address the caller by his/her first name C. Take immediate action on the caller's request D. Record the correct spelling of each caller's name

10. A good example of a casually operated group is a

A. football team selecting a strategy or play. C. few players tossing a football during practice. B. football team running laps around the field. D. few friends talking about football.

11. Businesspeople need to use the correct words in written communication in order to make sure that the

receiver __________ the message. A. understands C. accepts B. agrees with D. approves of

Test 1021 MARKETING CLUSTER EXAM 2 12. Which of the following is an example of a complimentary close:

A. Enclosure C. Yours truly B. To Whom It May Concern D. Dear Occupant

13. When encouraging the reader to take a specific course of action, persuasive messages are most

effective when the message source demonstrates a high level of A. credibility. C. adaptability. B. inconsistency. D. objectivity.

14. When staff members wish to discuss problems related to their jobs, they should communicate with

A. their immediate supervisor. C. the company president. B. the personnel department. D. their coworkers.

15. What can you do to project to customers that they are important to the business?

A. Use customer names in conversations. B. Stare at customers so they know you are listening. C. Request a supervisor's assistance in resolving problems. D. Speak loudly so that customers can easily hear your responses.

16. Sharon is a customer service representative who spends most of her day on the phone with customers.

Her company prohibits her from eating at her work station so she won't be tempted to eat while talking with customers. This is an example of a(n) __________ policy.

A. service C. product B. employee D. customer

17. Which of the following is not an action to take in helping the slow/methodical, or analytical, customer:

A. Demonstrate merchandise carefully C. Summarize benefits of buying now B. Seek agreement on key selling points D. Show a large selection of products

18. Determine the type of utility being created in the following situation: A business offers a credit plan to

allow customers to purchase items they want. A. Price C. Form B. Place D. Possession

19. A Vermont ski shop has not yet received its November shipment of ski supplies. Since the holiday rush is

only days away, you would expect prices of existing stock to A. decrease. C. remain the same. B. increase. D. fluctuate.

20. Efficient resource use is an advantage of the ________ organizational structure.

A. regional C. matrix B. vertex D. regulated

21. The ultimate goal of a company that redirects its marketing effort to an untapped market segment is to

increase its A. profit. C. expenses. B. prices. D. output.

22. Stable prices and interdependence are characteristics of a(n)

A. technical monopoly. C. monopoly. B. oligopoly. D. differentiated oligopoly.

23. What is an advantage of specialization of labor?

A. Management can rotate jobs. C. Worker dependency increases. B. It's easier to train workers. D. Jobs may become obsolete.

Test 1021 MARKETING CLUSTER EXAM 3 24. During which phase of a business cycle does the demand for goods and services begin to exceed the

production capacity of the business community? A. Trough C. Peak B. Expansion D. Contraction

25. The way that businesspeople in different countries behave is based on what is acceptable in their

business A. activities. C. contracts. B. subcultures. D. policies.

26. Ultimately, employees with initiative try to further their education to prepare themselves for

A. job advancement. C. membership in professional organizations. B. lateral job changes. D. certification.

27. Accepting blame for failure and credit for success is an indication of a person's

A. initiative. C. consideration. B. responsibility. D. interpersonal skills.

28. An employee who consistently displays a positive attitude is likely to have

A. decreased chances of promotion. C. increased self-consciousness. B. difficulty with relationships. D. increased chances of success.

29. Which of the following is a true statement regarding negative feedback:

A. Most negative feedback points out a person's strengths, as well as his/her weaknesses. B. Negative feedback reinforces a message receiver's attitude or behavior. C. The primary purpose of negative feedback is to embarrass the message receiver. D. Negative feedback expresses disapproval about a specific behavior.

30. What should you develop to persuade others to believe what you say?

A. Personal credibility C. Creativity B. Nonverbal language D. Speaking skills

31. Which of the following is an example of using posture to express assertiveness:

A. Explaining why you must refuse a request for help B. Raising your eyebrows when you have questions C. Standing up straight when talking to other people D. Frowning when you disagree or disapprove

32. Which of the following is an example of a conflict response mode:

A. Frustration C. Mediation B. Avoidance D. Exclusion

33. Tim and his classmates all feel that their teacher's grading scale is unfair. While everyone else sits

around and grumbles about it, Tim decides to ask his teacher for a meeting to discuss the grading scale. Which characteristic of a change leader is Tim displaying in this situation?

A. Knows how to coach others C. Loves to learn new things B. Persuasive D. Not afraid to “go for it”

34. Because the United States is made up of people from all parts of the world, it has many different

A. governments. C. courts. B. cultures. D. sanctions.

35. Businesses that offer revolving charge accounts and send customers updated statements showing the

status of their accounts are following which federal law? A. Equal Credit Opportunity Act C. Fair Credit Billing Act B. Truth-in-Lending Act D. Fair Credit Reporting Act

Test 1021 MARKETING CLUSTER EXAM 4 36. Which of the following statements about understanding your spending habits is true:

A. A key aspect of opening a bank account C. The first step in creating a financial plan B. A key aspect in exceeding financial goals D. The last step in creating a financial plan

37. The Chrysler Theater is hosting the road show of "Annie." In which of the following cases would the

theater be liable for damages: A. A guest trips on loose carpet in the hallway and sprains an ankle. B. During intermission, one attendee accidentally spills a drink on someone. C. An attendee's car parked in a city lot gets broken into during the performance. D. People complain that the theater-goers in front of them blocked their view of the show.

38. Business managers use accounting information to help them to

A. reduce insurance premiums. C. calculate excise taxes. B. allocate their funds. D. pay labor union dues.

39. A business's buying buildings, vehicles, and equipment is an example of money flowing out in order to

acquire A. products. C. staples. B. assets. D. supplies.

40. Benny's Bike Shop manufactures bicycles for its customers during the year. Benny's purchas es

sprockets from Spikes Sprockets, tires from Tiny's Tires, and frames from Freddie's Frames. The expense of purchasing these items is known as

A. gross profit. C. revenue. B. operating expenses. D. cost of goods sold.

41. Which of the following is a measure of how well a business generates cash flow:

A. Capital structure C. Return on capital B. Accounts receivable D. Accounts payable

42. Which of the following is a desired characteristic of the format of a particular budget report:

A. Is flexible and unimportant C. Can change to meet a manager's needs B. Is standardized and does not change D. Is unique to each department and manager

43. In what way might a human resources manager be involved in employee benefits?

A. Selecting an employee's personal plan options B. Determining eligibility and costs of benefits C. Collecting insurance payments from employees D. Choosing an employee's vacation days

44. A wholesaler breaks down a large shipment of a product and sells portions of it to several retailers. The

wholesaler is reducing a discrepancy of A. installation. C. quantity. B. assortment. D. promotion.

45. As Justin is cooking, his sister reads the recipe directions to him out loud. Justin isn't sure if she said one

teaspoon of vanilla or two. He gives her a puzzled look, and his sister reads the directions again. Which of the following steps for following directions does this situation illustrate:

A. Accept responsibility B. Acknowledge directions verbally or nonverbally C. Take notes D. Eliminate distractions

46. Which of the following Internet-based marketing-research methods is most likely to raise an ethical issue

regarding the users' right to privacy: A. Scan portals C. Browsers B. Cookies D. Banner ads

Test 1021 MARKETING CLUSTER EXAM 5 47. Using a database to track its customers' preferences and buying habits can usually help a business

A. build strong, loyal customer relationships. B. obtain additional deductions for its semi-annual tax return. C. reduce unnecessary operational expenses. D. decrease the need for personnel to analyze marketing activities.

48. The observation method of collecting marketing-research data involves

A. surveying consumers by mail. C. watching what consumers do. B. test marketing new products. D. calling consumers on the telephone.

49. Advertisers that use concept testing to obtain feedback from potential customers are conducting

A. focus group analysis. C. target readership evaluation. B. primary market research. D. pretest idea measurement.

50. What do businesses create to help answer the research problem?

A. Objectives C. Procedures B. Strategies D. Activities

51. How might a business use the information in salespeople's lost-business reports that indicates that

customers are dissatisfied with the business's credit policies and service? A. To identify its target market C. To revise its marketing strategy B. To change its operating goals D. To update its promotional techniques

52. Which of the following is an example of a business developing a code for answers to survey questions in

order to process and analyze marketing information: A. Results are tabulated according to date received. B. Questions are numbered in chronological order. C. Each survey contains an identification number. D. Each answer has a specific numeric value.

53. In addition to the wording on a questionnaire being clear, the wording should be

A. ambiguous and complex. C. concise and objective. B. complex and concise. D. objective and adaptable.

54. Because of customer requests, a business decides to reorder a product that it had stopped selling. The

business is using the A. distribution process. C. production process. B. promotional-mix concept. D. marketing concept.

55. The XYZ Corporation has set a goal to increase profitability by 15% within the next two years. To achieve

that goal, the corporation has decided to open a new location. This strategy is the corporation's A. plan of action. C. type of risk. B. marketing mix. D. financial plan.

56. Which of the following is an example of an external change that could affect a business's sales forecast:

A. A new sales rep has been hired to develop the company's territory in Texas. B. The population of a town increases when a new hospital opens in the community. C. The company plans to modify its approach to mailing catalogs to customers. D. A company plans to raise prices on its products.

57. Managing information regarding copyrights and trademarks helps a company to preserve its

A. identity. C. correspondence. B. inventory. D. customers.

58. The scope of the Internet can be described as

A. regional. C. worldwide. B. secure. D. proprietary.

Test 1021 MARKETING CLUSTER EXAM 6 59. What is the visual tool in presentation software that smoothly moves one slide into the next slide?

A. Transition C. Effects B. Animation D. Formatting

60. What type of software would a business use to calculate the effect that charging higher rates would have

on profit? A. Presentation C. Database B. Desktop publishing D. Spreadsheet

61. A new law was passed that affects the type of personnel records Germaine must keep at his financial

services company. What is influencing the selection of records that the business must keep? A. Regulations C. Industry B. Leaders D. Size

62. Which of the following is an example of information that a manufacturing company keeps about its

customers: A. Expense reports C. Payroll reports B. Tax returns D. Invoices

63. What type of trend are businesses considering when they analyze where customers live and their ethnic

backgrounds? A. Demographic C. Technical B. Environmental D. Cultural

64. Which of the following forms of technology is most useful in operations:

A. Smart phones C. E-mail B. Wireless internet D. Computer-aided design

65. A common cause of back injuries on the job is

A. sitting in one position. C. hard physical labor. B. poor posture. D. improper lifting.

66. What do project-planning tools show you about the project?

A. When you will do a similar project C. How pleased the stakeholders are B. Why you want to complete the project D. Who is doing what

67. Which of the following is a way that effective purchasing benefits a business:

A. Creates jobs C. Lowers costs B. Increases assets D. Reduces sales

68. Production is often called a conversion process because it

A. makes inputs from outputs. C. changes failure to success. B. creates product utility. D. turns resources into products.

69. One way that employees can help to control a business's expenses is by

A. handling products casually. C. overlooking thefts. B. rotating stock daily. D. arriving at work on time.

70. Why is it important for businesses to maintain storage areas in a way that allows them to identify and

discard products whose expiration dates have expired? A. To prevent cross-contamination C. To obtain replacement items B. To eliminate health hazards D. To follow federal guidelines

71. Personal grooming rules for hair should include keeping the hair clean, styled, and

A. dandruff free. C. cut short. B. tinted. D. curled.

Test 1021 MARKETING CLUSTER EXAM 7 72. In a staff meeting, a store manager asks employees to come up with as many suggestions for

improvement as they can within 15 minutes. What creativity technique is being used? A. Attribute listing C. Brainstorming B. Checklist D. Problem identification

73. Employees who arrive at work on time and direct their own work-related activities during the course of the

day usually possess positive __________ skills. A. inner-qualitative C. self-management B. self-conceptual D. personal-orientation

74. Many teenagers begin searching for their first jobs by contacting

A. community training programs. C. national corporations. B. employment agencies. D. neighborhood businesses.

75. What is the preferred length of a job résumé?

A. As long as necessary C. Five pages B. Three pages D. From one to two pages

76. Why do many businesses provide opportunities for their employees to continue their education or receive

additional training? A. To provide financial assistance C. To identify problems in the company B. To be able to promote from within D. To support the local community college

77. Informing, persuading, or reminding customers about products is known as

A. product planning. C. pricing. B. promotion. D. place.

78. What is the advantage to a business of using bar-code pricing?

A. Easier to change prices B. Reduces required business security C. Easier for customers to read D. Reduces number of employees needed for sales

79. Which step in the new-product development process involves seeking feedback from customers to know

what response they would give to a proposed product? A. Product screening C. Idea generation B. Concept testing D. Feasibility analysis

80. A business using satellite communications systems to track a product from the time it is ordered until it is

delivered is an example of technology impacting the __________ function. A. product/service management C. transportation and receiving B. marketing-information management D. selling and promotion

81. How does the use of grades and standards affect the buying and selling process?

A. It provides product information on unsafe products. B. It enables consumers to buy without having to inspect each product. C. It enables businesses to set high prices. D. It enables salespeople to suggest products without having to determine customer needs.

82. An unwritten warranty that is understood by the customer and the seller that the product will perform as

expected is a(n) __________ warranty. A. full C. limited B. implied D. express

Test 1021 MARKETING CLUSTER EXAM 8 83. Mr. and Mrs. Finetune purchased a new digital camera from Optical One. Six months after purchasing

the product, it caught on fire and was damaged very badly. The Finetunes contacted the manufacturer so they could have the camera replaced. The representative gave them a control number and retailer that would provide them with another digital camera. This is an example of the manufacturer complying with which of the following federal laws:

A. Fair Packaging and Labeling Act C. Consumer Product Safety Act B. Federal Food, Drug, and Cosmetic Act D. Magnuson-Moss Warranty Act

84. The assortment of products that a firm offers for sale is referred to as its product

A. line. C. mix. B. consistency. D. differentiation.

85. A company packages two software programs together and sells them at a lower price than if each

program were purchased individually. This is an example of product A. integration. C. bundling. B. blending. D. consolidation.

86. Before selecting a brand name for a new product, marketers should determine the acceptability of brand

possibilities among different cultures. As part of this process, marketers should A. create URLs for the product in each of the countries where the product will be marketed. B. determine if the brand name would be culturally taboo where the product will be marketed. C. develop a different trade character for each of the countries where the product will be marketed. D. choose a different brand name for each country where the product will be marketed.

87. Determine whether the following statement is true or false: Promotion is nonpersonal communication of

information about goods, services, images, or ideas to achieve a desired outcome. A. False, promotion can be personal or nonpersonal communication about ideas, images, goods, or

services. B. False, promotion is any paid form of communication about ideas, images, goods, or services. C. True, promotion is any nonpaid form of communication about ideas, images, goods, or services. D. True, promotion is the nonpersonal communication of ideas, images, goods, or services.

88. Premiums, coupons, point-of-purchase displays, contests, and dealer incentives are all examples of the

form of promotion known as A. sales promotion. C. publicity. B. advertising. D. personal selling.

89. Which of the following is an example of electronic interactive media that allows businesses to promote

their products to large audiences: A. Specialty C. Transit B. Internet D. Electronic spectaculars

90. In a free-enterprise economic system, promotional practices are often subject to regulation by

governmental systems, consumer groups, and __________ organizations. A. liability C. nonprofit B. competitive D. industry

91. Which of the following types of media may include catalogs:

A. Out-of-home C. Broadcast media B. Direct mail D. Transit media

92. Which of the following statements is true regarding direct advertising strategies:

A. Marketers often select their direct advertising methods based on customers' preferences. B. Use of e-mail advertising messages rewards most marketers with a very high response rate. C. Telemarketing programs are generally considered to be obsolete forms of direct advertising. D. Infomercial and home shopping television are the least effective media to send promotional

messages.

Test 1021 MARKETING CLUSTER EXAM 9 93. Your partner has designed a sharp, distinctive graphic logo for your business's ad and wants you to

develop a catchy phrase to use with the logo. What will you be creating? A. Headline C. Copy B. Slogan D. Illustration

94. One of the first steps in developing a promotional plan is to

A. set objectives. C. design a message. B. prepare a budget. D. create a schedule.

95. Which of the following is a promotional activity that retail businesses should coordinate with their special

promotions: A. Visual merchandising C. Sales training B. Information gathering D. Product planning

96. Carlos tries to respond personally to his customers' needs and wants by using communication to

influence their purchase decisions. Carlos is engaged in A. distributing. C. financing. B. advertising. D. selling.

97. Maggie is in the market for a new stove, and Jan recommends Appliance World because she has

purchased three different appliances there and the company backs up its promises. This is an example of which benefit of customer service?

A. Profit motive C. Spirit B. Reputation D. Convenience

98. Fostering customer loyalty and goodwill helps to build a clientele, but these efforts can be wiped out by

salespeople who A. implement business policies. C. avoid competition. B. fail to keep promises. D. give customers full attention.

99. New salespeople often rely on more experienced personnel to explain product information that is

A. ordinary. C. technical. B. routine. D. favorable.

100. What is the primary difference between selling approaches in the retail and manufacturing industries?

A. The level of communication C. The nature of the customer B. Sales volume in terms of dollars D. Business ownership structure

KEY

Test Number 1022

Finance Cluster Exam


Test 1022 FINANCE CLUSTER EXAM—KEY 10 1. D

Minors. Businesses usually are prevented from entering into legally binding contracts with certain groups of people because these people are not considered to have the capacity to understand the consequences of their actions. One of these groups includes minors, those people under the legal age. In most cases, minors cannot enter into legally binding contracts because they are not old enough to be responsible for the consequences. Businesses usually may enter into legally binding contracts with people who are adults, older than the legal age, regardless of whether they are foreigners, senior citizens, or tourists. SOURCE: BL:002 SOURCE: Bovée, C. L., & Thill, J. V. (2008). Business in action (4th ed.) [pp. 381-382]. Upper Saddle

River, NJ: Pearson Prentice Hall. 2. B

Set water quality standards for industry. Setting water quality standards is part of the agency's emphasis on society's health. The EPA has no authority over where you get your water supply or how much you use. While the agency may test pollution levels in rivers and streams, it has no interest in the water levels that are found there. SOURCE: BL:073 SOURCE: U.S. Environmental Protection Agency. (n.d.). What are water quality standards? Retrieved

September 20, 2009, from http://www.epa.gov/waterscience/standards/about/ 3. B

Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act repeals part of the Glass-Stegall Act of 1933 by allowing different types of financial institutions to form mergers or consolidate. The Securities Exchange Act of 1934 requires the disclosure of certain financial information, regulates the issuance of securities, and outlaws insider-trading practices. The Sarbanes-Oxley Act of 2002 regulates corporations' and public accounting firms' activities. SOURCE: BL:133 SOURCE: Answers.com. (2009). Gramm-Leach-Bliley Act of 1999. Retrieved September 19, 2009, from

http://www.answers.com/topic/gramm-leach-bliley-act-of-1999 4. A

Charitable donation. Gifts are money, financial products, or property given to an individual or organization. Some gifts, such as charitable donations, are tax deductible. This means that the donor pays a reduced amount of tax or is exempt from paying the tax, depending on the type and value of the gift. Vacation homes, stocks, and inherited items are taxable gifts. SOURCE: BL:134 SOURCE: Internal Revenue Service. (2008, October 27). Frequently asked questions on gift taxes.

Retrieved September 19, 2009, from http://www.irs.gov/ businesses/small/article/0,,id=108139,00.html#3

5. D

Conduct a compliance audit. Financial-services businesses must follow many government regulations. These regulations affect the way that businesses record and report financial data. To ensure that the business is following all of the regulations, the business should conduct a compliance audit. A comprehensive compliance audit can detect discrepancies and problems. For example, a compliance audit might indicate that updated compliance software will resolve or correct a noncompliance issue. Developing a business plan and monitoring service procedures are not actions that will ensure that the business is following government regulations. SOURCE: CC:003 SOURCE: Beaumier, C. (2007, June). How to audit compliance in the financial services industry.

Retrieved September 19, 2009, from http://www.knowledgeleader.com/KnowledgeLeader/content.nsf/dce93ca8c1f384d6862571420036f06c/914cac74cb8c8d0f88257345007cf3ca/$FILE/How%20to%20Audit%20Compliance%20in%20the%20Financial%20Services%20Industry.pdf


Implement security policies. Businesses have an ethical responsibility to maintain the privacy of their customers' financial information. Businesses must take precautions to ensure that customers' credit, loan, and other types of financial data are kept confidential. To maintain confidentiality, businesses must develop and implement security policies. The policies may restrict the employees' access to customers' financial information. The policies may also involve the use of computer safety measures, such as firewalls and encryption techniques. Collection procedures are the activities that the business uses to collect funds owed by others. Developing collection procedures, monitoring competitors' activities, and reviewing inventory systems are not actions that will help businesses protect the privacy of their customers' financial information. SOURCE: FM:003 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 355-359). Mason, OH: South-

Western Cengage Learning. 7. B

Oral directions. When a manager tells an employee to take charge of a project, the employee is receiving oral directions. When a person speaks, s/he is not giving nonverbal directions or written directions. Directions for taking charge of a project are not social directions. SOURCE: CO:119 SOURCE: QS LAP 24—Simon Says

8. B

Listen with empathy. Empathy is the ability to put oneself in another person's place. Listening with empathy helps the listener to understand the speaker's point of view. You should stand a reasonable distance from the speaker. Standing too close may be interpreted as aggressiveness. If you are thinking about what you will say next, you may not hear everything that the speaker says. Background noise exists in all environments and cannot be eliminated. SOURCE: CO:017 SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)

[pp. 258-259]. Cincinnati: South-Western. 9. B

Enunciation. Proper enunciation involves clearly and distinctly voicing the sounds of words. Using proper enunciation is important when giving verbal presentations because it makes it easier for listeners to understand the message. Pronunciation is the manner of saying words. Vocabulary includes all words understood by an individual. Tone communicates emotions and attitudes through the voice. SOURCE: CO:147 SOURCE: eHow, Inc. (1999-2009). How to enuciate. Retrieved September 19, 2009, from

http://www.ehow.com/how_2092518_enunciate.html 10. A

Speak loudly enough for the audience to hear the message. When making an oral presentation to a group, the speaker should speak loudly enough for everyone in the audience to hear what s/he is saying. If audience members cannot hear what the speaker is saying, they might misunderstand or misinterpret the message. A speaker should try not to turn away from the audience when presenting visual aids and should maintain eye contact with the audience. Because swaying back and forth can distract the audience, the speaker should avoid this type of movement. SOURCE: CO:025 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [p. 95]. Mason, OH: Thomson South-Western.

Test 1022 FINANCE CLUSTER EXAM—KEY 12 11. A

Memorandums. Memorandums are the main form of written communication within a business. Memorandums are informal letters or notes between a company's employees. Letters are the principal form of written communication between businesses. Telephone calls and staff meetings are not forms of written communication. SOURCE: CO:016 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [pp. 298-299]. Mason, OH: Thomson South-Western. 12. A

Analytic. Informational messages communicate knowledge, facts, or data to the message receiver. Analytic messages specifically communicate information that the message sender or someone else has evaluated, compiled, or interpreted, which gives the message meaning. For example, if a manager writes a memo stating that a project is over budget and backs up the statement with numerical data and examples, the manager is providing evaluative (analytic) information. Explanatory messages simply state information in a neutral and objective way. The simplicity or complexity of an evaluative message depends on the message topic. SOURCE: CO:039 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [pp. 217-218]. Mason, OH: Thomson South-Western. 13. C

Less formal. A simple, or short, report is less formal than a long, or complex, report. It is often presented in a memo form so that the recipients can read it quickly and use the information in their decision making. A simple report is less comprehensive than a complex report. SOURCE: CO:094 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 366-367].

Boston: Irwin/McGraw-Hill. 14. A

Grapevine. Grapevine communication exists in most companies. It is an informal, oral communication method in which information is passed around the company but not formally announced or verified. The direction of information flow may be either vertical or horizontal. SOURCE: CO:014 SOURCE: Lehman, C. & DuFrene, D. (2005). Business communication (14th ed.) [pp. 11-13]. Mason,

OH: South-Western. 15. C

Create positive customer/client relations. Policies that establish appropriate attitudes toward customers/clients help to ensure that employees will treat customers in a way that will create positive relations. Such policies do not prevent all conflict with customers/clients because they do not guarantee that the business can always do what the customer wants. These policies are not established for the purpose of making employees' jobs easier. Customer objections are reasons customers have for not buying, and they are handled with selling techniques that may involve disagreeing politely with the customer. SOURCE: CR:003 SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 8, 88-89). Mason, OH: South-

Western.

16. C Silent. Silent customers are shy, insecure, or too sensitive to talk very much even when they need help. The stock broker may have difficulty meeting the needs of this kind of customer because it is hard to identify those needs. Customers who are patient, agreeable, and decisive are much easier to help. SOURCE: CR:009 SOURCE: EI LAP 1—Making Mad Glad

Test 1022 FINANCE CLUSTER EXAM—KEY 13 17. C

Determining each customer’s needs. Customer complaints often occur when customers make improper buying decisions or are inconvenienced. Bank tellers can help customers avoid dissatisfaction by accurately determining their needs and serving them promptly. Asking customers personal questions about their ethnicity is illegal. Pressuring customers to open new accounts will result in complaints if the accounts fail to meet customer needs. The bank teller should discuss only the bank products applicable to each customer rather than discussing all bank products. SOURCE: CR:010 SOURCE: Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [p. 152]. Mason,

OH: South-Western Cengage Learning. 18. A

Be honest, open, and trustworthy. While it is important for finance professionals to help their clients manage their finances and grow their wealth, it is also important that they earn their clients' trust. Finance professionals earn their clients' trust by behaving ethically and being honest and open. By doing so, finance professionals are more likely to build long-term relationships with their clients. Finance professionals must help clients set financial goals with which the clients are comfortable—some clients can or want to make risky investments, while others take a more conservative approach. Earning trust and helping clients meet their financial goals also involve ongoing, consistent, and frequent communication with their clients. Requiring clients to sign a short-term contract will not always help finance professionals build long-term relationships with their clients. SOURCE: CR:012 SOURCE: Peppers, D. & Rogers, M. (2004). Managing customer relationships: A strategic framework

(pp. 235-238). Hoboken, NJ: John Wiley & Sons. 19. D

Update their databases. Businesses use data-cleansing applications to ensure that their customer databases contain useful, relevant, and accurate data. The data-cleansing process removes duplicate records, updates expired data, and completes incomplete data fields. When a business's database is current and up-to-date, it can generate accurate reports that help the business make well-informed decisions. Businesses do not use data-cleansing applications to calculate statistical data. SOURCE: CR:024 SOURCE: Knol BETA. (2009). CRM data cleansing & management . Retrieved September 11, 2009,

from http://knol.google.com/k/neil-sequeira/crm-data-cleansing-management/s2w9p78k2qby/1#

20. B

Specialty. Specialty goods are consumer goods with special or unique characteristics that consumers are willing to exert special efforts to obtain. The specialty item Keisha desires will take a lot of money and effort to acquire. A shopping good is a consumer good purchased after consumers compare goods and stores in order to get the best quality, price, and/or service. Keisha is not concerned with price. A convenience good is a consumer good purchased quickly and without much thought or effort. Keisha has put a lot of thought into this purchase. Industrial goods are purchased for resale, not consumer usage. SOURCE: EC:002 SOURCE: Burrow, J.L. (2006). Marketing: Instructor's wraparound edition (2nd ed.) [p. 234]. Mason,

OH: Thomson/South-Western. 21. A

Possession. Possession utility is usefulness created when ownership of a product is transferred from the seller to the user. A layaway program makes it easier for a consumer to obtain possession. Place utility is usefulness created by making sure that goods or services are available at the place where they are needed or wanted by consumers. Time utility is usefulness created when products are made available at the time they are needed or wanted by consumers. Form utility is usefulness created by altering or changing the form or shape of a good to make it more useful to the consumer. SOURCE: EC:004 SOURCE: EC LAP 13—Use It (Utility)


Buy less of the product. Likewise, if customers feel that the price is relatively low, they will buy more. Customers affect prices of products through the use of their economic votes—by deciding to buy or not to buy. Most retail prices are not negotiable or of interest to the Better Business Bureau, which tries to protect consumers from fraud. Many customers will complain about prices, but few would take the time to make a formal, written complaint. SOURCE: EC:006 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (p. 105). Tinley Park, IL:

Goodheart-Willcox. 23. A

Obtain funding for supplies. With Rosita's pizza shop, financial analysis is used to obtain funding for supplies. Attracting customers is part of marketing. Overseeing a process is likely to take place within operations management, not financial analysis. And, developing recipes is part of operations management. SOURCE: EC:071 SOURCE: EC LAP 19—Strictly Business (Business Activities)

24. B

Risk. The external factors affecting profit include the economy, demand, and chance—not risk. Risk involves weighing the possible outcomes and choosing the result most likely to happen. SOURCE: EC:010 SOURCE: EC LAP 2—Risk Rewarded (Profit)

25. B

Business risks. They fall into three general categories: human, economic, and natural. Some of these risks are insurable, and others are uninsurable risks. Liabilities are a business's debts or losses and can be the result of taking risks. SOURCE: EC:011 SOURCE: EC LAP 3—Lose, Win, or Draw (Business Risk)

26. D

Enrichment. Job enrichment involves adding interest and satisfaction to a task. Job analysis is a detailed study of a job. Job enlargement is adding more tasks to a worker's present job. Containment is a distractor. SOURCE: EC:014 SOURCE: Management-hub.com. (n.d.). Facilitating job enrichment and enlargement in human

resources management. Retrieved September 19, 2009, from http://www.management-hub.com/hr-enrichment.html

27. B

To avoid double counting. Businesses produce a variety of goods that are used as components of other goods. To avoid including these intermediate goods in the GDP count, thereby inflating actual GDP, the intermediate goods are only included in the GDP count when they become components of their finished goods. Public goods are those items that are paid for with tax money, thus being "free" to anyone who wants to use them. They are only counted in GDP when they are finished goods. Welfare payments are not an aspect of finished goods. Inflation makes the value of a dollar worth less in the future than it is today. SOURCE: EC:017 SOURCE: McConnell, C.R., & Brue, S.L. (2005). Economics: Principles, problems, and policies

(16th ed.) [pp. 112-113]. Boston: McGraw-Hill/Irwin.


Communicating needs effectively. When you are aware of your own emotions, you can speak about your needs and wants in an exact way. You won't describe your feelings in inadequate terms. Hence, Brent was enjoying the advantage of communicating his needs effectively. In this situation, Brent was not understanding or responding to others' needs or difficulties, nor was he responding to criticism. SOURCE: EI:001 SOURCE: EI LAP 6—EQ and You (Emotional Intelligence)

29. D

An employee's completing an inventory assignment on time. An employee's completing an inventory assignment on time is not necessarily the result of initiative since the person is performing basic job expectations. Added responsibility, higher job evaluation ratings, and various awards are direct results of demonstrating initiative. SOURCE: EI:024 SOURCE: EI LAP 2—Hustle! (Taking Initiative at Work)

30. D

Get promoted. How employees behave and how they treat other people at work can affect how successful they become in their chosen career. It can determine whether they receive a promotion, a raise, or the opportunity to work on a particular project. How employees behave and how they treat other people does not have an effect on whether they earn vacation time, receive benefits, or receive fair wages. SOURCE: EI:004 SOURCE: EI LAP 4—Work Right (Ethical Work Habits)

31. B

Being receptive to change helps employees to be successful. The business world is dynamic and constantly changing. To be successful, employees must be able to adapt to it. An employee cannot change others—the desire to change must come from within oneself. Employees accept change with less resistance if they are prepared for it in advance. SOURCE: EI:026 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 484-488). New

York: Glencoe/McGraw-Hill. 32. B

Use tact when speaking. Tact is the ability to do or to say the right thing in any circumstance. Empathy is the ability to put yourself in another person's place. Using tact is one way to demonstrate empathy. Developing a good imagination and keeping an open mind are ways to develop empathy. To sympathize with a coworker is to feel sorry for that person. SOURCE: EI:030 SOURCE: EI LAP 12—Have a Heart (Empathy)

33. C

Nonverbal. Nonverbal communication transmits a message without the use of words. Verbal communication is carried out by speaking. Smiling at customers and looking them in the eye is a positive approach. However, this cannot be called effective communication since it is limited. SOURCE: EI:007 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 317-320].

Boston: Irwin/McGraw-Hill. 34. C

Fight or flight. The fight or flight response is the normal human reaction to feeling "under attack." The human body reacts to stress by preparing for defense or retreat. Eustress is the term for "good" stress that keeps us alert. Over-reaction and stimulus responses do not describe the physiological response to stress that results in feeling defensive. SOURCE: EI:028 SOURCE: Yamauchi, K.T. (n.d.). Stress management: Ten self-care techniques . Retrieved September

19, 2009, from http://www.reachoutmichigan.org/learn/stresmgt.html


A goal is concrete and measurable. A goal and a vision are two different things. A goal is a concrete achievement that you want to complete. Goals tend to be more specific and measurable than visions. Since a goal is specific, it means the same thing to all people. It isn't abstract and indefinite like a vision. SOURCE: EI:063 SOURCE: QS LAP 11—Picture This

36. B

People will be able to depend on you. Taking full responsibility for your own actions and never blaming others for your mistakes means you are reliable. People will know they can depend on you to do what you say you will do. This does not help you to be objective or enthusiastic, and it will not keep people from trying to take advantage of you. SOURCE: EI:037 SOURCE: EI LAP 5—Can You Relate?

37. A

Payment to be made at a future date. A benefit of credit to customers is that they can make purchases and take possession of the goods or services without having to make payment at the time of purchase. Sometimes, credit is offered with deferred interest charges or a scheduled payment plan, but this is not always the case. A credit customer may be asked for identification, especially if s/he is not carrying the appropriate credit card or credit identification. SOURCE: FI:002 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (p. 429). New York:

Glencoe/McGraw-Hill. 38. D

College fund. In many cases, paying for college is a future financial need for which many individuals and married couples plan. In order to make sure sufficient money will be available to pay for college, individuals often establish a college fund. This may be set up with a bank or an investment company. People often set aside a certain amount to invest on a monthly basis so the fund will have a certain value by the time it is needed to pay college expenses. A living will involves a person's wishes concerning medical issues. A line of credit is a type of loan. A checking account is used to manage current income and expenses. SOURCE: FI:064 SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal

finance (p. 266). New York: Glencoe/McGraw-Hill. 39. C

Getting started early. Getting started early is the key to successful investing. The sooner you begin to take advantage of the compounding growth of the stock market, the better. Compounding is your best friend because, right now, time is on your side. As a teenager, you have more years ahead of you to invest than your grandparents, your parents, and even your older siblings. Inflation is an increase in the cost of goods and services. Opportunity costs are the trade-offs that occur when you choose one alternative over another; they are impossible to avoid. The rule of 72 is a trick for determining how long it will take to double your money at a certain interest or return rate. SOURCE: FI:270 SOURCE: QS LAP 30—Supersize Your Money

40. C

Financial intermediaries. Intermediaries (middlemen) help move financial products between producers and end users. Commercial banks, brokerage firms, financial-planning firms, insurance institutions, and credit unions are examples of financial intermediaries. Legislative groups (e.g., U.S. Congress) develop and pass laws. A nonprofit organization is a business or organization whose intent is to make enough money to support its mission. SOURCE: FI:336 SOURCE: BusinessDictionary.com. (2009). Financial intermediary. Retrieved September 19, 2009,

from http://www.businessdictionary.com/definition/financial-intermediary.html


Soft commodities. A financial market is an organized effort or exchange that facilitates the buying and selling of financial assets. There are many types of financial markets, including the commodities market. Commodities are resources, including agricultural goods and mined goods (e.g., gold, silver) that are often used to make other goods. Agricultural goods such as cocoa beans and corn are types of soft commodities. Money markets facilitate the buying and selling of short -term, low-risk financial products (e.g., treasury bills). Selective property and insurance do not describe types of financial markets. SOURCE: FI:337 SOURCE: Investopedia. (n.d.). Soft commodity. Retrieved September 19, 2009, from:

http://www.investopedia.com/terms/s/softcommodity.asp 42. C

Financial holding company. Because financial holding companies provide a wide variety of financial services and related products, the Federal Reserve Board supervises their activities. The primary services that an accounting firm provides include accounting, tax preparation, auditing, and bookkeeping services. Some financial holding companies may offer accounting services. Commodities investors invest their funds in goods (futures) such as grains, livestock, raw materials, etc. SOURCE: FI:573 SOURCE: Answers.com. (2009). Financial holding company (FHC). Retrieved September 19, 2009,

from http://www.answers.com/topic/financial-holding-company-fhc 43. B

An individual buys 10 shares of stock for $150 per share on one market, and immediately sells each share for $200 on another market. Arbitrage is profiting from the sale of a financial instrument (e.g., stock) or good on a different market. Arbitrage often involves the buying and selling of goods and other types of services. For example, a person who buys a set of football tickets from a sport organization for $100 and sells them on E-bay to another person for $500 is engaging in arbitrage. When an individual earns interest on his/her money by agreeing to leave it in a financial institution for a certain timeframe, s/he is investing in a certificate of deposit. Businesses that set aside money for their employees' retirement are contributing to a pension plan. A business that sells bonds is using debt financing to raise funds for its expansion efforts. SOURCE: FI:574 SOURCE: Moffatt, M. (n.d.). What is arbitrage? Retrieved September 19, 2009, from

http://economics.about.com/cs/finance/a/arbitrage_3.htm 44. D

Unstable stock markets in a transitional economy. Emerging markets are growing markets (e.g., stock, bond, commodities, etc.) that result when a country initiates reforms that move it from a closed economy to an open or market economy. Because the markets are new, they are untried and relatively unstable, which is a high risk for investors. However, these markets also have the potential to provide investors with high returns, as the country's business activity increases and its economy grows. Developing countries tend to experience gains in gross domestic product due to higher production and business activity, which is often facilitated by high foreign investment. The infrastructure of developing countries often improves when the government and investors provide the financial resources to support it. SOURCE: FI:575 SOURCE: Charles Schwab. (2009). Glossary: Emerging market . Retrieved September 19, 2009, from

http://www.schwab.com/public/schwab/home/new_to_investing/glossary?cmsid=P-2877087&lvl1=home&lvl2=new_to_investing#e

45. C

The annual report. Form 10-K is the annual report that a company must file with the SEC. It is less attractive than the annual report that companies send to their shareholders. Form 10-Q is a quarterly report. The bottom line and cash flow statements appear in 10-Ks. SOURCE: FI:274 SOURCE: QS LAP 36—The Source Is With You


It's a well-established company. Typically, well-established companies are the ones that pay dividends. Companies that are still growing tend to put their profits back into their companies and, therefore, do not pay dividends. Whether or not a company is trying to rid itself of cash, or is paying back a loan, cannot be determined by the numbers in the dividend column of a stock table. SOURCE: FI:275 SOURCE: QS LAP 37—Table Talk

47. C

Over a period of time. Watching numbers over a period of time is a good idea because investors can get a sense of what is normal for a stock price. Looking at the numbers once a year, on a given day, or when dividends are paid does not give you enough time to obtain this kind of information. SOURCE: FI:275 SOURCE: QS LAP 37—Table Talk

48. D

Health. Health insurance pays for different kinds of medical care, depending upon the type of policy. A basic policy might cover minimum medical expenses, while a policy that has major medical coverage might cover the entire bill. Disability insurance provides income for ill or injured workers while they are off the job. Homeowner's insurance protects the homeowner's personal property and home. Liability insurance protects against lawsuits that result from injuries to others. SOURCE: FI:081 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 449-451). New

York: Glencoe/McGraw-Hill. 49. A

Purchasing insurance. Insurance is a contractual agreement in which one company (insurer) will pay for specified losses incurred by the other company (insured) in return for installment payments (premiums). Purchasing insurance does not prevent or control disaster, but it can protect the business from financial loss if a disaster occurs. The other alternatives are actions the business can take that may help to prevent losses, but they do not transfer the risk to another business. SOURCE: FI:084 SOURCE: Seleshanko, K. (n.d.). Protect your business with insurance and risk management. Retrieved

September 24, 2009, from http://www.business.com/directory/financial_services/commercial_finance/treasury/insurance_and_risk_management/

50. A

Current assets. Assets are anything of value the business owns. Current assets would include cash on hand, accounts receivable, and inventory owned by the business. Income is money received by a business or an individual from an outside source. Liabilities are debts that the business owes. SOURCE: FI:085 SOURCE: FI LAP 5—Show Me the Money (Nature of Accounting)

51. B

Monitor. Many businesses know that there are times when they will have cash shortages and other times when they will have cash surpluses. In order to stay in business, these firms monitor their cash flow to be able to operate even when sales are down. They plan to put money aside when there are surpluses in order to cover expenses when there are cash shortages. Businesses often are unable to control their cash flow because it may depend on when their customers pay them. Businesses do not spend all of their cash but save some for times of shortages. Businesses are not able to invest cash unless they have a surplus. SOURCE: FI:091 SOURCE: FI LAP 6—Count the Cash (Cash Flow)


Insurance payments. The operating-expenses category of an income statement includes all the expenses incurred from keeping a business's doors open. Some examples include insurance payments, wages, utilities, and rent. The business pays these expenses in order to operate. The operating-expense category does not cover the cost of goods sold/cost of sales, which includes such expenses as shipping charges to obtain goods for resale, cost of raw materials to produce goods, and items returned by customers. SOURCE: FI:094 SOURCE: FI LAP 4—Watch Your Bottom Line (Income Statements)

53. C

Accounts receivable. Money owed to the business is known as accounts receivable. Equity refers to assets the business already owns. Assets are things the business owns that are of value. Accounts payable refers to money the business owes to others. SOURCE: FI:354 SOURCE: FI LAP 7—Money Matters (Role of Finance)

54. B

Transparent. When financial information is fully disclosed and is presented in a clear, understandable way, it is transparent. Transparent information is not buried in a document or presented in a way that deliberately confuses the reader. Comparable information exists when the data from the report relate to other information. Timely information is current or up-to-date. Flexible data are often used in or applicable to different situations. Alana's report may or may not contain flexible, comparable, or timely information. SOURCE: FM:001 SOURCE: BasicCollegeAccounting.com. (2006, November 10). Main qualitative characteristics of

financial statement. Retrieved September 19, 2009, from http://basiccollegeaccounting.com/main-qualitative -characteristics-of-financial-statement/

55. B

Inaccurate data. When companies fail to maintain and update their financial information, they have inaccurate data. Companies look at all types of financial data to make business decisions. When business decisions are based on inaccurate or incorrect information, it could be very costly to the company. Ineffective leadership may be one reason why data are inaccurate. Simplified processes and understandable feedback are positive results of well-managed financial information. SOURCE: FM:002 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 341-343). Mason, OH: South-


Ensure that they are complying with laws. Because large businesses process large amounts of financial transactions and other types of financial information, they use software programs to ensure that they are complying with the many laws they must follow. A virtual auditor is a type of compliance technology that continuously reviews financial transactions and processes to identify errors and/or compliance violations. By using this technology, the business is reducing its risk of penalties and fines that might result from noncompliance. Businesses use other types of computer software to detect correlations among customer data, calculate debt-equity ratios, and analyze financial statements. SOURCE: CC:004 SOURCE: Cummings, J. (2005, September 1). Upfront: Slow uptake for virtual audit tools. Retrieved

July 22, 2009, from http://businessfinancemag.com/article/upfront-slow-uptake-virtual-audit-tools-0901


Identity theft. Identity theft is a fraud that occurs when an individual pretends to be another person in order to obtain money or some other type of benefit. With the widespread use of the Internet, hackers try to break into a business's computer system or web site to steal customers' financial information, such as bank account numbers or credit card information, which they then use to illegally obtain money or goods. To reduce the risk of identity theft due to computer hackers, businesses install firewalls, which are computer programs that secure and protect their computer networks from unauthorized users. Tax evasion occurs when an individual or business inaccurately reports or fails to pay taxes. An investment scam is a deceptive plan to use others' money for personal gain. A trade barrier is an action that blocks or restricts the exchange of goods or services. SOURCE: FM:003 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 355-359). Mason, OH: South-


Digital microfilm scanner. Businesses must keep a variety of financial information for a certain length of time, often for several years. Many businesses have saved their archived financial information on microfilm. Microfilm is a type of film that stores photographed images and text in a condensed format for easy storage. A digital microfilm scanner can take existing microfilm, which is older technology, and convert it into a digital format. The advantage to switching microfilm records to a digital format is that businesses can easily view the data on computers and share information quickly through the Internet. Direct-response software is a computer program that helps businesses automate their direct-marketing efforts. Electronic data interchange (EDI) is a network of computers that allows businesses to share information. Businesses use web-development programs to develop and maintain web sites. SOURCE: FM:011 SOURCE: Canon. (2009). Can I convert microfilm to digital? Retrieved September 19, 2009, from

http://www.canon-me.com/For_Work/Products/Document_Imaging_Systems/Digital_Microfilm_Scanners/index.asp

59. C

Predict trends. Data mining is the process of searching computer databases to look for patterns and relationships among information. Often, businesses use the financial information that they obtain from data mining to predict trends. Businesses that predict and understand trends are in a better position to act and respond to changes that might affect them. Businesses do not use data mining to identify procedures, select intermediaries, or negotiate contracts. SOURCE: FM:012 SOURCE: Hair, J.F., Bush, R.P., & Ortinau, D.J. (2009). Marketing research in a digital information

environment (4th ed.) [pp. 98-100]. New York: McGraw-Hill Irwin. 60. C

Expense. A budget is an estimate of income and expense for a specific period of time. Expenses are monies that the business spends. Because payroll involves providing money to employees for the work they complete, it is an expense. Income is the money received by a business from outside sources. Businesses generate income from sales, investments, interest, etc. Charges are fees. If the business charges customers for services, then it would be income. If the business must pay charges for goods or services, then the charges are expenses for the business. SOURCE: FM:013 SOURCE: Peavler, R. (2009). Business budget worksheet. Retrieved September 19, 2009, from

http://bizfinance.about.com/od/businessbudgeting/a/budget_wksheet.htm

Test 1022 FINANCE CLUSTER EXAM—KEY 21 61. B

Leverage ratio. Computer software applications can calculate and summarize many types of financial data to facilitate the business's decision-making processes. A leverage or debt-equity ratio measures the business's level of debt in relation to its assets. Leverage is an important consideration when a business wants to issue stock or obtain a loan. Depreciation is the reduction in value of goods or assets occurring over time. A cash budget is an estimate of cash inflows for a specific time. Transaction costs are the cumulative expenses associated with a transaction (e.g., labor, equipment, etc.). SOURCE: FM:014 SOURCE: Mayo, H.B. (2007). Basic finance: An introduction to financial institutions, investments, &

management (9th ed.) [p. 187]. Mason, OH: South-Western Cengage Learning. 62. D

To evaluate the amount of money associated with inventory storage. To maintain profitability, a firm must evaluate its costs in relation to its various business functions, which include purchasing, marketing, human resources, operations, etc. Businesses often analyze the various costs associated with carrying products. For example, a temperature-sensitive product may require special warehousing accommodations, which increase the costs associated with storing the product. Businesses use accounts-receivable applications to determine the number of delinquent accounts. Income reports summarize income changes. Businesses use budgeting applications to estimate sales volume. SOURCE: FM:014 SOURCE: MicroStrategy.com. (n.d.). Financial analysis. Retrieved September 19, 2009, from

http://latam.microstrategy.com/financial-analysis/ 63. B

Macro. A macro is a customized keystroke or shortcut that commands the database program to perform certain tasks automatically, such as inserting a specific table or bolding specific text. Using macros can increase efficiency when working with complex databases. The split function can divide text or cells. The break function inserts page breaks. The consolidate function combines data. SOURCE: FM:015 SOURCE: Microsoft Corporation. (n.d.). What is a macro? Retrieved September 19, 2009, from

http://office.microsoft.com/en-us/access/HA012142021033.aspx 64. B

Accurate financial statements. Large corporations that sell stock to the public are required by the Securities and Exchange Commission to accurately report their financial position to stockholders. Corporations usually do this by providing financial statements such as the income statement and balance sheet. As a result, corporations need to keep track of financial information and accurately report it in order to comply with the requirements of the Securities and Exchange Commission. SOURCE: FM:004 SOURCE: Gitman, L. J., & Madura, J. (2001). Introduction to finance (pp. 212-217). Boston: Addison

Wesley. 65. A

Net worth. Net worth is the total value of the business. A business determines its net worth by preparing various financial documents that indicate assets and liabilities. These documents should contain accurate information in order to correctly state the business's financial position. If the documents are incorrect, they may indicate that the business is worth more or less than it actually is. Accurately reporting its financial position does not indicate a business's sales forecast, price policy, or target market. SOURCE: FM:004 SOURCE: Gitman, L. J., & Madura, J. (2001). Introduction to finance (pp. 498-502). Boston: Addison

Wesley.


