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M Business OC Ferrell 6e
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M Business OC Ferrell 6e
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,M: Business, 6e (Ferrell)Chapter 1 The Dynamics of Business and Economics
1) A product can be an idea.
Answer: TRUE
Explanation: This is true, a product can be tangible goods or intangible services. It can also be
an idea.
Difficulty: 1 Easy
Topic: Definition of Business
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) Habitat for Humanity is a nonprofit organization because it does not have the fundamental
purpose of earning a profit.
Answer: TRUE
Explanation: Nonprofit organizations—such as National Public Radio (NPR), Habitat for
Humanity, and other charities and social causes—do not have the fundamental purpose of
earning profits.
Difficulty: 1 Easy
Topic: Definition of Business
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3) A shareholder is NOT a stakeholder.
Answer: FALSE
Explanation: Customers, employees, investors (including shareholders), government regulators,
and the community are all stakeholders.
Difficulty: 1 Easy
Topic: Definition of Business
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
Copyright © 2019 McGraw-Hill
,4) Businesses have the right to keep and use their profits as they choose, without limitations.
Answer: FALSE
Explanation: Within legal limitations, businesses have the right to keep and use their profits as
they choose.
Difficulty: 1 Easy
Topic: Definition of Business
Learning Objective: 01-01 Define basic concepts such as business, product, and profit.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) Operations management applies to the development of both good and services.
Answer: TRUE
Explanation: Although most people associate operations with the development of goods,
operations management applies just as strongly to services.
Difficulty: 2 Medium
Topic: Operations Management
Learning Objective: 01-02 Identify the main participants and activities of business and explain
why studying business is important.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) The functions of management are decision making, leadership, and the implementation of
work tasks.
Answer: FALSE
Explanation: Management involves the functions of planning, organizing, leading, and
controlling.
Difficulty: 1 Easy
Topic: Functions of Management
Learning Objective: 01-02 Identify the main participants and activities of business and explain
why studying business is important.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2
Copyright © 2019 McGraw-Hill
, 7) The four Ps of marketing are product, purchasing, price, and promotion.
Answer: FALSE
Explanation: Marketing focuses on the four P's—product, price, place (or distribution), and
promotion—also known as the marketing mix.
Difficulty: 1 Easy
Topic: The Marketing Mix
Learning Objective: 01-02 Identify the main participants and activities of business and explain
why studying business is important.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
8) Finance refers to all activities concerned with obtaining money and using it effectively.
Answer: TRUE
Explanation: Finance refers to all activities concerned with obtaining money and using it
effectively. Financial resources must be managed effectively if the business aims to succeed.
Difficulty: 1 Easy
Topic: Financial Management
Learning Objective: 01-02 Identify the main participants and activities of business and explain
why studying business is important.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
9) Owners have little responsibility to provide funds for the operation of the business.
Answer: FALSE
Explanation: The primary responsibility of the owners is to provide financial resources for the
operation of the business.
Difficulty: 1 Easy
Topic: Definition of Business
Learning Objective: 01-02 Identify the main participants and activities of business and explain
why studying business is important.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3
Copyright © 2019 McGraw-Hill
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