Lower expenses. By monitoring its cash flow, a business can plan how and when it will pay its bills. If the amount of inflowing cash declines over an extended period of time, then the business might need to take steps to lower its expenses and costs, which might include ordering less inventory or laying off employees. If cash inflow steadily increases, then the business might consider expansion. SOURCE: FM:005 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 342-343). Mason, OH: South-

Western Cengage Learning. 67. C

External users. A business uses the financial accounting system to report its financial position to external users, those who are not involved in the day-to-day operations of the business. These financial accounting reports provide information about the profitability of the business that those outside the business, such as investors or creditors, might use to decide if they want to invest in the business or give the business a loan. Bookkeepers and regional managers are internal users. Businesses use the management accounting system to report the business's financial position to internal users. SOURCE: FM:006 SOURCE: Guerrieri, D.J., Haber, F.B., Hoyt, W.B., & Turner, R.E. (2007). Accounting: Real-world

applications & connections (First-Year Course) [pp. 34-35]. New York: Glencoe/McGraw-Hill. 68. C

Improved forecasting. A trend is the direction in which something is moving. Internal and external financial information can help a business identify trends, such as changes in the overall economy or the business's sales, which can help the business forecast potential earnings more accurately. Trends may indicate increased profitability, but profitability cannot be ensured. Premiums are payments for insurance policies. Higher insurance premiums would be costly to the business. A liability is debt, usually money, the business owes. SOURCE: FM:008 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (p. 83). South-Western Cengage

Learning. 69. B

Income, debt ratio, and credit rating. To reduce the risk of nonpayment or default on a loan, a business considers several factors before it extends credit to its customers. Data such as the customer's income, debt ratio, and credit rating indicate to the business if the customer is a good credit risk or not. The customer's objectives and educational level are not primary considerations. SOURCE: FM:009 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 266-270). South-Western

Cengage Learning. 70. C

Analyze variances. By comparing and contrasting two or more sets of financial data, a businessperson can determine if there are differences and patterns among the data. Detecting these differences and patterns facilitates business decision making, which may include making improvements, reducing costs, or changing processes. SOURCE: FM:010 SOURCE: Microsoft. (2009). Conducting variance analysis. Retrieved September 19, 2009, from

http://office.microsoft.com/en-us/excel/HA011545141033.aspx 71. D

Employee recruitment. Human resources management is the process of planning, staffing, leading, and organizing the employees of the business. An important aspect of the human resources function is seeking out and attracting qualified potential employees, which is employee recruitment. Technical investment, domain development, and equipment acquisition are not primary activities of the human resources function in business. SOURCE: HR:410 SOURCE: Gaspar, J., Bierman, L., Kolari, J., Hise, R., Smith, L., & Arreola-Risa, A. (2006). Introduction

to business (p.199). Boston: Houghton Mifflin.


Employee holiday party. An employee holiday party is not necessarily a touch point because it does not allow the company to connect with customers and potential customers. Interaction with a salesperson, seeing a television advertisement, and receiving a bill or invoice are all touch points businesses can utilize to reinforce company image to customers. SOURCE: MK:019 SOURCE: MK LAP 3—Just Do It…Right (Company Actions and Results)

73. A

"Home foreclosures"; Arkansas; years: 2000 OR 2010. When quotes are put around phrases, search engines will select only those websites containing the exact phrase. By putting Arkansas within the quotes, you would delete results that had Arkansas appearing after the phrase home foreclosures. Adding the year's designation before 2000 OR 2010, lets the computer know that you are not searching for footage, phone numbers, etc. By using OR rather than AND, the results will contain one or the other years; they would not need to contain both years for the websites to appear in the results. SOURCE: NF:078 SOURCE: Google.com. (2009). Google search basics: More search help. Retrieved September 21,

2009, from http://www.google.com/support/websearch/bin/answer.py?answer=136861 74. A

A government agency. A government agency, such as the Bureau of Labor Statistics, should contain unbiased, accurate information. A term paper and a personal blog would probably be biased based on the writer's viewpoint. Although Wikipedia is an open source of information that is constantly updated, you might have received wiki information when it was inaccurate. SOURCE: NF:079 SOURCE: Claudia Chan, C.; Leung, J.; & Miu, S. (2008). Reliable websites: How to sort out the

trustworthy sites and the dishonest ones. Retrieved September 21, 2009, from http://www.slideshare.net/guest4041d/reliable-websites-presentation

75. D

Reduce a business's risk. Informed business decisions are better decisions, and they reduce a business's risk. Informed decisions help businesses compete better. They may or may not cost less money. SOURCE: NF:110 SOURCE: NF LAP 3—In the Know (Nature of Information Management)

76. A

Analyze customer information. Database software programs are designed to sort, arrange, locate, and analyze a wide variety of information. Many businesses use database software to analyze information that relates to customers, such as their names, addresses, type of purchases, and amount spent. Then, this information can be used to identify customers who might be interested in specific products or who live in certain parts of the country. The business also can rearrange the information according to different criteria. Word-processing software programs are used to design stationery and prepare reports. Spreadsheet software is used for accounting purposes. SOURCE: NF:009 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)

[pp. 163-165]. Woodland Hills, CA: Glencoe/McGraw-Hill. 77. A

Serial numbers. Businesses should record the serial numbers of all equipment. These are unique numbers that are used for identification purposes. Serial numbers are found on all types of business equipment and are useful when making equipment-related inquiries and when tracking stolen property. Inventory information deals with the materials a business needs for producing the goods or services it sells, or the items it buys to resell. Businesses do not need to know how equipment was produced, and it is not usually necessary to keep track of every mechanical repair. SOURCE: NF:001 SOURCE: NF LAP 1—Record It (Business Records)


Cash flow. By monitoring its cash flow statement, Maxton Mart knows when it is running short on cash and can take needed steps to alleviate upcoming cash shortages. If necessary, Maxton Mart should be prepared to take out a short-term loan to cover inventory costs. The income statement provides a picture of a business's profit or loss conditions. The balance sheet shows a snapshot of the business's assets, liabilities, and owner's equity. Open-to-buy documents indicate how much money the business has to invest in additional inventory. SOURCE: NF:014 SOURCE: Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business

(10th ed.) [p. 476]. New York: The National Foundation for Teaching Entrepreneurship, Inc. 79. B

Variance. Variance is a measure of how data points differ from the mean. Its calculation will help you to show others how dispersed the data were from the mean of 7. The mode, like the median and mean, is a measure of central tendency rather than depicting dispersion. The mode is the number that appears most often in the data results. A geometric mean is used in business to show average rates of growth. This, too, would be a measure of central tendency. SOURCE: NF:093 SOURCE: Knox, J.A. & Estrella, A. (2005, September 16). Introduction to statistics. Retrieved

September 21, 2009, from http://math.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=math&zu=http%3A%2F%2Ficp.giss.nasa.gov%2Feducation%2Fstatistics%2F

80. A

All other parts of the business. Operations managers must work closely with managers and employees in all other parts of the business. This is because operations activities affect every other business function, including marketing, finance, human resources, etc. Depending on the business, operations managers may or may not work with managers in foreign markets. Operations managers do not work with managers at competitive businesses. SOURCE: OP:189 SOURCE: OP LAP 3—Smooth Operations (Nature of Operations)

81. C

Taking periodic inventory. Taking inventory is a necessary activity for most businesses, but it is not an accident-prevention measure. Training employees in safety precautions and the proper use of equipment should reduce the possibility of accidents. Correcting poor lighting and inspecting equipment regularly will help to prevent unsafe conditions that my lead to accidents. SOURCE: OP:009 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 223-224). New

York: Glencoe/McGraw-Hill. 82. D

Theft by employees. Stealing cash is a way employees defraud businesses. They may take cash from the register or pocket the cash paid by customers for their purchases. Most businesses study register tapes, watch for suspicious refunds or voids, and use other methods to prevent thefts. Payroll fraud occurs in the payroll department when employees alter checks in their favor. Shoplifting is theft of goods by customers. Liability insurance protects the business against injuries to customers or employees while on the premises. SOURCE: OP:013 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (pp. 401-406). Tinley Park,

IL: Goodheart-Willcox.


Employees B & C. An important part of developing a project plan is determining how much time it will take to perform and which employees are available to complete the project on time. If the business only has part -time employees, it needs to consider which combination of workers will be able to do the project within the one-week time frame. In this example, Employee B is working 3 1/2 hour days from 1 to 4:30 for a total of 17.5 hours a week. Employee C is working 4 1/2 hour days from 7:30 to 12 for a total of 22.5 hours a week. Together, these employees are working a 40-hour week (17.5 + 22.5 = 40). Employees A and D are each working three hours a day for a total of 15 hours a week. SOURCE: OP:001 SOURCE: Chapter 6: Cost management (2009). Retrieved September 19, 2009, from

http://www.stsc.hill.af.mil/resources/tech_docs/gsam4/chap6.pdf 84. B

Mass. Since GM would be making a large quantity of cars, it would want to use mass production. Mass production is used when a standardized item is produced in large quantities with interchangeable parts. Batch production involves producing items in specific amounts, usually for seasonal items. Unit or custom production is for individual and custom-produced items, such as a custom-tailored suit. SOURCE: OP:017 SOURCE: BA LAP 1—Nature of Production

85. C

Shoplifting. Businesses lose millions of dollars each year because of shoplifting. Salespeople can help discourage shoplifting by being alert on the job and watching for suspicious people. Preventing shoplifting helps businesses reduce the losses that they would incur if goods were stolen. Salespeople should encourage purchasing by customers. Salespeople's job is to sell. Discouraging exchanges would not control expenses. SOURCE: OP:025 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (pp. 405-406). Tinley Park,

IL: Goodheart-Willcox. 86. D

False, a business's poor housekeeping can damage the business. From the minute customers enter a business, they are aware of its appearance. If the business is dusty, dirty, or looks as though it is in need of cleaning, customers may not return. A business that does not build a clientele of repeat customers may not be successful, even if its prices are attractive. While housekeeping affects business success, it is seldom the most important factor. SOURCE: OP:032 SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)

[pp. 318-320]. Upper Saddle River, NJ: Prentice Hall. 87. A

Long-term. Short -term, immediate, and intermediate goals are normally set for much shorter time periods such as a day, a week, or a month. SOURCE: PD:018 SOURCE: PD LAP 16—Go For the Goal (Goal Setting)

88. D

Suggesting a new use for an existing product. Creativity is the ability to generate unique ideas, approaches, and solutions. The other alternatives are routine responses or job responsibilities. SOURCE: PD:012 SOURCE: PD LAP 2—Creativity


Holds the kind of job you want. Interviewing someone who currently holds the kind of job you want will yield information on career paths, preparation, advantages, and disadvantages of the career. Interviewing people who hire, used to be in that position, or are executives of the company may provide an incomplete picture of the career you are interested in. SOURCE: PD:023 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 53-54). New


Flexibility and independence. Many individuals become entrepreneurs to enjoy greater flexibility and independence. Flexibility and independence allow an entrepreneur to manage his/her own work and time based on her/his needs and desires. While some entrepreneurs may look forward to other perks, such as purchasing and using advanced technology or enjoying tax breaks and deductions, neither of these is Michelle's motivation in becoming her own boss. As an entrepreneur, an individual must make a personal commitment to his/her business, which means putting in long hours and even weekends. Entrepreneurs seldom start their businesses simply to fulfill this personal commitment. SOURCE: PD:066 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship)

91. B

I have skills that this company could use. Recognizing and appreciating your own skills gives you self-confidence and helps you to present yourself well in a job interview. All of the other alternatives represent an over-confident or cocky attitude that is likely to make a negative impression on the interviewer. SOURCE: PD:028 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 67-69].

Mason, OH: South-Western. 92. B

Banks, insurance companies, securities firms, and other financial institutions are often owned by a single large firm offering a complete range of financial services. Since deregulation of the financial-services industry in 1999 (the Gramm-Leach-Bliley Act), financial-services providers are allowed to offer a broad range of services. Before deregulation, the industry was highly segmented, with separate businesses for separate services. A career as a securities broker can be pursued in many places, not just at a traditional financial-services firm on Wall Street. The financial-services industry is highly regulated by the U.S. Securities and Exchange Commission. SOURCE: PD:152 SOURCE: QS LAP 51—Careers in the Money

93. B

Trade show. Trade shows usually are held for only a few days in convention centers or exhibition halls in large cities. Trade shows feature the latest goods and related items in a specific product category, and are good sources of information that can contribute to professional development. They often are held on an annual basis. A three-day exhibition of computer equipment, software, and related goods is an example of a trade show. A central market is a city where many major suppliers of a product are located. A floor plan is a layout or design for a space. A warehouse club offers large quantities of consumer items, usually at discounted prices. SOURCE: PD:036 SOURCE: Burrow, J.L. (2006). Marketing: Instructor's wraparound edition (2nd ed.) [p. 183]. Mason,

OH: Thomson/South-Western.


Certified Financial Planner (CFP). Many jurisdictions require finance professionals to obtain certification or licensure to perform their jobs. Because Elise performs duties that involve financial planning, she is most likely to have certification as a Certified Financial Planner (CFP), which is a well-known certification program in the financial industry. Tax specialists obtain a CTS certification. Loan officers obtain a CLO certification. Businesspeople who work as technical investment analysts obtain a CMT certification. SOURCE: PD:082 SOURCE: CondoByOwner.com (2003). Glossary. Retrieved September 25, 2009, from

http://www.condobyowner.com/glossary.asp 95. B

Stockbroker. Stockbrokers are required to obtain a license to trade securities. To obtain the license, stockbrokers must take and pass the General Securities Registered Representative Examination. Accountants obtain the Certified Public Accountant (CPA) certification; insurance underwriters obtain the Chartered Life Underwriter (CLU) certification; and estate planners obtain the Accredited Estate Planner (AEP) certification. SOURCE: PD:082 SOURCE: Morgan, E. (2006, August 21). How to become a stock broker. Retrieved September 19,

2009, from http://ezinearticles.com/?How-To-Become-A-Stock-Broker&id=275927 96. D

Joining community organizations. By joining community organizations, such as a local professional or trade association, the local chamber of commerce, or Kiwanis Club, financial-services professionals increase their opportunity to network with others who live and work in the same region. Networking is the exchange of information with others for the purpose of professional or business development or advancement. Networking can help financial-services professionals to build new business relationships, obtain referrals, and acquire leads to increase clientele. Submitting proposals to web-based financial businesses and working with well-known securities firms do not necessarily help to build professional finance relationships at the local level. Financial-services professionals want to obtain referrals from others. SOURCE: PD:153 SOURCE: Misner, I. (2002, December 23). Want to join a networking group? Retrieved September 19,

2009, from http://www.entrepreneur.com/marketing/marketingideas/networkingcolumnistiva nmisner/article58210.html

97. A

Implement an ethics program. Because employees represent the business, their unethical behavior can negatively affect the business's reputation. If a business develops a poor reputation or public image, customers may take their business elsewhere. To reduce the risk of a tarnished reputation, the business should implement an ethics program. An ethics program might include ongoing ethics training, which provides continuous guidance for the employees as to what constitutes ethical behavior on the job. The business should discourage fraudulent behavior, offer credit to customers who meet the business's credit criteria, and maintain optimal inventory levels so that the products are available when customers need them; these actions promote a positive public image for the company. SOURCE: RM:041 SOURCE: Head, G. (2005, February). Why link risk management and ethics? Retrieved September 19,

2009 from http://www.irmi.com/expert/articles/2005/head02.aspx 98. B

Use computer passwords. A business must take precautions to secure its clients' confidential information. To reduce the risk of unauthorized access to confidential information, businesses often assign computer passwords to allow authorized employees to view secured information. Developing a routing system, restricting digital signature options, and limiting Internet use are not actions that will limit the accessibility of internal business information. SOURCE: RM:042 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 358-359). South-Western

Cengage Learning.


Conducting backup procedures. Backup procedures involve duplicating computer entries, records, and transactions on a regular basis and storing the duplicate files in a different location. By having backup files, the business can retrieve information that might be lost due to a computer crash, a power outage, or fire. Encryption is the process of transforming information into a secret code so that only the recipient can read it. An authorization process is a way to limit the access to certain information. Using encryption techniques, implementing an authorization process, and monitoring data-transmission rates are not ways in which a business can protect its computer data from loss due to fire or power outages. SOURCE: RM:042 SOURCE: Halifax Business Referral Network. (n.d.). Data backup is the best data protection. Retrieved

September 19, 2009, from http://hbrn.ca/05292006.htm 100. A

Reduce the chance of financial losses. Because risk involves the possibility of loss, businesses must be diligent to control their levels of risk. Businesses can experience financial losses in all areas of the business—from product recalls and poor hiring selections to poor credit policies and workplace injuries. Businesses can control their various risks by implementing appropriate business policies, training employees, and acquiring adequate insurance coverage. By controlling financial risk, businesses can limit their debt (liabilities). When businesses have low debt, they increase the potential to earn profit, which contributes to the well-being of society. Businesses increase their visibility in the market in different ways (positive and negative) and are not always related to controlling their levels of risk. SOURCE: RM:058 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (p. 326). Mason, OH: South-Western

Cengage Learning.



Finance Cluster Exam



Test 1022 FINANCE CLUSTER EXAM 1


1. Businesses usually are unable to enter into legally binding contracts with A. tourists. C. foreigners. B. senior citizens. D. minors.

2. Under the Clean Water Act, the Environmental Protection Agency has the authority to

A. monitor water levels in rivers and streams. B. set water quality standards for industry. C. decide where you must get your water supply. D. determine how much water you can use for your industry.

3. Which of the following pieces of legislation allows for the consolidation of commercial and investment

banks, insurance companies, and securities firms: A. Securities Exchange Act of 1934 C. Sarbanes -Oxley Act of 2002 B. Gramm-Leach-Bliley Act D. Glass-Stegall Act

4. Which of the following is a tax-deductible gift:

A. Charitable donation C. Stocks B. Vacation home D. Inherited items

5. What can a financial-services business do to ensure that it is following government regulations?

A. Monitor service procedures C. Develop a business plan B. Improve technical systems D. Conduct a compliance audit

6. How can a business maintain its ethical responsibility of protecting the privacy of its customers' financial

information? A. Review inventory systems C. Monitor competitors' activities B. Develop collection procedures D. Implement security policies

7. When a manager tells an employee to take charge of a project, the employee is receiving

A. social directions. C. nonverbal directions. B. oral directions. D. written directions.

8. Which of the following is a rule of good listening:

A. Eliminate background noise. C. Be thinking about what you will say next. B. Listen with empathy. D. Stand as close as possible to the speaker.

9. When giving a verbal presentation, a speaker who distinctly voices the sounds of words is using proper

A. pronunciation. C. tone. B. enunciation. D. vocabulary.

10. Which of the following actions is it important for a speaker to take when s/he makes an oral business

presentation to a large group: A. Speak loudly enough for the audience to hear the message B. Turn away from the audience when presenting visual aids C. Avoid eye contact with anyone in the audience D. Relax the audience by swaying back and forth when speaking

11. The main form of written communication within a business is

A. memorandums. C. staff meetings. B. business letters. D. telephone calls.

12. Which of the following types of messages presents evaluative information:

A. Analytic C. Simple B. Explanatory D. Complex


13. A simple, or short, report differs from a complex report in that the simple report is A. not in memo form. C. less formal. B. more comprehensive. D. not used in decision making.

14. Information that is informally passed to the staff of a business is referred to as __________

communication. A. grapevine C. formal B. vertical D. horizontal

15. "The customer is ALWAYS right," is a philosophy many businesses try to follow in order to

A. make employees' jobs easier. C. create positive customer/client relations. B. prevent any conflict with customers/clients. D. help employees handle selling objections.

16. Stock brokers sometimes have difficulty meeting the needs of customers who are

A. decisive. C. silent. B. agreeable. D. patient.

17. A good way for bank tellers to prevent customer complaints is by

A. pressuring customers to open additional accounts. B. discussing all of the bank’s products. C. determining each customer’s needs. D. asking customers personal questions about their ethnicity.

18. What do finance professionals need to do to build long-term relationships with their clients?

A. Be honest, open, and trustworthy C. Follow-up with clients every two years B. Invest all clients' money conservatively D. Require clients to sign a short-term contract

19. Businesses use data-cleansing applications to

A. generate necessary reports. C. duplicate internal records. B. calculate statistical data. D. update their databases.

20. For her best friend's birthday, Keisha is shopping for a unique item—no substitute will do, and price is no

object. What type of item is Keisha shopping for? A. Convenience C. Shopping B. Specialty D. Industrial

21. Ronnie's Retail Mart recently began a layaway program for large-ticket items. By introducing this lay-

away program, Ronnie's hopes to increase __________ utility. A. possession C. time B. place D. form

22. If customers feel that a product's price is too high, they will probably

A. buy less of the product. C. make a formal complaint. B. call the Better Business Bureau. D. try to negotiate the price.

23. With Rosita's pizza shop, financial analysis is used to

A. obtain funding for supplies. C. oversee the baking process. B. attract customers. D. develop the best recipe.

24. Which of the following is not an external factor affecting profit:

A. Chance C. Economy B. Risk D. Demand

25. Potential losses that businesses face are called

A. liabilities. C. insurable risks. B. business risks. D. uninsurable risks.


26. The practice of allowing workers to assume some higher level decision making is called job A. analysis. C. enlargement. B. containment. D. enrichment.

27. Why does the Gross Domestic Product include only finished goods?

A. To account for public goods C. To omit welfare payments B. To avoid double counting D. To correct for inflation

28. Brent likes to use his emotional intelligence to describe his feelings in accurate terms. What benefit of

emotional intelligence is he experiencing? A. Communicating needs effectively C. Understanding other people's needs B. Responding to criticism D. Responding to difficult people

29. Lack of initiative cannot be tolerated for long in most occupations. Which of the following is not a result of

employee initiative: A. An employee who receives an "Employee of the Month" award B. An employee's receiving high job evaluation ratings C. An employee given added responsibility D. An employee's completing an inventory assignment on time

30. How employees behave and how they treat other people at work often have an effect on whether they

A. receive fair wages. C. earn vacation time. B. receive benefits. D. get promoted.

31. Which of the following statements about change in the workplace is true:

A. An employee often can change the behavior of coworkers. B. Being receptive to change helps employees to be successful. C. Employees accept change better if it is unexpected. D. Employees usually can refuse to make changes they don't like.

32. Which of the following is a way to demonstrate empathy:

A. Develop a good imagination. C. Keep an open mind. B. Use tact when speaking. D. Sympathize with a coworker.

33. Smiling at customers and looking them in the eye is what type of communication?

A. Negative C. Nonverbal B. Verbal D. Effective

34. Frederick has been criticized by his supervisor and knows the criticism is justified, but he still feels

defensive. This physiological response to stress is the __________ response. A. eustress C. fight or flight B. over-reaction D. stimulus

35. How does a goal differ from a vision?

A. There is no difference—the two are the same. B. A goal could mean different things to different people. C. A goal is abstract and indefinite. D. A goal is concrete and measurable.

36. Why is accepting responsibility for your own actions important to effective human relations skills?

A. It helps you to be objective. C. It helps you to be enthusiastic. B. People will be able to depend on you. D. People will not take advantage of you.

37. Whenever a business extends credit to customers, it allows them to obtain goods and services

immediately with A. payment to be made at a future date. C. no interest charges for 90 days. B. no identification required. D. payment spread over a 12-month period.


38. What do many individuals establish when planning for future financial needs? A. Checking account C. Line of credit B. Living will D. College fund

39. What is the key to successful investing?

A. Avoiding opportunity costs C. Getting started early B. Inflation D. The rule of 72

40. Commercial banks and brokerage firms are examples of

A. insurance institutions. C. financial intermediaries. B. legislative groups. D. nonprofit organizations.

41. Cocoa beans and corn are examples of investments that people make in which of the following financial

markets: A. Selective property C. Soft commodities B. Insurance D. Money

42. Supervised by the Federal Reserve Board, The DAB Company provides investment advisory services,

insurance underwriting, securities underwriting, and merchant banking services. The DAB Company is an example of a(n)

A. financial auditing institution. C. financial holding company. B. accounting firm. D. commodities investor.

43. Which of the following is an example of arbitrage:

A. An individual earns interest on his/her money by agreeing to leave it in a financial institution for a certain timeframe.

B. An individual buys 10 shares of stock for $150 per share on one market, and immediately sells each share for $200 on another market.

C. A business places a percentage of its income into a retirement account for employees. D. A business sells corporate bonds to obtain funds to finance major expansion efforts.

44. Which of the following is characteristic of an emerging market:

A. Low gross domestic product due to high foreign investment B. Strong and highly developed infrastructure C. High-yield bond markets that operate in a secure economic climate D. Unstable stock markets in a transitional economy

45. Form 10-K is most like

A. the bottom line. C. the annual report. B. Form 10-Q. D. the cash flow statement.

46. What might a dividend payout tell you about a company?

A. It's reinvesting its profits back into the business. B. It's trying to rid itself of cash. C. It's a well-established company. D. It's paying back a loan.

47. It's a good idea for an investor to watch the numbers on a stock table

A. once a year. C. over a period of time. B. just for a given day. D. when dividends are paid.

48. What kind of insurance will help to pay your hospital bill if you are seriously ill?

A. Homeowner's C. Liability B. Disability D. Health


49. The impact of some business risks can be reduced if the business transfers the risk to another business by

A. purchasing insurance. C. employing security guards. B. hiring a risk specialist. D. installing burglar alarms.

50. A business has an inventory valued at $750,000. This amount would appear in the business's balance

sheet under A. current assets. C. cash. B. liabilities. D. income.

51. To stay in business, a firm that has periods of cash shortages and cash surpluses should plan to

__________ its cash flow. A. spend C. invest B. monitor D. control

52. Which of the following is an example of an expense that a business would include in the operating-

expenses category of an income statement: A. Customer returns C. Insurance payments B. Cost of raw materials D. Shipping charges

53. Money owed to the business is known as

A. assets. C. accounts receivable. B. equity. D. accounts payable.

54. When Alana prepares a report so that all of the financial data is clearly disclosed, she is ensuring that the

information is A. comparable. C. timely. B. transparent. D. flexible.

55. Which of the following is a consequence of poor financial-information management:

A. Simplified processes C. Ineffective leadership B. Inaccurate data D. Understandable feedback

56. The reason that businesses use virtual auditor technology to scan their financial records is to

A. detect correlations among customer data. C. calculate debt-equity ratios. B. ensure that they are complying with laws. D. analyze their financial statements.

57. By installing firewalls on its computer networks, a business can protect its online customers' credit-card

information from A. trade barriers. C. investment scams. B. tax evasion. D. identity theft.

58. Which of the following is a technological tool that businesses use to archive their financial records:

A. Direct-response software C. Electronic data interchange B. Digital microfilm scanner D. Web-development programs

59. Businesses often use the patterns and relationships detected during the data mining process to

A. select intermediaries. C. predict trends. B. identify procedures. D. negotiate contracts.

60. Alex is using a computer software program to develop the operating budget for his small company. He

has two part-time employees who work 12 hours per week. How should Alex categorize the company's payroll in his budget?

A. Sales C. Expense B. Income D. Charges


61. If Jennifer wants to determine the degree to which the business uses its debt to finance its assets, she should use a financial analysis application that indicates the business's

A. depreciation rates. C. cash budget. B. leverage ratio. D. transaction costs.

62. In which of the following situations would a firm use cost-analysis applications:

A. To predict sales volume for a certain period of time B. To determine the number of delinquent accounts C. To assess income changes over a certain period of time D. To evaluate the amount of money associated with inventory storage

63. What function allows users to customize and automate tasks when developing a database?

A. Split C. Break B. Macro D. Consolidate

64. Large corporations that sell stock to the public are required by the Securities and Exchange Commission

to provide __________ to their stockholders. A. regular dividends C. copies of expense reports B. accurate financial statements D. organizational charts

65. A business needs to accurately report its financial position because that information indicates the

business's A. net worth. C. price policy. B. sales forecast. D. target market.

66. A business that is experiencing a cash-flow deficit should take steps to

A. reduce income. C. increase costs. B. lower expenses. D. spend revenues.

67. A business uses the financial accounting system to report the business's financial position to

A. regional managers. C. external users. B. bookkeepers. D. internal users.

68. What is a potential benefit to a business that uses financial information to identify trends?

A. Ensured profitability C. Improved forecasting B. Enhanced liability D. Increased premiums

69. Which of the following are factors that affect a business's decision to offer credit to a customer:

A. Debt ratio, credit rating, and education C. Credit rating, objectives, and income B. Income, debt ratio, and credit rating D. Debt ratio, education, and objectives

70. While Karl reviews financial reports, he compares and contrasts similar data from different quarters and

years. The primary reason that Karl is reviewing the reports is to A. reduce costs. C. analyze variances. B. make improvements. D. change processes.

71. An important function of human resources management in business is

A. equipment acquisition. C. domain development. B. technical investment. D. employee recruitment.

72. Which of the following is not a touch point businesses could utilize to reinforce company image:

A. Interaction with a salesperson C. Television advertisement B. Employee holiday party D. Bill or invoice


73. You have been asked to quickly locate information comparing the number of home foreclosures in Arkansas in 2000 with those in 2010. Which of the following searches should yield the fastest, most relevant search results:

A. "home foreclosures"; Arkansas; years: 2000 OR 2010 B. “home foreclosures in Arkansas in 2000 AND 2010” C. Arkansas home foreclosures between 2000 and 2010 D. “home foreclosures; Arkansas”; “2000 OR 2010”

74. Your web search results contain URLs from a variety of sources. Which of the following sources should

provide the most reliable data: A. A government agency C. A personal blog B. A term paper D. A Wikipedia site

75. A benefit of informed business decisions is that they

A. hurt a business's chances at competing. C. cost less money. B. are usually bad decisions. D. reduce a business's risk.

76. One way that many businesses use database software programs is to

A. analyze customer information. C. prepare governmental reports. B. design company stationery. D. monitor accounting functions.

77. What type of information about equipment is important for businesses to keep in their records?

A. Serial numbers C. Inventory status B. Mechanical repairs D. Production process

78. Maxton Mart is being pressured by its vendors to pay for inventory it purchased more than 30 days ago.

However, Maxton Mart has not received its accounts receivable from customers. What business record has Maxton Mart failed to monitor successfully?

A. Income statement C. Balance sheet B. Cash flow D. Open to buy

79. Your statistical findings show that the mean and the median of the following data are the same:

Data Set A: 2, 5, 8, 10, 10 Data Set B: 7, 7, 7, 7, 7 Data Set A: Mean = 7, Median = 7 Data Set B: Mean = 7, Median = 7

Just by looking at the data, you can tell the data results are quite different. What statistic do you need to

use to show that difference? A. Mode C. Geometric mean B. Variance D. Measure of central tendency

80. Operations managers must work closely with managers and employees in

A. all other parts of the business. C. competitive businesses. B. the marketing department only. D. foreign markets.

81. Accidents in the workplace may be prevented by all of the following techniques except

A. correcting poor lighting. C. taking periodic inventory. B. providing employee training. D. inspecting equipment regularly.

82. Monitoring activities at the point of sale can protect the business from

A. payroll fraud. C. shoplifting losses. B. liability claims. D. theft by employees.


83. If a business is planning a project that will take 40 hours to complete and must be done in one week, which two employees should be assigned the project if the business has four part-time employees who work the following schedule:

Employee A—Mon-Fri, 9-12; Employee B—Mon-Fri, 1-4:30; Employee C—Mon-Fri, 7:30-12; Employee D—Mon-Fri, 11-2

A. Employees B & C C. Employees C & A B. Employees A & D D. Employees D & C

84. General Motors decided to produce a new car called the "Shark." Since the parts of the car will be easily

interchangeable and the company expects to produce a large quantity of cars, the best method of production would be __________ production.

A. unit C. batch B. mass D. custom

85. Alert salespeople can help businesses control expenses by discouraging

A. exchanging. C. shoplifting. B. purchasing. D. selling.

86. Determine whether the following statement is true or false: Housekeeping practices do not affect the

success of a business. A. False, housekeeping is the most important factor affecting business success. B. True, housekeeping practices are unrelated to business success. C. True, customers are more concerned with price than with appearance. D. False, a business's poor housekeeping can damage the business.

87. Goals which normally take a year or more to achieve are referred to as __________ goals.

A. long-term C. immediate B. intermediate D. short-term

88. Which of the following activities reflects creativity:

A. Completing a sales check according to company policy B. Replacing merchandise sold from a window display C. Referring an irate customer to the store manager D. Suggesting a new use for an existing product

89. When using exploratory interviews to identify occupational interests, you should try to interview someone

who A. has an executive position in the company. C. holds the kind of job you want. B. used to have the kind of job you want. D. hires people for the kind of job you want.

90. Michelle's primary reason for starting her own business is her desire to make her own schedule. Michelle

is looking forward to the __________ she hopes to have as a business owner. A. flexibility and independence C. tax breaks and deductions B. advanced technology D. personal commitment

91. Which of the following is an example of an appropriate attitude for a job applicant to have about a job

interview: A. I can do any job that I'm asked to do. B. I have skills that this company could use. C. I think this company would be lucky to get me. D. I know all about this company and its products.


92. Which of the following statements most accurately describes the financial-services industry today: A. It is highly segmented, with separate businesses for separate services. B. Banks, insurance companies, securities firms, and other financial institutions are sometimes

owned by a single large firm offering a complete range of financial services. C. The only place to pursue a career as a securities broker is a traditional financial securities firm on

Wall Street. D. The financial-services industry is largely unregulated with little federal oversight.

93. A three-day exhibition in a convention hall featuring the most up-to-date computer equipment, software,

and related goods is an example of which of the following: A. Central market C. Floor plan B. Trade show D. Warehouse club

94. As an employee of a financial-services firm, Elise helps her clients reduce their debt, build their wealth,

and save for their retirement. Which certification is Elise mostly likely to need to perform her job: A. Certified Tax Specialist (CTS) C. Certified Loan Officer (CLO) B. Certified Financial Planner (CFP) D. Chartered Market Technician (CMT)

95. After passing the General Securities Registered Representative Examination, a businessperson obtains

a license that allows him/her to work as a(n) A. accountant. C. underwriter. B. stockbroker. D. estate planner.

96. One way to build professional finance relationships at the local level is by

A. working with well-known securities firms. B. submitting proposals to web-based financial businesses. C. providing existing clients with referrals. D. joining community organizations.

97. How can a business reduce risks that are associated with a poor public image:

A. Implement an ethics program C. Encourage fraudulent behavior B. Maintain minimal inventory levels D. Offer credit to few customers

98. To limit the access of employees to clients' confidential information, a financial business might require the

employees to A. develop a routing system. C. restrict digital signature options. B. use computer passwords. D. limit their use of the Internet.

99. To reduce the risk of loss due to fire or power outages, a financial business should protect its computer

data by A. implementing an authorization process. C. conducting backup procedures. B. using encryption techniques. D. monitoring data-transmission rates.

100. The primary reason that firms must take steps to control their levels of business risk is to

A. reduce the chance of financial losses. C. contribute to the well-being of society. B. increase their vi sibility in the market. D. increase their financial liability levels.

KEY

Test Number 1023

Hospitality and Tourism Cluster Exam


Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM — KEY 10 1. A

To interpret laws. The United States' judicial system is the court system. One of the main functions of this system is to interpret the body of American law. The various courts interpret the law and apply it in order to provide justice. The judicial system does not develop regulations, license attorneys, or analyze crimes. SOURCE: BL:068 SOURCE: Miller, R.L., & Jentz, G.A. (2005). Fundamentals of business law (6th ed.) [p. 33]. Mason,

OH: Thomson/South-Western. 2. B

Sole proprietorship. This is a form of business ownership in which the business is owned by only one person, and that person receives any profits made by the business. A merger is the absorption of one company by another rather than a type of business ownership. A partnership is owned by two or more people, and profits would be split between them. A corporation is owned by people who own stock in the business, and they split the profits. SOURCE: BL:003 SOURCE: BA LAP 7—Own It Your Way

3. A

To be informed about a destination's social conditions. Travel agents and tour operators have an obligation to inform clients about the social and political conditions in a destination that they are considering visiting. Clients have a right to know if there is political unrest, a threat of terrorism, or other dangerous situations that might affect their travel plans or their safety. They should be made aware of possible problems in order to make an informed decision as to whether to visit certain destinations. Travel agents and tour operators usually do not discuss a competitor's refund policy. They often ask customers if they want to buy trip insurance, but that is not considered a customer right. Travel to most foreign countries is not dangerous. However, if travel to some areas is dangerous, customers have a right to know. SOURCE: BL:135 SOURCE: Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real

choices (5th ed.) [p. 69]. Upper Saddle River, NJ: Pearson Prentice Hall. 4. D

We can more easily obtain products from all over the world. Channels of distribution allow consumers, industrial users, producers, and other channel intermediaries to save time and money. They also allow us to more easily obtain products from all over the world, since we do not have to travel and search for each individual item we wish to purchase. SOURCE: CM:003 SOURCE: CM LAP 1—Channel It (Channels of Distribution)

5. D

Distribution. Promotion helps to create demand for products, while distribution makes those products available. Businesses coordinate distribution with promotional activities to make sure that sufficient quantities of advertised products are available when customers want to buy them. If a business plans to promote a certain item, the business must make sure that an adequate supply will be on hand to meet customer demand. Businesses may lose customers if they promote certain items that are not available because they failed to make the necessary distribution arrangements. Transportation is the act of moving items from one place to another and is only one aspect of distribution. Segmentation involves dividing something, such as a total market, into smaller, more specific groups. Communication is an exchange of information in which the words and gestures are understood in the same way by both the speaker and the listener. SOURCE: CM:007 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 367). New

York: Glencoe/McGraw-Hill.

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM — KEY 11 6. D

Listen with your brain. Good communication is a two-way process. To communicate, you must learn how to be a good listener as well as how to express your own ideas. This involves listening to everything the speaker says even if not all of it is of personal interest, being genuinely interested, and thinking about what you are hearing rather than letting your mind wander to other things. SOURCE: CO:147 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [p. 81]. Mason, OH: Thomson South-Western. 7. A

Thank the caller. Answering the telephone and taking messages for coworkers is often part of an employee's everyday routine. It is important for the employee to properly handle the call, and this involves thanking the caller. In many cases, the caller is a customer who is leaving an important message. Therefore, the person taking the call should always thank the caller for contacting the business. The employee taking the message should obtain the necessary information, but does not need to write a detailed explanation. It is usually not necessary to contact a supervisor unless there is a problem that must be addressed immediately. It is not appropriate to file the information. SOURCE: CO:114 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for


Be accurate. When you state a fact, it's important to be accurate. Make sure you can support your statement. Don't generalize. Stating a fact is not usually about thinking before you speak (as in stating an opinion) or about changing your mind (as in hearing a fact stated by another person). SOURCE: CO:053 SOURCE: QS LAP 29—Put In Your Two Cents

9. A

Put items in time sequence. Chronological order arranges items according to the time they occur. The order that describes a problem and a plan for solving it is problem/solution order. The order that arranges material into related subcategories is topical order. The order that emphasizes the relationship between events is cause-and-effect order. SOURCE: CO:025 SOURCE: QS LAP 9—Well Said!

10. C

Be thorough. Effective written communication must be thorough and contain all the information necessary for the recipient to respond or react. Effective written communication answers the questions of who, what, when, where, why, and how. Recipients of effective written communication will understand exactly what the senders are trying to convey. Effective written communication should not be repetitious, wordy, or trite. SOURCE: CO:016 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 187-189). New

York: Glencoe/McGraw-Hill. 11. C

Body. The body of a business letter contains one or more paragraphs of information that the writer wants to give to the receiver. The introduction begins the letter. The salutation addresses the receiver (Dear Mr. Jones). The close usually tells the reader what to do or the preferred course of action. SOURCE: CO:133 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 285-286].

Boston: Irwin/McGraw-Hill.

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM — KEY 12 12. B

Persuasive. A collection letter is a type of persuasive message that many businesses write to customers who are delinquent in making payments on their accounts. The purpose of the collection letter is to persuade customers to send payment or to contact the business to make some type of arrangement. Collection letters should not be threatening or overly aggressive because they may offend customers rather than encourage them to respond immediately. Although a collection letter contains information, it is not considered to be an informational message. SOURCE: CO:031 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [p. 341]. Mason, OH: Thomson South-Western. 13. D

To announce the addition of a new product line. The main form of written communication within an organization is the memorandum. Businesses use memos to provide information that is needed by company employees, such as the addition of a new product line. Personal matters, such as friendships and employee birthdays, should not be the subject of memorandums. A request for merchandise would be placed through a purchase order. SOURCE: CO:094 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for


Handling problems. Problems and complaints should not be avoided but looked at as opportunities to demonstrate a customer-service mindset. Most customers will tell others about problems they have with the business, but they will also tell how quickly and satisfactorily their problems or complaints were resolved. These customers will likely return to the business, in spite of previous problems, because they know employees will resolve whatever problems arise. Employees do not need to demonstrate a customer-service mindset when placing orders, contacting suppliers, and preparing schedules because customers are not involved in these situations. SOURCE: CR:004 SOURCE: Kirkham, M., Weiss, P., & Crawford, B. (2000). The waiting game: The ultimate guide to

waiting tables (p. 33). Austin, TX: Twenty Per Cent. 15. A

Restating. Often, it is helpful for the employee to restate the customer's question to make sure that's what the customer actually asked. Writing down the question would only be done when the employee needed to obtain further information in order to answer the question. Employees who are trying to understand what a customer is asking would not refute or ignore the question. SOURCE: CR:007 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 226). New


Apologize to the customer and indicate that there is no charge for the order. The shift manager should focus on improving the customer's negative perceptions of the business. Her/his goal should be to make the customer's service experience as pleasant as possible. Delivery of quality customer service builds long-term customer loyalty. Offering the customer a free meal is one way to indicate that the customer's business is important. The cost of a free meal is low when compared to the money that can be lost due to unsatisfied customers. Not dealing with the situation in a customer-oriented manner will affect future sales. It is inappropriate to inform a customer that the cook is trying to improve. When a cook consistently performs below standard, the restaurant should provide needed training or find someone else who can meet the desired standards. Telling the customer that others have had the same experience or acting busy while talking to the customer does not resolve the customer's negative impression of the restaurant. SOURCE: CR:010 SOURCE: Kirkham, M., Weiss, P., & Crawford, B. (2000). The waiting game: The ultimate guide to

waiting tables (p. 33). Austin, TX: Twenty Per Cent.


Personalized activity schedules. A competitive advantage is the edge that businesses achieve when they can offer something better than their competitors. A business that provides a service, or a better type of service, often has an advantage over competitors that do not provide the same service. Offering personalized activity schedules may persuade customers to buy from that cruise line. A business that does not have a competitive advantage if it offers room service or standard products that are provided by other, similar businesses. Open-door policy is a business practice whereby management encourages communication between employees and management by indicating that their doors are always open. SOURCE: DS:029 SOURCE: Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real

choices (5th ed.) [p. 315]. Upper Saddle River, NJ: Pearson Prentice Hall. 18. C

Natural resources. Natural resources are found in nature and are used to produce goods or services. Human resources are the people who work to produce goods and services. Capital goods are all manufactured or constructed items that are used to produce goods or services. Economic resources refer to all of the items used to produce goods or services. SOURCE: EC:003 SOURCE: Clayton, G.E. (2005). Economics: Principles & practices (p. 7). New York: Glencoe/McGraw-

Hill. 19. B

Amount of satisfaction. Consumers often decide how much they are willing to pay for goods and services based on how much satisfaction or value they expect to receive from the purchase. Consumers who expect to receive great satisfaction from a certain good or service often are willing to pay higher prices than those consumers who do not place such a high value on the item. Discounts and refunds are ways of reducing prices. Commissions are paid to the sellers of products, not to consumers. SOURCE: EC:006 SOURCE: Miller, R.L. (2005). Economics: Today and tomorrow (p. 173). New York: Glencoe/McGraw-

Hill. 20. B

Hires an outside firm to perform its marketing. A business performs its activities in an "out of the ordinary" way when it uses outsourcing or when it offers virtual services. Outsourcing is acquiring assistance from outside organizations/consultants to perform primary business activities. In this case, outsourcing is demonstrated by hiring an outside firm to perform the primary business activity of marketing. Operating as a link between customers and products is the role of marketing—certainly not out of the ordinary. Long-term planning and organizing for the future are part of strategic management. Offering a new product in a popular product line is part of marketing and/or operations. SOURCE: EC:071 SOURCE: EC LAP 19—Strictly Business (Business Activities)

21. B

Scarce. Often, companies do business with foreign firms because the firms are located in a country that has a scare (rare) resource that the companies (and nations) want or need. For example, crude oil is used to make the gasoline that fuels our cars and trucks. Middle Eastern countries have rich oil fields that other countries do not have, and sell this scarce product to other businesses and countries. If the desired resource were abundant, or reusable, there would be no reason to obtain the product from firms in other countries. Consumable products are usable, which may also be scare, abundant, or reusable. SOURCE: EC:104 SOURCE: Pride, W.M., Hughes, R.J., & Kapoor, J.R. (2008). Business: Library edition (9th ed.)

[pp. 77-79]. Boston: Houghton Mifflin Company.


Income from sales. Income is the first factor that businesses consider when calculating profit. The gross profit of a business is computed by subtracting cost of goods sold from income from sales. The net profit is calculated by subtracting operating expenses from the gross profit. Market share is an organization's portion of the total industry sales in a specific market. SOURCE: EC:010 SOURCE: EC LAP 2—Risk Rewarded (Profit)

23. D

Job task. This kind of specialization occurs when workers perform a limited number of highly specific tasks as part of a larger job effort. Specialization by stages of production occurs when different stages of production are required to change a raw material into a finished product. Trade or profession specialization is according to the type of work which a person performs in order to earn a living. The geographic region in which workers live may affect their choice of trade or profession, but it is not a category of labor specialization. SOURCE: EC:014 SOURCE: Sexton, R.L. (2002). Exploring economics (2nd ed.) [pp. 38-39]. Mason, OH: South-Western.

24. C

Increased wages. Wages are usually a number-one issue for labor unions. Other objectives are improved working conditions and job security. Management objectives would include reducing labor costs, retaining managerial authority, and improving worker efficiency. SOURCE: EC:015 SOURCE: Sexton, R.L. (2002). Exploring economics (2nd ed.) [p. 327]. Mason, OH: South-Western.

25. D

OK sign. Hand gestures have different meanings in different cultures. If businesspeople do not understand the meaning of those gestures in other countries, they may accidentally offend or insult businesspeople in those countries. The OK sign is an example of a hand gesture that has different meanings in different countries. In some countries it is a rude and insulting gesture, while in other countries a similar sign represents money. A handshake is not a hand gesture. An embrace is classified as touching. Crossed arms is not a hand gesture. SOURCE: EC:045 SOURCE: Lesikar, R.V., & Flatley, M.E. (2005). Basic business communication: Skills for empowering

the Internet generation (10th ed.) [pp. 456-457]. Boston: McGraw-Hill/Irwin. 26. A

Behavior. Integrity is adhering to an established set of personal ethics. Ethics are the basic principles that govern your behavior. People with integrity follow their ethical or moral principles in order to do what is right. Integrity cannot be evaluated on the basis of appearance, education, or occupation. SOURCE: EI:022 SOURCE: Wikipedia. (2009, September 16). Honesty. Retrieved September 18, 2009, from

http://en.wikipedia.org/wiki/Honesty 27. B

Optimists. An optimist is a person with a positive attitude. A pessimist is a person with a negative attitude. An extremist is a person who is unconventional or radical. A realist is a person who looks at things as they really are. SOURCE: EI:019 SOURCE: EI LAP 3—Opt for Optimism

28. A

Make an effort to remain calm. In some cases, acting calm will actually help you to be more calm. Using language to vent your anger indicates you have lost your self-control. Frowning and being defensive are negative responses that will not help you to maintain your self-control. SOURCE: EI:025 SOURCE: EI LAP 14—Control Yourself (Self-control)


Positive. Positive feedback is feedback involving praise. It tends to reinforce the behavior that led to the praise. Critical feedback is a form of negative feedback that tends to make people want to change their words or behavior. External feedback comes from an outside source and can be positive or negative. SOURCE: EI:003 SOURCE: EI LAP 15—Grin and Bear It (Using Feedback for Personal Growth)

30. C

In many cultures, women do not have complete independence. The role of women can cause cultural sensitivity issues because, in many cultures, women do not have the independence they have in Western culture. Women's success in higher education and men's avoidance of working for women are actions rather than generalizations based on gender. This does not mean that women do not usually become managers, or that men avoid working for women. SOURCE: EI:033 SOURCE: EI LAP 11—Getting to Know You (Cultural Sensitivity)

31. B

At work. Refusing requests can be a particularly tough task at work. There are times when you can't reasonably say “no,” such as when your manager assigns you a new project or when a client has an unbreakable deadline. However, there are times when saying “no” is necessary and even makes you a better employee. Refusing requests isn't necessarily tougher when you are sick or during the summer. Aggressive people usually have no trouble saying “no.” SOURCE: EI:008 SOURCE: EI LAP 18—Assert Yourself (Assertiveness)

32. B

External conflict. An external conflict occurs with one other person or with a group of people. When you have conflicting thoughts or ideas within yourself, it's an internal conflict. A labor dispute usually refers to a disagreement between a labor union and management. Reconcilable dispute is not a commonly used phrase to describe conflict, but it indicates that a disagreement can be resolved. SOURCE: EI:015 SOURCE: EI LAP 7—Stop the Madness (Conflict Resolution in Business)

33. A

It provides focus for team members' energy. Shared vision has helped Penny focus her energy from day-to-day while she performs her work tasks. Shared vision also creates accountability, acts as a guide for decision making, and stimulates creativity, but these benefits are not illustrated in Penny's situation. SOURCE: EI:060 SOURCE: EI LAP 13—Vision Quest (Enlisting Others in Vision)

34. D

Prejudice. Prejudice is opinions or judgments based on feelings or hearsay, rather than fact. Sally is basing her opinion of her coworker on what she has heard, not on fact. Her prejudice will keep her from feeling empathy for Janet. Thoughtfulness is consideration for others. Generosity is the willingness to give to others. A grievance is a complaint about unfairness. SOURCE: EI:036 SOURCE: Bailey, L.J. (2007). Working (4th ed) [p. 474]. Mason, OH: South-Western Cengage

Learning.


Finance company. To receive cash in exchange for the Silvers' contract, the dealership dealt with a sales finance company. This is a business that purchases borrowers' contracts from sellers and receives the borrowers' payments. A credit union is a financial cooperative set up to provide savings and credit services to its members. It usually operates within a business or a labor union. A savings and loan association is a financial institution that offers savings accounts and makes loans to borrowers. Most of the loans are for real-estate purchases. Commercial banks are full-service banks offering a variety of banking services, including checking and savings accounts, secured and unsecured loans, installment credit, and bank credit cards. SOURCE: FI:002 SOURCE: Lowe, R.E., Malouf, C.A., & Jacobson, A.R. (2003). Consumer education & economics

(5th ed.) [pp. 280-281]. New York: Glencoe/McGraw-Hill. 36. D

Realize what it takes to get the things you really want. Financial planning is a good way to realize what it takes to get the things you really want. It is not a method for removing the fun from saving and investing, nor does it make it all right to treat yourself to something special. And, even the best financial planning can't guarantee you'll retire with a million dollars by the time you're age 40. SOURCE: FI:065 SOURCE: QS LAP 31—Set Yourself Up (Setting Financial Goals)

37. A

Checkbook balance. Reconciling a bank statement is the process of determining any differences between the bank statement balance and the checkbook balance. A company's balance sheet is not part of maintaining a personal bank account or its records. Canceled checks and deposit slips are used during bank-statement reconciliation to determine if accurate records have been kept. SOURCE: FI:070 SOURCE: Guerrieri, D.J., Haber, F.B., Hoyt, W.B., & Turner, R.E. (2004). Accounting: Real-world

applications & connections (p. G-8). New York: Glencoe/McGraw-Hill. 38. D

Securities. In investing, legal owning- or lending-agreements between individuals, businesses, or governments are known as securities. Securities can be separated into "owning" and "lending" categories. Bonds are one type of lending investment. Contracts are legal agreements in general—not necessarily related to investing. Guarantees are sometimes provided by sellers to buyers in a purchase situation. SOURCE: FI:077 SOURCE: QS LAP 32—Risky Business

39. A

It builds up cash value. Whole-life insurance is also called ordinary or straight life insurance. One of the benefits of whole-life insurance is that as the policyholder pays premiums, the cash value of the policy increases. If necessary, s/he can cash in the policy for its cash value or borrow money against the cash value. The interest paid on the premiums is not usually high. Whole-life premiums increase as the policyholder gets older, but the face value of the policy stays the same. SOURCE: FI:081 SOURCE: Bailey, L.J. (2007). Working (4th ed.) [pp. 382-383]. Mason, OH: South-Western Cengage

Learning. 40. D

Making reasonable decisions as new conditions develop. It is important to be flexible enough to make common-sense judgments if unforeseen situations develop. Current and future economic conditions should be analyzed to determine their possible effects on the business. The consequences of possible actions should be considered before the choices are narrowed. Transferring responsibility does not necessarily reduce or remove risk. SOURCE: FI:084 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 719). New



Spending too much on expenses. By themselves, the elements of an income statement are simply categories and totals. A business needs to be able to see how the categories are affecting each other and the bottom line. By comparing categories, a business will be able to determine if it is spending too much on expenses and not earning sufficient profit. Most businesses try to spend as little as possible when purchasing supplies or acquiring goods. Businesses try to earn as much income as possible. SOURCE: FI:094 SOURCE: FI LAP 4—Watch Your Bottom Line (Income Statements)

42. C

Cash management. Finance is the process of obtaining funds and using them to achieve the goals of the business. An important aspect of the finance function is managing the cash that flows into and out of the business. Product sourcing, materials allocation, and sales forecasting are not primary responsibilities of a company's financial function. SOURCE: FI:354 SOURCE: Ivancevich, J.M., & Duening, T.N. (2007). Business principles, guidelines, and practices

(2nd ed.) [p. 543]. Mason, OH: Thomson. 43. C

Orientation. Orientation is an on-boarding activity, an HR management activity that gets new employees started on the job. It may involve giving the employee a tour of the facilities and making introductions, giving the employee information about company procedures and policies, and familiarizing the employee with his/her new work space and equipment. Compliance is an HR management activity that involves making sure the company is following laws and regulations. Grievances are formal employee complaints made to an HR representative. Exit interviews are conducted with an employee who is leaving, not one who is new to the job. SOURCE: HR:410 SOURCE: HR LAP 35—People Pusher (Nature of Human Resources Management)

44. D

To determine where to locate a new restaurant based on population growth. The U.S. Census data provide information on designated geographic areas that indicate demographic data, social data, and economic data, and allow comparisons across years. The restaurant could use the data to determine whether a geographic area is growing. The type of restaurant to open is already pre-determined by the types of restaurants in the chain. The census data cannot determine whether management personnel want to run a new restaurant, but they provide insight into the percentages of people in management and the educational levels of people in the area. The U.S. Census provides information about how long it takes people to get to work, but it does not address the area's infrastructure. SOURCE: IM:423 SOURCE: U.S. Census Bureau. (2007). American fact finder. Retrieved September 18, 2009, from

http://factfinder.census.gov/home/saff/main.html?_lang=en 45. C

Trade magazines. These publications provide insight into technological changes occurring specifically in hospitality and tourism marketing. They are also a good source to use when tracking social/cultural changes and legal changes. By staying on top of environmental changes occurring in the industry, hospitality and tourism marketers are better positioned to take advantage of the changes. Customers may or may not be in the hospitality and tourism industry, so their knowledge of technological changes will probably be limited. The average check size is a good source to track when examining economic changes. Consumer magazines are of general interest and would not address the hospitality and tourism industry specifically. SOURCE: IM:425 SOURCE: Kotler, P., Bowen, J., & Makens, J. (1999). Marketing for hospitality and tourism (2nd ed.)

[pp. 133-135]. Upper Saddle River, NJ: Prentice Hall. Morrison, A.M. (2002). Hospitality and travel marketing (3rd ed.) [p. 23]. Albany, NY: Delmar/Thomson Learning.


Sales records. By analyzing the hotel's sales records, a hotel can identify trends in their business guests' buying behavior. For example, they might determine types of rooms requested and services used while at the hotel. Focus groups, test markets, and surveys do not capture actual buying behavior that can be examined over a period of time. SOURCE: IM:349 SOURCE: Edwards, B. (2004). Credit management handbook (p. 162). Burlington, VT: Gower

Publishing Company. 47. D

3.4. The mean is the average of the values within a sample. If the values range from 1 to 6, the mean is the average of the respondents' ratings. To calculate mean, first multiply the number of respondents by the value of their rating (30 x 1 = 30; 82 x 2 = 164; 114 x 3 = 342; 96 x 4 = 384; 67 x 5 = 335; 31 x 6 = 186). Then, add the values and divide by the number of respondents (30 + 164 + 342 + 384 + 335 + 186 = 1,441; 1,441 / 420 = 3.43 or 3.4). In this example, 3.4 is the mean rating for the quality of service based on a scale of 1 to 6. SOURCE: IM:416 SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical approach

for the new millennium (p. 526). Boston: Irwin/McGraw-Hill. 48. B

Highlight key findings. When presenting findings orally, marketing researchers should not waste time on the specifics of the research study. However, they must clearly communicate highlights of the key findings. Without this information, the decision makers will not be able to make decisions to benefit the company. Although graphic presentation of data is helpful, it is not essential. Explaining the statistics used to obtain the results would provide information that is too detailed. Not all research studies use both primary and secondary data. SOURCE: IM:391 SOURCE: Morrison, A.M. (2002). Hospitality and travel marketing (3rd ed.) [p. 151]. Albany, NY:

Delmar/Thomson Learning. 49. A

Image. Promotion is a marketing function that communicates information about goods, services, images, and/or ideas to achieve a desired outcome. Businesses often develop promotional campaigns to create a certain image or to improve an existing image. The purpose of creating a favorable image is to increas e sales. Businesses do not use promotional campaigns to create or improve credit or safety, which are business activities. Displays may be part of a promotional campaign. SOURCE: MK:002 SOURCE: MK LAP 1—Work the Big Six (Marketing Functions)

50. D

Services are usually produced and consumed at the same time. Because of the immediate nature of services, there is usually no time between when they are produced to when they are consumed. This makes it impossible to store services for use when demand is higher. Products and services have differing prices, and one can cost more than the other in any given situation. Services are intangible, and products are tangible. Product consistency is important with both services and products. SOURCE: MK:008 SOURCE: Czinkota, M.R., & Kotabe, M. (2001). Marketing management (2nd ed.) [p. 396]. Mason,


Trip purpose. Either business or leisure defines the most common marketing segment. Income level and life stage are part of demographics, and geographic area is considered in geographics. SOURCE: MP:034 SOURCE: Chon, K., & Sparrowe, R. (2000). Welcome to hospitality: An introduction (2nd ed.) [p. 129].

Cincinnati: South-Western.


Everyone in the organization. Everyone in the organization is responsible to do his/her part to contribute to appropriate information management. This includes, but is not limited to, the information management department, an information technology manager, and the chief executive officer. SOURCE: NF:110 SOURCE: NF LAP 3—In the Know (Nature of Information Management)

53. B

Robotics. Robotics is a mass production technique in which robots carry out the repetitive tasks that workers would find monotonous and tiring. Web feeds refer to the on-demand distribution of information, usually sent to a personal web site or blog, as it becomes available on the Web. A business uses a satellite-tracking system to monitor the transportation route of products in real time. Webcasts are sound or video bites that are transmitted to personal computers through the World Wide Web. SOURCE: NF:003 SOURCE: Ivancevich, J.M., & Duening, T.N. (2007). Business principles, guidelines, and practices

(2nd ed.) [pp. 248-249]. Mason, OH: Thomson. 54. C

Can be forwarded to others. When employees write e-mail messages to coworkers or customers, the recipients of the messages can forward them to others without the sender's knowledge or permission. Therefore, employees should be cautious about the content of e-mail messages because they have no control over what the recipients do with the e-mails. It is best not to include personal or sensitive information in e-mails, particularly if the sender wants the information to remain private. E-mail messages are not private conversations, do not take a long time to prepare, and are not considered formal correspondence. SOURCE: NF:004 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 164-165].


To create text documents. Most word-processing software programs are designed to be used to create text documents, although some have limited graphic capabilities. Businesses use word-processing software programs to write letters, memos, reports, business plans, and sales contracts. There are many different word-processing software programs available that enable businesses to create, edit, and store important text documents. Spreadsheet software programs are used to organize numerical information. Database software programs are used to maintain customer lists and catalog personnel records. SOURCE: NF:007 SOURCE: Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (p. 199).

Woodland Hills, CA: Glencoe/McGraw-Hill. 56. B

Productivity. Productivity is the amount of work employees perform in a given time period. Collaborative computer software allows many employees to access the same business information. Some applications, such as e-mail, allow employees to instantly transmit messages and business documents to coworkers who are traveling or working in other facilities, which can facilitate a quick response. Quick responses can increase an employee's productivity because the employee can take immediate action and then proceed to work on other tasks. Collaborative computer software does not necessarily increase an employee's independence or motivation because other factors can affect a person's independence (e.g., type of job) and motivation. The business, rather than its employees, receives the profit that might result from increases in the employees' productivity. SOURCE: NF:011 SOURCE: Sheldon, T. (n.d.). Groupware. Retrieved June 10, 2009, from

http://www.linktionary.com/g/groupware.html


Storing them in a safe environment. Records need to be maintained in a safe physical environment to protect them from damage or destruction. Businesses often protect their records by storing them in fireproof safes, fire-resistant cabinets, or moisture-controlled rooms. Because technology is constantly evolving, many people believe that videotapes are outdated, if not obsolete. Insufficient information is provided to determine whether the business office offers a safe environment. In addition, vital records may be kept in areas other than the business office. Filing records in cardboard boxes is not safe because cardboard boxes may be destroyed by fire or water. SOURCE: NF:001 SOURCE: NF LAP 1—Record It (Business Records)

58. D

To obtain useful information. Statistical findings need to be interpreted in order to convert them to useful information. Simply gathering statistics, which are data presented in numerical form, is not helpful unless a business analyzes them and converts them to useful information. For example, it is not useful to know that 500 customers buy a certain product unless the business also knows the total number of potential customers and what percentage of the potential customers are current customers. Perhaps 500 seems like a strong customer base, but that is not the case if the potential is 10,000. Businesses often use statistical findings to develop charts and tables and calculate the median. However, those are not reasons why the business interprets them. Businesses do not interpret statistical findings to organize a database. SOURCE: NF:093 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 170-171). New


Rely less on the use of travel agencies for business. The Internet has made it possible for individuals to bypass travel agencies by checking on room availability and making their own reservations online. This is beneficial for properties because they don't have to pay as many sales commissions to travel agencies. The number of guest reservations that need to be processed so that guests can be assigned a room upon check-in remains the same, regardless of whether the reservation was made online or offline. The property still needs to communicate important information about reservations, including a confirmation number, through e-mail or by other means. The number of individuals needed to staff the front desk is not affected by an online reservations system, although the number of reservation clerks required to take telephone reservations might be. SOURCE: NF:060 SOURCE: Vallen, G.K., & Vallen, J.J. (2000). Check-in: Check-out (6th ed.) [pp. 116-117]. Upper Saddle

River, NJ: Prentice Hall. 60. D

Production planning. The foundation of the operations function is production planning, since most other operations activities are based on decisions made during this step. In production planning, a business determines its operating system, which in turn dictates what is needed for maintenance, repairs, purchasing, quality control, etc. SOURCE: OP:189 SOURCE: OP LAP 3—Smooth Operations (Nature of Operations)

61. C

Hazards in the workplace. OSHA's purpose is to prevent employee injuries and deaths by insisting that businesses maintain safe, hazard-free workplaces. The agency's inspectors visit businesses to see that the government's safety and health regulations are being followed. OSHA does not deal with natural risks, unemployment, or employee theft. SOURCE: OP:007 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 128). New


Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM — KEY 21 62. C

An unsafe environment. An unsafe environment may result from poor housekeeping, fire hazards, or a lack of safety equipment. OSHA rules are intended to make the workplace safe. Being safety-conscious helps to prevent accidents. A job transfer would not be the direct cause of an accident. However, a newly transferred worker should receive training in safety on the new job. SOURCE: OP:009 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 724). New


Padding an expense account. Employee pilferage involves the taking of small amounts or small articles without the consent of the company. That is what occurs when an employee pads his/her expense account. Changing the amount specified on a check is an example of fraud. Installing personally owned software on your computer at work is against most companies' policies; however, it does not represent employee pilferage. Hacking into your company's computer to obtain trade secrets is a computer crime. Since losing trade secrets can be very costly to the company, it does not qualify as pilferage. SOURCE: OP:013 SOURCE: Chapter 10: White collar crime: Occupational and corporate crime. Retrieved September 18,

2009, from http://www.sagepub.com/haganstudy/outlines/Ch10_Outline.doc 64. D

The profit margin for donuts will increase. If Annika reduces the materials' cost of Dottie's donuts, the profit margin for the donuts will increase, not decrease. As long as Dottie does not lower the price of donuts, using less expensive sugar will not have an impact on donut sales. SOURCE: OP:015 SOURCE: OP LAP 2—Buy Right (Purchasing)

65. C

Break-even point. The break-even point is the level of sales at which revenues equal total costs. Businesses calculate the break-even point to select the most appropriate price at which to sell their goods. A business needs to make sure that the price is sufficient to cover all expenses and make a profit. Trade-in allowance is a price reduction offered for selling back an old model of the product being purchased. A sales-volume quota is a quota based on sales or some aspect of sales volume. Prime-interest rate is the rate of interest banks charge their best customers. SOURCE: OP:024 SOURCE: Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real

choices (5th ed.) [pp. 345-348]. Upper Saddle River, NJ: Pearson Prentice Hall. 66. D

Preventive. Preventive maintenance involves regularly inspecting and servicing equipment to locate and correct potential problems. Routinely servicing operating equipment costs a business money, but it also helps to prevent breakdowns that may be more expensive to repair. Breakdown maintenance involves repairing broken equipment. Replacement involves buying new equipment. Emergency maintenance usually occurs once equipment has broken down. SOURCE: OP:032 SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)

[pp. 318-319]. Upper Saddle River, NJ: Prentice Hall. 67. C

Protect People First. A key security issue is to protect store personnel and any customers who might be on hand. People are the priority rather than protecting property or prosecuting offenders. Stores are not always able to hire off-duty police to protect the premises. SOURCE: OP:113 SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:

Teacher's manual (2nd ed.) [p. 381]. Woodland Hills, CA: Glencoe/McGraw-Hill.


Follow appropriate emergency procedures. Motels must be prepared to handle emergencies if they occur. Depending on the property's geographic location, the property might be more likely to experience some emergencies (e.g., earthquakes, floods) than others. And because the effects of natural disasters differ from one another, motels should have procedures for the various types of emergencies they are likely to encounter. A motel should thoroughly explain to employees the procedures for each emergency it might face. By preparing employees for each type of emergency, the employees can better respond and get guests, themselves, and coworkers out of harms way. The sprinkler system usually goes off automatically when fires occur. Calling medical professionals and administering first aid may or may not be necessary and depends on the type of emergency at hand. SOURCE: OP:119 SOURCE: Stutts, A.T., & Wortman, J.F. (2006). Hotel and lodging management: An introduction

(2nd ed.) [pp. 201-202]. Hoboken, NJ: John Wiley & Sons, Inc. 69. C

Abide by the dress policies of the employer. Appropriate business attire varies according to the type of business, and each employee must determine what is expected in his/her job. Appropriate clothing does not necessarily have to be expensive. Personal taste should be expressed in clothing selected for personal activities. Businesswear should be accessorized with a minimum amount of jewelry. SOURCE: PD:002 SOURCE: PD LAP 5—Brand ME! (Personal Appearance)

70. D

Set a time limit for reaching the goal. Setting a time by which you want to achieve a goal means you are less likely to put off your efforts to reach the goal. There is something about a time limit that gets people going and keeps them moving. Your goal should be honest and specific, but those characteristics will not keep you from putting off your efforts to reach the goal. No one can evaluate your commitment to your goal except you. SOURCE: PD:018 SOURCE: PD LAP 16—Go For the Goal (Goal Setting)

71. D

Period of incubation. To come into being, most creative ideas need a period of incubation. Putting a problem or an idea aside for a day or two can give you the fresh perspective you need for a breakthrough. The length of the incubation period will vary depending on the people involved and the nature of the ideas. For creative ideas to flourish, people also need cooperation from others rather than extensive criticism. Thinking in a nonconformist way also helps to improve creativity. SOURCE: PD:012 SOURCE: PD LAP 2—Creativity

72. D

Administrative services. An employee who answers phone calls and manages the office schedule works in administrative services. Employees working in administrative services facilitate business operations through a wide range of duties, including information and communication management, data processing and collection, and project tracking. These positions are often referred to as support staff positions. This employee would not be working in operations management, corporate/general management, or human resource management. Employees working in operations management focus on planning, organizing, coordinating, and controlling the resources needed to produce/provide a business's goods and/or services. Careers in corporate/general management focus on planning, organizing, directing, and evaluating part or all of a business organization through the allocation and use of financial, human, and material resources. Human resource management careers focus on the staffing activities that involve planning, recruitment, selection, orientation, training, performance appraisal, compensation, and safety of employees. SOURCE: PD:025 SOURCE: PD LAP 15—Go For It! (Careers in Business)


Former employers. The reference section of a résumé should list two or three people who can provide information about you. The best references are former employers, because they can accurately describe your work habits, abilities, and attitudes towards the job. Prospective employers will want to contact these references to find out if you performed satisfactorily in former positions. Potential employers usually do not want to contact your classmates, family members, and coworkers because they are personal references who may be unable to provide unbiased information about you. SOURCE: PD:031 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 49-51].


The chamber of commerce because local chapters are often involved in special sales-promotion events. The Chamber is a nonprofit organization dedicated to facilitating community leadership to create economic prosperity. The purpose of the National Restaurant Association is to provide services to the restaurant industry at the national level and is not involved with local events. The same is true with the Hospitality and Tourism Association. The mall, while possibly being involved with the summer festival, is more concerned with bringing customers to the mall and not just to the restaurant, if the restaurant is located within the mall. SOURCE: PD:036 SOURCE: Nashville Area Chamber of Commerce. (2009). About the chamber. Retrieved September

18, 2009, from http://www.nashvillechamber.com/membership/about/index.html 75. D

Join a professional trade association. Most segments within the hospitality industry (e.g., travel agents, hotels, restaurants, intermediaries) have organizations that provide research, educational, and promotional information as well as current trends. Most organizations charge membership fees to belong. The fees can be used to develop programs and conduct research. Information can be communicated by meetings, seminars, newsletters and web sites. These organizations also provide leverage and input regarding legislation pertaining to the hospitality industry. A motivational speaker might encourage the manager to succeed on the job but does not necessarily provide detailed industry-related information. Training manuals are written documents that outline procedures to complete tasks; they do not provide industry trends, education, and promotion information. An assessment consultant who evaluates staff does not necessarily have information regarding trends, education, and promotion within the hospitality industry. SOURCE: PD:061 SOURCE: Kaser, K., & Freeman, J.T. (2002). Hospitality marketing (pp. 294-295). Mason, OH: South-

Western/Thomson Learning. 76. C

A decrease in the number of guests and an increase in the number of rooms available. A decrease in the number of guests occurs during economic slowdowns because people are reluctant to spend their discretionary income on travel. Consequently, there is an increase in the number of rooms available as more rooms become available for rent. An increase in the number of guests and an increase in the number of rooms available does not follow the law of supply and demand, which suggests that as demand for rooms go up, supply typically goes down. A decrease in the number of guests and a decrease in the number of rooms available would work the other way because as demand goes down, the supply of rooms available for rent typically goes up. An increase in the number of guests and a decrease in the number of rooms available typically occurs during good economic times when people are more willing to spend their discretionary income on travel. SOURCE: PD:111 SOURCE: Vallen, G.K., & Vallen, J.J. (2005). Check-in: Check-out (7th ed.) [p. 7]. Upper Saddle River,

NJ: Prentice Hall.


Price. Demand is the quantity of a good or service that buyers are ready to buy at a given price at a particular time. Demand has a significant effect on the price of travel and tourism products because if demand is high, prices often increase because travelers are willing to pay more to obtain the products they want. For example, if demand for a cruise is high during certain times of the year, the price of cabins will increase because there are many travelers who want to book passage on that cruise. On the other hand, prices usually decrease as demand decreases because fewer travelers want to buy travel products. Demand does not have a significant effect on the availability, quality, or source of travel and tourism products. SOURCE: PI:039 SOURCE: Morrison, A.M. (2002). Hospitality and travel marketing (3rd ed.) [pp. 514-518]. Albany, NY:

Delmar/Thomson Learning. 78. C

To set it apart from competitors. Positioning is a product mix strategy in which a business creates a certain image or impression of a product in the minds of consumers. For a new product, businesses often try to develop a unique positioning concept that will set the new product apart from competitors. For example, the new product may have features that competing products do not have. These features make the product unique so the business can position the product based on its unique features. Businesses do not develop a unique positioning concept for a new product to monitor its growth stage, to create an original marketing plan, or to identify innovative objectives. SOURCE: PM:228 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 645-646). New


Four. If one turkey serves 15 people, then two turkeys will serve 30 people, three turkeys will serve 45 people, and four turkeys will serve 60 people. The restaurant should purchase four turkeys because it plans to serve 50 customers which is five more people than three turkeys will serve. SOURCE: PM:261 SOURCE: Mill, R.C. (2001). Restaurant management: Customers, operations, and employees (2nd ed.)

[p. 211]. Upper Saddle River, NJ: Prentice Hall. 80. C

Lodging. The core product in the hospitality industry is lodging, which involves providing overnight sleeping accommodations for guests. The various segments of the hospitality industry offer a range of accommodations including economy, full-service, and resort. Many properties also offer complementary products, such as entertainment, food service, and retailing; however, the main product is lodging. For example, an economy property that provides rooms is selling only the core product, while a resort that has many restaurants, nightly entertainment, and retail shops is selling the core product as well as complementary products. SOURCE: PM:081 SOURCE: Morrison, A. (2002). Hospitality and travel marketing (3rd ed.) [pp. 256-259].

Delmar/Thomson Learning. 81. C

Shuttle. A resort that is located near a large amusement park might provide shuttle service to transport its guests to the amusement park. Resort guests who arrive by airplane often do not have automobiles to drive to the resort. Therefore, a resort that provides shuttle service to a nearby attraction is meeting a segment of its guests' needs. Courier service usually offers same- or next-day delivery of documents and small parcels; courier service is often used by businesses. Room service is the delivery of food and beverage to a guest's sleeping room or meeting room. Dining service refers to the overall food and beverage operation, which includes the resort's restaurant and banquet facilities. While room service and dining service are not available at all lodging facilities, food and beverage service is usually a standard service rather than a distinct service that large resorts offer. SOURCE: PM:095 SOURCE: Kaser, K., & Freeman, J.T. (2002). Hospitality marketing (p. 210). Mason, OH: South-

Western.


High-speed Internet connection. Streaming media are sound, video, or animations that play in real time. E-mail is capable of delivering streaming media when the recipient opens the message or clicks on a "play" button. Streaming media are very expensive to produce, and for it to work properly, the recipient needs a high-speed Internet connection. Therefore, it is not delivered through e-mail very often. Streaming media do not require the recipient to have an unlisted telephone number, a sophisticated computer keyboard, or a complicated operating system. SOURCE: PR:165 SOURCE: PR LAP 13—E-Mail as a Marketing Tool

83. D

Provide realism. One of the reasons that businesses use color in advertisements is to present their products in an attractive and realistic manner. Readers are attracted to color ads and can identify more easily with products that are depicted in their actual color. The main purpose of using vivid colors in advertisements is to provide realism rather than to offer choices or create balance. Businesses do not want to distract readers from their advertisements. SOURCE: PR:123 SOURCE: Wells, W., Burnett, J., & Moriarty, S. (2003). Advertising principles & practice (6th ed.)

[pp. 368-369]. Upper Saddle River, NJ: Prentice-Hall. 84. D

Typography. Typography is the effective use of type. However, typography involves more than the type or lettering. It involves the style and size of type as well as the space between letters or words. Typography has a significant effect on the look of an ad and helps to convey a message and express a certain feeling. Therefore, typography is an important part of designing an effective advertisement. Creating a storyboard is an important part of developing a television commercial. Frequency and position are factors to consider when placing print ads. SOURCE: PR:295 SOURCE: Lane, W.R., King, K.W., & Russell, J.T. (2005). Kleppner's advertising procedure (16th ed.)

[p. 547]. Upper Saddle River, NJ: Pearson/Prentice Hall. 85. D

Databases. A database is computerized storage for information and facts. The use of databases is one way of tracking marketing-communications activities. For example, a business sends out 100,000 promotional letters to customers and receives 25,000 responses. The business maintains a database of the names and characteristics of 100,000 customers as well as information about those who responded. The business can analyze the database to track the effectiveness of the mailing in reaching the target market. Questionnaires, surveys, and interviews are ways of obtaining marketing information rather than ways of tracking marketing-communications activities. SOURCE: PR:335 SOURCE: Solomon, M.R., & Stuart, E.W. (2000). Marketing: Real people, real choices (2nd ed.)

[pp. 460-461]. Upper Saddle River, NJ: Prentice Hall. 86. B

Printing process. Digital color printing uses computer-based files to print high-quality promotional materials such as advertisements. Digital color is a full-color printing process that often is less expensive than other types of printing processes. It is a process that is being used more frequently because many ads are created on a computer. Digital color is not a type of media strategy, graphic design, or advertising method. SOURCE: PR:274 SOURCE: Lane, W.R., King, K.W., & Russell, J.T. (2005). Kleppner's advertising procedure (16th ed.)

[pp. 535, 543, 560]. Upper Saddle River, NJ: Pearson/Prentice Hall.


Benefits. Advertising copy focuses primarily on the benefit that the product creates for the user and tries to convince the consumer that the benefit is unique to the specific brand of product. Features, or characteristics, don't sell products—consumers are more interested in what the product can do for them to make their lives easier or better. Not all products offer a warranty or are expected to offer one. Dependability will only apply to certain products. SOURCE: PR:126 SOURCE: Czinkota, M.R., & Kotabe, M. (2001). Marketing management (2nd ed.) [p. 384]. Mason, OH:

South-Western. 88. D

Press. The account manager should request a press proof that uses halftone film and actual printing inks to give the most accurate proof. Although this is an expensive proof, the account manager recognizes the importance of the large account. Black-and-white laser, blue lines, and Velox proofs will not provide the quality of color needed to assess the proof. SOURCE: PR:130 SOURCE: Lane, W.R., King, K.W., & Russell, J.T. (2005). Kleppner's advertising procedure (16th ed.)

[p. 558]. Upper Saddle River, NJ: Pearson/Prentice Hall. 89. B

Sets the business apart from competitors. Many businesses are involved in community activities. The benefit to the business is that this involvement often sets it apart from competitors who may not be involved in community activities. The business usually receives positive publicity for its involvement which helps to create a good public image. Customers often are attracted to these companies because of the publicity and decide to do business with them rather than with their competitors. Businesses often compensate employees if they ask employees to spend time participating in community activities, such as fundraisers for charitable organizations. Being involved in community activities does not help a business to test new products, nor does it necessarily make it possible for customers to meet top management. SOURCE: PR:315 SOURCE: Solomon, M.R., & Stuart, E.W. (2000). Marketing: Real people, real choices (2nd ed.)

[pp. 133-136]. Upper Saddle River, NJ: Prentice Hall. 90. A

Contribute to the social good. Businesses often identify community issues for company involvement. When considering possible issues, businesses often look for those that will contribute to the social good, such as helping needy families, supporting education, mentoring at-risk teenagers, etc. The intent is to become involved in activities that will improve the community and benefit the citizens. When identifying community issues for company involvement, businesses usually do not consider which ones will earn a reasonable profit, generate positive publicity, or build consumer loyalty. However, as a result of being involved in community activities, a business might receive positive publicity which will help build consumer loyalty and increase profit. SOURCE: PR:347 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 135-136). New


Captioned photograph. A captioned photograph is a picture that is accompanied by written text called a caption. Including a photograph with a print news release can help to get information presented. The print media will sometimes use a news release simply because they like the photograph, or they think it will add interest to a particular page. Businesses should send a thank-you note to the editor after the release is used. Businesses do not include promotional souvenirs or reference lists with a news release. SOURCE: PR:057 SOURCE: Pride, W.M., Hughes, R.J., & Kapoor, J.R. (2010). Business (p. 447). Mason, OH: Cengage

Learning.


Confirm that red items have been displayed. The day before a special promotion you should make sure that all the items related to the event are on display. If it's a Valentine's Day promotion, you should make sure that red items are prominently displayed because customers will be looking for those items. The day before a special event is too late to order goods or make sure that ads have appeared in the newspaper. It should not matter whether the salespeople who worked last year are working this year. SOURCE: PR:068 SOURCE: Meyer, E.C., & Allen, K.R. (2000). Entrepreneurship and small business management:

Teacher's manual (2nd ed.) [p. 209]. Woodland Hills, CA: Glencoe/McGraw-Hill. 93. B

Remove damaged items. Maintaining displays in good condition often involves removing those items that have become damaged or soiled. Over a period of time, the items may be damaged. Damaged items detract from the appearance of the display. The restaurant should remove those items from the display and replace them with new items to maintain the display in good condition. Once a display is constructed, a restaurant would not add new props, change the background, or update the color scheme. SOURCE: PR:052 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 393). New


Sans serif. Sans serif means that there are no details or flourishes (feet) on letters and characters in the type style. This style of type is plain and usually is easy to read. Sans serif type may be used in headlines or in ad copy. Graphic is not a characteristic of certain styles of type. Pica is a measurement of type size. Dot pattern is a characteristic of halftones. SOURCE: PR:326 SOURCE: Lane, W.R., King, K.W., & Russell, J.T. (2005). Kleppner's advertising procedure (16th ed.)

[pp. 547-551]. Upper Saddle River, NJ: Pearson/Prentice Hall. 95. B

Sales promotion. Sales promotion refers to the activities other than advertising, personal selling, and publicity that stimulate customer purchases. Coupons and samples are examples of sales promotion. Institutional advertising refers to any paid nonpersonal message that aims to create a certain image in the eyes of consumers. Opt-in e-mail refers to electronic promotional messages that are sent with a recipient's permission and allow the recipient to request removal from the subscriber list at any time. A trade-in allowance is a price reduction offered for selling back an old model of the product that the customer is purchasing. SOURCE: PR:121 SOURCE: Silva, K.E., & Howard, D.M. (2006). Hospitality and tourism (pp. 260-263). Woodland Hills,

CA: Glencoe/McGraw-Hill. 96. B

Designate a week for displays to feature souvenirs, videos, and photos pertaining to the tour. Creating such a "theme week" would draw attention to the tour through the use of displays at the agency. Point-of-purchase displays and themes are one form of customer-oriented sales promotion. Advertising special discounts through outside media and holding a sweepstakes for purchasers are different forms of customer-oriented promotion. Offering incentives to agents is a form of trade-oriented sales promotion. SOURCE: PR:162 SOURCE: Burke, J., & Resnick, B. (2000). Marketing & selling the travel product (2nd ed.) [pp. 211-213].

Albany, NY: Delmar/Thomson Learning.


Audio-visual needs for the meeting. To determine the customer's meeting-room needs, the hotel's sales staff needs to ask a few general questions about the room's intended use. Then, s/he needs to ask questions focused on who, what, when, where, why, and how. Asking about audio-visual needs is one of the “what's” that needs to be determined so that the customer knows her/his total costs. Inquiring about the customer's budget should wait until a later time. Asking about the attendees' sensitivity to cold rooms would indicate a problem to the customer. Inquiring about other hotels being considered would be rude. The sales staff needs to focus on his/her property, services, and costs. SOURCE: SE:111 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 285). New


Customers' needs. Restaurant wait staff often is able to recommend a substitute menu item when the one requested is not available. Although a restaurant's ultimate goal is to sell food, the recommended substitute item should always satisfy customer needs. A waitperson should not substitute menu items just to make a sale. When customers' needs are met, the customers will probably return to the restaurant to eat. Wait staff should not jeopardize satisfying customers' needs in order to satisfy the business's goals, the suppliers' demands, or the owner's requests. SOURCE: SE:114 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 305). New


Direct. The sales closing technique in which the travel agent asks the customer if s/he is ready to buy is a direct close. A summative close is a sales technique in which the travel agent reviews the features and benefits at the conclusion of the presentation. An incentive, or bonus, close is a technique that offers the customer something extra for buying now. With the assumptive close, the travel agent acts like the sale has been made. SOURCE: SE:895 SOURCE: Burke, J., & Resnick, B. (2000). Marketing & selling the travel product (2nd ed.) [p. 235].

Albany, NY: Delmar/Thomson Learning. 100. C

During check-in. Hotel employees should inform guests of the hotel's services and amenities during the check-in process. Guests who are not aware that the hotel offers certain services will not use them, which can affect the guests' experience during their stay and can affect the hotel's sales. For example, a guest who does not realize that the hotel has an on-site restaurant will not dine there. As a result, the hotel's food and beverage division loses potential revenue. Advising guests about services during checkout is not beneficial to the guest or to the hotel. Posting is a term that describes adding or subtracting charges to a guest's bill. SOURCE: SE:221 SOURCE: Vallen, G.K., & Vallen, J.J. (2005). Check-in: Check-out (7th ed.) [p. 292]. Upper Saddle

River, NJ: Pearson Education.



Hospitality and Tourism

Cluster Exam INSTRUCTIONS: This is a timed, comprehensive exam for the occupational area identified above. Do not open this booklet until instructed to do so by the testing monitor. You will have _____ minutes to complete all questions.


Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 1


1. Which of the following is a function of the United States' judicial system: A. To interpret laws C. To license attorneys B. To develop regulations D. To analyze crimes

2. After only her seventh month in business, Martha realized that her new business venture was paying off,

and she would be taking home a $1,000 profit for the month. Finally, she could reap the financial rewards of being the boss. This is an advantage of what type of business ownership?

A. Partnership C. Corporation B. Sole proprietorship D. Merger

3. Which of the following is one of the rights of customers in the travel and tourism industry:

A. To be informed about a destination's social conditions B. To be asked if they want to buy trip insurance C. To be reminded that foreign travel is often dangerous D. To be told about a competitor's refund policy

4. Which of the following is a benefit of channels of distribution:

A. We spend more time looking for products we want. B. Producers must spend more money. C. Retailers must spend more money. D. We can more easily obtain products from all over the world.

5. To make sure products are available when customers want them, a business should coordinate

promotion with A. communication. C. segmentation. B. transportation. D. distribution.

6. A skill that promotes effective verbal communication is the ability to

A. think of other things while you listen. C. tune out anything boring. B. pretend interest in what is being said. D. listen with your brain.

7. What should a business employee do after taking a telephone message for a coworker?

A. Thank the caller C. Contact a supervisor B. Write a detailed explanation D. File the information

8. When you state a fact, it's important to

A. be accurate. C. generalize. B. think before you speak. D. change your mind.

9. When organizing an oral presentation, you use chronological order to

A. put items in time sequence. C. arrange material into related subcategories. B. describe a problem and a plan for solving it. D. emphasize the relationship between events.

10. Which of the following is a guideline for developing effective written communication:

A. Be wordy C. Be thorough B. Be repetitious D. Be trite

11. What part of a business letter contains the writer's message?

A. Salutation C. Body B. Introduction D. Close

12. A collection letter that a business writes to customers to encourage them to pay is an example of a(n)

__________ message. A. informational C. threatening B. persuasive D. aggressive

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 2 13. Which of the following is an acceptable reason to send an office memorandum:

A. To establish a personal friendship line C. To order merchandise from a vendor B. To wish an employee a happy birthday D. To announce the addition of a new product

14. It is important for employees to demonstrate a customer-service mindset when they are

A. handling problems. C. placing orders. B. contacting suppliers. D. preparing schedules.

15. Employees often try to make sure that they understand what a customer is asking about a business

policy by __________ the customer's question. A. restating C. ignoring B. writing down D. refuting

16. A waitperson has let the shift supervisor know that a customer is very upset because his order was not

cooked properly at first. When the order was returned to the table, the food lacked the requested toppings. The customer threatens to not come back to the restaurant. What action should the shift supervisor take?

A. Tell the customer that many customers have had the same complaint B. Explain to the customer that the cook is trying to improve C. Act busy while talking to the customer D. Apologize to the customer and indicate that there is no charge for the order

17. What can a cruise ship provide its customers to improve its service image and give itself a competitive

advantage? A. Room service C. Standard products B. Personalized activity schedules D. Open-door policy

18. Using a stream to supply water to a field in order to grow crops is an example of using

A. capital goods. C. natural resources. B. human resources. D. economic resources.

19. The prices that consumers are willing to pay for goods and services often depend on the __________

they expect to receive. A. amount of discount C. number of refunds B. amount of satisfaction D. percent of commission

20. An example of performing business activities in an "out of the ordinary" way is when a business

A. operates as the link between customers and products. B. hires an outside firm to perform its marketing. C. begins long-term planning and organization. D. offers a new product in a popular product line.

21. Which type of resource would most likely encourage a company to do business with a foreign firm:

A. Abundant C. Consumable B. Scarce D. Reusable

22. Which of the following is one type of information needed to compute the gross profit of a business:

A. Operating expenses C. Market share B. Net profit D. Income from sales

23. An employee of a quick-serve restaurant prepares French fries, while another cooks hamburgers, and

still another takes customer orders. This is an example of labor specialization by A. stages of production. C. trade or profession. B. geographic region. D. job task.

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 3 24. One of the principal objectives of labor unions is

A. reduced labor costs. C. increased wages. B. improved worker efficiency. D. retained managerial authority.

25. Which of the following is a hand gesture that businesspeople should understand the meaning of in other

cultures to avoid offending businesspeople in those countries: A. Crossed arms C. Embrace B. Handshake D. OK sign

26. In general, people judge your integrity on the basis of your

A. behavior. C. education. B. appearance. D. occupation.

27. People with a positive attitude are often referred to as

A. pessimists. C. realists. B. optimists. D. extremists.

28. When people make you angry or upset, you may be able to maintain your self-control if you

A. make an effort to remain calm. C. adopt a defensive attitude. B. use language to vent your anger. D. frown to indicate your displeasure.

29. Which of the following kinds of feedback is most likely to reinforce a certain behavior:

A. External C. Critical B. Negative D. Positive

30. The role of women can cause cultural sensitivity issues because

A. men avoid working for women. B. women exceed men's accomplishments in higher education. C. in many cultures, women do not have complete independence. D. women usually do not become managers.

31. Refusing requests can be a particularly tough task

A. when you are sick. C. for an aggressive person. B. at work. D. during the summer.

32. When two people in the same department disagree about how to allocate their budget, they are

experiencing a(n) A. internal conflict. C. labor dispute. B. external conflict. D. reconcilable dispute.

33. Penny finds her daily work tasks to be less mundane now that she understands how they contribute to

accomplishing the team's shared vision. Which benefit of a shared vision has helped Penny in this situation?

A. It provides focus for team members' energy. C. It acts as a guide for decision-making. B. It creates accountability. D. It stimulates creativity.

34. Sally is sure she won't like her new coworker, Janet, because Janet is from New England. Sally doesn't

know anyone from New England, but she believes they are cold and unfriendly. Sally's attitude is an example of

A. generosity. C. grievance. B. thoughtfulness. D. prejudice.

35. When the Silvers purchased their new car, the dealership representative sold their contract to another

company in exchange for cash. To what type of business would the dealership have sold the Silvers' contract?

A. Finance company C. Commercial bank B. Savings and loan association D. Credit union

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 4 36. Financial planning can be described as a way to

A. retire with a million dollars by the time you're age 40. B. remove the fun from saving and investing. C. make it all right to treat yourself. D. realize what it takes to get the things you really want.

37. Reconciling a personal bank statement is the process of determining any differences between the bank

statement balance and the A. checkbook balance. C. canceled checks. B. balance sheet. D. deposit slips.

38. In investing, legal owning- or lending-agreements between individuals, businesses, or governments are

known as A. guarantees. C. contracts. B. bonds. D. securities.

39. One of the benefits of buying whole-life insurance is that over time

A. it builds up cash value. C. it pays high interest. B. the premiums decrease. D. the face value increases.

40. Business risk can be reduced through careful planning and by

A. transferring decision-making responsibility to an assistant. B. ignoring current and future economic conditions. C. quickly narrowing the choice of possible actions. D. making reasonable decisions as new conditions develop.

41. By comparing the categories in an income statement, a business will be able to determine if it is

A. spending too much on expenses. C. earning too much income. B. paying too little for supplies. D. acquiring goods for too low a price.

42. Which of the following is a primary responsibility of a company's financial function:

A. Materials allocation C. Cash management B. Product sourcing D. Sales forecasting

43. Which of the following is an on-boarding activity:

A. Grievances C. Orientation B. Compliance D. Exit interviews

44. How could the corporate headquarters of a national restaurant chain use the U.S. Census data that it

obtained online? A. To determine ease of access to a new restaurant's location B. To determine what type of restaurant to open in a geographic area C. To determine availability of management personnel who want to run a new restaurant D. To determine where to locate a new restaurant based on population growth

45. Which of the following would be most useful in tracking environmental changes in technology that impact

hospitality and tourism marketing: A. Average check size C. Trade magazines B. Customers D. Consumer magazines

46. Which of the following would best enable a hotel to assess its business guests' ongoing behavior:

A. Sales records C. Test markets B. Focus groups D. Surveys

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 5 47. Calculate the mean if 420 customers rated the quality of service on a scale of 1 to 6 in the following

manner: 30 rated it a 1; 82 rated it a 2; 114 rated it a 3; 96 rated it a 4; 67 rated it a 5; and 31 rated it a 6. A. 3.6 C. 3.1 B. 3.3 D. 3.4

48. When presenting marketing research results to key decision makers, which of the following is the most

important action for the researcher to take? A. Present the data graphically B. Highlight key findings C. Explain statistics used to obtain the results D. Incorporate both primary and secondary data

49. Businesses often use promotional campaigns to create or improve their

A. image. C. safety. B. credit. D. displays.

50. One key difference between product marketing and service marketing is that

A. consistency is much more important with a product than with a service. B. products are intangible, while services are tangible. C. products always cost more than services cost. D. services are usually produced and consumed at the same time.

51. In determining potential lodging markets, industry leaders must look at the most common marketing

segment in the lodging industry which is defined by A. life stage. C. trip purpose. B. geographic area. D. income level.

52. Who is responsible for information management?

A. The information management department C. An information technology manager B. Everyone in the organization D. The chief executive officer

53. Which of the following is a form of technology that reduces the need for manual labor and maximizes

production efficiency: A. Web feeds C. Satellite tracking systems B. Robotics D. Webcasts

54. When writing e-mail messages, employees should remember that e-mails

A. are formal correspondence. C. can be forwarded to others. B. take a long time to prepare. D. are private conversations.

55. Which of the following is the primary capability of most word-processing software programs:

A. To maintain customer lists C. To create text documents B. To generate spreadsheets D. To catalog personnel records

56. An advantage to a business that uses collaborative computer software is that its employees can share

information quickly, which increases their A. independence. C. profit. B. productivity. D. motivation.

57. One way that a business protects its vital records is by

A. storing them in a safe environment. C. filing them in cardboard boxes. B. keeping them in the business office. D. converting them to videotapes.

58. Why is it important for businesses to interpret statistical findings?

A. To organize a database C. To calculate the median B. To develop charts and tables D. To obtain useful information

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 6 59. A benefit that online reservations systems have created for properties is the ability to

A. process fewer guest reservations. B. communicate with guests less often. C. hire fewer front desk clerks. D. rely less on the use of travel agencies for business.

60. The foundation of the operations function is

A. quality control. C. purchasing. B. maintenance and repairs. D. production planning.

61. The Occupational Safety and Health Administration (OSHA) is a federal government agency that tries to

prevent A. employee theft. C. hazards in the workplace. B. high levels of unemployment. D. natural risks.

62. A major cause of accidents on the job is

A. OSHA rules. C. an unsafe environment. B. job transfers. D. being safety-conscious.

63. Which of the following is an example of employee pilferage:

A. Installing personally owned software on your computer at work B. Changing the amount specified on a check you prepare for the company C. Padding an expense account D. Hacking into your company's computer to obtain trade secrets

64. Annika, the purchasing specialist for Dottie's Donut Shop, just located a new, less expensive sugar

supplier. Dottie does not plan to lower donut prices. If Annika buys the shop's sugar from this cheaper supplier, what is likely to happen?

A. The profit margin for donuts will decrease. C. Donut sales will increase. B. Donut sales will decrease. D. The profit margin for donuts will increase.

65. Which of the following should a business calculate before deciding what price to charge for its goods:

A. Trade-in allowance C. Break-even point B. Sales-volume quota D. Prime-interest rate

66. Which of the following is a type of business maintenance that routinely services operating equipment:

A. Replacement C. Emergency B. Breakdown D. Preventive

67. Which of the following is a slogan that a store might develop to remind its employees of their first priority

when making decisions if they are approached by a robber: A. Protect Property Please C. Protect People First B. Provide Police Protection D. Prosecute to Pay Profits

68. If a motel experiences a fire, earthquake, or severe flood, the motel staff should

A. administer first aid as soon as possible. C. call the appropriate medical professionals. B. activate each motel room's sprinkler system. D. follow appropriate emergency procedures.

69. A business's employees should keep themselves well groomed and

A. accessorize with plenty of jewelry. C. abide by the dress policies of the employer. B. wear their most expensive clothes. D. demonstrate personal clothing tastes.

70. A good way to keep yourself from putting off working toward your goal is to

A. ask someone to evaluate your commitment. C. make sure your goal is specific. B. make sure your goal is honest. D. set a time limit for reaching the goal.

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 7 71. What do most creative ideas need in order to come into being?

A. Attitude of conformity C. Time for criticism B. Limited amount of cooperation D. Period of incubation

72. An employee who answers phone calls and manages the office schedule works in

A. human resource management. C. corporate/general management. B. operations management. D. administrative services.

73. Which of the following are the best references to list in a résumé:

A. Coworkers C. Former employers B. Family members D. Classmates

74. Billy Bob's, a local restaurant, wants to be involved in a citywide summer festival. Which of the following

associations should Billy Bob's contact and why: A. The National Restaurant Association because Billy Bob's is a restaurant B. The chamber of commerce because local chapters are often involved in special sales-promotion

events C. The Hospitality and Tourism Association because Billy Bob's restaurant is a hospitality business D. The local shopping mall's association because the mall is likely to plan shopping events

75. To stay current on industry trends, promotional methods, and educational opportunities, a hotel manager

might A. hire an assessment consultant for staff evaluation. B. develop a staff training manual. C. attend a session with a motivational speaker. D. join a professional trade association.

76. What is the typical effect of an economic slowdown on the hospitality industry?

A. A decrease in the number of guests and a decrease in the number of rooms available B. An increase in the number of guests and a decrease in the number of rooms available C. A decrease in the number of guests and an increase in the number of rooms available D. An increase in the number of guests and an increase in the number of rooms available

77. Demand is often a factor that has a significant effect on the __________ of travel and tourism products.

A. price C. quality B. availability D. source

78. Why do businesses often try to develop a unique positioning concept for a new product?

A. To create an original marketing plan C. To set it apart from competitors B. To monitor its growth stage D. To identify innovative objectives

79. If one 16-pound turkey usually serves 15 people, how many turkeys should a restaurant purchase in

order to serve 50 customers? A. Five C. Four B. Three D. Six

80. Which of the following is the core product in the hospitality industry:

A. Retailing C. Lodging B. Entertainment D. Food service

81. Which of the following is a distinct service that a resort, which is located near a large amusement park,

might provide its guests: A. Room C. Shuttle B. Courier D. Dining

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 8 82. One of the disadvantages to marketers of using streaming media e-mail is that it requires the recipient to

have a(n) A. complicated operating system. C. high-speed Internet connection. B. sophisticated computer keyboard. D. unlisted telephone number.

83. Businesses often use vivid colors to present their products in advertisements in order to

A. offer choices. C. create balance. B. distract readers. D. provide realism.

84. Which of the following is an important part of designing an effective advertisement:

A. Position C. Frequency B. Storyboard D. Typography

85. One way of tracking marketing-communications activities is through the use of

A. interviews. C. surveys. B. questionnaires. D. databases.

86. Digital color is a type of

A. media strategy. C. graphic design. B. printing process. D. advertising method.

87. The main message of advertising copy usually focuses on a product's

A. dependability. C. warranty. B. features. D. benefits.

88. An account manager for a large national travel company is responsible for proofing print ads that will

coincide with the company's Super Bowl ads. What type of proof should the account manager request? A. Velox C. Blue lines B. Black-and-white laser D. Press

89. One reason why it is important for a business to be involved in community activities is because this

involvement often A. requires employees to donate their time. C. helps the business to test new products. B. sets the business apart from competitors. D. allows customers to meet top management.

90. When identifying community issues for company involvement, businesses often consider which ones will

A. contribute to the social good. C. generate positive publicity. B. earn a reasonable profit. D. build consumer loyalty.

91. What do businesses often include with a news release to attract an editor's attention:

A. Promotional souvenir C. Reference list B. Captioned photograph D. Thank -you letter

92. The Smart Travelers' Store is planning a special promotion for Valentine's Day. What should you do the

day before to make sure that your department is prepared? A. Make sure advertisements appeared in the newspaper. B. Determine whether anything needs to be ordered. C. Confirm that red items have been displayed. D. Staff the store with the same salespeople who worked last year.

93. What is a guideline that a restaurant might follow to maintain displays in good condition?

A. Add new props C. Change backgrounds B. Remove damaged items D. Update color schemes

Test 1023 HOSPITALITY AND TOURISM CLUSTER EXAM 9 94. Which of the following is a characteristic of certain styles of type:

A. Dot pattern C. Pica B. Graphic D. Sans serif

95. The Regal Hotel sends a 20% discount coupon to its previous guests to use if they book a room during a

specific time period. This is an example of a(n) A. institutional advertisement. C. opt-in e-mail. B. sales promotion. D. trade-in allowance.

96. To promote a new package tour to India, a travel agency that wants to use creative themes and point-of-

purchase displays might A. hold a sweepstakes with expensive prizes for customers who purchase the tour. B. designate a week for displays to feature souvenirs, videos, and photos pertaining to the tour. C. offer monthly sales incentives to agents who book the most seats on the tour. D. advertise special discounts or price breaks on buses, taxis, and billboards.

97. An appropriate question for a hotel's sales staff to ask a potential business customer who is booking a

meeting room is about A. other hotels that are being considered. C. audio-visual needs for the meeting. B. attendees' sensitivity to cold rooms. D. budget the customer has to work with.

98. When restaurant wait staff use substitute selling, they should remember that it is important to always

satisfy the A. suppliers' demands. C. owner's requests. B. business's goals. D. customers' needs.

99. A travel agent says to a customer, “Should we reserve space for you on this cruise?” What type of sales

closing technique has been used? A. Assumptive C. Summative B. Incentive (Bonus) D. Direct

100. When is the best time for a front -desk hotel employee to recommend hospitality services, such as dining

and exercise facilities, to a hotel guest: A. After posting charges C. During check-in B. After posting credits D. During check-out

KEY

Test Number 1024

Business Management and Administration Cluster Exam


Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM—KEY 11 1. B

Rights of business. Many governmental agencies are responsible for enforcing rules and regulations that are intended to protect the rights of businesses. Some of these agencies help to keep the marketplace competitive and protect businesses' trade secrets and formulas from being stolen. The agencies often develop a strong relationship with businesses in the process of protecting their rights. Governmental agencies do not protect the barriers to trade, the target market, or the monetary policy. SOURCE: BL:072 SOURCE: O'Sullivan, A., & Sheffrin, S.M. (2003). Economics: Principles in action (pp. 54-55). Upper

Saddle River, NJ: Prentice Hall. 2. A

Multi-level marketing. Multi-level marketing refers to a business, usually well known, that pays commissions on sales earned to people at two or more levels. The sales representatives usually work independently of the company. A product trade-name franchise is a franchise arrangement based on an independent sales relationship between a franchisor and franchisee to stock and sell a specific line of goods. It is also known as a dealership or exclusive distributorship. Licensing is a business arrangement that requires the authorization or permission from an owner to another entity to use trademarked, copyrighted (e.g., logo, name), or patented material for a specific activity, during a specific time period, for the profit of both parties. Strategic partnering is not a term that is recognized as a method of business ownership. SOURCE: BL:003 SOURCE: BA LAP 7—Own It Your Way

3. C

Past experiences. People often think they know what someone is going to say before they say it and as a result do not listen well. People's past experiences may influence how well they listen because they think they already know the answer or understand the explanation. Effective listeners try to block out past experiences and focus on what the speaker is saying. Age differences, attention span, and language skills are other factors that may affect how well people listen. SOURCE: CO:119 SOURCE: Miculka, J. (2007). Speaking for success (2nd ed.) [pp. 18-22]. Mason, OH: Thomson South-

Western. 4. B

Giving honest responses. The three main reasons for active listening are gathering information, forming an opinion, and connecting with and helping people. Giving an honest response is a good thing to do, but it is not one of the reasons for active listening. SOURCE: CO:017 SOURCE: QS LAP 1—Listen Up

5. B

Having a pleasant voice. Verbal communication has a much more positive effect on listeners when the speaker has a pleasant voice. Listeners are more likely to concentrate on the speaker's message than they would if the speaker's voice is harsh, unpleasant, or irritating. Enunciating, or pronouncing clearly, is important but should not necessarily be done rapidly. Mannerisms are part of body language, the way you express yourself through posture, facial expression, etc., and these are not forms of verbal communication. SOURCE: CO:147 SOURCE: Miculka, J. (2007). Speaking for success (2nd ed.) [p. 32]. Mason, OH: Thomson South-

Western.

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM—KEY 12 6. A

Their names. Answering a business phone requires a more formal procedure than answering a personal phone. People who phone a business expect to be greeted with the name of the company and the name of the person who answered. Customers feel more comfortable dealing with individuals who have identified themselves. It is not necessary for the employee answering the telephone to automatically recite the address of the company, explain its purpose, or give the time of day to the caller unless specifically asked. SOURCE: CO:114 SOURCE: Odgers, P. (2004). The world of customer service (pp. 128-129). Mason, OH: South-

Western. 7. C

Many opinions increase the chances of developing useful recommendations. Many businesses encourage employees to participate in group discussions to analyze problems and find solutions. The advantage is that when employees share many different opinions, there is an increase in the chance of developing useful recommendations. However, the group leader needs to encourage participation, and make all members feel comfortable so they will express their ideas and opinions. A disadvantage of group discussions is that participants often tend to start thinking the same. Also, they may not want to share controversial suggestions. Participants may be too willing to conform rather than express different opinions. SOURCE: CO:053 SOURCE: Miculka, J. (2007). Speaking for success (2nd ed.) [p. 132]. Mason, OH: Thomson South-

Western. 8. C

Attractive visuals. The use of attractive visuals often enhances an oral presentation because visuals make the information easier to understand. Also, visuals attract attention and help to keep the audience focused on the message. Having charts, graphs, photographs, or slides helps to make the presentation more interesting to the audience. Employees do not include written notes, detailed instructions, or coffee breaks to make oral presentations more interesting to the audience. SOURCE: CO:025 SOURCE: Miculka, J. (2007). Speaking for success (2nd ed.) [pp. 194-195]. Mason, OH: Thomson

South-Western. 9. B

Progress. A progress report is usually prepared to let management know whether a project is on schedule. A credit report concerns the credit standing of a credit applicant. An analytical report is a longer report that not only presents data but analyzes the data and presents the results. A message report is a memo containing a message for an employee. SOURCE: CO:094 SOURCE: Leskiar, R.V., & Flatley, M.E. (2005). Basic business communication: Skills for empowering

the Internet generation (10th ed.) [pp. 318, 322]. Boston: McGraw-Hill/Irwin. 10. C

Feasibility study. An analytical report provides evaluative information. A feasibility study is a type of analytical report that explores the positive and negative consequences or the implications associated with taking a certain course of action, such as changing vendors. A troubleshooting guide is a document that provides guidance for solving problems with a product or process. An opportunity assessment presents favorable circumstances that potentially benefit the business and is an element of a SWOT analysis, which evaluates a business's strengths, weaknesses, opportunities, and threats. SOURCE: CO:185 SOURCE: Bovée, C. L., & Thill, J. V. (2008). Business communication today (9th ed.) [pp. 407-413].

Upper Saddle River, NJ: Pearson Prentice Hall.


Recommendations. A research report is a written document that summarizes an investigation related to a particular issue or problem. The recommendations section is the proposed course of action, and it is the last component presented in the report. The purpose of the study, which appears at the beginning of the report, describes why the research is needed. The background or historical information is presented at the beginning of the report and usually appears after the purpose of the study. The methodology section of the report appears in the middle of the report and discusses the types of research tools used and why they were selected. SOURCE: CO:186 SOURCE: Walonick, D. (2005). Elements of a research proposal and report. Retrieved September 21,

2009, from http://www.statpac.com/research-papers/research-proposal.htm 12. A

An office memorandum. An office memorandum, or memo, is the most commonly used method of in-house communication in many businesses. It may be handwritten, typed, or sent by e-mail. A letter of transmittal is a letter that accompanies a long report or proposal. A business letter would be used to communicate with another business. It is inappropriate to write a personal letter to a supervisor. SOURCE: CO:014 SOURCE: Bovée, C. L., & Thill, J. V. (2008). Business communication today (9th ed.) [p. 98]. Upper

Saddle River, NJ: Pearson Prentice Hall. 13. D

Result in customer satisfaction. Making customers feel important is a goal of demonstrating a customer-service mindset. Customers should feel welcome and that their satisfaction is important to everyone concerned. By focusing on the customers' needs, employees can increase sales and benefit the business. The customer-service mindset should be practiced by all employees regardless of whether employees have direct contact with customers. SOURCE: CR:004 SOURCE: Odgers, P. (2004). The world of customer service (p. 6). Mason, OH: South-Western.

14. B

Suspicious. Suspicious customers may become regular customers if the salesperson can gain their confidence and trust. Disagreeable customers are often surprised and calmed by salespeople who are composed, courteous, and efficient. Domineering/Superior customers should be made to feel important and in charge, which will help them to convince or sell themselves. Slow/Methodical customers may need more action on the salesperson's part in order to close within a reasonable period of time. SOURCE: CR:009 SOURCE: EI LAP 1—Making Mad Glad (Handling Difficult Customers)

15. D

Thank the customer for identifying the problem. Letting the customer know that you appreciate hearing about the problem helps to calm irate customers. It's difficult for those customers to remain angry when you're letting them know how much you appreciate their information. Asking the irate customer why s/he thinks there is a problem or telling the customer his/her complaint is not justified would be likely to increase the customer's anger. Explaining company policy may help the situation but would be a later step in handling the complaint. SOURCE: CR:010 SOURCE: Odgers, P. (2004). The world of customer service (pp. 54-55). Mason, OH: South-Western.

16. B

Who buys and uses the product. Industrial products are purchased by producers for resale, to use in making other goods and services, or for use in their operations. Consumer goods and services are purchased and used by the ultimate consumer. Price, origin, and producer have no bearing on whether a product is a consumer or an industrial item. SOURCE: EC:002 SOURCE: EC LAP 10—Get the Goods on Goods and Services (Economic Goods and Services)


Concert tickets. Elastic demand is a form of demand for products in which changes in price affect changes in demand. Products that are not considered essential have elastic demand. The demand for them will go down as prices increase. So, while concerts may be popular, if the price of tickets goes up, consumers will find other activities. SOURCE: EC:005 SOURCE: EC LAP 11—It's the Law (Supply and Demand)

18. A

They produce products that are the most profitable. Producers will sell goods and services at the highest prices the market will bear at the lowest cost possible. They are driven by incentives, or profits, and they want the most profit possible. They need information to decide whether to buy, what to buy, and how much to buy. SOURCE: EC:006 SOURCE: Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 526-527).

Woodland Hills, CA: Glencoe/McGraw-Hill. 19. C

Create new and better products. Businesses have the responsibility to consumers of producing and/or selling safe, quality products. They can provide these products by conducting research to determine consumer desires, developing desired products, and testing their quality and safety. A business's research and development activities may create jobs or put it in a favorable position for a government grant, but those are not socially responsible goals of such activities. Balancing the budget is part of financial management. SOURCE: EC:070 SOURCE: EC LAP 20—Business Connections (Business and Society)

20. B

Cost of goods. The cost of goods is the amount of money a business pays for the products it sells or the money a business pays for the raw materials from which it produces goods to sell. Expenditures necessary to keep the business running are called operating expenses. Advertising, utilities, and supplies are all operating expenses. SOURCE: EC:010 SOURCE: EC LAP 2—Risk Rewarded

21. A

Sherman Antitrust Act. This legislation, passed in 1890, was our government's first attempt to protect competition. The Celler-Kefauver Antimerger Act protects competitors from takeovers if the acquisition would hinder competition. The Robinson-Patman Act prohibits discriminatory price concessions, while the Clayton Act prevents business actions, such as price discrimination, that might restrict competition. SOURCE: EC:012 SOURCE: EC LAP 8—Ready, Set, Compete! (Competition)

22. D

Specialization. When labor is specialized, there are many advantages to the company and the employee. Among these advantages are simplified worker training, increased production rates, and increased employee interest. Job scope refers to the frequency that a job task is performed. Job depth refers to the amount of control a worker has over his/her job tasks. Mass production refers to the rapid production of a large quantity of goods and may not always be associated with the advantages that accompany job specialization. SOURCE: EC:014 SOURCE: Clayton, G.E. (2005). Economics: Principles & practices (p. 16). New York:

Glencoe/McGraw-Hill.


The government gives Mr. Jones $50 in food stamps. This transaction is not included in GDP because it is a transfer payment. Transfer payments are payments made by the government for which no goods or services are received in exchange. A city's purchase of a police car, a state's construction of a new highway, and the government's purchase of a copying machine would all be included in the calculation of GDP. SOURCE: EC:017 SOURCE: McConnell, C.R., & Brue, S.L. (2005). Economics: Principles, problems, and policies

(16th ed.) [pp. 112-116]. Boston: McGraw-Hill/Irwin. 24. C

Spatial differences. Cultures view space differently. In some countries (e.g., U.S.), it is acceptable for people to maintain distance from others during conversation. In other cultures (e.g., Mexico), people feel it is unfriendly to maintain distance and prefer to stand or sit closely when conversing. Clothing, makeup, and hygiene are issues that relate to appearance. Punctuality relates to the concept of time. Language variations are differences in language. SOURCE: EC:130 SOURCE: InternationalBusinessCenter.org. (1998-2008). Mexico: Behavior. Retrieved September 21,

2009, from http://www.cyborlink.com/besite/mexico.htm 25. A

Dress conservatively. It is important for U.S. businesspeople to understand different customs and practices to avoid offending businesspeople from different countries and culture. When doing business in France, it is important to dress conservatively by wearing a dark or neutral- colored business suit. French people consider it rude to speak loudly and to arrive somewhere unannounced. Gift-giving practices depend on the specific business's policies. SOURCE: EC:131 SOURCE: InternationalBusinessCenter.org. (1998-2008). France. Retrieved September 21, 2009, from

http://www.cyborlink.com/besite/france.htm 26. D

It is important to arrive at meetings on time. It is important for a businessperson to understand a foreigner's business customs and practices so that s/he does not exhibit behavior that offends the foreign businessperson. Conducting research and learning about a country's customs will help the businessperson exhibit acceptable behavior. For example, punctuality is important to Chilean businesspeople, so it is important to arrive to meetings on time. Exhibiting proper table manners and maintaining direct eye contact are also important behaviors when conducting business with Chileans. Children and family are good conversational topics. Politics and human rights are conversational topics to avoid. SOURCE: EC:132 SOURCE: InternationalBusinessCenter.org. (1998-2008). Chile. Retrieved September 21, 2009, from

http://www.cyborlink.com/besite/chile.htm 27. A

Patient. A patient person has the ability to endure life's aggravations and difficulties calmly. Exhibiting patience is important when doing business with foreigners because their customs and practices often differ from our own. In some countries, businesspeople make their decisions quickly, while businesspeople in other countries (e.g., China) take more time to make business decisions. If a foreign businessperson does not exhibit patience and behaves in an aggressive, conceited, or intolerant way, s/he may offend the Chinese businessperson and lose an important business deal. SOURCE: EC:133 SOURCE: InternationalBusinessCenter.org. (1998-2008). China: Behavior. Retrieved September 21,

2009, from http://www.cyborlink.com/besite/china.htm


Nonverbal behavior. It is important for foreigners to monitor their nonverbal behavior or body language, so they do not offend Indian businesspeople. Gestures that might not be offensive in some cultures are offensive in others, such as putting your hands on your hips. Oral tradition is associated with verbal communication or language. Social status refers to a person's social class, which is often influenced by education, money, surname, title, occupation, and geographic location. Wearing the appropriate clothing is a consideration that relates to appearance. SOURCE: EC:135 SOURCE: InternationalBusinessCenter.org. (1998-2008). India: Behavior. Retrieved September 21,

2009, from http://www.cyborlink.com/besite/india.htm 29. A

Solving problems. In this example, Penny did not communicate her needs, persuade others, or display flexibility. She used her emotional intelligence to solve problems—acknowledging and separating negative feelings from the positive action you can take to find a solution. SOURCE: EI:001 SOURCE: EI LAP 6—EQ and You (Emotional Intelligence)

30. B

Self-control. By not saying anything to Anna and concentrating on his duties, Alex is demonstrating self-control. He is restraining his feelings, words, and actions toward Anna's complaining. Assertiveness is the ability to express yourself; communicate your point of view; and stand up for your rights, principles, and beliefs, while respecting authority and being tactful. Interest and enthusiasm is showing interest in those around you, the goods/services that you market, and in your business in general. Adaptability is flexibility, the ability to adjust to changing conditions. SOURCE: EI:018 SOURCE: EI LAP 9—You've Got Personality (Personality Traits in Business)

31. B

Tone of voice can be used to express emotions and thoughts. This means that people can show their interest and enthusiasm by what they say and by the way they say it. Although body language conveys intent, people can communicate how they feel through their choice of words. The words that people use often express their interest and enthusiasm. A key element of verbal communication is listening. SOURCE: EI:020 SOURCE: Miculka, J. (2007). Speaking for success (2nd ed.) [pp. 35, 155]. Mason, OH: Thomson

South-Western. 32. A

Failing to accept responsibility for his actions. When you take responsibility for your actions, you accept the consequences (good and bad) of your behavior, which is based on the decisions you make. Taking responsibility for your actions often involves admitting and learning from your mistakes and trying to do better in the future. In the example, Ned became defensive about a mistake that he made and blamed another employee. By blaming another employee, Ned is failing to accept responsibility for his actions, which were pulling and packing an incorrect item. Ned is not offering to correct the customer's order, nor is he acknowledging that he made a costly mistake. SOURCE: EI:075 SOURCE: Payne, S. (n.d.). Accepting responsibility for your own work. Retrieved September 17, 2009,

from http://www.helium.com/items/1587239-accepting-responsibility-for-your-own-work

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM—KEY 17 33. D

Schedule enough time to complete activities. It is important for employees to allow sufficient time to complete a work activity. For example, if an employee must present a report at a 2:00 p.m. meeting, and it takes two hours to prepare the report, the employee should not begin preparing the report at 1:00 p.m. that day. Employees do not always have authority to delegate their work to coworkers or to reorganize their work goals. Focusing on the least important tasks will not always help employees to effectively manage their work commitments. SOURCE: EI:077 SOURCE: Time Management. (n.d.). Manage your scheduling commitments—six effective guidelines to

get things done (part 1). Retrieved September 21, 2009 http://www.timemanagment.info/111/manage-your-time-scheduling-commitments-six-effective-guidelines-to-get-things-done/

34. D

Evaluate your own behavior. Self-control is the ability to manage your feelings, words, and actions. In order to develop self-control, you need to evaluate your own behavior to determine how much self-control you have or need. Reading, attending lectures, and asking the advi ce of friends can provide ideas and insight; but you must take personal action in order to reach a goal. SOURCE: EI:025 SOURCE: EI LAP 14—Control Yourself! (Self-Control)

35. B

Constructive. Constructive criticism is evaluative information designed to help employees improve themselves. Destructive criticism serves only to hurt or discredit an employee. Negative criticism identifies shortcomings. Internal criticism is self-evaluation. SOURCE: EI:003 SOURCE: EI LAP 15—Grin and Bear It (Using Feedback for Personal Growth)

36. D

"Christine, your situation sounds like a problem I had with my manager." Empathetic behavior is characterized by intellectual identification with the thoughts, feelings, values, attitudes, and/or actions of another person. "I think it should be this way, but I guess we can do it your way," represents passive behavior. Passive behavior is characterized by failure to exercise personal rights and a lack of respect for personal needs. The remaining alternatives represent apathetic behavior, which is characterized by indifference or lack of interest. SOURCE: EI:030 SOURCE: EI LAP 12—Have a Heart (Empathy)

37. D

Observing feedback from the receiver. The way in which listeners react to what they hear is a form of feedback. Feedback can be expressed through words or gestures. For example, a puzzled expression may indicate lack of understanding, while a nod of the head or a positive comment such as "Yes, I see" would indicate the receiver feels s/he understands what the speaker is saying. In some cases, repeating the message may be necessary but does not tell the speaker whether the message was understood. Organizing the message and using appropriate gestures are good communication techniques. SOURCE: EI:007 SOURCE: Miculka, J. (2007). Speaking for success (2nd ed.) [pp. 8-9]. Mason, OH: Thomson South-

Western. 38. B

Being flexible. By keeping his team focused on the vision even when outsiders are negative and circumstances are in flux, Paul is demonstrating flexibility. Flexibility is important when working toward a vision because it is a long-term project that will encounter many struggles along the way. In this situation, Paul is not demonstrating listening skills, establishing relationships, or being an example. SOURCE: EI:060 SOURCE: EI LAP 13—Vision Quest (Enlisting Others in Vision)


Democratic. Democratic-style managers seek input from employees and discuss work-related problems with them. Authoritarian managers emphasize assigning specific job duties and responsibilities with little employee involvement. Laissez-faire is an open style in which managers provide little or no employee direction. SOURCE: EI:037 SOURCE: EI LAP 5—Can You Relate?

40. C

Revolving. The form of credit that the Gibsons applied for with Dellmart Superstore is known as revolving credit. This type of credit account limits the total amount of money that may be owed and charges interest on outstanding balances. A regular credit account is a credit account which allows credit users to buy at any time during a set time period, usually 30 days. It is also called an open account. A budget account is a form of short-term credit often set up for 60- or 90-day periods with a payment due every 30 days. An installment credit account is a type of credit account set up to handle one total amount of credit which is to be paid in regular installments. SOURCE: FI:002 SOURCE: Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 685-686).

Woodland Hills, CA: Glencoe/McGraw-Hill. 41. D

Return. Investors are willing to take a risk for the potential of return (reward or benefit they might receive). The return is what the investment can potentially earn for the investor. Prizes are awarded to players in sweepstakes contests. Bonuses are added to employees' paychecks. And, recognition is positive attention for extraordinary achievements. Prizes, bonuses, and recognition do not provide the motivation for investing. SOURCE: FI:077 SOURCE: QS LAP 32—Risky Business?

42. D

Developing a financial plan. The development of a financial plan is the most critical step in reducing business risk. The goal of the financial plan is to reduce the need for capital to the lowest possible level and still produce the desired profit. Managers need to become familiar with financial terms and with the five financial tools that are used to make the necessary estimates in order to alter their marketing strategy to reflect financial realities. Organizing an inventory system, installing a telephone code, and preparing an employment policy are not steps in reducing business risk. SOURCE: FI:084 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 13-14). South-Western Cengage

Learning. 43. B

$42,315. The assets of a business include cash, accounts receivable, inventory, and property or equipment. In order to determine the assets, add those four figures ($6,500 + $3,725 + $7,240 + $24,850 = $42,315). Short-term debt is a liability because the business owes that money. Short-term debt ($5,300) is not included in assets. SOURCE: FI:085 SOURCE: FI LAP 5—Show Me the Money (Nature of Accounting)

44. C

$8,970. Cash receipts are the specific sources of money flowing into the business from such things as interest income and the sale of goods and assets. Only collected money, not monies owed to the business from credit sales, is recorded under cash receipts. In this example, add the sale of assets, interest, and cash sales to determine cash receipts ($5,100 + $245 + $3,625 = $8,970). SOURCE: FI:091 SOURCE: FI LAP 6—Count the Cash (Cash Flow)

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM—KEY 19 45. C

Revenue. Revenue is the money received by resource owners and by producers for supplying goods and services to consumers. Revenue is an important component of an income statement because it indicates the total amount of money a business earns from all sources such as sales, interest, and dividends. A business's revenue should exceed its expenses in order for the business to make a profit. Taxes are calculated on the net income determined by the income statement. Assets are anything of value that a business owns. Liabilities are debts that a business owes. SOURCE: FI:094 SOURCE: FI LAP 4—Watch Your Bottom Line (Income Statements)

46. B

Monetary returns and risks. The finance function obtains, monitors, and controls funds so the business can achieve its objectives. Finance involves monitoring monetary returns (e.g., sales revenues, investment profits) and analyzing risks (possibilities of loss) associated with expenses and investments. The financial function does not directly monitor or control the business's product-development process, supply channel members, and selling efforts. SOURCE: FI:354 SOURCE: Gaspar, J., Bierman, L., Kolari, J., Hise, R., Smith, L., & Arreola-Risa, A. (2006). Introduction

to business (p. 443). Boston, Houghton Mifflin. 47. A

Credit. Credit is often associated with finance, the process of obtaining funds and using them to achieve the goals of the business. Many businesses use credit to obtain funds from lenders, and offer credit to customers to increase sales. The way businesses use credit might be a legal consideration, particularly if the business misrepresents its net worth to obtain credit, or misrepresents the cost of credit to customers. Therefore, it is important for businesses to make sure they understand and follow the law with regard to the use of credit. Legal considerations for finance usually do not involve a business's use of equipment, resources, or profit. SOURCE: FI:356 SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)

[pp. 487-489]. Cincinnati: South-Western. 48. A

They control all other company resources. Human resources are a company's most important resource because they control all other company resources. That's why it's so vital to have appropriate human resources in place at all times. Human resources are not necessarily a company's most expensive or least expensive resource. SOURCE: HR:410 SOURCE: HR LAP 35—People Pusher (Nature of Human Resources Management)

49. A

Personal gain. Robert possesses certain knowledge that may help other employees perform their jobs more efficiently, which might improve the group's cohesiveness and teamwork. Because Robert is purposely withholding this information, he is more concerned with his personal career advancement than he is with helping the company improve its performance. Inevitable disclosure is a concept that suggests that workers are likely to intentionally or unintentionally share their current employers' trade secrets with future employers. Inevitable disclosure and privacy are not reasons why Robert is unwilling to share his knowledge with coworkers. SOURCE: KM:002 SOURCE: Wang, Chi-Chien. (2004, September 19). The influence of ethical and self-interest concerns

on knowledge sharing intentions among managers: An empirical study. International Journal of Management, Vol. 21, Issue 3, pp. 370-380.


Intranet. An intranet is a private, internal network that links a company's computers. Intranet capabilities allow one or more employees to access and share the same information. The Internet is a worldwide (external) network of computers that enables users to access information and communicate with others. A web blog is an online diary or journal. An interstitial is a type of online advertisement. SOURCE: KM:003 SOURCE: Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real

choices (5th ed.) [pp. 107-109]. Upper Saddle River, NJ: Pearson Prentice Hall. 51. C

After examining the chemical makeup of an existing product on the market, a researcher recreates and sells a similar product. Independent discovery of a trade secret is legal. Because the researcher recreated the formula by examining an existing product (reverse engineering), s/he was not breaking trade-secret laws. Breaching a nondisclosure agreement, hacking into another business's computer system, and selling information to a third party for personal gain are illegal actions. SOURCE: KM:004 SOURCE: Nolo. (n.d.). Trade secret basics faq: What every business owner should know about trade

secret law. Retrieved September 15, 2009, from http://www.nolo.com/article.cfm/pg/5/objectId/90781CA8-0ECE-4E38-BF9E29F7A6DA5830/catId/1FBE2D95-203C-4D38-90A2A9A60C6FD618/310/119/FAQ/

52. B

Observation. Observation involves obtaining information by watching others perform a task or activity. A business can obtain knowledge about work-task processes by observing employees performing their jobs. The manager is not rationalizing or imitating the employee's behavior. There is not sufficient information provided to determine if the manager is asking questions or interrogating the employee. SOURCE: KM:005 SOURCE: Milton, N. (2003, November 20). Knowledge acquisition. Retrieved September 22, 2009,

from http://www.epistemics.co.uk/Notes/63-0-0.htm 53. B

Customers may feel they are losing their human touch. Technological advances can help companies provide more customer service with fewer employees, but companies must be careful because customers may feel they are losing their human touch if they can only reach an automated telephone service or get online to receive help. Computers and telephones may break down, but not necessarily on a regular basis. Current employees may not be happy if their jobs are replaced with technology, but they will not necessarily go on strike. Technology can provide 24-7 service, which is one of its benefits. SOURCE: MK:019 SOURCE: MK LAP 3—Just Do It…Right (Company Actions and Results)

54. C

Audit. A risk involved with information management is being unprepared for a government audit, in which the company would have to present accounting records for auditors to “look at the books.” Tax breaks, elections, and loans don't necessary pose risks for businesses as far as preparedness. SOURCE: NF:110 SOURCE: NF LAP 3—In the Know (Nature of Information Management)

55. A

Forward. By clicking the “forward” button, the message recipient can send the message to another person. The reply key allows the recipient to respond to the sender's message. The edit function allows changes to be made to an e-mail message. The new key allows the sender to create an e-mail message. SOURCE: NF:004 SOURCE: About.com. (n.d.). How to forward e-mails. Retrieved September 23, 2009, from

http://email.about.com/od/howtoforwardemails/How_to_Forward_Emails.htm


Minus sign. Placing the minus sign (-) before a word entered in the query field will exclude the word from the search. For example, if an individual wanted to conduct a search for information about cars but doesn't want information about Ford cars, s/he enters the query [cars -Ford ]. To search for an exact phrase, the Web user should place quotation marks around the phrase (e.g., "AMC cars"). Exclamation points (!) and the number sign (#) are not symbols that exclude a word from a Web search. SOURCE: NF:006 SOURCE: Google (2009). Google search basics: More search help. Retrieved September 23, 2009,

from http://www.google.com/support/websearch/bin/answer.py?hl=en&answer=136861 57. D

Highlight the main points of the discussion. Presentation software is used to support an oral presentation. The visuals serve as an outline to the speaker's discussion, which can reduce or eliminate the speaker's need for additional notes. Too much text or detail on each visual or slide might overwhelm or confuse the audience. Graphic elements should support the text or presentation message. The audience is a key consideration when developing an effective presentation. For example, content presented to a board of directors might differ from information presented to a potential customer. Therefore, general content is not necessarily included just because it is needed for other presentations. SOURCE: NF:008 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 489-490].


The same criteria. The query is the mechanism used to obtain the desired information from the database. The desired information involves pulling records that have the same or matching criteria. For example, a business that wants to obtain its customers' credit transactions from the state of Wisconsin for July 1, 2009 would set the query using the appropriate values for the credit, state, and date fields to pull all of the records with the desired information. Some of the other information in various database fields may differ, such as the name and address of each customer. A query pulls specified information rather than random, meaningless statistics. After the query is set and the data or records are retrieved, businesspeople can evaluate the data and organize them into useful information. SOURCE: NF:009 SOURCE: Chapple, M. (2009). What is a database? Retrieved September 14, 2009, from

http://databases.about.com/od/specificproducts/a/whatisadatabase.htm 59. C

Groupware computer. Groupware computer software allows employees to share and access the same information from a variety of locations. The ability to access the same information allows each employee to have the necessary data to complete his/her portion of the project in a timely manner. Using groupware computer applications can increase productivity and efficiency. Businesspeople use presentation software to develop computer-operated visual aids that support an oral presentation. Spreadsheet software programs are designed to organize, calculate, and analyze mathematical or numerical information. Data mining is the process of searching computer databases to look for patterns and relationships among information. SOURCE: NF:011 SOURCE: Whitehead, B. (2005, November 1). The benefits of using groupware for project

management. Retrieved September 23, 2009, from http://www.web-conferencing-zone.com/4038-groupware.htm


Integrated. Project-management software helps project managers automate, schedule, and track the various project components by computer. An integrated project-management software program performs many types of basic functions, such as database, spreadsheets, graphics, and word-processing. Stand-alone project-management software performs one function. Presentation software is used to create visual aids to support oral presentations. Abstract is not a type of project-management software. SOURCE: NF:130 SOURCE: Portny, S., Mantel, S. J., Meredith, J. R., Shafer, S. M., & Sutton, M. M. (2008). Project

management: Planning, scheduling, and controlling projects (pp. 47-51). Hoboken, NJ: John Wiley & Sons.

61. C

Use a system. By committing to a workable structure for record keeping, Jackson will be following the good-record-keeping tip of "use a system." He may or may not choose to use a computer, and he may or may not avoid hazards as he proceeds—although he should! Preventing natural disasters is outside of Jackson's control. SOURCE: NF:001 SOURCE: NF LAP 1—Record It (Business Records)

62. D

Following local fire ordinances. Operations management is the process of planning, controlling, and monitoring the day-to-day activities required for continued business functioning. An important aspect of operations management is complying with safety laws, such local fire ordinances. Many jurisdictions require businesses to have a certain number of fire extinguishers and exits and may require businesses to post escape routes throughout the building. The finance function is responsible for determining how company resources will be invested. Advertising and pricing laws are related to the marketing function of business. SOURCE: OP:339 SOURCE: Beatty, J. F., & Samuelson, S. S. (2008). Essentials of business law (3rd ed.) [p. 661].

Mason, OH: Thomson/South-Western. 63. B

Poor housekeeping can cause safety hazards. Cluttered areas of the workplace can create safety hazards. For example, people can trip over items lying on the floor, slip on liquids that have been spilled, or be injured when poorly-stacked containers fall over. Safety hazards differ according to the kind of business. Equipment that needs repair may have loose parts or malfunction in a way that would injure workers. Safety hazards are not obvious to most people unless they have been taught to recognize them. SOURCE: OP:007 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (pp. 406-410). Tinley Park,

IL: Goodheart-Willcox. 64. C

Determine the severity of the injury. The action that is needed depends upon how severe the injury is. The customer should not be moved until qualified medical personnel have examined the customer to determine the proper course of action. While it might be best for employees not to discuss the accident with outsiders, they should report it to an appropriate supervisor or manager. Most businesses keep records of all accidents occurring on the premises in order to protect the company in case of a lawsuit. SOURCE: OP:009 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (pp. 406-410). Tinley Park,

IL: Goodheart-Willcox.


Effective security devices. Internal theft is any kind of theft by employees of the business. The majority of businesses find that internal theft is an even greater problem than shoplifting. Businesses that do not have security devices to monitor employees' activities are more likely to experience internal theft. Outside lighting systems are helpful in deterring robberies. Electronic cash registers and personal computers do not prevent internal theft. SOURCE: OP:013 SOURCE: Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.)

[pp. 383-385]. Upper Saddle River, NJ: Prentice Hall. 66. D

Develop a to-do list. A to-do list contains every activity that the employee needs to accomplish in a period of time. After developing the to-do list, the employee can rank each activity's importance (prioritize) in relation to the time it takes to complete the activity and the activity's deadline. Multi-tasking involves working on several activities at one time. Employees may not have the authority to change work deadlines. Working overtime may help the employee complete the work on time, but this action will not help the employee to prioritize the work. SOURCE: OP:228 SOURCE: eHow.com. (n.d.). How to prioritize at work. Retrieved September 16, 2009, from

http://www.ehow.com/how_2293060_prioritize-work.html 67. D

Concurrent. Concurrent activities are done simultaneously. Depending on the nature of the project and the types of activities required, some activities can be done at the same time, rather than in a sequential or chronological order. There is not enough information provided to determine if the activities are independent or if they overlap with each other. SOURCE: OP:230 SOURCE: Campbell, G.M., & Baker, S. (2007). The complete idiot's guide to project management

(4th ed.) [pp. 110, 112]. New York: Penguin Group. 68. C

Leadership. One of the most important skills is the ability to guide or direct the actions of others in a desired manner. One of the main roles of a project manager is to lead the group to achieve the project's goal. Members follow an effective leader because the leader motivates them and includes them in making decisions. Education is not a skill. Integrity is a personal quality rather than a skill. Strength is a physical attribute. SOURCE: OP:002 SOURCE: QS LAP 18—Make It Happen

69. C

Share relevant information. To maintain favorable relationships with its vendors, a business should share relevant information. Open, frequent, and honest communication can build trust and respect, which facilitate long-term business relationships. A competitive orientation may help the business achieve short-term goals, but may damage long-term vendor relationships. Automating ordering processes and requesting volume discounts will not always help the business maintain long-term relationships with its vendors. SOURCE: OP:241 SOURCE: Krajewski, L.J., Ritzman, L.P., & Malhotra, M.K. (2007). Operations management: Processes

and value chains (8th ed.) [pp. 389-391]. Upper Saddle River, NJ: Pearson Education.


Open. An open order is an order for staple goods that is placed with one of several available vendors who can meet the business's immediate requirements (e.g., time, price, quantity). Because Sheets Paper Company was best able to meet the retail chain's requirements, it was the vendor selected to fulfill the order. An advance order is a regular order that is placed now with delivery requested at a future time (e.g., weeks, months). A special order is an order for customized products. A standing order is an order that involves sending specific products at set intervals. SOURCE: OP:250 SOURCE: Cash, R. P., Thomas, C., Wingate, J. W., & Friedlander, J. S. (2006). Management of retail

buying (p. 208). Hoboken, NJ: John Wiley & Sons. 71. D

Wood. Manufacturers keep inventory of items that they need to produce their goods. Wood is an example of a raw material that a manufacturer might keep in inventory to produce items such as furniture, shelves, wall paneling, musical instruments, etc. Toothpaste, staplers, and chairs are examples of finished goods. SOURCE: OP:336 SOURCE: eNotes. (2009). Inventory types. Retrieved September 16, 2009, from

http://www.enotes.com/management-encyclopedia/inventory-types 72. A

Deadline driven. Establishing and stating deadlines is one tactic that businesses often use when negotiating with vendors. By providing the vendor with specific deadlines (e.g., shipping orders within 24 hours of order placement), the business is making sure that its requests are met. Limited authority is a negotiation strategy in which one party claims that s/he does not have the authority to meet certain requests. Bargaining involves “give-and-take” tactics by both parties to reach an agreement. Silence involves not speaking and is a good negotiating tactic to use when the discussion becomes heated or when the other party does not like what is being said. SOURCE: OP:337 SOURCE: Moore, D. (September 6, 2004). Use deadlines for powerful negotiations. Retrieved

September 21, 2009, from http://hbswk.hbs.edu/archive/4354.html 73. B

Increase net profit. Net profit is the money remaining after operating expenses are subtracted from gross profit. Operating expenses consist of fixed costs and variable costs. Fixed costs are expenses that do not change with sales volume, while variable costs fluctuate with changes in sales volume. Therefore, if sales increase without much increase in variable costs, and fixed costs remain the same, a larger net profit should result. The cost of goods sold is independent of the relationship between fixed/variable costs and sales. Break-even point is the level of sales at which revenues equal total costs. SOURCE: OP:024 SOURCE: Dlabay, L.R., & Burrow, J.L. (2008). Business finance (pp. 82, 128-129, 151-152). South-

Western Cengage Learning. 74. D

Jan uses the company stationery for personal correspondence. Jan is not only not helping to control expenses but is actually increasing them by increasing the cost of supplies. By keeping a service record for a van and counting shipments before signing for them, Ken and Harris contribute to expense control. Employees who are late and ask others to clock in for them are increasing expenses by stealing time from the company. Tasha is helping the company by refusing to punch in for other workers. SOURCE: OP:025 SOURCE: BizMove.com. (n.d.). How to reduce costs. Retrieved September 23 2009, from

http://www.bizmove.com/finance/m3k.htm


Replacing burned-out bulbs. Dusting light fixtures and replacing burned-out light bulbs is part of general housekeeping. Special display lights would be the responsibility of the display department. Designing new fixtures would be done by an engineer or other expert. Ordering new fixtures would be done by the purchasing department. SOURCE: OP:032 SOURCE: Stutts, A. T., & Wortman, J. F. (2006). Hotel and lodging management: An introduction

(2nd ed.) [pp. 88, 99-101]. Hoboken, NJ: John Wiley & Sons. 76. C

Financial. Business analysis is the process of investigating and evaluating a business issue, problem, process, or approach. Analysis helps a business determine if it is achieving its goals or if it needs to take corrective action, so it can achieve its goals. Financial analysis involves evaluating the business's financial health. Because the business needs to make a reasonable profit so it can thrive in marketplace, it is important to continuously analyze the business's financial status. The operations business function involves the day-to-day activities that the business performs—activities that are required for continued business functioning. Information management is the process of coordinating the resources pertaining to business knowledge, facts, or data. Marketing is the process of creating, communicating, and delivering value to customers and managing customer relationships in ways that benefit the organization and its stakeholders. SOURCE: OP:327 SOURCE: B2T Training. (2009). Essential skills for business analysis. Retrieved September 16, 2009,

from http://www.b2ttraining.com/curriculum/training-program/Business-Analyst-Skills/ 77. D

No, you should not try to do it all at once. If you have a messy work area, it probably didn't get that way overnight. Don't try to clean up the whole area at one time. You'll get discouraged, and you may not finish. Don't wait for your supervisor to tell you it's time to get organized. The job will go better if it's your own idea. SOURCE: PD:009 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (pp. 722-723). Tinley Park,

IL: Goodheart-Willcox. 78. A

Achieve. Goals are objectives that people plan to achieve. They are definite ideas about something that people want in order to satisfy a particular need. Most people's goals are based on their wants and needs. In order to achieve their goals, people first identify, define, and establish them. SOURCE: PD:018 SOURCE: PD LAP 16—Go For the Goal (Goal Setting)

79. B

Communicating effectively. The manager communicated effectively by discussing with the employee the work s/he was expected to do as well as providing written information about the company. Effective communication saves time in the workplace because employees have less need to ask questions before they can do a job. Combining tasks is accomplished when you complete more than one thing at a time. Avoiding procrastination involves not putting off tasks until another time. Building in planning time is setting aside time to plan what you will do tomorrow. SOURCE: PD:019 SOURCE: OP LAP 1—About Time (Time Management in Business)

80. D

Activities Preference Inventory. This is a professionally prepared test created to help you identify your areas of greatest interest by asking you about activities that appeal to you. The General Aptitude Test Battery tests your aptitude in several different categories. The Scholastic Aptitude Test and a Standard Proficiency Test are used to determine levels of academic achievement. SOURCE: PD:013 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 36-40, 258-260).

New York: Glencoe/McGraw-Hill.


Professional development. Learning new job skills or updating your current job skills is known as professional development or continuing education. You might go back for your graduate degree or participate in workshops or seminars specific to your career. Licensing is something specific to a career—a requirement necessary to perform the job, such as a stock broker's license. An internship is training in which schools and businesses cooperate to provide on-the-job practice for learners; learners receive classroom instruction and on-the-job experience. A bachelor's degree is something you earn before starting your business career. SOURCE: PD:025 SOURCE: PD LAP 15—Go For It! (Careers in Business)

82. A

Up-to-date information. Professional organizations disseminate valuable research data about trends in the profession/industry. Some professional organizations also conduct workshops and provide manuals, bulletins, and advisory services for their members. Fringe benefits are extra employee benefits such as paid vacations. Supplementary incentive plans are special compensation plans which supplement the regular salary of an employee. Quota plans are a combination of salary and commissions often used as incentive for salespersons. SOURCE: PD:036 SOURCE: Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 789-790).

Woodland Hills, CA: Glencoe/McGraw-Hill. 83. A

Reprimand Dora. An employer expects her/his employees to follow the business's rules of conduct, which are the business's policies and expectations of appropriate workplace behavior. If an employee violates the business's rules of conduct, the business may take disciplinary action. Disciplinary action might include a verbal reprimand or warning for less serious infractions, such as arriving late to work. Other disciplinary actions might include counseling, revoking privileges, and implementing unpaid suspensions. Serious offenses may result in dismissal. The business is unlikely to promote Dora, assign her additional responsibilities, or excuse her tardiness. SOURCE: PD:251 SOURCE: Mathis, R.L., & Jackson, J.H. (2003). Human resource management (10th ed.)

[pp. 529-530, 533-534]. Cincinnati: Thomson/South-Western. 84. B

Vice president of finance. The chain of command defines the level of authority and the specific individual who supervises particular employees. A hierarchical chain of command provides structure and organization for the business. Large companies often set up their chain of command by department. For example, all of the vice presidents of various departments (e.g., finance, operations, marketing, etc.) report directly to the CEO. A regional marketing manager generally reports to the vice president of marketing. The production coordinator reports to the production manager. The board of directors consists of individuals who are selected by the shareholders (owners) to manage the corporation. The CEO reports to the board of directors. SOURCE: PD:252 SOURCE: DuBrin, A. (2009). Essentials of management: Instructor's edition (8th ed.) [pp. 261-262].

Mason, OH: South-Western Cengage Learning. 85. D

Organizational goals. Organizational goals are the overall objectives or desired outcomes that the business wants to achieve. After the business determines its goals, it plans, executes, and controls the strategies, policies, and procedures to do the work necessary to achieve the organizational goals. A product objective is one type of organizational goal that the business sets. The business may also consider profit margins in relation to pricing goals. SOURCE: PD:254 SOURCE: Associated Content. (2008, October 3). The nature of organizational goals. Retrieved

September 21, 2009, from http://www.associatedcontent.com/article/1059363/the_nature_of_organizational_goals.html


Interdependent. Employees perform tasks that are based on individual goals that management sets for each employee. To be successful in achieving the business's overall objectives, the employees must perform their jobs to the best of their abilities. To achieve the business's overall objectives, the employees' work is often performed interdependently. When employees are interdependent, they rely on each other to accomplish something, such as performing their jobs. The example does not indicate that the employees' jobs are incongruent, symmetrical, or flexible. SOURCE: PD:255 SOURCE: Success Factors. (n.d.). Goal management. Retrieved September 18, 2009, from

http://www.successfactors.com/goal-management/small/ 87. A

Terms and commitments. The statement of work (SOW) is a document that outlines the terms, commitments, and conditions of the project. It includes information about the project's activities, timelines, and deliverables. The project team and the project's stakeholders should agree to the SOW contents before beginning the project. A request for proposal is a document that solicits bids for an activity, project, or order from vendors. A results summary contains the results of the project, and is provided to stakeholders upon completion of the project. Charts and materials do not need to be included in the SOW. SOURCE: PJ:005 SOURCE: Portny, S., Mantel, S. J., Meredith, J. R., Shafer, S. M., & Sutton, M. M. (2008). Project


88. B

Work assignment, task, and subtask. Work breakdown structure (WBS) is the process of dividing project tasks into meaningful components to complete the project. Dividing the entire project into smaller components helps the project manager effectively schedule, assign, and monitor complex project activities. When dividing the work, the project manager first divides the entire project into work assignments. Then, each work assignment is broken down by the tasks that the assignment requires for completion. In some situations, each task has subtasks that need to be completed before moving on to the next task. SOURCE: PJ:006 SOURCE: Portny, S., Mantel, S. J., Meredith, J. R., Shafer, S. M., & Sutton, M. M. (2008). Project


89. A

Help resolve the conflict. Conflict resolution is the process of resolving or ending a conflict. Project managers may need to help resolve conflicts if the team members cannot reach resolution by themselves. When team members disagree, the project manager would not negotiate with external sources, evaluate the reward system, or change the project scope. SOURCE: PJ:007 SOURCE: Portny, S., Mantel, S. J., Meredith, J. R., Shafer, S. M., & Sutton, M. M. (2008). Project


90. B

Successes, failures, and suggestions for improvement. During the project's closing phase, the project manager, team, and stakeholders provide feedback for a “lessons-learned” document. The “lessons-learned” document summarizes the project's successes and failures. The document also includes suggestions for improvement for similar projects in the future. Costs may be an issue addressed in the successes, failures, or suggestions for improvement areas of the document. Project managers develop the project charter and the statement of work during the initiation or beginning phase of the project. SOURCE: PJ:008 SOURCE: Campbell, G.M., & Baker, S. (2007). The complete idiot's guide to project management

(4th ed.) [pp. 334-336]. New York: Penguin Group.


Product safety. Quality management is the coordination of resources to ensure the degree of excellence of a process, good, or service. A product recall is the removal from the marketplace of a product that is defective or hazardous to consumers. Defective brake pads can cause automobile accidents and serious injuries. Therefore, the manufacturer needs to fix or replace the cars to reduce the risk of accidents and injuries. Customization is the process of producing a product with special specifications. Customer preferences are a customer's specific wants. Adaptability is the ability to adjust to changing conditions. The example is not a quality-management issue related to customization, customer preferences, or adaptability. SOURCE: QM:001 SOURCE: Marsh, Inc. (n.d.). Do you know the impact a product recall can have on your company?

Retrieved September 18, 2009, from http://www.marshriskconsulting.com/st/PSEV_C_361_SC_291086_NR_302.htm

92. A

Improving, and controlling. Six Sigma is a quality improvement framework that involves continuously setting higher goals of perfection. It builds upon previous goals to set higher goals that continuously improve the quality of the business's goods, services, or processes. DMAIC is an acronym for the Six Sigma method of improving existing processes. The steps include defining goals, measuring performance, analyzing problem areas, improving the problem areas by eliminating defects, and controlling future performance and processes. SOURCE: QM:002 SOURCE: iSixSigma. (n.d.). Six sigma: What is six sigma? Retrieved September 21, 2009, from

http://www.isixsigma.com/sixsigma/six_sigma.asp 93. A

Objective data. Continuous improvement is the ongoing process of looking for ways to increase the levels of excellence in relation to a process, good, or service. Objective data help the business determine which components of the process are working and where problems exist. By isolating the problems, the business can take action to correct and improve product quality. Positional authority is the authority and responsibility officially assigned to an individual who holds a position and/or a title on an organizational chart. Positional authority, inconclusive or questionable information, and biased feedback do not facilitate the quality-improvement process. SOURCE: QM:003 SOURCE: Iowa State University. (2009). Continuous quality improvement (cqi). Retrieved September

21, 2009, from http://www.fpm.iastate.edu/worldclass/cqi.asp 94. C

A company executive provides a tax auditor with incomplete information. If an employee deliberately withholds or provides incomplete information from an auditor, s/he is acting in an unethical manner. Using software to detect inconsistent data, researching compliance issues, and reviewing information accuracy are ethical actions. SOURCE: RM:041 SOURCE: Head, G. (2005, February). Why link risk management and ethics? Retrieved September 22,

2009 from http://www.irmi.com/expert/articles/2005/head02.aspx 95. A

Encryption techniques. Risk management is a business activity that involves implementing activities to limit business losses. One way that businesses control security risks is by using encryption to prevent unauthorized individuals (e.g., hackers) from obtaining confidential financial data. Encryption is the process of transforming information into a code so that only the recipient can read it. A pixel is the smallest unit of a digital image. A bot is a program that scans the Web looking for information changes. An image map is an online graphic that directs users to different web pages by clicking on hotspots located on the graphic. SOURCE: RM:042 SOURCE: Miles, J.E., & Dolce, C. (2006). E-Commerce (pp. 125-126). New York: Glencoe/McGraw-

Hill.


Contract. A contract is an agreement between two or more parties stating that one party is to do something in return for something provided by the other party. By putting the terms of an agreement or business arrangement in a written contract that both parties sign, the business reduces the risk of misunderstanding about what is expected and what will be provided. When agreements are not documented and a problem occurs, legal action may be required, which can be costly to the business. An invoice is a bill. A premium is a fee for an insurance policy. A warrant is a legal document issued by authorities that requires an individual or business to take a certain action. SOURCE: RM:043 SOURCE: Beatty, J. F., & Samuelson, S. S. (2008). Essentials of business law (3rd ed.) [p. 214].

Mason, OH: Thomson/South-Western. 97. A

Use a systematic approach to establish objectives. Planning is the management function of deciding what will be done and how it will be accomplished. Deciding what will be done involves establishing objectives or desired outcomes. Using a systematic and organized approach helps the business set SMART objectives—objectives that are specific, measurable, attainable, relevant, and time bound. The business develops strategies and procedures for implementation, establishes criteria to evaluate the strategies, and evaluates the quality of the strategies after it sets the objectives. SOURCE: SM:063 SOURCE: Management Study Guide. (1998-2009). Planning function of management. Retrieved

August 4, 2009, from http://www.managementstudyguide.com/planning_function.htm 98. C

Organizing. Organizing is the management function of setting up the way the business's work will be done. Determining how to structure the business is an organizing activity. Directing is the management function of providing guidance to workers and work projects. Controlling is the management function that monitors the work effort. Staffing is the management function of finding workers for the business. SOURCE: SM:064 SOURCE: Erven, B. (n.d.). The five functions of management. Retrieved September 17, 2009, from

http://extension.osu.edu/~mgtexcel/Function.html 99. D

Directing. Directing is the management function of providing guidance to workers and work projects. Because the supervisor is providing a new line worker with information or instructions about how to perform a task, s/he is engaged in the directing function of management. Staffing is the management function of finding workers for the business. Planning is the management function of deciding what will be done and how it will be accomplished. Reporting is an activity that is related to the controlling function of management. The controlling function of management involves monitoring the work effort. SOURCE: SM:066 SOURCE: Erven, B. (n.d.). The five functions of management. Retrieved September 18, 2009, from

http://extension.osu.edu/~mgtexcel/Function.html 100. D

To maintain appropriate control. Control is the management function that involves comparing what was planned with the actual results. To be able to make comparisons, managers need to develop standards to measure the productivity of specific business activities. If activities do not meet the standards, managers can make changes to increase productivity. Organize is the management function that determines what work needs to be done and who is to do each job. Plan is the management function that includes gathering information, making decisions, and setting goals. Direct is the management function responsible for seeing that workers perform their tasks correctly and on time. SOURCE: SM:004 SOURCE: Kleindl, B.A. (2001). Strategic electronic marketing: Managing e-business (pp. 626-627).

Cincinnati: South-Western College Publishing.



Business Management and Administration Cluster Exam



Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 1


1. The goal of many governmental agencies is to protect the A. barriers to trade. C. target market. B. rights of business. D. monetary policy.

2. Olivia runs a home-based business that distributes high-quality, handmade baskets. She sells the

products and earns commissions on the baskets sold by four other basket representatives. This is an example of

A. multi-level marketing. C. product licensing. B. product trade-name franchising. D. strategic partnering.

3. The employee didn't listen to the manager's explanation about how to perform a certain task because

s/he had done a similar job before. Which of the following factors caused the employee not to listen effectively:

A. Age differences C. Past experiences B. Attention span D. Language skills

4. Which of the following is not one of the three main reasons for active listening:

A. Gathering information C. Forming an opinion B. Giving honest responses D. Connecting with people

5. An important factor in effective verbal communication is

A. developing mannerisms. C. using body language. B. having a pleasant voice. D. enunciating rapidly.

6. Employees who answer the telephone should give both the name of the business and

A. their names. C. its address. B. the time. D. its purpose.

7. What is an advantage to a business of encouraging employees to participate in group discussions?

A. A reduction in the possibility of sharing controversial suggestions B. Ultimately, it is easier to reach unanimous conclusions. C. Many opinions increase the chances of developing useful recommendations. D. An increase in the desire to conform and develop agreements

8. What do business employees often include in oral presentations to make the presentations more

interesting to the audience? A. Detailed instructions C. Attractive visuals B. Written notes D. Coffee breaks

9. A short, written report concerning the present status of a project is called a(n) __________ report.

A. analytical C. credit B. progress D. message

10. Ella developed a document that discusses the consequences of switching to a new payroll-processing

vendor. What type of analytical report has Ella prepared? A. Opportunity assessment C. Feasibility study B. Troubleshooting guide D. SWOT analysis

11. Which of the following is the last component of a research report:

A. Purpose of the study C. Background information B. Recommendations D. Methodology

12. Which of the following would be an effective way to communicate a job-related suggestion to your

supervisor: A. An office memorandum C. A business letter B. A letter of transmittal D. A personal letter

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 2 13. As employees go about their daily activities, their actions should be driven by whether the actions will

A. be witnessed by customers. C. benefit the business. B. result in additional sales. D. result in customer satisfaction.

14. Gaining the confidence and trust of a customer is a good technique for handling which type of difficult

customer? A. Disagreeable C. Slow/Methodical B. Suspicious D. Domineering/Superior

15. A good way to calm an irate customer who has just made an angry complaint is to

A. tell the customer his/her complaint is not justified. B. explain company policy related to the complaint. C. ask the customer why s/he thinks there is a problem. D. thank the customer for identifying the problem.

16. What determines whether an economic product is an industrial product or a consumer product?

A. The price of the product C. Who produces the product B. Who buys and uses the product D. The origin of the product

17. Demand is likely to be most elastic for which of the following:

A. Footwear C. Ground beef B. Concert tickets D. Bread

18. How do producers answer the economic question of what to produce in a market economy?

A. They produce products that are the most profitable. B. They produce products that provide the least incentives. C. They produce products that cost them the most to produce. D. They produce products for which they have the most information.

19. One of the ways in which businesses can be socially responsible is by using research and development

in order to A. create more jobs. C. create new and better products. B. balance corporate budgets. D. gain governmental grants.

20. Which of the following is not an operating expense:

A. Utilities C. Advertising B. Cost of goods D. Supplies

21. Which of the following pieces of legislation prevents monopolies from forming and hinders price fixing:

A. Sherman Antitrust Act C. Clayton Act B. Robinson-Patman Act D. Celler-Kefauver Antimerger Act

22. Simplified worker training, increased production rates, and increased employee interest are all basic

advantages of A. mass production. C. job scope. B. job depth. D. specialization.

23. Which of the following government expenditures would not be counted in GDP:

A. Your state builds a new highway. B. The government gives Mr. Jones $50 in food stamps. C. Your city purchases a new police car. D. The government purchases a new copying machine.

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 3 24. Ms. Green is a businesswoman who is meeting with Mr. Lopez, the president of a manufacturing firm

headquartered in Mexico City. Ms. Green noticed that Mr. Lopez tends to stand or sit very closely to people when speaking with them, while she prefers more distance between herself and others when she is speaking. This is an example of a custom or practice that relates to

A. punctuality. C. spatial differences. B. appearance. D. language variations.

25. When attending a business meeting in France, it is important for U.S. businesspeople to

A. dress conservatively. C. arrive unannounced. B. speak loudly. D. bring gifts.

26. Which of the following statements is true about Chilean business customs and practices:

A. Politics and human rights are good conversational topics. B. Proper table manners are unimportant. C. Direct eye contact is extremely offensive. D. It is important to arrive at meetings on time.

27. Because Chinese businesspeople tend to take more time to make decisions, it is important for foreign

businesspeople to be A. patient. C. conceited. B. aggressive. D. intolerant.

28. To Indian businesspeople, it is offensive to put your hands on your hips because it indicates anger. This

is an example of a practice or custom that relates to A. oral tradition. C. social status. B. nonverbal behavior. D. appropriate clothing.

29. As Penny used her emotional intelligence to separate negative feelings from the positive action she could

take in a situation, she experienced the benefit of A. solving problems. C. communicating needs effectively. B. persuading others. D. being flexible.

30. Anna and Alex work at the local movie theater. Anna is always complaining about the working conditions

at the theater, the long hours, and about most of the people that they have to work with. Although Alex does not approve of Anna's ongoing complaints and wants to tell Anna to quit, he does not. He lets her talk while he concentrates on his duties. Which of the following traits is Alex demonstrating:

A. Assertiveness C. Adaptability B. Self-control D. Interest and enthusiasm

31. What is an advantage of verbal communication?

A. Listening often is not required with verbal communication. B. Tone of voice can be used to express emotions and thoughts. C. Words generally cannot be used to express enthusiasm. D. People must see you to understand the intent of your message.

32. Ned is a line supervisor for a large distribution center. Part of his job is to gather and pack items for

customers' orders. Yesterday, when the warehouse manager asked Ned about an incorrect order that he packed, Ned replied, “Well, Pete put the wrong product on the shelf. It's not my fault that the customer received the wrong item.” What is Ned doing?

A. Failing to accept responsibility for his actions B. Blaming himself for Pete's mistake C. Offering to correct the customer's order D. Acknowledging that he made a costly mistake

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 4 33. To effectively manage various work commitments, employees should

A. reorganize work goals. B. first focus on the least important tasks. C. ask coworkers to complete important activities. D. schedule enough time to complete activities.

34. A necessary step toward achieving self-control is to

A. do a lot of reading. C. request a friend's opinion. B. attend motivational lectures. D. evaluate your own behavior.

35. Criticism that is intended to help an employee is __________ criticism.

A. negative C. destructive B. constructive D. internal

36. Which of the following statements represents empathetic behavior:

A. "Do what you want! I don't care." B. "I don't understand what you are talking about." C. "I think it should be this way, but I guess we can do it your way." D. "Christine, your situation sounds like a problem I had with my manager."

37. The sender of a verbal message can determine whether s/he is being understood by

A. using appropriate gestures. C. organizing the message. B. repeating the message. D. observing feedback from the receiver.

38. Paul keeps his team focused on the vision even when they encounter negative responses from outsiders

and changes in circumstances. Which guideline of sharing a vision does this illustrate: A. Being an example C. Being a good listener B. Being flexible D. Establishing good working relationships

39. A manager believes employees work better together and become more motivated when they are

included in the decision-making process. This manager prefers a(n) __________ management style. A. democratic C. laissez-faire B. open D. authoritarian

40. Mr. and Mrs. Gibson went to the Dellmart Superstore to purchase a new digital 36-inch television and

surround sound system for their new entertainment room. The Gibsons wanted to purchase the merchandise on a credit plan that was issued by the retailer. The Gibsons would most likely apply for a(n) __________ credit account.

A. budget C. revolving B. regular D. installment

41. Investors take a risk for the potential of receiving which of the following:

A. Bonus C. Recognition B. Prize D. Return

42. Which of the following is the most critical step in reducing business risk:

A. Preparing an employment policy C. Installing a telephone code B. Organizing an inventory system D. Developing a financial plan

43. Determine the assets of a business based on the following information: cash of $6,500, accounts

receivable of $3,725, inventory of $7,240, property worth $24,850, and short-term debt of $5,300. A. $41,115 C. $43,875 B. $42,315 D. $47,600

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 5 44. Calculate a business's cash receipts for one month based on the following information: sells assets worth

$5,100, earns $245 in interest, has cash sales of $3,625, and has credit sales of $1,675. A. $10,400 C. $8,970 B. $8,725 D. $10,645

45. Which of the following is one of the main components of an income statement:

A. Taxes C. Revenue B. Assets D. Liabilities

46. In business, the financial function monitors and controls the company's

A. product development process. C. supply channel members. B. monetary returns and risks. D. selling and profitability efforts.

47. Legal considerations for finance often involve a business's use of

A. credit. C. resources. B. equipment. D. profit.

48. Human resources are a company's most important resources because

A. they control all other company resources. B. they are the least expensive resources. C. they are controlled by other company resources. D. they are the most expensive resources.

49. Because Robert is up for a promotion and wants to impress his manager, he will not share with his

coworkers the tacit knowledge that helps him efficiently perform his job. Robert's reason for not sharing the information relates to

A. personal gain. C. privacy issues. B. inevitable disclosure. D. group cohesiveness.

50. When all of the employees of a company's purchasing and sales departments have the ability to check

inventory through an internal network of computers, they are obtaining important business information through the company's

A. intranet. C. Internet. B. web blog. D. interstitial.

51. Which of the following is a situation that does not violate trade-secret laws:

A. A software developer hacks into a competitor's computer system to obtain specifications for a new product.

B. A worker breaches a nondisclosure agreement with a former employer by revealing the former employer's manufacturing technique to his/her new employer.

C. After examining the chemical makeup of an existing product on the market, a researcher recreates and sells a similar product.

D. After gaining access to his/her firm's mailing list, a business executive sells the mailing list to the firm's largest competitor.

52. A manager watches an employee perform a work activity and writes notes that describe the process. This

is an example of capturing knowledge by A. rationalization. C. interrogation. B. observation. D. imitation.

53. Technological advances can help companies provide more customer service with fewer employees, but

why must the companies be careful? A. Computers and telephones break down regularly. B. Customers may feel they are losing their human touch. C. Current employees may go on strike. D. Technology cannot provide 24-7 service.

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 6 54. A risk involved with information management is being unprepared for a government

A. election. C. audit. B. tax break. D. loan.

55. Joseph received an e-mail message from his supervisor and wants to send it to his coworker, Jackie.

What e-mail function key would Joseph use to send the message to Jackie? A. Forward C. Edit B. Reply D. New

56. Which of the following symbols placed before a word in a search-engine query field will exclude the word

from the search: A. Exclamation point C. Minus sign B. Quotation marks D. Number sign

57. When using presentation software to design a multimedia presentation, the text should

A. include general content that can be used in other presentations. B. support the graphic elements. C. provide as many discussion details as possible. D. highlight the main points of the discussion.

58. A database query allows a user to retrieve business records that contain

A. random statistics. C. the same criteria. B. different values. D. evaluative information.

59. If a business wants all of the members of a project team to have the ability to access the same

information from different locations, it should use __________ applications. A. spreadsheet software C. groupware computer B. presentation software D. data mining

60. If Allison wants to use a project-management software program that combines database, spreadsheet,

graphics, and word-processing functions, she should purchase a(n) __________ software package. A. stand-alone C. presentation B. integrated D. abstract

61. As Jackson plans the opening of his coffee shop, he needs to commit to a workable structure for record

keeping. What good record-keeping tip does Jackson need to follow? A. Avoid hazards C. Use a system B. Use a computer D. Prevent disasters

62. Which of the following is a legal consideration for a business's operations -management function:

A. Pricing products fairly B. Determining how to invest company resources C. Adhering to advertising laws D. Following local fire ordinances

63. Which of the following is a true statement about safety hazards in the workplace:

A. Safety hazards are obvious to most people. B. Poor housekeeping can cause safety hazards. C. Safety hazards are the same for most businesses. D. Equipment that needs repair is not a safety hazard.

64. When a customer is injured in an accident at a place of business, employees should try to

A. examine the injured customer. C. determine the severity of the injury. B. move the customer to a comfortable area. D. keep the incident to themselves.

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 7 65. What do businesses that have frequent instances of internal theft usually lack?

A. Effective security devices C. Personal computers B. Electronic cash registers D. Outside lighting systems

66. Which of the following actions should employees do to prioritize their work:

A. Change deadlines C. Multi-task B. Work overtime D. Develop a to-do list

67. Tim and Lara are working on different types of project tasks at the same time. They are performing

__________ activities. A. reverse C. overlapping B. chronological D. concurrent

68. Which of the following is one of the most important skills for a project manager to possess:

A. Integrity C. Leadership B. Education D. Strength

69. A business that wants to maintain positive, long-term relationships with its vendors should

A. automate ordering processes. C. share relevant information. B. develop a competitive orientation. D. request volume discounts.

70. Elaine, a buyer for a large retail chain, places a paper-goods order with Sheets Paper Company, one of

five paper suppliers she uses, because Sheets has the best prices and can ship the order tomorrow. This is an example a(n) ___________ order.

A. Open C. Special B. Advance D. Standing

71. Which of the following is an example of a raw material that a business might inventory for production use:

A. Chair C. Stapler B. Toothpaste D. Wood

72. When negotiating terms with a vendor, a business states that it wants all orders shipped within 24 hours

of order placement. What negotiating tactic is the business using? A. Deadline driven C. Bargaining B. Limited authority D. Silence

73. If a business's fixed costs are high in relation to its variable costs, a major increase in sales with very little

increase in variable costs should A. change the break -even point. C. reduce fixed costs. B. increase net profit. D. increase the cost of goods sold.

74. In which of the following situations is an employee not helping the company to control its expenses:

A. Harris counts the boxes in a shipment before signing the delivery receipt. B. Ken keeps a record of repairs for the delivery van. C. Tasha refuses to punch time cards for coworkers. D. Jan uses the company stationery for personal correspondence.

75. Which of the following lighting jobs is a housekeeping responsibility:

A. Designing new fixtures C. Replacing burned-out bulbs B. Ordering new fixtures D. Lighting special displays

76. An employee is comparing income statements from the past three years to evaluate changes and trends

in the business's revenue. What type of business analysis is the employee conducting? A. Information management C. Financial B. Operations D. Marketing

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 8 77. If you know you need to become organized, should you try to do it all at once?

A. No, wait until your supervisor tells you to get organized. B. Yes, it's easier to do it all at one time. C. Yes, start and don't stop until everything is in order. D. No, you should not try to do it all at once.

78. A goal is an objective that a person plans to

A. achieve. C. define. B. identify. D. establish.

79. A manager reviewed each of a new employee's job duties with the employee and gave the new worker a

company handbook. What time-management technique has been demonstrated? A. Building in planning time C. Avoiding procrastination B. Communicating effectively D. Combining tasks

80. Which of the following tests would help you to develop self-understanding by identifying your interests:

A. Standard Proficiency Test C. Scholastic Aptitude Test B. General Aptitude Test Battery D. Activities Preference Inventory

81. Learning new job skills or updating your current job skills is known as

A. an internship. C. a bachelor's degree. B. licensing. D. professional development.

82. One of the purposes of professional organizations is to provide members with

A. up-to-date information. C. quota plans. B. supplementary incentive plans. D. fringe benefits.

83. Dora has been arriving late to work once or twice a week. Because Dora is not following the company's

rules of conduct, what action is Dora's employer likely to take? A. Reprimand Dora C. Excuse Dora's tardiness B. Promote Dora D. Assign Dora additional work

84. Who is most likely to report directly to a corporation's chief executive officer (CEO)?

A. Regional marketing manager C. Production coordinator B. Vice president of finance D. Board of Directors

85. Which of the following provides the foundation for a business's overall planning and controlling activities:

A. Product objectives C. Ordering procedures B. Profit margins D. Organizational goals

86. Amy and Tom work in a busy purchasing department. Amy relies on Tom to provide her with important

information every day to do her job. Because the business's ability to achieve its goals relies on Amy and Tom's collaborative efforts, these two employees' jobs are

A. flexible. C. symmetrical. B. incongruent. D. interdependent.

87. What should a project's statement of work include?

A. Terms and commitments C. The results summary B. A request for proposal D. Charts and materials

88. Which of the following is the sequential order of a project's work breakdown structure:

A. Subtask, task, and work assignment C. Task, subtask, and work assignment B. Work assignment, task, and subtask D. Work assignment, subtask, and task

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 9 89. When team members disagree about the best way to complete an activity, the project manager may

need to A. help resolve the conflict. C. evaluate the reward system. B. negotiate with external sources. D. change the project scope.

90. Which of the following pieces of information are included in the “lessons-learned” document when closing

a project: A. Costs, suggestions for improvement, and project charter B. Successes, failures, and suggestions for improvement C. Statement of work, successes, and failures D. Project charter, successes, and failures

91. An automobile manufacturer initiates a product recall for a group of new sedans that have defective

brake pads. This is an example of a quality-management issue related to A. customization. C. customer preferences. B. product safety. D. adaptability.

92. The Six Sigma framework approaches the quality improvement of existing processes by implementing

the DMAIC method, which includes the five steps of defining, measuring, analyzing, A. improving, and controlling. C. instigating, and correcting. B. increasing, and counteracting. D. influencing, and collaborating.

93. What is needed for continuous quality improvement?

A. Objective data C. Inconclusive information B. Positional authority D. Biased feedback

94. Which of the following situations presents a potentially unethical situation in relation to risk management:

A. An employee researches various compliance issues affecting the industry. B. A business uses computer software that detects inconsistent data. C. A company executive provides a tax auditor with incomplete information. D. A manager reviews reports to verify the accuracy of business information.

95. To secure confidential financial data that are transmitted through the Internet, businesses often use

A. encryption techniques. C. bots. B. pixels. D. image maps.

96. To reduce the risk of future legal problems, a company might require its business partners to sign a

formal A. contract. C. premium. B. invoice. D. warrant.

97. Which of the following is the first step of effective managerial planning:

A. Use a systematic approach to establish objectives B. Evaluate the quality of various processes C. Develop procedures for activity implementation D. Establish criteria to evaluate strategies

98. The owners of the IHM Company are determining if they should structure the new business by product

line or by departmental functions. The owners are performing an activity associated with the ______________ management function.

A. controlling C. organizing B. directing D. staffing

Test 1024 BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM 10 99. A production supervisor provides a new line worker with information about how to assemble an item.

What management function is the production supervisor performing? A. Planning C. Reporting B. Staffing D. Directing

100. Why is it important for managers to develop standards to measure the productivity of specific business

activities? A. To direct the operation of the business C. To gather information for planning B. To decide what work needs to be done D. To maintain appropriate control

KEY

Test Number 1020

Business Administration Core Exam

CAUTION: Posting these materials on a website is a copyright violation unless specifically authorized by MBAResearch. This comprehensive exam was developed by the MBAResearch Center. Items have been randomly selected from the MBAResearch Test-Item Bank and represent a variety of instructional areas. Performance Indicators for this exam are at the prerequisite and career-sustaining levels. A descriptive test key, including question sources and answer rationale, has been provided the state DECA advisor. Copyright © 2010 by Marketing & Business Administration Research and Curriculum Center®, Columbus, Ohio Each individual test item contained herein is the exclusive property of MBAResearch. Items are licensed only for use as configured within this exam, in its entirety. Use of individual items for any purpose other than as specifically authorized in writing by MBAResearch is prohibited. This exam, without modification, is licensed for one-time use on a date specified by the licensee (state DECA advisor or designee), on or before MARCH 31, 2010. Possession of this exam, without written authorization, under any other circumstances is a copyright violation. Posting to inter- or intranet sites is specifically forbidden unless written permission is obtained prior to posting. Report violations to MBAResearch at 800.448.0398.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM — KEY 10 1. D

Corporation. By starting a corporation, Tim and Dan can sell stock to raise the necessary capital to cover business expenses. By owning the majority of the stock themselves, they can still control the business. A sole proprietorship is a business owned by one person. A major disadvantage of a partnership is that the capital available is limited to the partners' resources, so partnership is not the best option for Tim and Dan. A franchise owner buys the right to sell the goods or services of the parent company. Franchises are business ownership options rather than legal business structures. SOURCE: BL:003 SOURCE: BA LAP 7—Own It Your Way

2. A

Training materials. Employees are often expected to read a variety of company resources in order to learn about and understand policies and procedures. Training materials are a type of resource that companies often make available to employees. By analyzing the materials, employees learn about company structure, business strategies, operating policies and procedures, etc. The more employees know and understand about the company, the better able they are to perform effectively and advance in the organization. Sales reports, promotional brochures, and research documents usually do not contain information about company policies and procedures. SOURCE: CO:057 SOURCE: Jackson, S. & Schuler, R. (2003). Managing human resources through strategic partnerships

(8th ed.) [pp. 369-370]. Cincinnati: Thomson/South-Western. 3. B

Maintaining eye contact. By maintaining eye contact, listeners are communicating to a speaker that they are paying attention. This supports and encourages a speaker because the listeners are indicating that they are focused on the message. If listeners do not maintain eye contact, a speaker might think that the listeners do not care about the message and stop talking. When listeners look around the room, close their eyes, or glance at the clock, they are telling the speaker that they are bored or not interested. SOURCE: CO:082 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [p. 79]. Mason, OH: Thomson South-Western. 4. D

Go in order. When Chad puts something in place for catching the oil first, he is following his friend's directions in order. Good directions are listed in sequential order, or the order in which they need to occur. There is generally a good reason for the order, so follow it. If you skip around, you may miss one of the directions. Failing to do so could result in quite a mess. In this situation, Chad is not asking questions, noting key words, or accepting responsibility. SOURCE: CO:119 SOURCE: QS LAP 24—Simon Says

5. C

Four times as fast as people can talk. Humans can listen and process speech much faster than they can generate it; much faster, not slower, than the average person talks. This ability is not part of the communication model, nor does active listening increase it. SOURCE: CO:017 SOURCE: QS LAP 1—Listen Up

6. B

Commands attention. Effective communication requires that the receiver be willing to accept the message from the sender. A communicator who commands the receiver's attention is increasing the opportunity for successful reception of the message. Speakers should use variations of voice pitch, rather than speaking in a monotone. They should also try to speak without mannerisms and avoid sounding like a recording. SOURCE: CO:147 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 184-185). New



Providing an answer. Businesses receive inquiries on a regular basis. The inquiries might come from customers, suppliers, or business associates. The purpose of an inquiry usually is to ask a question. Therefore, when providing responses to inquiries, it is usually best to begin by providing an answer. If the inquiry includes more than one question, the response should provide answers to all of the questions by beginning with the most important question. It is not necessary to restate the question. If the question is unclear, it may be necessary to ask for more information before providing a response. Many inquiries are routine questions. Therefore, it usually is not necessary to be sympathetic. SOURCE: CO:060 SOURCE: Lesikar, R.V., & Flatley, M.E. (2005). Basic business communication: Skills for empowering

the Internet generation (10th ed.) [pp. 119-121]. Boston: McGraw-Hill/Irwin. 8. C

Visualize themselves following the directions. Whether it's to provide drivi ng directions to a specific location, or to provide instructions to carry out an activity, most people will need to give verbal directions to another person at some time. To provide the steps in a clear, audible, and logical way, it may help you to visualize yourself following the directions as you give them. While nonverbal actions (e.g., pointing) may be helpful when providing directions, not everyone knows sign language. If you provide too many options while providing directions, you may confuse the other person(s). SOURCE: CO:083 SOURCE: Buzan, T. (n.d.). The power of verbal intelligence. Retrieved September 16, 2009, from

http://www.scribd.com/doc/18283400/The-Power-of-Verbal-Intelligence 9. B

Unbiased. Ed believes that his idea is feasible, so he needs to persuade other group members that it is too. To do this effectively, Ed needs to present his reasons and information logically and objectively—without bias. Ed should present his reasons in a direct, unemotional way. If Ed is over-emotional or cynical, the group members may not take him seriously. And, if Ed presents the information in an understated or subtle way, the group members may not understand what Ed is trying to say. SOURCE: CO:061 SOURCE: Leskiar, R.V., & Flatley, M.E. (2005). Basic business communication: Skills for empowering

the Internet generation (10th ed.) [pp. 288-289]. Boston: McGraw-Hill/Irwin. 10. A

Offer to get the information and call back. When a customer asks for information you don't have, apologize for not knowing and offer to get the information. No one is expected to know everything, but you should know where to find necessary information. Always offer to call the customer back. It may be inconvenient for the customer to call you again, and s/he should not be asked to call someone else. Asking the customer why s/he needs the information would be rude. SOURCE: CO:114 SOURCE: Lesikar, R.V., & Flatley, M.E. (2005). Basic business communication: Skills for empowering

the Internet generation (10th ed.) [pp. 417-419]. Boston: McGraw-Hill/Irwin. 11. D

Assertive manner. Assertiveness is the ability to express yourself; communicate your point of view; and stand up for your rights, principles, and beliefs. Business employees who participate in group discussions should present their ideas and opinions in an assertive manner so others will know exactly what they think. Being assertive is an effective way to express your point of view in group discussions. Employees should not be argumentative when participating in group discussions because the goal usually is to reach some type of agreement. Employees usually do not present their ideas and opinions in a written format or a nonverbal style when participating in group discussions. SOURCE: CO:053 SOURCE: Lussier, R.N. (2003). Management fundamentals: Concepts, applications, skill development

(2nd ed.) [pp. 329-330]. Mason, OH: South-Western.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM — KEY 12 12. B

Work to understand what the communication means. Effective written communication presents information in a clear, easy-to-read style so that readers do not have to try to figure out what the communication is all about. Readers should be able to grasp the communication's message in a minimum amount of reading time. Written communication should follow a logical train of thought, and readers should be able to find the information they need within the communication. SOURCE: CO:016 SOURCE: Hyden, J.S., Jordan, A.K., & Steinauer, M.H. (2006). Communicating for success (3rd ed.)

[pp. 116-119]. Mason, OH: Thomson South-Western. 13. C

E-mail. There is no variable expense associated with most routine e-mail. There are expenses associated with business letters, such as the cost of paper and postage, and with the fax and telephone. SOURCE: CO:133 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [p. 301]. Mason, OH: Thomson South-Western. 14. C

To sell products. One reason why businesses write informational messages is to sell products to customers. Businesses often develop sales letters that explain their goods and services and send these letters to prospective or current customers. The sales letters include important information about the business and its products and are intended to encourage customers to buy. Letters and memos are types of informational messages. Businesses identify customers before sending them informational messages. SOURCE: CO:039 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [p. 283]. Mason, OH: Thomson South-Western. 15. B

An e-mail requesting vendor pricing and discounts. An inquiry is a request for information. Businesses often send e-mails asking or requesting information from other businesses. Some requests might include product pricing, membership eligibility, or shipping dates. A performance review, meeting agenda, and financial report provide business information. The information is not an inquiry unless someone asks for something. SOURCE: CO:040 SOURCE: Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for

success (3rd ed.) [pp. 285-286]. Mason, OH: Thomson South-Western. 16. B

Staff. Messages for all employees are considered staff communication. This is a form of downward communication in which information is presented to employees by management. Upward communication occurs when employees present information to management. Informal communication is the unofficial exchange of information among members of an organization. Lateral, or horizontal, communication involves the exchange of information between employees on the same level. SOURCE: CO:014 SOURCE: Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.)

[pp. 250-251]. Cincinnati: South-Western. 17. D

Provide a meeting agenda to review. An agenda is a list of topics that will be discussed in a meeting. By having an agenda before the meeting takes place, employees can gather information and prepare notes for the discussion. Unless the department's financial status is the reason for the meeting, participants are unlikely to need a copy of the department budget. It is seldom appropriate to limit each participant's speaking opportunities. SOURCE: CO:063 SOURCE: Lussier, R.N. (2003). Management fundamentals: Concepts, applications, skill development

(2nd ed.) [pp. 326-328]. Mason, OH: South-Western.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM — KEY 13 18. A

Customers' names. Customers' names are very special and important to them. The salesperson who can use the customer's name in the presentation brings a personal and positive touch to the sale. Brand names are more important to some customers than to others. In most cases, technical terms tend to have a negative rather than a positive effect on customers. Not all customers or selling situations involve credit terms. SOURCE: CR:003 SOURCE: Anderson, R.E., & Dubinsky, A.J. (2004). Personal selling: Achieving customer satisfaction

and loyalty (pp. 116-117). Boston: Houghton Mifflin. 19. B

Employees would not have jobs if there were no customers. Without customers, there would be no need for employees, businesses would close, and employees would be out of work. All customers are important to the success of a business—not just those who own the business. Customers deserve the very best service now, regardless of what might happen in the future. Businesses pay employee bonuses—not customers. SOURCE: CR:004 SOURCE: Select Knowledge. (n.d.). Quality best practice 3—Achieving service excellence. Retrieved

September 14, 2009, from http://www.selectknowledge.com/images/public/preview_quality3.pdf

20. A

Telling the truth. A service orientation is the philosophy of providing quality service to customers. Businesses reinforce this orientation through communication. To be effective, the communication should be truthful and provide customers with accurate information and correct answers to their questions. Even if the answers are not the ones that customers want, they will respect the business for being truthful. For example, it is better to tell customers that their orders will be shipped in five days rather than promise shipment in two days if that is not possible. Businesses do not reinforce their service orientation through communication by developing advertisements, using publicity, or writing news releases. SOURCE: CR:005 SOURCE: Rokes, B. (2000). Customer service: Business 2000 (pp. 135-136). Mason, OH: South-

Western. 21. D

Managers. Business managers set policies to guide the operation of the business so both employees and customers know the rules. Customers, salespeople, and suppliers do not set policies for businesses. However, their comments and suggestions may be used by management in developing policies. SOURCE: CR:007 SOURCE: Washington State University. (2008, Spring). Business management economics: Lecture 2—

Managing the business. Retrieved September 14, 2009, from http://classes.ses.wsu.edu/EconS352/Sp2008-Marsh/lectures/Lecture2 _Managing_the_Business.pdf

22. D

Domineering/Superior. Domineering/Superior customers often appear overly self-confident and pushy by boasting about their purchases. Since these customers usually know what they want, they convince or sell themselves. Disagreeable customers are unpleasant and hard to help because they are argumentative, complaining, irritable, moody, insulting, impatient, and/or have a leave-me-alone attitude. Suspicious customers question everything and want facts and proof before being convinced to buy. Slow/Methodical customers require a lot of time to make a purchase because of difficulty in making a choice or buying decision. SOURCE: CR:009 SOURCE: EI LAP 1—Making Mad Glad


Investigate the problem. Once you fully understand a customer's complaint, you have to decide if the complaint is justified before you can resolve the situation. Investigating the problem helps to determine how the situation can be handled within company policy. Restating the complaint eliminates any misunderstandings. Taking action occurs after determining how the complaint can be handled. Asking a supervisor about a complaint would only be done in unusual circumstances. SOURCE: CR:010 SOURCE: Ontario Skills Passport. (2009, January 20). Special events coordinators and special events

managers. Retrieved September 15, 2009, from http://skills.edu.gov.on.ca/OSPWeb/jsp/en/nocdetails.jsp?key=1226&sort=D#9

24. A

Buying gum. This activity involves the exchange of two things of monetary value, gum and money. Economic activities involve consumption, production, exchange, and distribution. The other alternatives are noneconomic activities. SOURCE: EC:001 SOURCE: Clayton, G.E. (2005). Economics: Principles & practices (pp. 6, 10). New York:

Glencoe/McGraw-Hill. 25. D

Form. Form utility is the usefulness created by changing the shape of a good to make it more useful to customers. Manufacturers can create form utility by changing their products according to the market-research information from customers. Place utility is usefulness created by making sure that goods and services are available at a place where they are needed or wanted by customers. Time utility is usefulness created when products are made available at the time they are needed or wanted by customers. Possession utility is usefulness created when ownership of a product is transferred from seller to user. SOURCE: EC:004 SOURCE: EC LAP 13—Use It

26. C

Sold to the ultimate consumer. Retailing is not simply the exchange of goods or offering goods for sale. Retailing occurs only when goods are sold to those who will use them, and it may occur in the consumer's home, over the telephone, or in a variety of ways other than in a retail establishment. SOURCE: EC:070 SOURCE: EC LAP 20—Business Connections (Business and Society)

27. B

Promoting the new bread through advertising. Since Franco's Bread Shop is introducing a new type of sandwich bread to the community this week, the bread shop is now performing the business activity of marketing by promoting the new bread through advertising. Collecting information and developing a system for storing information are both part of information management. (Collecting information can be part of marketing, too.) Planning for long-term results can be part of marketing and/or strategic management. SOURCE: EC:071 SOURCE: EC LAP 19—Strictly Business (Business Activities)

28. B

Consumers. In a market economy, consumers decide what will be produced by casting economic votes through their purchases in the marketplace. Custom determines what is produced in traditional economies. Strategic planning is a management activity that might use consumer demand data to make production decisions. Trial and error is not an economic decision-making method. SOURCE: EC:007 SOURCE: O'Connor, D.E. (2006). Encyclopedia of the global economy A guide for students and

researchers (p. 33). Westport, CT: Greenwood Press.


Prices. Supply and demand work together in private enterprise to determine prices. Consumers indicate their demand for products by the prices they are willing to pay for those products. Limited government control is a characteristic of the private enterprise economic system. Profits are determined by factors in addition to prices. Competition is a characteristic and economic freedom of the private enterprise economic system. SOURCE: EC:009 SOURCE: EC LAP 15—People Power (Private Enterprise)

30. C

Cost of goods. The amount of money paid for raw materials and products sold is cost of goods. Operating expenses are all of the expenses involved in running a business. Gross profit and net profit are received, not paid. SOURCE: EC:010 SOURCE: EC LAP 2—Risk Rewarded

31. A

Indirect. Businesses compete indirectly with other businesses whose products are different from their own. Direct competition refers to competition between businesses which offer similar types of products. Price competition focuses on the use of price to attract scarce customer dollars. Nonprice competition is a type of competition involving factors other than price. SOURCE: EC:012 SOURCE: EC LAP 8—Ready, Set, Compete!

32. C

Productivity. Productivity is the amount and value of goods and services produced from set amounts of resources. Inputs are all the resources used in producing goods and services. Objectives are goals to be reached. Mass production is the production of a few products in large quantities. SOURCE: EC:013 SOURCE: EC LAP 18—Make the Most of It (Productivity)

33. D

Discrimination. Discrimination is unfair treatment of a person or a group based on the person's or group's characteristic, e.g., race, religion, gender, age, etc. In this situation, the business may be guilty of discrimination for hiring an older man rather than a young woman if both have similar qualifications. It might be considered discrimination if the business is making the hiring decision mainly on the basis of age and gender. This is not an example of harassment, team conflict, or remedial action. SOURCE: EI:017 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 222, 246-247).

New York: Glencoe/McGraw-Hill. 34. A

It may reveal characteristics about ourselves that we don't like. Assessing strengths and weaknesses is a difficult task because it may reveal characteristics about ourselves that we don't like. It takes courage to evaluate yourself, acknowledge your strengths, and examine your flaws. Assessing strengths and weaknesses need not be a time-consuming process, although it should be an ongoing one. It is not unrealistic to try to discover all of one's strengths and weaknesses, nor is it impossible to be modest when listing one's strengths. SOURCE: EI:002 SOURCE: EI LAP 17—Assess for Success (Assessing Personal Strengths and Weaknesses)

Test 1020 BUSINESS ADMINISTRATION CORE EXAM — KEY 16 35. C

Personal. A personal trait is a personal characteristic expressed by a consistent pattern of behavior. Julie changed her regular pattern of behavior from unreliable to dependable. Physical traits include age, height, weight, build, or other physical characteristics. Mental traits involve intellectual abilities such as remembering, comprehending, analyzing, evaluating, and creating. Emotional traits involve attitudes, feelings, values, and so forth. SOURCE: EI:018 SOURCE: EI LAP 9—You've Got Personality (Personality Traits in Business)

36. C

Increased initiative usually brings increased job responsibility. Increased job responsibility is just one benefit of demonstrating initiative. If you possess initiative, you are ready, willing, and able to both think and act on your own. You do not have to be prodded or urged to do so. Initiative is extremely important to workers in all types of occupations, especially in the field of business. To be viewed as a person with initiative, your willingness to think and act on your own should be reflected in all areas of your life. SOURCE: EI:024 SOURCE: EI LAP 2—Hustle! (Taking Initiative at Work)

37. B

Obligations. Obligations are personal promises or job duties you have promised to carry out. Giving top priority to fulfilling one's obligations is a characteristic of being responsible. A responsible person will not allow her/his own needs, desires, or weaknesses to prevent the fulfillment of those obligations. SOURCE: EI:021 SOURCE: PD LAP 7—Make the Honor Role (Acting Responsibly)

38. A

Consult a mentor. Sometimes, employees may find themselves facing a situation at work that doesn't seem to have a clear right or wrong answer. In these situations, it is helpful to have a mentor to whom they can turn for guidance and advice. Mentors should be people who are well-respected in the workplace and who have a reputation for behaving ethically. The office gossip is not a good source of advice because s/he is behaving unethically. Coworkers may be inexperienced and not have useful advice. Friends are outside of the workplace and not available when needed. SOURCE: EI:004 SOURCE: EI LAP 4—Work Right (Ethical Work Habits)

39. D

It keeps you from taking yourself too seriously. Having a sense of humor helps you maintain a positive attitude because it keeps you from taking yourself too seriously. Being able to laugh at yourself and at annoying things that happen is very good for your positive attitude. It helps you to keep things in perspective. Havi ng a sense of humor does not have anything to do with hanging out with positive people, staying healthy, or giving your appearance the attention it deserves. SOURCE: EI:019 SOURCE: EI LAP 3—Opt For Optimism (Positive Attitude)

40. B

Recognizing that all people make mistakes. If we can accept that, then we are on the way to making criticism a helpful tool. The other alternatives would not help us improve or change ourselves and would harm good human relations. SOURCE: EI:003 SOURCE: EI LAP 15—Grin and Bear It (Using Feedback for Personal Growth)

41. D

Yes, you can give the person supportive feedback. People enjoy sharing their success with others and getting supportive feedback. Giving this supportive feedback is a way to show empathy. While sympathy is limited to problem situations, empathy is not. SOURCE: EI:030 SOURCE: EI LAP 12—Have a Heart (Showing Empathy for Others)


Cultural sensitivity. The willingness to adjust your opinions and behaviors so that you value different people and ideas is cultural sensitivity. Communication is an exchange of information. Prejudice is an opinion or judgment that is based on feeling or hearsay, rather than fact. Ethnocentrism is the belief that your own culture is naturally better than other cultures. SOURCE: EI:033 SOURCE: EI LAP 11—Getting to Know You (Cultural Sensitivity)

43. B

Concise. Communicating all the important information in the shortest way possible means you are being concise. Being concise means making the best use of your words. Being sensitive means putting “you” before “I” in your communication. Being concrete means your communication is accurate, specific, and easy to visualize. SOURCE: EI:007 SOURCE: QS LAP 25—More Than Just Talk

44. C

I am worthy of my own respect and the respect of others. To be assertive, you need to believe in your own worth, have self-respect, and expect respect from others. You do not have the right to express your feelings in any way you choose if it will offend or hurt others. Being able to ask others for help is a characteristic of assertiveness. It is not always possible to agree with everyone. SOURCE: EI:008 SOURCE: EI LAP 18—Assert Yourself (Assertiveness)

45. C

Project team. A project team is a team of employees from different parts of the company who are assigned to work together on a specific project. In large companies, the team members often communicate via computer rather than face to face. A work team is a group of employees who are responsible for carrying out an entire work process. A quality circle is a problem-solving group of coworkers who are given work situations or problems to study and discuss in order to recommend solutions to management. A standing committee is one whose work continues over a long period of time. SOURCE: EI:045 SOURCE: Gido, J., & Clements, J.P. (2003). Successful project management (2nd ed.) [p. 324]. Mason,

OH: South-Western. 46. B

Role model. Angela is a role model. A role model is a person whose behavior is imitated by others. Leaders are often role models, but they also do much more. The behavior of people who are examples and heroes is not by definition imitated. These people may serve as role models, but not necessarily. SOURCE: EI:009 SOURCE: EI LAP 16—Lead the Way (Concept of Leadership)

47. C

Reachable goals. Individuals who have an achievement orientation want to do their best and be successful. One way to develop an achievement orientation is to establish reachable goals. Achieving goals builds confidence and self-esteem and encourages individuals to continue achieving. If the goals are unrealistic, individuals might fail, which often leads to giving up rather than trying to achieve in the future. In order to achieve, it is often necessary to establish firm deadlines. Establishing personal relationships and safe conditions are not ways of developing an achievement orientation. SOURCE: EI:027 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (p. 198). New York:

Glencoe/McGraw-Hill.


Be able to identify opportunities for change. To be a change leader, you must be able to identify opportunities for change. Research shows that successful change can be led from all levels and all walks of life. You don't need to be a certain age or have a certain amount of education or experience to be a change leader. SOURCE: EI:005 SOURCE: QS LAP 23—20/20 Foresight

49. B

Being a good listener. By being aware of what's going on in the industry, Matthias is being a good listener. He's keeping his ears and eyes open for issues and trends that may affect the team vision. In this situation, Matthias is not demonstrating enthusiasm, flexibility, or being an example. SOURCE: EI:060 SOURCE: EI LAP 13—Vision Quest (Enlisting Others in Vision)

50. C

Difficulty getting along with others. More people are fired because they can't get along with their coworkers than for any other reason. Businesses usually let such people go because of the problems they cause within the business. Help is usually offered to employees who need a better understanding of their jobs or have poor job performance. Poor self-esteem is a personal problem that the individual must work to correct. SOURCE: EI:037 SOURCE: EI LAP 5—Can You Relate?

51. B

It is better to receive $100 today than $101 a year from now. According to the concept of the time value of money, the sooner money is received the more time you have to let it grow. Receiving money later costs you the opportunity to earn interest or other appreciation. Saving money will not buy time on debt payment. Time and money are not related by due date. SOURCE: FI:062 SOURCE: Investopedia.com. (n.d.). Understanding the time value of money. Retrieved September 15,

2009, from http://www.investopedia.com/articles/03/082703.asp 52. C

Installment loan. Under this plan, the customer is usually required to make a down payment and a series of continuing payments for a specified period of time. With an open account, a customer is billed each month for all purchases made during the preceding month. The option account gives the customer the choice, or option, of paying the entire amount due without a finance charge or paying a minimum amount due (or more) with a finance charge added. With a revolving credit account, the customer pays a small amount each month, usually with a service charge. SOURCE: FI:002 SOURCE: Types of credit. (n.d.). Retrieved September 15, 2009, from

http://finance.mapsofworld.com/credit/types.html 53. B

Co-signer. When a borrower agrees to a loan, s/he is making a contractual agreement to pay back the loan in a certain manner within a specific period of time. When the borrower does not have the collateral or credit history to obtain the loan, the lender often requests that another person co-sign for the loan. A co-signer is responsible for paying back the loan if the borrower does not. The credit union, Treasury Department, and debt collectors are not responsible for repaying a loan unless they agree to be co-signers on loan contracts. SOURCE: FI:063 SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal

finance (pp. 182-183). New York: Glencoe/McGraw-Hill.


Saving even a little bit each month will help. Even a small amount of money, invested from an early age over a long period of time, can make a significant contribution to retirement savings. People do not have plenty of time to save for retirement; beginning early allows more time for savings to grow. Social Security benefits are not likely to cover basic living expenses. Due to longer life spans, many people are in retirement longer than 15 years. SOURCE: FI:064 SOURCE: Kapoor, J., Dlabay, L., Hughes, R., & Hoyt, W. (2005). Business and personal finance

(pp. 477-481). New York: Glencoe/McGraw-Hill. 55. A

Specific details. The S in SMART goals stands for specific, the first characteristic of effective financial goals. Saving money and spending wisely are good habits that can support financial goals, but they are not what the S in SMART represents. A sense of teamwork is not related to the characteristics of financial goals. SOURCE: FI:065 SOURCE: QS LAP 31—Set Yourself Up

56. D

Unexpected car repairs. A budget is an estimate of income and expense for a specific period of time. Individuals develop personal budgets so they can manage their money. An expense is money that the person pays for something. A variable expense is a cost that is unexpected or may change, such as unexpected car repairs. It is a good idea to budget a certain amount of money to an emergency fund to cover unexpected, variable expenses. A salary increase is a source of income rather than an expense. Fixed expenses, such as car loans and homeowner insurance premiums, are payments that are not expected to change. SOURCE: FI:066 SOURCE: Kapoor, J.R., Dlabay, L.R., & Hughes, R.J. (2005). Personal finance (pp. 75-77, 79). New


Amount due on an inheritance. A tax liability is a debt, or the total amount of tax an individual owes. There are many types of taxes, and one of them is an inheritance tax. When individuals receive an inheritance, they usually have to pay tax on at least a portion of the inheritance based on the amount of the inheritance. The inheritance tax is a debt that individuals must pay when they receive an inheritance. Deductions for a charitable contribution, credits for eligible expenses, and the value of an exemption reduce the tax liability on the amount of income that a person earns. SOURCE: FI:067 SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal

finance (pp. 381-382). New York: Glencoe/McGraw-Hill. 58. D

Double-entry. While maintaining financial records, accountants often record transactions using a system that affects at least two accounts, called the double-entry accounting system. "Dual-entry," "bi-level," and "bi-weekly" are not terms used to describe the recording of transactions or the maintenance of financial records. SOURCE: FI:069 SOURCE: Guerrieri, D.J., Haber, F.B., Hoyt, W.B., & Turner, R.E. (2004). Accounting: Real-world

applications & connections (p. 73). New York: Glencoe/McGraw-Hill.


Validating their credit history. Individuals often validate their credit history before applying for additional credit to make sure that the information in the history is accurate. In some cases, individuals may want to provide additional information to more fully explain their income status if the credit history does not include all sources of income. Also, if there was a history of late payments for a certain account, individuals might want to explain that the charges were in dispute and that the matter has been resolved. Adding additional information often helps to answer questions related to an individual's credit history. Individuals usually do not provide additional information about their income status and payment history when opening a checking account, estimating their tax liability, or hiring a financial planner. SOURCE: FI:072 SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal

finance (pp. 174-175). New York: Glencoe/McGraw-Hill. 60. A

Deduct allowable expenses. Form 1040 is the longest version of the tax forms. However, there are benefits to using this form depending on an individual's situation. If an individual has a lot of allowable expenses that are deductible, the individual often can reduce the amount of tax that is owed. These deductions must total more than the standard deduction in order to save money on taxes. For example, if the standard deduction is $8,000 but the individual has allowable deductions of $12,000, it is to the individual's benefit to use Form 1040 to claim the higher deduction. Using Form 1040 does not speed up the refund process or enable individuals to estimate tax payments. Individuals use Form 1040 to itemize deductions rather than to claim the standard deduction. SOURCE: FI:074 SOURCE: Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal

finance (pp. 384-385). New York: Glencoe/McGraw-Hill. 61. A

24-hour account access. One of the advantages of using an online brokerage firm is 24-hour access to your account. Many self-directed investors like being able to access this information at any time without having to call or visit their broker. Online brokerages do not offer personal guidance from a live broker or many additional financial products and services. Online brokerages usually have low commissions rather than high ones. SOURCE: FI:075 SOURCE: Investopedia. (2009). Brokers and online trading: Full-service or discount? Retrieved

September 15, 2009, from http://www.investopedia.com/university/broker/broker2.asp 62. C

One investment to another. The purpose of the risk pyramid is to show a comparison of one investment to another. With high-, moderate-, and low-risk categories, the pyramid helps you to see which investments are more or less risky than others. Near the peak are the most risky investments, while at the base are investments with the most reliable returns. The purpose of the risk pyramid is not just to compare stocks to stock mutual funds, corporate bonds to municipal bonds, or one stock to another. SOURCE: FI:077 SOURCE: QS LAP 32—Risky Business?

63. B

Ordinary life. Ordinary life is a type of life insurance that pays benefits on the death of the policyholder. It also provides a savings and investment program at current market rates and has cash value. Term is a form of life insurance that covers a specific number of years. Homeowner's insurance protects property owners from damage to their property. It usually includes liability insurance, which protects the homeowner if someone else is injured on or by their property. SOURCE: FI:081 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 382-383].

Mason, OH: South-Western.


Profit-and-loss statement. A profit-and-loss statement is an income statement that summarizes a business's revenue and expenses over a period of time. A business owner preparing to apply for an increased line of credit probably would ask the accounting department to compile a profit-and-loss statement to provide current financial information to the bank. The information in a profit-and-loss statement reflects the business's financial condition and indicates if it is making sufficient profit to repay an increased line of credit, which is a type of loan. A marketing-information report contains marketing-related data from inside and outside the business. A capital-goods analysis lists all the equipment, resources, facilities, etc., owned by a business. Truth-in-lending is a federal law that requires all finance charges to be disclosed on consumer credit agreements. SOURCE: FI:085 SOURCE: FI LAP 5—Show Me the Money (Nature of Accounting)

65. B

New business projects and strategies. The finance function would definitely be involved in a decision regarding new business projects and strategies. It is important for a business's financial managers to help top management with planning. Marketing involves decisions about public relations, publicity, and personal selling. The human resources department aids in the hiring process. SOURCE: FI:354 SOURCE: FI LAP 7—Money Matters (Role of Finance)

66. A

The skills, knowledge and characteristics required for a job. A job specification is an explanation of the skills, knowledge, and characteristics required for a job. It describes what an employee in that position should be. An explanation of the responsibilities and tasks associated with a job is a job description. It describes what an employee in that position does. A job specification does not indicate the physical location of a job or who manages the department where a job position is open. SOURCE: HR:410 SOURCE: HR LAP 35—People Pusher (Nature of Human Resources Management)

67. B

Promotion. An advertising campaign is a series of advertisements planned around a central theme. Such campaigns are frequently part of a firm's promotional efforts. Distribution involves moving, storing, locating, and/or transferring ownership of goods and services. Pricing involves determining and adjusting prices to maximize return and meet customers' perceptions of value. Planning consists of establishing methods for achieving goals and objectives. SOURCE: MK:001 SOURCE: BA LAP 11—Have It Your Way!

68. B

Presentation. Presentation is the way in which the information is communicated. It addresses such factors as clarity of language used, sufficiency of font size, clarity of layout, effectiveness of colors, usefulness of graphics or photos, clarity of audio or video (if included), and helpfulness of any animation used. Presentation is particularly important on the Web since so much time is spent reading online. Relevance deals with whether the information pertains to the topic being researched. Objectivity deals with presenting unbiased information. Timeliness deals with how up-to-date the information is; however, the importance of timeliness will vary from topic to topic. SOURCE: NF:079 SOURCE: The Open Learn University. (n.d.). 4 Evaluating business and management information on

the internet—4.2 P is for presentation. Retrieved September 16, 2009, from http://openlearn.open.ac.uk/mod/resource/view.php?id=188766

Test 1020 BUSINESS ADMINISTRATION CORE EXAM — KEY 22 69. C

By cause/effect. Identifying the causes and/or the effects of the highway bypass will be helpful in persuading management to make a decision about its course of action. Cause tells management why the bypass happened, while effect presents the results of the bypass. Chronological order would provide management with information according to the sequence in which the bypass occurred. An alternating organization pattern would stress the points you want to make about a comparison you are making. Emphatic order would present your ideas in their order of importance, either the strongest point being given first or last. SOURCE: NF:080 SOURCE: Colorado State University. (2009). Cause/effect. Retrieved September 16, 2009, from

http://writing.colostate.edu/guides/processes/organize/pop4a.cfm 70. C

It is data put into a useful form. Data and information are not the same thing. Data are the necessary facts and figures, but information is what you get when data are in a useful form. Information is something an organization values, and it is not always simple to manage. SOURCE: NF:110 SOURCE: NF LAP 3—In the Know (Nature of Information Management)

71. B

Transaction processing system. This is a computerized information system that processes daily, routine business transactions at the operational level of companies. Knowledge work systems aid knowledge workers in the creation and integration of new knowledge into companies. Its purpose is to improve worker productivity. Decision support systems aid managers in making decisions that are unique and rapidly changing. Executive support systems are reporting tools that enable managers to turn a company's data into useful reports. SOURCE: NF:083 SOURCE: Chapter 2: The strategic role of information systems. (2003). Retrieved September 16, 2009,

from http://www.scribd.com/doc/17116780/Chapter-2-Strategic-Role-of-Information-Systems 72. C

Operating system. An operating system runs the computer, serving as a go between for hardware and software applications. In addition, the operating system provides security for the computer system. A server is any combination of hardware or software designed to provide services to clients. Application software is software that enables the users to perform specific tasks, such as word processing. A computer's hard drive is the element of the system that stores software applications, the operating system, and other data. SOURCE: NF:085 SOURCE: Soward, K. (1999-2009). Computer operating system tutorial. Retrieved September 16,

2009, from http://www.ehow.com/way_5209060_computer-operatingsystem-tutorial.html 73. C

Internet companies offering phone service. Digital convergence is the tendency of digital services that were once separate entities to combine into new forms. An example of the Internet offering phone service is Skype. Wireless, bandwidth, and WANS are not examples of digital convergence. SOURCE: NF:086 SOURCE: Bovée, C. L., Thill, J. V., & Mescon, M. H. (2007). Excellence in business (3rd ed.)

[pp. 148-150]. Upper Saddle River, NJ: Pearson Prentice Hall.


Use more words for descriptors or a more precise keyword. Unless the search engine will only allow one word to be used, it is better to use exact wording to get to the site that has the needed information. For example, using "retail" as a keyword would very likely net several hundred or thousand sites, but if "grocery AND retailing AND Texas" is used, the search will be narrowed down tremendously. Opening all 578 responses is not practical. Starting at #578 is not effective because many search engines list the most popular sites related to the keyword first. Going to another search engine will probably net about the same number of results. SOURCE: NF:006 SOURCE: Google. (n.d.). Google Help Center: Advanced Search Made Easy. Retrieved September 15,

2009, from http://www.google.com/help/refinesearch.html 75. D

Status Bar. The Status Bar appears at the very bottom of your window and provides such information as the current page and the number of words in your document. You can change what displays on the Status Bar by right-clicking on the Status Bar and selecting the options you want from the Customize Status Bar menu. The Ribbon In Microsoft Word 2007 is used to issue commands. The Ribbon is located near the top of the screen, below the Quick Access Toolbar. The Title Bar displays the title of the document on which you are currently working. SOURCE: NF:007 SOURCE: Baycon Group. (2009). Lesson 1: Getting familiar with Microsoft Word 2007 for Windows.

Retrieved September 15, 2009, from http://www.baycongroup.com/word2007/01_word2007.html

76. A

Templates. The template feature of presentation software allows the user to enter information into a set of standardized slides that all have a similar look. The wizard uses already prepared slide shows to suggest content. Blank slides allow the user to prepare the presentation from scratch. The premade slides would be considered part of the wizard. SOURCE: NF:008 SOURCE: Baycon Group. (2009). Lesson 2: PowerPoint overview. Retrieved September 15, 2009, from

http://www.baycongroup.com/powerpoint/02_powerpoint.htm 77. D

To maintain client lists. One use of a computer database is to store information about the business's customers. A database allows a business to add and update information and to organize it in many different ways. For example, a business might organize its client list according to the amount of money each customer spends, by zip code, or by location. The business can rearrange this information at any time by a simple click on a computer key. Databases are not used to transmit documents, communicate with vendors, or to monitor economic trends. SOURCE: NF:009 SOURCE: Goodwill Community Foundation (2009). Access 2007: Why do I need a database-Lesson 1.

Retrieved August 29, 2009, from http://www.gcflearnfree.org/computer/lesson.aspx?id=1476&p=3

78. A

Interest rate is expected to decrease by 1/2%. Spreadsheet software programs allow businesses to use a computer to perform accounting and other financial calculations. An advantage of using a spreadsheet program is that a business can make various changes to specific numbers and figures to find out quickly what effect they will have on its financial status. For example, a business could reduce the interest rate it is paying on loans to find out the effect that would have on operating expenses. If a business owes a substantial amount of money and the interest rate decreases, it will be able to save a significant sum in interest. The business can enter several different interest rates, and the spreadsheet program will automatically do the calculations. The alternatives are not examples of change that will affect a business's financial status. SOURCE: NF:010 SOURCE: Longenecker, J.G., Moore, C.W., & Petty, J.W. (2000). Small business management: An

entrepreneurial emphasis (11th ed.) [pp. 461-463]. Cincinnati: South-Western College.


Point-of-sale software. There are many point-of-sale software applications that enable businesses to perform a variety of functions beyond the point of sale. Some of these functions include placing orders, controlling inventory, placing special orders, etc. Wi-Fi is an abbreviation for wireless fidelity, and it provides wireless networking capabilities. SMS is an abbreviation for short messaging service and is used to send text messages on a variety of cell phones. Spreadsheet applications are computer applications that simulate a paper worksheet of financial data. SOURCE: NF:088 SOURCE: Appliance stores point of sale software. (n.d.). Retrieved September 16, 2009, from

http://wws5.com/au_pdf/appliancestores-au.pdf 80. C

Assurance. This clothing manufacturer is using quality assurance. Quality assurance is a process businesses use to prevent defective products from being created, not just to eliminate or correct them after they've already been produced. Quality inspection is a process businesses use to check for defects after products have been produced. Quality guarantee and quality delivery are not traditional terms used in operations or quality control. SOURCE: OP:189 SOURCE: OP LAP 3—Smooth Operations (Nature of Operations)

81. C

Government agency. Service businesses must follow certain procedures to ensure the safety and health of both their customers and their employees. The government establishes health and safety laws to protect the well-being of anyone who enters the business. A service business that does not follow the laws could be endangering customers and employees. If this occurs, the appropriate government agency should be contacted so that corrective action can be taken to prevent accidents or illness. The local chamber of commerce, the utilities commission, and the regional risk coalition are not organizations that handle violations of health and safety regulations. SOURCE: OP:005 SOURCE: Paster, Tara (2007). The HACCP food safety training manual (pp. 122-124). Hoboken, NJ:

John Wiley & Sons, Inc. 82. B

Using a letter opener to slit envelopes. A letter opener is designed for this task. Using scissors to open a pop can and a knife to pry open a drawer are examples of using tools for tasks other than the ones for which they were intended. A hammer that has a loose handle is an example of a defective tool that may be hazardous to use. SOURCE: OP:007 SOURCE: Bailey, L.J. (2007). Working (4th ed) [p. 243]. Mason, OH: South-Western Cengage

Learning. 83. D

Described on an accident report form. The company should keep a written record of accidents, injuries, and illnesses for its own use. Most companies are also required to record such information on forms provided by the Occupational Safety and Health Administration. Even minor cuts or injuries should be treated because of the danger of infection. Accident report forms, rather than company stationery, should be used to ensure all relevant information is collected and recorded. Not all accidents require a doctor's attention. SOURCE: OP:009 SOURCE: Workplace accident report form. (2009, June 10). Retrieved September 15, 2009, from

http://www.docstoc.com/docs/7105004/Workplace-Accident-Report -Form


Security measures. Taking security measures involves using a variety of security methods and devices to protect the physical building and its contents. If used properly, they protect the business from the risk of theft of money and other valuables and even loss of life. Businesses must work toward detecting and preventing losses that result from such activities as customer theft (shoplifting), employee pilferage, and burglary. Maintenance activities involve the repair and general upkeep of business equipment and property. A benefits program includes all of the vacation time, health insurance, and other employee benefits provided by the business. Compensation policies are guidelines the business follows in paying employees. SOURCE: OP:013 SOURCE: Workplace violence incidents and security measures: 2005. (2005). Retrieved September 15,

2009, from http://www.census.gov/compendia/statab/tables/09s0640.xls 85. B

Review the invoice. One way to evaluate supplier performance after the purchased goods or services have been delivered is to review the invoice. By reviewing the invoice, a purchasing specialist can determine whether the supplier charged the agreed upon price. A purchasing specialist should contact the supplier's references, visit the supplier's plant, and/or check the supplier's credentials before doing business with that supplier. SOURCE: OP:015 SOURCE: OP LAP 2—Buy Right (Purchasing)

86. A

Legal contract. A purchase order is a form identifying the prices, discounts, dating, transportation, charges, etc., applicable to an order issued by a buyer to a seller. Once the order is signed and accepted by a vendor, it is a legal contract. Therefore, a business must fill out all the information correctly because the agreement is enforceable by law. If a business makes an error, such as listing a higher purchase price, the vendor has the right to charge that price. A purchase order is not a receiving document, a delivery form, or a payment record. SOURCE: OP:016 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 288].

Woodland Hills, CA: Glencoe/McGraw-Hill. 87. A

Continuous. Businesses with a steady demand for their standard products, such as toothpaste, often operate continuously. In most cases, the continuous production process is highly automated and operates steadily with assistance from only a few employees. Intermittent production starts and stops frequently and produces only when there is a need to increase stock levels. Labor-intensive production processes rely more on people than on machines. Batch production processes are used to produce limited quantities of a product at one time. SOURCE: OP:017 SOURCE: BA LAP 1—Nature of Production

88. A

Help to prevent medical problems. Good posture helps to keep the body in alignment and enables the body's organs to function properly. This helps to prevent such medical problems as a bad back, fatigue, and muscle strain. Good posture may make you look taller than you really are, but that is not an important reason for practicing good posture. Good posture cannot eliminate the need for some clothing alterations, and it is not likely to improve your ability to relax. SOURCE: PD:002 SOURCE: PD LAP 5—Brand ME! (Personal Appearance)


Gives you a good start the next day. It is better for you psychologically if you can start each work day in a work area that is reasonably well organized. It usually takes only a few minutes to straighten things up at the end of each day, and it is time well spent. Cleaning up before you leave does show you are trying to stay organized, make your work area look neat overnight, and set a good example for coworkers, but those are not important reasons to develop this habit. SOURCE: PD:009 SOURCE: O'Connor, K. (2005). Organize your time and space in two minutes or less. Retrieved

September 16, 2009, from http://www.right-writing.com/organize.html 90. A

Dynamic. Goals are dynamic, meaning they are flexible and can be changed. In this case, Chris changed his career goal from grooming horses to giving riding lessons. Good goals are specific, measurable, and effective, but Chris's example does not illustrate these traits. SOURCE: PD:018 SOURCE: PD LAP 16—Go for the Goal (Goal Setting)

91. D

Mind mapping. Mind mapping allows your brain to think the way it wants to, meaning that you don't force it to think logically or step-by-step. It can just spit out ideas. The results may appear random or chaotic. Mind mapping involves drawing pictures, arrows, and other visual elements to represent a problem and organize ideas about possible solutions. Brainstorming is a problem-solving method in which a group throws out possible solutions to the problem. Appreciative inquiry is a problem-solving method that requires you to think positively about the problem. The intuitive problem-solving approach requires you to wait for the solution to flash into your mind. None of these three methods is described in this situation. SOURCE: PD:077 SOURCE: IS LAP 2—No Problem

92. C

Extrinsic. These are the actual rewards obtained for performing the job. Intrinsic satisfactions come from within yourself. Concomitant satisfactions result from such working conditions as a pleasant work environment or good relationships with coworkers. Vocational satisfaction is the overall pleasure obtained from working in an occupation. SOURCE: PD:013 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (p. 30). New York:

Glencoe/McGraw-Hill. 93. C

Accepting responsibility for mistakes. Employers expect their employees to have the necessary skills to do the work, but they also expect them to be honest. Being honest means not only that employees will not lie or steal, but that they will accept responsibility for their mistakes and not make excuses or blame others. Businesses respect employees who are honest and admit their mistakes because businesses realize that everyone makes mistakes from time to time. Employees who complete assignments on time are meeting their employer's expectations for dependability. Employees who help coworkers or look for better ways to do the job are exhibiting initiative. SOURCE: PD:020 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 94-97].



Unemployment benefits. Employees have certain rights on the job, and one of these is to receive unemployment benefits if they lose their jobs for no fault of their own. Employers pay the cost of unemployment insurance so that employees can receive benefits if they lose their jobs. For example, employees who are terminated because the business is losing money and needs to restructure are entitled to receive unemployment benefits. Workers' compensation is insurance purchased by employers to provide benefits such as disability payments to employees who are injured on the job. Individuals often purchase insurance coverage to protect themselves from various mishaps. SOURCE: PD:021 SOURCE: Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 236-237). New


State departments of vocational rehabilitation. These departments provide current information about the physical requirements of many jobs and suggestions about other agencies to contact. College and high school services for persons with disabilities focus on access to education rather than on career planning. Nonprofit vocational training programs offer limited types of training to persons with disabilities and usually have relatively few job openings. SOURCE: PD:022 SOURCE: U.S. Dept. of Labor. (2000). Occupational outlook handbook 2000-2001 (pp. 8-9).

Washington: U.S. Government Printing Office. 96. B

Small-business owners generally are not interested in expanding their businesses. Entrepreneurs are individuals who expand their businesses in the form of products, personnel, and target markets. Entrepreneurs do not necessarily need to start a business from scratch, and they can purchase franchises. However, for franchise owners to be entrepreneurs, they must expand the business or create new businesses. Entrepreneurs are usually very involved in the daily management of their businesses in the early stages of the ventures. The U.S. Small Business Administration defines a small business as being one employing fewer than 500 people. SOURCE: PD:066 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship)

97. C

Avoid making any negative statements about the firm she left. In many cases, people leave jobs because they can no longer tolerate the workplace. They may want to get away from a disagreeable coworker, a domineering boss, or an unpleasant atmosphere. When these people apply for new jobs, they should not describe problems or be totally honest and open about their previous situations. They should not be dishonest, but they should give whatever positive reason applies to them. These might include the desire for added responsibility, the hope of career advancement, or the wish to broaden horizons. Refusing to discuss why you left a job would indicate that you were hiding something or had been fired for some reason. SOURCE: PD:027 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [p. 47]. Mason,

OH: South-Western. 98. D

Is short and typed. A follow-up letter after a job interview should be short and to the point. The purpose is to briefly thank the interviewer. Typed letters are preferred. Follow-up letters do not contain a photo or another résumé. They should not be long and detailed. SOURCE: PD:029 SOURCE: Ober, S. (2001). Contemporary business communication (4th ed.) [pp. 550-552]. Houghton

Mifflin.


Personalized. Some jobs have certain requirements that applicants should respond to by preparing personalized résumés that provide specific information about the applicant's qualifications. For example, a person applying for a sales position might mention experience in the restaurant business if the job was related to selling supplies to restaurants. Making the résumé more personal for specific types of jobs might give an applicant an advantage over someone who provided a general résumé. A chronological résumé lists an applicant's education and experience in order according to date, beginning with the most recent. A functional résumé emphasizes major accomplishments according to importance rather than date. A generalized résumé contains broad, general information rather than specific information. SOURCE: PD:031 SOURCE: Grayson, B. (2009, June 11). How to create a personalized résumé. Retrieved September

16, 2009, from http://ezinearticles.com/?How-to-Create-a-Personalized-Resume&id=2463545

100. D

Accomplishing company goals. Top-level management uses the business's resources to achieve company goals through the management activities of planning, organizing, directing, and controlling. First-line supervisors have the responsibility for supervising day-to-day activities. Maintaining security and conducting research would be the responsibility of mid-level managers. SOURCE: SM:001 SOURCE: SM LAP 3—Manage This! (Concept of Management)



Business Administration

Core Exam INSTRUCTIONS: This is a timed, comprehensive exam for the occupational area identified above. Do not open this booklet until instructed to do so by the testing monitor. You will have _____ minutes to complete all questions.

CAUTION: Posting these materials on a website is a copyright violation unless specifically authorized by MBAResearch. This comprehensive exam was developed by the MBAResearch Center. Items have been randomly selected from the MBAResearch Test-Item Bank and represent a variety of instructional areas. Performance Indicators for this exam are at the prerequisite and career-sustaining levels. A descriptive test key, including question sources and answer rationale, has been provided the state DECA advisor. Copyright © 2010 by Marketing & Business Administration Research and Curriculum Center®, Columbus, Ohio Each individual test item contained herein is the exclusive property of MBAResearch. Items are licensed only for use as configured within this exam, in its entirety. Use of individual items for any purpose other than as specifically authorized in writing by MBAResearch is prohibited. This exam, without modification, is licensed for one-time use on a date specified by the licensee (state DECA advisor or designee), on or before MARCH 31, 2010. Possession of this exam, without written authorization, under any other circumstances is a copyright violation. Posting to inter- or intranet sites is specifically forbidden unless written permission is obtained prior to posting. Report violations to MBAResearch at 800.448.0398.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 1


1. Tim and Dan want to start a business. Their main problem is acquiring enough money to pay start-up costs as well as initial operating expenses. What legal structure of business ownership is best for Tim and Dan?

A. Partnership C. Franchise B. Sole proprietorship D. Corporation

2. Which of the following is a company resource that employees often analyze to ascertain policies and

procedures: A. Training materials C. Promotional brochures B. Sales reports D. Research documents

3. Listeners can support and encourage a speaker by

A. looking around the room. C. closing their eyes. B. maintaining eye contact. D. glancing at the clock.

4. Chad's friend wrote down instructions for him to change the oil in his car. Chad makes sure he follows

the direction to put something for catching the oil in place first, so it doesn't spill everywhere. Which of the following steps for following directions does this situation illustrate:

A. Accept responsibility C. Note key words B. Ask D. Go in order

5. The human ability to listen to and process speech is

A. slower than the average person talks. C. four times as fast as people can talk. B. the basis for the communication model. D. increased with active listening.

6. A characteristic of an effective communicator is that s/he

A. speaks in a monotone. C. sounds like a recording. B. commands attention. D. uses frequent mannerisms.

7. When providing legitimate responses to inquiries, it is usually best to begin by

A. being sympathetic. C. asking for more information. B. restating the question. D. providing an answer.

8. To provide accurate verbal directions to group members, it often helps speakers to

A. use a low tone of voice when giving the directions. B. use sign language to support the verbal instructions. C. visualize themselves following the directions. D. evaluate many options as they convey the information.

9. Ed had an idea for a group project that Tara said would not work. When defending his idea to the group,

Ed should focus on presenting the idea's positive attributes in a(n) _________ way. A. emotional C. cynical B. unbiased D. understated

10. What should an employee do if a customer calls asking for information that the employee doesn't have?

A. Offer to get the information and call back C. Ask why the customer needs the information B. Ask the customer to call back later D. Suggest that the customer call someone else

11. Business employees who participate in group discussions should present their ideas and opinions in a(n)

A. nonverbal style. C. argumentative way. B. written format. D. assertive manner.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 2 12. Written communication is not effective when readers must

A. follow the writer's logical train of thought. B. work to understand what the communication means. C. find the information they need within the communication. D. spend a minimum amount of time reading the communication.

13. Mr. Jones operates a small business serving several states. He needs to communicate with his

customers but does not need an immediate response. The most economical method of delivering his messages would be through

A. fax. C. e-mail. B. business letters. D. telephone.

14. Which of the following is a reason why businesses write informational messages:

A. To develop memos C. To sell products B. To prepare letters D. To identify customers

15. Which of the following is an example of a written business inquiry:

A. A memo outlining an upcoming meeting agenda B. An e-mail requesting vendor pricing and discounts C. A form describing an employee's performance review D. A report summarizing annual financial information

16. A message from the company president to all employees concerning a change in insurance coverage is

a form of __________ communication. A. informal C. upward B. staff D. lateral

17. In planning a staff meeting for her department, Mara should

A. limit the number of times that each participant speaks. B. change the meeting date and time. C. forward a copy of the department budget to all participants. D. provide a meeting agenda to review.

18. The most positive words to use in selling are

A. customers' names. C. credit terms. B. brand names. D. technical terms.

19. Why should employees act as if customers are their employers?

A. Customers pay employees' bonuses. B. Employees would not have jobs if there were no customers. C. Employees might work for the customers in the future. D. Customers own the business.

20. One way that many businesses reinforce their service orientation through communication is by

A. telling the truth. C. using publicity. B. developing advertisements. D. writing news releases.

21. Who is responsible for developing a business's policies?

A. Salespeople C. Suppliers B. Customers D. Managers

22. "I buy only the most expensive brands" is a statement that characterizes the __________ customer.

A. slow/methodical C. suspicious B. disagreeable D. domineering/superior

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 3 23. What should you do to determine whether a customer's complaint is justified?

A. Investigate the problem C. Take immediate action B. Restate the complaint D. Ask a supervisor

24. John gets up, dresses, brushes his teeth, eats breakfast, goes to school, buys gum at the school store,

and reports to his first class. Which of these would be considered an economic activity? A. Buying gum C. Brushing teeth B. Eating breakfast D. Going to class

25. When a manufacturer asks a business to collect information from customers concerning how to improve

a product, which type of utility is most likely to be affected? A. Possession C. Time B. Place D. Form

26. Retailing takes place whenever goods are

A. offered for sale. C. sold to the ultimate consumer. B. exchanged for other goods. D. sold in a retail establishment.

27. Franco's Bread Shop is introducing a new type of sandwich bread to the community this week. Which of

the following describes the business activity the bread shop is likely involved in: A. Collecting information on last year's new breads B. Promoting the new bread through advertising C. Creating a system for storing new bread recipes D. Planning for the long-term results of introducing new breads

28. In a market economy, the basic economic question of what to produce is answered by

A. strategic planners. C. custom. B. consumers. D. trial and error.

29. In a private enterprise economic system, the interaction of supply and demand primarily determines

A. government control. C. profits. B. prices. D. competition.

30. The amount of money paid for raw materials and products sold is called

A. net profit. C. cost of goods. B. operating expense. D. gross profit.

31. Rivalry between two companies which offer dissimilar products is called __________ competition.

A. indirect C. price B. direct D. nonprice

32. The amount and value of outputs produced from set amounts of resources are known as

A. objectives. C. productivity. B. inputs. D. mass production.

33. A business deciding to hire an older man rather than a young woman for a sales position even though

both have similar qualifications might be an example of A. remedial action. C. team conflict. B. harassment. D. discrimination.

34. Why is assessing strengths and weaknesses a difficult task?

A. It may reveal characteristics about ourselves that we don't like. B. It's impossible to be modest when listing our strengths. C. It's an extremely time-consuming process. D. It's unrealistic to try to discover every strength and weakness.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 4 35. Julie has been warned by her supervisor that she may be fired if she continues coming to work late. After

this warning, Julie began to arrive at work five minutes early. Julie is demonstrating a change in her __________ traits.

A. mental C. personal B. physical D. emotional

36. Which of the following is a true statement regarding initiative:

A. People with initiative must usually be prodded into doing things. B. Possessing initiative is unimportant in business occupations. C. Increased initiative usually brings increased job responsibility. D. Initiative should be demonstrated only at your place of employment.

37. Being responsible means that you will give first priority to fulfilling your personal

A. desires. C. weaknesses. B. obligations. D. needs.

38. When employees need advice about handling ethical situations at work, it is often helpful to

A. consult a mentor. C. talk to friends. B. ask the office gossip. D. check with coworkers.

39. How does having a sense of humor help you maintain a positive attitude?

A. It encourages you to give your appearance the attention it deserves. B. If you hang out with positive people, you'll be positive as well. C. It is easier to maintain a positive attitude when you're healthy. D. It keeps you from taking yourself too seriously.

40. Which of the following is necessary in order for a person to accept criticism and turn it into a helpful tool:

A. Maintaining resistance to critical comments B. Recognizing that all people make mistakes C. Being satisfied with ourselves D. Remaining skeptical of suggestions for improvement

41. Is it appropriate to express empathy about a positive event such as winning a competition or getting a

promotion? A. No, people who have positive experiences don't need empathy. B. Yes, you can express empathy by using sympathy. C. No, empathy is only appropriate in problem situations. D. Yes, you can give the person supportive feedback.

42. The willingness to adjust your opinions and behaviors so that you value different people and ideas is

A. ethnocentrism. C. prejudice. B. communication. D. cultural sensitivity.

43. Communicating all the important information in the shortest way possible means you are being

A. concrete. C. sensitive. B. concise. D. accurate.

44. Which of the following is a belief that is necessary to being assertive:

A. I should try to agree with everyone. B. I should avoid asking other people for help. C. I am worthy of my own respect and the respect of others. D. I have the right to express my feelings any way I choose.

45. Digital Equipment Corporation's engineers exchange ideas for new products with employees from other

departments who are working together on a short-term basis. This kind of group is called a A. work team. C. project team. B. standing committee. D. quality circle.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 5 46. Angela has achieved business success, and many other people look up to her. This makes her a(n)

A. leader. C. example. B. role model. D. hero.

47. One way to develop an achievement orientation is to establish

A. personal relationships. C. reachable goals. B. flexible deadlines. D. safe conditions.

48. To be a change leader, you must

A. be able to identify opportunities for change. C. have experience with leading change. B. be at least 18 years old. D. have a college degree.

49. Matthias regularly talks to other team leaders in the industry to keep up with current trends that may

affect his team vision. Which guideline of sharing a vision does this illustrate? A. Being flexible C. Being an example B. Being a good listener D. Being enthusiastic

50. The primary reason that people lose or leave their jobs is that they have

A. poor self-esteem. C. difficulty getting along with others. B. difficulty understanding their jobs. D. poor job performance.

51. By understanding the time value of money concept, you know that

A. it is better to receive $101 a year from now than $100 today. B. it is better to receive $100 today than $101 a year from now. C. saving money can buy time on debt payment. D. time and money are related by due date.

52. For which of the following types of credit would you need to ask a customer to make a down payment:

A. Open account C. Installment loan B. Option account D. Revolving credit account

53. Who is legally responsible for repaying a bank loan if the loan borrower fails to make payments as

indicated in the loan contract? A. Credit union C. Treasury Department B. Co-signer D. Debt collectors

54. Which of the following statements about retirement is true:

A. You have plenty of time to start saving for retirement. B. Saving even a little bit each month will help. C. You can depend on Social Security for your basic living expenses. D. You will be in retirement only about 15 years.

55. Which of the following phrases best describes the S in setting SMART goals:

A. Specific details C. Sense of teamwork B. Saving money D. Spending wisely

56. Which of the following is a variable expense that Jake must consider when developing his personal

budget: A. Homeowner insurance premiums C. Fixed car-loan payments B. Anticipated salary increases D. Unexpected car repairs

57. Which of the following is an example of a tax liability:

A. Amount due on an inheritance C. Credit for an eligible expense B. Deduction for a charitable contribution D. Value of an exemption

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 6 58. While maintaining financial records, accountants often record transactions using a system that affects at

least two accounts. This system is called __________ accounting. A. bi-weekly C. bi-level B. dual-entry D. double-entry

59. Individuals have the right to provide additional information about their income status and payment history

when A. opening a checking account. C. estimating their tax liability. B. validating their credit history. D. hiring a financial planner.

60. One of the benefits to some individuals of using Form 1040 to file their personal income tax is that this

form enables them to A. deduct allowable expenses. C. claim standard deductions. B. speed up the refund process. D. estimate tax payments.

61. Which of the following is an advantage of using an online brokerage firm:

A. 24-hour account access C. Additional financial products and services B. Personal guidance from a live broker D. High commissions

62. The purpose of the risk pyramid is to show a comparison of

A. corporate bonds to municipal bonds. C. one investment to another. B. one stock to another. D. stocks to stock mutual funds.

63. What kind of insurance combines death benefits with a savings and investment account?

A. Homeowner's C. Term B. Ordinary life D. Liability

64. A business owner preparing to apply for an increased line of credit with a local bank probably would ask

the accounting department to compile a A. capital-goods analysis. C. truth-in-lending plan. B. marketing-information report. D. profit-and-loss statement.

65. The finance function would definitely be involved in a decision regarding

A. public relations and publicity. C. personal selling. B. new business projects and strategies. D. hiring.

66. A job specification is an explanation of

A. the skills, knowledge, and characteristics required for a job. B. the responsibilities and tasks associated with a job. C. where a job is located within the company's facility. D. who manages the department where a job position is open.

67. An advertising campaign would be part of the area of marketing known as

A. distribution. C. pricing. B. promotion. D. planning.

68. To evaluate an Internet source, what aspect would you consider to assess whether its information is

clearly laid out so that it is easy to read? A. Relevance C. Objectivity B. Presentation D. Timeliness

69. You have been asked to provide information to management about the impact a highway bypass will

have on your business, identifying a recommended course of action. What would be the best way to organize the information?

A. By emphatic order C. By cause/effect B. In chronological order D. In alternating organization

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 7 70. Which of the following is a true statement about information:

A. It is the same thing as data. C. It is data put into a useful form. B. It is simple to manage. D. It has no value for an organization.

71. Payroll, hotel reservations, and sales orders are handled by a(n) __________ type of information system.

A. Knowledge work system C. Decision support system B. Transaction processing system D. Executive support system

72. What aspect of a computer system acts as a go between for software and hardware applications?

A. Hard drive C. Operating system B. Server D. Application software

73. Which of the following is an example of the digital convergence occurring on the Internet:

A. Internet companies increasing their bandwidth B. Internet companies offering wireless service C. Internet companies offering phone service D. Internet companies increasing their use of WANs

74. When an employee searches the Web using a keyword and obtains 578 responses, the next logical step

would be to A. go to another search engine and see if it works better. B. use more words for descriptors or a more precise keyword. C. open all 578 responses looking for the best one. D. start from #578 and work backwards until the best one is found.

75. Where in Word 2007 should you look to determine what page of a document you're on and how many

words are in the document? A. Title Bar C. Quick Access Toolbar B. Ribbon D. Status Bar

76. With the use of a presentation software program, Martin selects a standardized group of slides and

enters the appropriate text and graphics in each slide. What is he using to design his presentation? A. Templates C. Blank slides B. Wizard D. Premade slides

77. Why do many businesses store information in a computerized database?

A. To monitor economic trends C. To transmit documents B. To communicate with vendors D. To maintain client lists

78. In which of the following situations would a business use a spreadsheet software program to calculate

the effect that one change will have on its financial status: A. Interest rate is expected to decrease by 1/2%. B. Operating profit is 15% of total sales. C. Average employee earns $30,000 per year. D. Fixed expenses are $58,500 per month.

79. Which of the following is an example of an integrated software application:

A. Wi-Fi C. SMS B. Point-of-sale software D. Spreadsheet applications

80. A clothing manufacturer builds quality into its operating system, placing responsibility on each employee.

This process is known as quality A. delivery. C. assurance. B. guarantee. D. inspection.

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 8 81. Which of the following organizations should be contacted if a service business is not following health and

safety regulations: A. Utilities commission C. Government agency B. Local chamber of commerce D. Regional risk coalition

82. Which of the following is not a safety hazard:

A. Using a knife to pry open a drawer C. Using a hammer that has a loose handle B. Using a letter opener to slit envelopes D. Using a scissors blade to open a pop can

83. Many businesses require that any accidents that occur on the job should be

A. handled by a physician. C. written up on company stationery. B. disregarded if they are minor. D. described on an accident report form.

84. Protective devices which a business uses to prevent such problems as customer theft, employee

pilferage, and burglary are part of the business's A. maintenance activities. C. compensation policies. B. benefits program. D. security measures.

85. Which of the following is a way to evaluate supplier performance after the purchased goods or services

have been delivered: A. Contact the supplier's references C. Visit the supplier's plant B. Review the invoice D. Check the supplier's credentials

86. One reason why it is important for a business to correctly fill out information about credit terms and

shipping instructions when ordering goods is because the purchase order is a A. legal contract. C. payment record. B. receiving document. D. delivery form.

87. What type of production process involves operating machines around the clock to meet consumer

demand for standard products? A. Continuous C. Batch B. Intermittent D. Labor-intensive

88. One of the major reasons that good posture is important is that it can

A. help to prevent medical problems. C. improve your ability to relax. B. eliminate clothing alterations. D. make you look taller than you are.

89. An important reason that it is a good idea to develop the habit of cleaning up your work area at the end of

each work day is that it A. makes your work area look neat overnight. C. sets an example for your coworkers. B. shows you are trying to stay organized. D. gives you a good start the next day.

90. Chris started working in a stable as a horse trainer, but later decided he would rather give riding lessons

for a living. This is an example of a goal's being A. dynamic. C. specific. B. effective. D. measurable.

91. Which problem-solving method involves the use of colors, pictures, and arrows?

A. Brainstorming C. Intuitive B. Appreciative inquiry D. Mind mapping

92. Salaries, commissions, and bonuses obtained from a job are examples of __________ satisfaction.

A. concomitant C. extrinsic B. intrinsic D. vocational

Test 1020 BUSINESS ADMINISTRATION CORE EXAM 9 93. Which of the following is an action that employees can take to meet their employer's expectations of

honesty: A. Helping coworkers with problems C. Accepting responsibility for mistakes B. Completing assignments on time D. Looking for better ways to do the job

94. Individuals who lose their jobs due to no fault of their own are entitled to receive

A. workers' compensation. C. insurance coverage. B. unemployment benefits. D. disability payments.

95. Where could you find up-to-date information about jobs that are available to persons with physical and

sensory disabilities? A. Nonprofit vocational training programs B. State departments of vocational rehabilitation C. High school special-education department D. College offices of disability services

96. One difference between entrepreneurs and small-business owners is that

A. entrepreneurs rarely manage the day-to-day aspects of their businesses. B. small-business owners generally are not interested in expanding their businesses. C. small-business owners usually employ between 500 and 1,000 workers. D. entrepreneurs must start businesses from scratch and do not purchase franchises.

97. Sharon is completing a job application form that asks why she left her previous job. An appropriate

guideline for Sharon to use in answering this question would be to A. say that she would rather not discuss the reason she left. B. be totally honest and open about her previous situation. C. avoid making any negative statements about the firm she left. D. describe the problems that caused her to leave.

98. After a job interview, an applicant should prepare a follow-up letter that

A. contains a photo. C. includes a résumé. B. is long and detailed. D. is short and typed.

99. Paul prepared a job résumé that addressed how his background and qualifications would meet the

specific requirements of the job he wanted. Paul's résumé is an example of a __________ résumé. A. chronological C. generalized B. personalized D. functional

100. Which of the following would be the responsibility of top-level management:

A. Maintaining security C. Conducting research B. Supervising day-to-day activities D. Accomplishing company goals

KEY

Test Number 1021

Marketing Cluster Exam


Test 1021 MARKETING CLUSTER EXAM – KEY 10 1. C

Resolve disputes. The legal procedure is the process of reviewing disputes or claims and resolving them in a fair manner. Businesses are often involved in disputes with other entities, such as suppliers or competitors. If a business believes it has been wronged by another, the business follows the appropriate legal procedure to resolve the issue. Enacting legislation, establishing laws, and regulating business are not the main functions of the legal procedure. SOURCE: BL:070 SOURCE: Miller, R.L., & Jentz, G.A. (2005). Fundamentals of business law (6th ed.) [pp. 32-40].

Mason, OH: Thomson/South-Western. 2. C

Sole proprietorship. A sole proprietorship is a form of business ownership in which the business is owned by one person and is easy to open, but the owner has limited capital and limited capabilities. Jason will not need a great sum of money, and he has experience in that type of business. A partnership is a form of business ownership in which the business is owned by two or more persons who combine their capital and capabilities. It is relatively easy to start. A corporation is owned by issuing stock and is difficult to form and operate. A monopoly is a condition in which a market is controlled by one supplier, and there are no substitute goods or services readily available. SOURCE: BL:003 SOURCE: BA LAP 7—Own It Your Way

3. C

Marketing-information management. This marketing function involves gathering, accessing, synthesizing, evaluating, and disseminating information for use in making business decisions. The type of information that is gathered often includes data about customers' preferences, opinions, habits, trends, and plans. Product/Service management involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities. Selling involves determining client needs and wants and responding through planned, personalized communication that influences purchase decisions and enhances future business opportunities. Promotion is communicating information about goods, services, images, and/or ideas to achieve a desired outcome. SOURCE: IM:012 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)

[pp. 211, 299, 505, 544]. Woodland Hills, CA: Glencoe/McGraw-Hill. 4. D

Wholesaler. A wholesaler is a business that buys goods from producers or agents and sells them to retailers. Agents do not buy goods from producers; rather, they assist in selling and promoting a producer's goods. Producers are growers, providers, or manufacturers of goods or services. Retailers are businesses that buy consumer goods or services and sell them to the ultimate consumer. SOURCE: CM:003 SOURCE: CM LAP 1—Channel It (Channels of Distribution)

5. B

Integrated data between channel members. The technology of electronic billing, purchase-order verification, bar coding, and image processing enable channel members to integrate data. Vertical and horizontal channel integration are methods of organizing distribution channels. The finance department may utilize the methods to share data, but the methods are not unique to that department. SOURCE: CM:004 SOURCE: Pride, W.M., & Ferrell, O.C. (2000). Marketing: Concepts and strategies (2000e)

(pp. 355-356). Boston: Houghton Mifflin.

Test 1021 MARKETING CLUSTER EXAM – KEY 11 6. B

Horizontal. Horizontal conflict occurs between businesses at the same level in the distribution channel. Branch locations of a business that operate in the same community are on the same level. The branches may experience horizontal channel conflict because they are targeting, and competing for, the same customers. Vertical conflict occurs between different levels of the same channel, such as between the local branch and the corporate office. Community and dominant are not types of channel conflict. SOURCE: CM:008 SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 444-445]. Mason,

OH: Thomson/South-Western. 7. A

Marketing research. Marketing research usually focuses on a specific problem the business needs to solve. Information flow is the process of moving information through the appropriate channels or making information accessible to those who need it. A situation analysis is a determination of a firm's current business situation and the direction in which the business is headed. Marketing research gathers primary data rather than secondary data information collected for purposes other than the project at hand. SOURCE: IM:001 SOURCE: IM LAP 2—Get the Facts Straight (Marketing-Information Management)

8. C

I don't want to know you. There are several situations in which nonverbal communication is a better indicator of a person's attitude than words. In this situation, Hank has made a polite verbal response, but he has indicated by refusing to shake hands that he is not glad to meet Jeremy and does not really want to know Jeremy. Even if they had met before, shaking hands would have been appropriate. SOURCE: CO:147 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 317-325].

Boston: Irwin/McGraw-Hill. 9. A

Identify the firm or department and yourself. General guidelines for answering a business telephone include greeting the caller, identifying yourself and the business or department, and asking how you can be of assistance to the caller. It is not always necessary to get the correct spelling of the caller's name. Immediate action may also not be required. Callers should not be called by their first names unless they are personal acquaintances of the individual answering the telephone. SOURCE: CO:114 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (p. 681). Tinley Park, IL:

Goodheart-Willcox. 10. D

Few friends talking about football. If the group's purpose is to give and find out opinions, the way the group operates is casual. No real “rules” exist beyond the normal standards of common courtesy. When the football players toss the football or run laps during practice, they are likely to operate under the direction of the coach. In a similar way, selecting a strategy or play may require the football players to conduct a more formal group discussion. SOURCE: CO:053 SOURCE: QS LAP 29—Put In Your Two Cents

11. A

Understands. Using the correct words in written communication is one way for businesspeople to make sure that the receiver understands the message. Correct and accurate language usage generally conveys the intended message and makes it easier for people to understand. Using the correct words will not necessarily ensure that the receiver accepts, agrees with, or approves of the message. SOURCE: CO:016 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [pp. 94-95].

Boston: Irwin/McGraw-Hill.


Yours truly. The complimentary close respectfully signals the end of a business letter. "Dear Occupant" and "To Whom It May Concern" are examples of impersonal salutations, which are greetings that do not use the receiver's name. The word "Enclosure" indicates that additional materials that have been referenced in the letter are in the envelope with the letter. SOURCE: CO:133 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [p. 588]. Boston:

Irwin/McGraw-Hill. 13. A

Credibility. The purpose of a persuasive message is to convey information that encourages the reader to take a specific course of action. Credibility is believability. A believable source demonstrates knowledge in a confident, trustworthy, and responsible manner. People are more likely to take action when they feel that the source is credible. Message receivers do not tend to take action if the source exhibits inconsistent behavior. A message receiver will first consider the source's credibility before it considers the source's adaptability. Objectivity is viewing things in an unbiased manner. Since the message sender is trying to get the message receiver to take a certain course of action, the message receiver has a specific opinion. Therefore, the message sender may exhibit some bias about the topic at hand. SOURCE: CO:031 SOURCE: Locker, K.O. (2000). Business and administrative communication (5th ed.) [p. 223]. Boston:

Irwin/McGraw-Hill. 14. A

Their immediate supervisor. Problems related to work should be discussed with the employee's immediate supervisor because this person should be the first to be told that a problem exists, and s/he should be given an opportunity to resolve it. The personnel department deals with problems connected to the hiring or firing of employees. Discussing problems with coworkers is often done but is not recommended. It is not part of the company president's job to deal with individual problems unless they cannot be solved by a subordinate. SOURCE: CO:014 SOURCE: Hilgert, R.R., & Leonard, E.C. (2001). Supervision: Concepts and practices of management

(8th ed.) [pp. 584-591]. Cincinnati: South-Western College Publishing. 15. A

Use customer names in conversations. Customers enjoy hearing their names, and they feel important when they realize employees have taken the time to learn them. You should maintain eye contact, not stare. You should speak at a comfortable volume—not too loudly or too softly. You should try, whenever possible, to resolve customers' problems without involving a supervisor. SOURCE: CR:004 SOURCE: CCJ Business Consulting. (2007). Fifteen smart ways you can start building customer loyalty

today! Retrieved September 2, 2009, from http://www.ccjconsulting.com/files/CCJ_Business_Consulting_FREE_REPORT_07_-_15_Smart_Ways_You_Can_Start_Building_Customer_Loyalty_Today.pdf

16. B

Employee. Businesses have policies that explain how employees are to act and how they are to deal with customers. Some of these policies include rules about eating and smoking on the job. Businesses make these policies to present a certain image to customers. Service policies are established to provide special features that other, similar businesses may not offer in order to persuade customers to choose their business over another. Some policies affect customers directly, such as guidelines for offering credit. A product policy is a guideline affecting the kinds of goods and services that businesses offer to customers. SOURCE: CR:007 SOURCE: International Customer Management Institute (2009). Food in the call center. Retrieved

September 25, 2009, from http://www.icmi.com/knowledgecenter/queuetips/viewQuestion.aspx?id=2798

Test 1021 MARKETING CLUSTER EXAM – KEY 13 17. D

Show a large selection of products. Slow/Methodical, or analytical, customers require a lot of time in making buying decisions. They want to know everything about a product so that they make the best decision. In addition, they do not buy immediately. They want time to think about and research the product. Therefore, you should avoid showing them too many products, as this will only compound their problem in reaching buying decisions. The other alternatives are guidelines for helping slow/methodical, or analytical, customers. SOURCE: CR:009 SOURCE: Tod Novak. (2009, January 26). Selling and motivating the analytical client: The Owl 1.

Retrieved September 3, 2009, from http://www.youtube.com/watch?v=BMaiYEATTpI 18. D

Possession. Possession utility is created when the ownership of a product is transferred from the seller to the customer. Credit plans allow customers to pay for their purchases gradually, thereby increasing their ability to own (possess) more products. Place utility involves making goods and services available at the place (location) they are wanted or needed by customers. Form utility occurs when the shape or form of a product is altered to make it more useful to the customer. Price is a component of the marketing mix but is not a type of economic utility. SOURCE: EC:004 SOURCE: EC LAP 13—Use It (Economic Utility)

19. B

Increase. Since the holidays usually bring people in need of ski equipment, this situation should create a seller's market in which buyers will be willing to pay higher prices to buy what they need. Prices usually increase in a seller's market instead of decreasing, remaining the same, or fluctuating. SOURCE: EC:005 SOURCE: EC LAP 11—It's the Law (Supply and Demand)

20. C

Matrix. Businesses can structure the way they do their work in a variety of ways. The matrix organizational structure uses horizontal authority to integrate departmental functions with product orientation. For example, an engineer, a marketing specialist, a financial coordinator, and a manufacturing employee are members of different departments but often work together to develop or refine one product. The advantage to businesses using this organizational structure is that the business is applying its resources efficiently because a representative from each of the major departments is knowledgeable about various aspects of the product. Vertex, regional, and regulated are not terms that describe types of business organizational structures. SOURCE: EC:103 SOURCE: Gibson, J.L., Ivancevich, J.M., Donnelly, J.H., & Konopaske, R. (2003). Organizations:

Behavior, structure, processes (11th ed.) [p. 385]. Boston: Irwin/McGraw-Hill. 21. A

Profit. If the company can create demand in a new market segment, this will help to increase sales, which will increase profits. Increasing expenses will decrease profits. Increasing prices could decrease sales. Increasing output may be needed to meet the needs of the new market, but that is not the company's ultimate goal. SOURCE: EC:010 SOURCE: EC LAP 2—Risk Rewarded


Oligopoly. An oligopoly is a market structure in which there are relatively few sellers, and industry leaders usually determine the prices. Because an oligopoly has interdependent multiple sellers, product prices are usually stable. A monopoly is a condition in which a market is controlled by one supplier or single seller, and there are no substitute goods or services readily available. A technical monopoly is a type of monopoly in which the seller controls the market with one or more technical products. Differentiated oligopoly is a fictitious term. SOURCE: EC:012 SOURCE: Miller, R.L. (2005). Economics: Today and tomorrow (pp. 240-244). New York:

Glencoe/McGraw-Hill. 23. B

It's easier to train workers. For example, it is easier to train workers to specialize in sewing on shirt collars than to train them to perform all the tasks necessary to sew, iron, and package the finished shirts. The dependency of workers upon each other is a disadvantage. Job obsolescence is a disadvantage to workers. Management uses job rotation to overcome some of the disadvantages of specialization. SOURCE: EC:014 SOURCE: Division of labor. (2009, September 1). Retrieved September 3, 2009, from

http://en.wikipedia.org/wiki/Division_of_labour#Types_of_Specialization 24. C

Peak. Peak is the phase of the business cycle when economic prosperity reaches a high point, and the demand for goods and services begins to exceed the production capacities of producers. Expansion is the beginning of growth in economic activity. Contraction occurs when the economy declines. Consumers spend less and save more, and economic activities decline. During trough, economic activities are at their lowest level. SOURCE: EC:018 SOURCE: Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2008). Business (9th ed.) [pp. 19-20]. Boston:

Houghton Mifflin. 25. B

Subcultures. A subculture is a group with distinguishing characteristics that exists within a culture. The customs, habits, and traditions of businesspeople are considered to be a business subculture. The businesspeople in different countries have different business subcultures, which means that the businesspeople from one country share certain beliefs, values, and ideals that are different from those of people in other countries. The way they behave in business is based on those beliefs and values. Therefore, in order to trade successfully throughout the world, businesspeople need to understand what is acceptable business behavior in other countries. Business policies, activities, and contracts differ from one business to another and do not have a significant impact on business behavior. SOURCE: EC:045 SOURCE: Ball, D.A., McCulloch, W.H., Frantz, P.L., Geringer, J.M., & Minor, M.S. (2006). International

business: The challenge of global competition (10th ed.) [pp. 418-419]. Boston: McGraw-Hill/Irwin.

26. A

Job advancement. Employees with initiative seek to further their education/training to prepare themselves for career advancement. In many fields, supplemental preparation has become a prerequisite for promotion. Lateral job changes would not require advanced education. Many professional organizations offer advanced education for their members; however, that is not a membership requirement. Certifications are obtained to secure a job or advance in careers. SOURCE: EI:024 SOURCE: EI LAP 2—Hustle! (Taking Initiative at Work)


Responsibility. Responsible individuals are accountable for things that are within their control. Initiative is the ability and willingness to think or act without being told. Interpersonal skills are how a person gets along with others. Consideration means showing kindness or thoughtfulness to others. SOURCE: EI:021 SOURCE: PD LAP 7—Make the Honor Role (Acting Responsibly)

28. D

Increased chances of success. A positive attitude means looking on the bright side of things. Expecting good things to happen is one way of increasing one's chances of success in life. People who have positive attitudes are more likely to achieve their goals. A positive attitude can help to reduce self-consciousness and improve the ability to develop satisfactory relationships. Positive people are also more likely to be promoted. SOURCE: EI:019 SOURCE: EI LAP 3—Opt for Optimism

29. D

Negative feedback expresses disapproval about a specific behavior. Negative feedback is defined as criticism or disapproval. The purpose of negative feedback is to change or improve the message receiver's behavior, rather than reinforce an existing attitude or behavior. Although negative feedback can embarrass the message receiver, its purpose is to help the message receiver improve or change a particular attitude or behavior. Negative feedback addresses a person's weaknesses, while positive feedback communicates information about his/her strengths. SOURCE: EI:003 SOURCE: EI LAP 15—Grin and Bear It (Using Feedback for Personal Growth)

30. A

Personal credibility. Credibility is believability. When you are credible, others believe what you say. If people get in the habit of believing you, they are more likely to be persuaded to agree with you or follow your lead. Nonverbal, or body, language includes gestures, facial expressions, and any other way of communicating without the use of words. Creativity is the ability to generate unique ideas, goods, or services. Speaking skills involve the ability to communicate clearly with words. Although nonverbal language, creativity, and speaking skills may help you to persuade others, they will not necessarily make others believe what you say. SOURCE: EI:012 SOURCE: QS LAP 10—Win Them Over

31. C

Standing up straight when talking to other people. Posture is the way in which you hold your body. Other ways you can use posture to express assertiveness include leaning toward the speaker to show your interest in what is being said or crossing your arms across your chest to indicate a negative response to what is being said. Explaining why you must refuse a request for help is an example of verbal assertiveness. Raising your eyebrows and frowning are facial expressions used in nonverbal assertiveness. SOURCE: EI:008 SOURCE: EI LAP 18—Assert Yourself (Assertiveness)

32. B

Avoidance. The ways that people react to conflict are called conflict response modes. One of these modes is avoidance, which is the effort to avoid conflict. This type of behavior might include ignoring the situation or pretending that it doesn't exist. Avoidance behavior will not resolve conflict. Frustration is a negative effect of conflict rather than a response mode. Mediation is a method of resolving conflict. Exclusion is feeling left out or excluded from an activity. SOURCE: EI:015 SOURCE: EI LAP 7—Stop the Madness (Conflict Resolution in Business)


Not afraid to “go for it.” Instead of sitting back with the rest of the class and complaining about the unfair grading scale, Tim decides to take action. He is not afraid to “go for it.” Change leaders are people of action. They're not satisfied with sitting on the sidelines. They stand up for what they believe in and aren't afraid to challenge the status quo (the way things exist right now). Change leaders are also persuasive, love to learn new things, and know how to coach others, but these are not the characteristics Tim displays in this situation. SOURCE: EI:005 SOURCE: QS LAP 23—20/20 Foresight

34. B

Cultures. The cultures of ethnic groups from all parts of the world are the customs, habits, and traditions that have been developed over time. Many people whose ancestors are from other countries retain their cultures and celebrate different holidays. The United States has one government that is a democracy which includes many different courts; but these were established to carry out different kinds of legal functions, not because U.S. citizens are from all over the world. Sanctions are trade restrictions placed by one country against another country that is violating international law. SOURCE: EI:036 SOURCE: HR LAP 24—Treating Others Fairly at Work

35. B

Truth-in-Lending Act. The Truth-in-Lending Act requires businesses to provide credit customers with all the information that applies to their accounts and send customers regular updated statements showing the status of their accounts. The purpose of the Equal Credit Opportunity Act is to make the granting of credit fair by prohibiting the denial of credit based on the applicant's gender, race, age, marital status, or national origin. The Fair Credit Billing Act requires businesses which extend credit to respond within 30 days to any customer's complaint or inquiry about a billing error. The Fair Credit Reporting Act gives consumers the right to inspect the files of their credit history at any credit agency and to have any mistakes corrected. SOURCE: FI:002 SOURCE: Washoe Legal Services. (2002). Consumer law: Truth in Lending: What you must be told

when getting a consumer loan or other consumer credit. Retrieved September 3, 2009, from http://www.washoelegalservices.org/truth.htm

36. C

The first step in creating a financial plan. Knowing how you spend your money—understanding your spending habits—is the first step in creating a financial plan. Knowing your spending habits does not guarantee that you will exceed your financial goals. Although it's helpful to know how many checks you expect to write in a month, you don't need to understand your spending habits to open a bank account. SOURCE: FI:065 SOURCE: QS LAP 31—Set Yourself Up (Setting Financial Goals)

37. A

A guest trips on loose carpet in the hallway and sprains an ankle. The theater is responsible for making sure the facility is safe and free of obstacles; therefore, it would be liable for damages. A car damaged in a parking lot owned by the city would not be the theater's responsibility. Complaining about someone blocking one's view would not bring about damage relief. The drink being spilled was an accident and is between the individuals involved. SOURCE: FI:084 SOURCE: Kaser, K., & Oelkers, D.B. (2001). Sports and entertainment marketing (p. 273). Mason, OH:

South-Western.


Allocate their funds. Managers use the accounting information that tells them the amount of funds available in order to develop operating budgets. These budgets specify how much money may be spent for such expenses as rent, salaries, insurance, etc. Insurance premiums are the monies paid to cover a contractual agreement in which one party will pay for specified losses incurred by the other party. Excise taxes are determined by government. They apply to certain items, such as gasoline, and are paid by the buyer. Labor union dues are paid by the union members. SOURCE: FI:085 SOURCE: FI LAP 5—Show Me the Money (Nature of Accounting)

39. B

Assets. Business owners must spend money to obtain assets, which are anything of value that the business owns. This results in money flowing out of a business. Some examples of business assets include land, buildings, vehicles, and equipment. Supplies are industrial goods that are constantly being purchased and used up in the operation of a business. Products are goods and services. Staples are goods for which there is constant demand. SOURCE: FI:091 SOURCE: FI LAP 6—Count the Cash (Cash Flow)

40. D

Cost of goods sold. Cost of goods sold includes all costs used in obtaining or producing the goods or services that a business sells, such as materials and supplies. Operating expenses are all other expenses in operating the business such as wages, advertising, insurance, rent, and utilities expenses. Gross profit is revenue minus cost of goods sold. Revenue is the total amount of money earned by a business. SOURCE: FI:094 SOURCE: FI LAP 4—Watch Your Bottom Line (Income Statements)

41. C

Return on capital. Return on capital is a measure of how well a business generates cash flow. It is a key component of managing working capital. Accounts receivable refers to money owed to the business by others. Capital structure refers to a business's mix of financing. Accounts payable refers to the money the business owes to others. SOURCE: FI:354 SOURCE: FI LAP 7—Money Matters (Role of Finance)

42. C

Can change to meet a manager's needs. The format of a particular budget report can change to meet a manager's needs. Depending on what the manager wants to know, s/he may need to see only the current budget, the current budget and past budgets, or budgeted and actual figures. Th e format, then, is not standardized and can change. It is flexible and is very important in providing a manager with just the right information. Formats are not necessarily unique to each department and manager. SOURCE: FI:106 SOURCE: FI LAP 3—Money Tracks

43. B

Determining eligibility and costs of benefits. A human resources manager might be involved in employee benefits by developing a benefits plan and determining eligibility and costs for employees. An HR manager would not be responsible for selecting an employee's personal plan options, collecting insurance payments from employees, or choosing an employee's vacation days. SOURCE: HR:410 SOURCE: HR LAP 35—People Pusher (Nature of Human Resources Management)


Quantity. The wholesaler is reducing a discrepancy of quantity by breaking down a large quantity of a product into smaller quantities for retailers to buy and sell to final customers. Reducing a discrepancy of assortment means making a variety of related products available in one place. There is no such thing as a discrepancy of installation or a discrepancy of promotion. SOURCE: CM:001 SOURCE: CM LAP 2—Chart Your Channels (Channel Management)

45. B

Acknowledge directions verbally or nonverbally. When Justin gives his sister a puzzled look so she knows he didn't understand her directions clearly, he is acknowledging her nonverbally. It's important to let the speaker know you hear and understand what s/he is saying by nodding your head or saying you understand. If you don't understand the directions, use your nonverbal signals to alert the person so s/he can clarify things for you. These signals include raising your hand, shaking your head, or even looking at the speaker with a puzzled look. In this situation, Justin is not taking notes, accepting responsibility, or eliminating distractions. SOURCE: CO:119 SOURCE: QS LAP 24—Simon Says

46. B

Cookies. Cookies are text files that are put on a web-site visitor's hard drive and then later retrieved during subsequent visits to the site in order to track shopping and buying behavior. As a result, Internet users often feel that their right to privacy is compromised. Portals are sites that are popular starting points for surfing the Web. Scan portal is not a term that is widely used to describe activi ties and concepts related to the Internet. A browser is the software that is needed for surfing the Internet. Banner ads are promotional messages appearing on the WWW, usually at the top of the web sites. SOURCE: IM:025 SOURCE: Churchill, G. (2001). Basic marketing research (4th ed.) [p. 55]. Mason, OH: South-Western.

47. A

Build strong, loyal customer relationships. When a business understands what its customers like and dislike about its goods and services, it can incorporate activities to maintain, improve, or expand its products. When customers see that the business is showing interest in meeting their needs and wants, they are more likely to continue the relationship with the business. A business's tax deductions are not generally based on its ability to track its customers' buying behavior. Operational expenses refer to all of the expenses (costs) of running the business. A database can facilitate efficient use of a business's resources, but does not necessarily reduce operating expenses, nor does it necessarily decrease the need for personnel to analyze marketing activities. SOURCE: IM:183 SOURCE: Semenik, R.J. (2002). Promotion and integrated marketing communications (p. 355). Mason,


Watching what consumers do. Observation is a marketing-research method that gathers data by watching consumers. This can be carried out by using cameras, by assigning people to watch consumers' actions, or by using scanners that record what consumers buy. Test marketing new products is part of the experiment method of collecting data. Calling consumers on the telephone and surveying consumers by mail are part of the survey method of collecting data. SOURCE: IM:010 SOURCE: Khazanchi, D. (n.d.). Data collection methods: Observation studies. Retrieved September 4,

2009, from http://www.isqa.unomaha.edu/dkhazanchi/teaching/isqa8060/slides/274,4,Observation


Primary market research. Concept testing involves exploring the concept, or idea, for a product in order to obtain feedback. Concept testing is one way to conduct primary market research, which results in obtaining new information specifically for the project at hand. The benefit of conducting primary market research is that it provides information that is relevant to the concept being tested. Other ways to conduct primary market research include analyzing focus groups, evaluating readership, and pretesting. SOURCE: IM:281 SOURCE: Lane, W.R., King, K.W., & Russell, J.T. (2005). Kleppner's advertising procedure (16th ed.)

[pp. 468-469]. Upper Saddle River, NJ: Pearson/Prentice Hall. 50. A

Objectives. There is a strong relationship between the research purpose and the research objectives which are the goals of the research. Businesses create research objectives to help answer the research problem. For example, if the problem is service, one objective might be to determine customer satisfaction with delivery. Strategies are plans of action, or activities, for achieving goals and objectives. A procedure is the step-by-step process personnel follow in performing a specific task. SOURCE: IM:284 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 612). New


To revise its marketing strategy. Businesses monitor lost-business reports because they usually contain an explanation of why customers no longer buy from the business. The reports might indicate that customers are dissatisfied with the product, dissatisfied with the business's credit policies, or are getting better prices and more service from competitors. A business might use this information to make changes to its marketing strategy in an attempt to regain customers or to prevent other customers from taking their business elsewhere. The more information a business obtains from lost-business reports, the better able it is to make useful and effective marketing decisions. Businesses do not use the information in lost-business reports to change their operating goals, identify their target markets, or update their promotional techniques. SOURCE: IM:184 SOURCE: Kotler, P. (2000). Marketing management (10th ed.) [pp. 47, 633-634]. Upper Saddle River,

NJ: Prentice Hall. 52. D

Each answer has a specific numeric value. Businesses often develop surveys to obtain marketing information. To process and analyze that information, businesses often develop a code for the answers to survey questions. Coding is the process of assigning a numeric value to the various responses on a marketing questionnaire or survey. For example, there are five possible answers to a question, and the first answer has a numeric value of one. The second answer has a numeric value of two, the third answer has a numeric value of three, and so on. By using a code, businesses can quickly process the results to determine which response is selected the most or the least. Coding does not involve numbering questions in chronological order, or tabulating results according to date received. Although each survey may contain a unique identification number, that is not an example of coding. SOURCE: IM:062 SOURCE: Hair, J.F., Jr., Bush, R.P., & Ortinau, D.J. (2000). Marketing research: A practical approach

for the new millennium (pp. 482-491). Boston: Irwin/McGraw-Hill. 53. C

Concise and objective. A questionnaire is a set of written questions designed to gather information. So that a business can obtain the most reliable information possible, questionnaire developers should make sure that the questionnaire is clear, concise, and objective, or free of bias. If the questionnaire is designed in a way that it is ambiguous (vague), complex, or adaptable, the business risks not obtaining reliable data. SOURCE: IM:293 SOURCE: Shao, A. (2002). Marketing research: An aid to decision making (2nd ed.) [p. 275]. Mason,

OH: South-Western.


Marketing concept. The marketing concept is based on satisfying the needs and wants of customers. By reordering a discontinued product, businesses are satisfying their customers' requests. The production process is the activity of producing goods and services. The promotional mix is the combination of communication channels a business uses. The promotional-mix concept does not result from providing previously discontinued products. Distribution involves moving, storing, locating, and/or transferring ownership of goods and services. SOURCE: MK:001 SOURCE: BA LAP 11—Have It Your Way! (Marketing)

55. A

Plan of action. Businesses determine a plan of action for achieving their goals and objectives. This plan of action in marketing is known as a marketing strategy. In this example, the goal is to increase profitability, and the plan for achieving that goal is to open a new location. Marketing mix is the combination of the four elements of marketing. Although risk is involved with every plan of action, the plan of action is not a type of risk. Financial planning involves developing budgets, which includes predicting the company's sales and expenses for a specific period. SOURCE: MP:001 SOURCE: IM LAP 7—Pick the Mix (Marketing Strategies)

56. B

The population of a town increases when a new hospital opens in the community. External changes occur outside the business, and the business has no control over these changes. Examples of external changes that may affect sales forecasts are population changes, economic changes, competitive changes, and market changes. Internal changes, on the other hand, are circumstances that occur within a business over which the business has some degree of control. Such factors would include changes in personnel, promotion, and pricing. SOURCE: MP:013 SOURCE: Fastlinksolutions. (n.d.). Sales forcasting: Factors that influence sales. Retrieved April 17,

2009, from http://www.fastlinksolutions.co.uk/calculat.htm#factors 57. A

Identity. Managing information regarding copyrights and trademarks helps a company to preserve its identity. If a competitor tries to infringe upon this protected material, the company will be ready to stake its claim quickly. Copyrights and trademarks do not necessarily relate to inventory, correspondence, or customers. SOURCE: NF:110 SOURCE: NF LAP 3—In the Know (Nature of Information Management)

58. C

Worldwide. The Internet is a worldwide network of computers that enables users to access information and communicate with others. Its scope is worldwide rather than regional because it is available to anyone who has access to a computer that has connectivity. Certain elements of the Internet are secure; however, that does not affect the scope. The Internet is not proprietary. SOURCE: NF:086 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 208). New


Transition. The transition tool provides a variety of ways for slides to move smoothly from one to the next. The effects tool is used to determine how the text or graphics will appear within the slide. Animation is the overall term for creating movement in the presentation. Formatting is the tool for creating the overall look of the presentation. SOURCE: NF:008 SOURCE: FYI Center. (n.d.). What are slide transition effects? Retrieved September 24, 2009, from

http://windows.fyicenter.com/888_Tools_PowerPoint_What_Are_Slide_Transition_Effects.html


Spreadsheet. Businesses use spreadsheet software to perform mathematical calculations quickly and accurately. One of the advantages of using spreadsheet software is that it is possible to do "what if" calculations. For example, a business might enter different rates to determine the effect that those rates would have on profit. The business can experiment with different rates before deciding which rate will be most appealing to customers and still generate the desired profit. Database software is used to arrange and sort information. Desktop publishing and presentation software are used for visual presentations. SOURCE: NF:010 SOURCE: Eggland, S.A., Dlabay, L.R., Burrow, J.L., & Ristau, R.A. (2000). Intro to business (4th ed.)

[pp. 214-216]. Cincinnati: South-Western Educational. 61. A

Regulations. When a law affects the records a business keeps, a regulatory factor is influencing the selection of records. Business size may also affect the selection of records, but it is not represented in this example. Leaders and the industry in which the business is involved may or may not affect the selection of records. Leaders and the industry can influence the laws that are introduced, however. SOURCE: NF:001 SOURCE: NF LAP 1—Record It (Business Records)

62. D

Invoices. An invoice is a formal, printed record of a sale that includes all necessary information as to the buyer, the seller, items purchased, amounts, prices, delivery date, and credit or discount terms. Invoices can help a business track customer purchasing habits so it can plan future business activities. Tax returns are formal documents that are completed and returned to the government. Payroll reports contain data about employees' salaries and payment schedules. Expense reports contain information about the money sales personnel spend on behalf of the company to obtain or service its customers. SOURCE: NF:002 SOURCE: Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 120-121]. Mason, OH: South-Western.

63. A

Demographic. Demographic trends refer to the physical and social characteristics of a population. Where people live and their ethnic backgrounds are demographic characteristics. For example, there is a growing trend towards urbanization, which means that more and more people are living in cities rather than in rural areas. Also, the population of many areas is becoming more multicultural, or made up of many different ethnic groups. Businesses consider demographic trends because they realize that changes in the population have an effect on how they market their goods and services to customers. Although where customers live may affect the environment, it's not an environmental trend. Likewise, where customers live can affect their access to technology; however, it is not a technical trend. Cultural trends would involve long-term changes to people's values and beliefs. They do not relate to the ages of people. SOURCE: NF:013 SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [p. 67]. Mason, OH: South-Western. 64. D

Computer-aided design. Computer-aided design is very useful in operations. Designing and testing products in the virtual world before trying them out in the real world can save companies a lot of time and money. Using computer software, a company can design, test, and redesign a product many times over until it's ready for production—all without wasting unnecessary resources. While wireless Internet, e-mail, and smart phones might also be useful in operations, computer-aided design stands out as the most useful and specific technology to enhance this business function. SOURCE: OP:189 SOURCE: OP LAP 3—Smooth Operations (Nature of Operations)


Improper lifting. Many people hurt their backs because they have not learned proper lifting techniques. They lift a load that is too heavy, stand too far from the load, or use their back and arms to do the lifting. Poor posture and sitting in one position may cause some problems, but are not common causes of back injuries. Hard physical labor does not necessarily cause back injuries. SOURCE: OP:007 SOURCE: Demby, G. (2005, May 24). Provide basic lifting instructions to prevent back injuries.

Retrieved September 4, 2009, from http://www.safetyxchange.org/health-safety/provide-basic-lifting-instructions-to-prevent -back-injuries

66. D

Who is doing what. Project-planning tools show you what has to be done and when, who is responsible for doing it, and how the work will be monitored. Project-planning tools do not show how pleased the stakeholders are, why you want to complete the project, or when you will do a similar project. SOURCE: OP:001 SOURCE: QS LAP 28—From Here to Done

67. C

Lowers costs. An important benefit of effective purchasing is that it helps businesses to keep their costs down. A business's purchasing department tries to lower costs by buying quality goods at the lowest possible price, by buying only the quantity of goods that is needed, and by making sure the goods are delivered when needed for use or for resale. Effective purchasing does not create jobs, increase assets, or reduce sales. SOURCE: OP:015 SOURCE: OP LAP 2—Buy Right (Nature of Purchasing)

68. D

Turns resources into products. Production is the process or activity of producing goods or services wanted by consumers. Production takes the business's resources (inputs) and turns them into salable products (outputs). If the products produced make a profit for the business, this could change business failure to success, but that is not the reason production is called a conversion process. Product utility is usefulness or the capability of satisfying consumers' needs, which is a desirable result of the production process. SOURCE: OP:017 SOURCE: Tutor2u.com (n.d.). Introduction to production and operations management. Retrieved

September 4, 2009, from http://tutor2u.net/business/production/pom_introduction.htm 69. D

Arriving at work on time. Employees should arrive on time because the business pays them to work a specific amount of time. Rotating stock helps to keep merchandise fresh and appealing to customers, but daily rotation would increase expenses because of the time it would take. Employees should also help to control expenses by handling products carefully to prevent damage and by being on the lookout for thefts by customers or other employees. SOURCE: OP:025 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [p. 96]. Mason,

OH: South-Western. 70. B

To eliminate health hazards. Many products, particularly drug and food products, have expiration dates printed on their packages. These dates indicate the times after which the products should not be sold or used. It is important for businesses to routinely discard products whose expiration dates have expired to avoid using or selling items that are potential health hazards. If these products are spoiled or otherwise contaminated, the people who buy and use them may experience health problems. Businesses do not discard expired products to prevent cross-contamination, obtain replacement items, or follow federal guidelines. SOURCE: OP:032 SOURCE: Mill, R.C. (2001). Restaurant management: Customers, operations, and employees (2nd ed.)

[pp. 217, 219]. Upper Saddle River, NJ: Prentice Hall.

Test 1021 MARKETING CLUSTER EXAM – KEY 23 71. A

Dandruff free. Dandruff is a scaly condition of the scalp, and some of the scales usually fall on an individual's shoulders. Preventing or controlling dandruff is important because this scattering of white scales detracts from an individual's personal appearance. Whether the hair is curled, tinted, or cut short would be a matter of personal preference. SOURCE: PD:002 SOURCE: PD LAP 13—Brand ME! (Personal Appearance)

72. C

Brainstorming. Brainstorming is often used in a group setting to create as many ideas as possible in a limited time. A checklist is a prepared list that can be used in a variety of situations. Attribute listing is a listing of things that already exist, then considering the items as a source of change or improvement. Problem identification pinpoints a situation or circumstance that presents a problem. SOURCE: PD:012 SOURCE: PD LAP 2—Creativity

73. C

Self-management. The ability to control one's own activities, behaviors, and attitudes in the workplace is often referred to as self-management. Employees who make a conscious effort to get to work on time each day are engaging in positive self-management skills. Other activities that employees can control in the workplace might include their ability to perform and produce quality work in a given time, willingness to learn new activities, level of flexibility, and degree of workplace socializing. Self-concept refers to how one views him/herself. Inner-qualitative and personal-orientation are not terms frequently used to describe self-control issues as they relate to the workplace. SOURCE: PD:020 SOURCE: Ludden, L. (2003). Job savvy: How to be a success at work (3rd ed.) [pp. 97-98].

Indianapolis, IN: JIST Publishing, Inc. 74. D

Neighborhood businesses. Local companies where teenagers and their families do business often are good sources for first jobs. Local businesses, such as grocery stores and independent retailers, often hire teenagers on a part-time basis to work after school hours, on weekends, and during summer vacations. These businesses frequently are willing to hire the teenagers who are members of their community. Most employment agencies do not work with people looking for entry-level jobs. Teenagers usually don't find their first jobs with national corporations unless those corporations have local offices. Community training programs are intended to help train teenagers for jobs. SOURCE: PD:026 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 33-35].

Mason, OH: South-Western. 75. D

From one to two pages. The preferred length of a résumé is one page or two pages if absolutely necessary. The most effective résumés stress the high points of the applicant's qualifications in a brief format. People who are responsible for reading the résumés do not want to spend a great amount of time trying to find out if the applicant is qualified for the position. Therefore, résumés should never be three or five pages in length. Applicants should be able to condense their experiences into a brief format and not write résumés that are as long as necessary. SOURCE: PD:031 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 49-51].



To be able to promote from within. Many businesses prefer to promote from within whenever possible and help current employees move up the career ladder. To do this, businesses often provide opportunities for their employees to continue their education or receive additional training. As a result, they have a pool of qualified employees to choose from when higher-level jobs become available. This benefits the employees because they can advance within the business. Businesses often provide financial assistance, such as tuition reimbursement, to help employees continue their education. However, that is not the reason for providing the additional training. Businesses do not provide educational opportunities to identify problems in the company or to support the local community college. SOURCE: PD:033 SOURCE: Bailey, L.J. (2003). Working: Career success for the 21st century (3rd ed.) [pp. 480-481].


Promotion. Promotion involves getting customers to want to buy a good or service. Pricing involves determining the price at which sellers are willing to sell and buyers are willing to buy. Place involves determining where to sell products and which transportation channel to use. Product planning decisions involve the use of market research in determining product mix. SOURCE: PI:001 SOURCE: PI LAP 2—The Price is Right (Nature of Pricing)

78. A

Easier to change prices. Bar codes that include price information can be scanned into a register terminal where the price is read and recorded. When a business needs to change a price, such as to offer a sale price, an employee can enter the change into the scanning system computer, and the change is made for every item. This is a faster and more economical method than manually changing prices on every item. Customers will need a scanning device to read the price. There are seldom changes in the number of security personnel or employees based on the use of bar-code pricing techniques. SOURCE: PI:016 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2001). Marketing (12th ed.) [p. 383]. New York:

Irwin/McGraw-Hill. 79. B

Concept testing. During concept testing, a product concept, or idea, is explored with potential customers to determine what response they would give to a proposed product idea. Idea generation is the step of new-product development in which ideas for new products are developed. Product screening involves considering each idea for a new product and discarding ideas that seem unworkable. A feasibility analysis is the step in the new-product development process that involves examining such factors as demand, costs, competition, capital investment required, and potential profit of a product to determine how it will fit into the company's product mix. SOURCE: PM:001 SOURCE: PM LAP 17—Rapping Up Products (Nature of Product/Service Management)


Product/service management. Product/Service management is a marketing function that involves understanding the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities. An important part of product/service management involves maintaining and improving the product or service because customers expect a quality product or service that keeps up with advances in technology. Satellite communications systems make it possible for businesses to track shipments from the time they are ordered until they are delivered to customers, thereby improving the product or service. Marketing-information management is a marketing function that involves understanding the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions. Transportation and receiving are distribution activities. Selling is a marketing function that involves determining client needs and wants, and responding through planned, personalized communication that influences purchase decisions and enhances future business opportunities. Promotion is a marketing function that involves communicating information about goods, services, images, and/or ideas to achieve a desired outcome. SOURCE: PM:039 SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [pp. 124-125]. Mason, OH: South-Western. 81. B

It enables consumers to buy without having to inspect each product. The use of grades and standards speeds up the buying and selling process because consumers can buy without having to inspect each product. It also furnishes information that salespeople can use to justify price, to sell benefits, and to meet customer needs. The use of grades and standards enables salespeople to recommend products that best meet customer needs. Although grades and standards provide product information, they do not address unsafe products. Unsafe products should not be offered since they are a business liability. Product prices will vary based on the product's grade. Therefore, the prices will not necessarily be high. SOURCE: PM:019 SOURCE: British Standards Institute. (2009). What are the benefits of standards. Retrieved September

16, 2009, from http://www.bsi-global.com/en/Standards-and-Publications/About-standards/What-are-the-benefits-of-standards/

82. B

Implied. An implied warranty is simply understood by both the marketer and the customer that the product will perform as expected. It is neither written nor spoken. An express warranty is one that is written or expressed verbally. A full warranty is one which covers the entire product. A limited warranty is one that covers only specific parts or certain repairs. SOURCE: PM:020 SOURCE: The Free Dictionary. (2009). Implied warranty. Retrieved September 4, 2009, from

http://legal-dictionary.thefreedictionary.com/Implied+Warranty 83. D

Magnuson-Moss Warranty Act. Since the Finetunes had their digital camera for a short time when the fire occurred, the manufacturer is required to make it as easy as possible for customers to use their warranty. The Magnuson-Moss Warranty Act regulates warranties offered by businesses, requiring them to provide more and better warranties. The Consumer Product Safety Act formed the Consumer Product Safety Commission which was given jurisdiction over the safety of consumer products. The Fair Packaging and Labeling Act is a federal law requiring specific information about products and producers to be provided on a product's package or label. The Federal Food, Drug, and Cosmetic Act bans the production, transportation, and sale of misbranded or adulterated foods, drugs, cosmetics, and medical devices. SOURCE: PM:017 SOURCE: The Federal Trade Commission. (2008, October 28). A businessperson's guide to federal

warranty law. Retrieved September 4, 2009, from http://www.ftc.gov/bcp/edu/pubs/business/adv/bus01.shtm#Magnuson-Moss


Mix. Product mix is the particular assortment of products that a business offers in order to meet its market's needs and its company's goals. Product line is a group of related products. Product differentiation is developing and promoting differences between one firm's product and similar products. Consistency is a product mix dimension that refers to how closely a firm's products are related in terms of their end use, methods of distribution and production, target market(s), and/or price range. SOURCE: PM:003 SOURCE: PM LAP 3—Mix & Match (Nature of Product Mix)

85. C

Bundling. Mixed product bundling is the practice of packaging different products together. Businesses price the packages so that customers pay less for bundled items than they do if they purchase each item separately. Blending, integration, and consolidation are not terms commonly used to describe the practice of packaging products together. SOURCE: PM:041 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 604].

Woodland Hills, CA: Glencoe/McGraw-Hill. 86. B

Determine if the brand name would be culturally taboo where the product will be marketed. If a brand is to be marketed in different cultures, it is important to make sure that the brand name would be acceptable in these areas of the world. A brand name that would be culturally taboo should be dropped from the list of brand name possibilities. It is not necessary to create URLs for the product in each of the countries where the product will be marketed, develop a different trade character for each of the countries, or choose a different brand name for each country. It would be better to use the same URL, trade character(s), and brand name everywhere that the product will be marketed. SOURCE: PM:021 SOURCE: PM LAP 6—It's a Brand, Brand, Brand World (Product Branding)

87. A

False, promotion can be personal or nonpersonal communication about ideas, images, goods, or services. Promotion includes both paid advertising and publicity that is provided free of charge. It can be personal promotion such as personal selling or nonpersonal such as sales promotion. SOURCE: PR:001 SOURCE: PR LAP 2—Razzle Dazzle (Nature of Promotion)

88. A

Sales promotion. Sales promotion is promotional activities other than advertising, personal selling, and publicity that are intended to achieve a desired outcome. Sales promotions augment advertising in an effort to stimulate sales. Advertising is any paid, nonpersonal presentation of ideas, images, goods, or services. Publicity is any nonpersonal presentation of ideas, goods, or services that is not paid for by the company or individual that benefits from it. Personal selling is planned, personalized communication intended to influence purchase decisions and enhance future business opportunities. SOURCE: PR:003 SOURCE: PR LAP 1—Promotional Mix

89. B

Internet. The Internet is a worldwide network of computers that enables users to access information and communicate with others. The interactive feature of the Internet means that businesses can promote their products to large audiences throughout the world and often receive an immediate response. In many situations, businesses develop promotional messages that ask users to provide feedback or give them the opportunity to ask questions and receive an immediate answer. Customers often interact with a business's promotional message by purchasing goods and services online. Specialty and transit are not examples of interactive mass media. Electronic spectaculars do allow businesses to promote their products to large audiences; however, they are not currently interactive. SOURCE: PR:100 SOURCE: Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an

e-commerce world (7th ed.) [pp. 501-502]. Mason, OH: South-Western.


Industry. Governments often restrict businesses in terms of their promotional activities. Some countries have independent groups (e.g., Public Citizen) that work to influence government regulation on the behalf of the consumer. In addition, many industries (e.g., media, financial services, utilities) have self-regulatory procedures in place to protect the integrity of their field. Competitive is a general term used to describe the level of rivalry between two or more businesses to attract scarce customer dollars. Nonprofit is a legal business structure. Liability is defined as debt. SOURCE: PR:101 SOURCE: Wells, W., Burnett, J., & Moriarty, S. (2003). Advertising principles and practice (6th ed.)

[pp. 54-56]. Upper Saddle River, NJ: Prentice Hall. 91. B

Direct mail. Direct mail is a promotional medium that comes to consumers' homes in the form of letters, catalogs, postcards, and folders. Broadcast media are promotional media such as radio and television, which use radio waves to reach consumers. Out-of-home media are promotional media to which we are exposed outside our homes such as outdoor and transit media. Transit media are out-of-home media found in various modes and locations of mass transportation. SOURCE: PR:007 SOURCE: PR LAP 3—Ad-quipping Your Business (Types of Promotional Media)

92. A

Marketers often select their direct advertising methods based on customers' preferences. Customers often respond to promotional messages for certain products when those messages are transmitted via direct advertising (e.g., direct mail) rather than other media. For example, research indicates that customers generally prefer to receive information regarding grocery, health, and beauty products through direct mail rather than through other venues such as telephone or in retail establishments. Although direct advertising often rewards businesses with higher response rates than other forms of advertising, it cannot be assumed that most businesses receive high response rates. Computer messages (e.g., spam) are often deleted by users before the message is opened, which lowers response rates. Although some governments have introduced legislation to restrict telemarketing programs, the medium is not necessarily becoming obsolete. Infomercial and home shopping television shows can be very effective promotional tools that often experience immediate response from customers. SOURCE: PR:089 SOURCE: Semenik, R.J. (2002). Promotion and integrated marketing communications (pp. 359-361).


Slogan. A slogan is a phrase that is easy to remember. It often becomes identified with the product or the advertiser, who may be the producer and/or seller of the product. Copy is the text of an ad. Headline is the text set in large type and usually positioned at the top of the ad. Illustration is a photograph, drawing, painting, or graphic. SOURCE: PR:014 SOURCE: Michael J. Motto Advertising. (2002). An advertising glossary. Retrieved September 4, 2009,

from http://www.motto.com/glossary.html 94. A

Set objectives. Objectives are goals to be reached. One of the first steps in developing a promotional plan involves deciding what the plan is trying to accomplish and establishing objectives to achieve that goal. In most cases, the primary objective of a promotional plan is to increase sales and profit. All other aspects of promotional planning are contingent on setting objectives. Preparing a budget, creating a schedule, and designing a message are steps in developing a promotional plan that take place after the objectives are set. SOURCE: PR:073 SOURCE: Burrow, J.L. (2002). Marketing (p. 419). Mason, OH: South-Western.


Visual merchandising. When holding special promotions, retail businesses should coordinate the various promotional activities, such as visual merchandising, signage, and advertising. The purpose of the promotion is to attract customers. Coordinating all the promotional activities usually creates a stronger focus and is more likely to attract customers. For example, the displays in the business should promote the same theme as the advertising and the special events. Product planning, information gathering, and sales training are not promotional activities. SOURCE: PR:076 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.)

[pp. 302-304]. Woodland Hills, CA: Glencoe/McGraw-Hill. 96. D

Selling. Selling is determining customer needs and wants and responding through planned, personalized communication that influences purchase decisions and enhances future business opportunities. Carlos is, therefore, engaged in selling. Advertising is any paid form of nonpersonal presentation of ideas, goods, or services. Distribution involves moving, storing, locating, and/or transferring ownership of goods or services. Financing is a marketing function that involves understanding the financial concepts used in making business decisions. SOURCE: SE:017 SOURCE: SE LAP 117—Sell Away (The Nature and Scope of Selling)

97. B

Reputation. This example shows that the business is building a loyal following and demonstrates a solid relationship by showing that it stands behind its products and cares about the customer. Customers often recommend businesses that provide good service, which also tends to build a positive reputation. Providing good customer service is essential for an organization to make a profit and stay in business. Spirit refers to the "can-do" attitude of employees in an organization. A critical aspect of customer service is putting customer convenience first. SOURCE: SE:076 SOURCE: Ingram, T.N., LaForge, R.W., Avila, R.A., Schwepker, C.H., & Williams, M.R. (2001).

Professional selling: A trust-based approach (pp. 258-259). Mason, OH: South-Western. 98. B

Fail to keep promises. Loyalty and goodwill can be wiped out quickly by salespeople who are discourteous, indifferent, and poorly informed. If salespeople use high-pressure sales tactics or fail to fulfill promises, businesses can expect to lose client loyalty. Avoiding competition may be detrimental to sales efforts. Implementing business policies, giving customers full attention, and understanding the products they sell will help salespeople to build clientele. SOURCE: SE:828 SOURCE: SE LAP 115—Keep Them Loyal (Building Clientele)

99. C

Technical. Experienced salespeople often are well-informed about the technical aspects of the products they sell. New employees should take advantage of this knowledge and ask the experienced personnel to explain product information that may be technical or confusing to them or to customers. New salespeople usually are able to interpret routine, favorable, and ordinary product information on their own. SOURCE: SE:062 SOURCE: Churchill, G.A., Ford, N.M., Walker, O.C., Johnston, M.W., & Tanner, J.F. (2000). Sales force

management (6th ed.) [pp. 391, 397, 401-402]. Boston: Irwin/McGraw-Hill.


The nature of the customer. Because of the limited contact with customers, retailers tend to spend little time prospecting, determining customer needs, and building relationships. This is generally because in many retail situations, customers already know what they want when they walk into the store. A manufacturing company generally sells to other businesses. The volume of customers is generally less, and the representatives need to spend more time qualifying customers and determining their needs. Since retail businesses and manufacturing companies vary within their own industries in terms of sales volume, communication levels, and business structures (e.g., corporation, hybrid), these options are not usually considered primary differences in regard to selling approaches. SOURCE: SE:048 SOURCE: Murphy, D. (2007, April 6). Marketing for B2B vs. B2C—Similar but different. Retrieved

September 4, 2009, from http://vista-consulting.com/marketing-b2b-vs-b2c/

Marketing Cluster Exam - Krizan Classroom...

Documents

Transcript of Marketing Cluster Exam - Krizan Classroom...