Business Management And Law Semester Exam Practice Test

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Business Management And Law Semester Exam Practice Test - Quiz

Sample/practice questions to prepare for the BML first semester exam.


Questions and Answers
  • 1. 

    The careful study of management decisions and procedures in order to improve the operation of businesses and organizations is called:

    • A.

      Management science

    • B.

      Decision science

    • C.

      Operational science

    • D.

      Business science

    Correct Answer
    A. Management science
    Explanation
    Management science is the correct answer because it involves the thorough examination and analysis of management decisions and procedures with the aim of enhancing the efficiency and effectiveness of businesses and organizations. It utilizes various quantitative and analytical techniques to solve complex problems and make informed decisions. By studying management science, professionals can identify areas for improvement, optimize resources, and increase productivity.

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  • 2. 

    Many small business owners serve as managers in their own business.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Many small business owners often take on the role of managers in their own business. As the owners, they are responsible for overseeing the day-to-day operations, making important decisions, managing employees, and ensuring the overall success of the business. Being both the owner and manager allows them to have direct control and involvement in all aspects of their business, which can be crucial for its growth and profitability.

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  • 3. 

    Staffing and implementing are normally performed by which level of management?

    • A.

      Supervisors

    • B.

      Mid-management

    • C.

      Executives

    • D.

      Non-managers

    Correct Answer
    A. Supervisors
    Explanation
    Supervisors are responsible for staffing and implementing tasks within an organization. They are typically in charge of overseeing and managing a group of employees, ensuring that they are properly staffed and that tasks are being implemented effectively. Supervisors are at a lower level of management compared to mid-management and executives, who have broader responsibilities and decision-making authority. Non-managers, on the other hand, do not have the authority or responsibility to perform staffing and implementation tasks at a managerial level.

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  • 4. 

    Managers using which leadership style are the most flexible in their approach?

    • A.

      Situational

    • B.

      Open

    • C.

      Autocratic

    • D.

      Democratic

    Correct Answer
    A. Situational
    Explanation
    Managers using the situational leadership style are the most flexible in their approach. This style involves adapting their leadership style based on the specific situation and the needs of their team members. It allows managers to assess the competence and commitment level of their employees and adjust their leadership style accordingly. By being flexible, situational leaders can provide the appropriate level of guidance and support to their team members, which can result in improved performance and productivity.

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  • 5. 

    Which of these is NOT a common leadership characteristic?

    • A.

      Inflexibility

    • B.

      Objectivity

    • C.

      Dependability

    • D.

      Stability

    Correct Answer
    A. Inflexibility
    Explanation
    Inflexibility is not a common leadership characteristic because effective leaders need to be adaptable and open to change. They should be able to adjust their plans and strategies based on the needs of the situation and the team. Being inflexible can hinder a leader's ability to make informed decisions and effectively lead their team towards goals. Therefore, inflexibility is not a desirable trait in a leader.

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  • 6. 

    What is the first step in the decision-making process?

    • A.

      Define the problem

    • B.

      Identify possible solutions

    • C.

      Choose a solution

    • D.

      Reflect on your choice

    Correct Answer
    A. Define the problem
    Explanation
    The first step in the decision-making process is to define the problem. This involves clearly understanding and articulating the issue or challenge that needs to be addressed. Without a clear definition of the problem, it becomes difficult to identify possible solutions and make an informed choice. Defining the problem helps to set the direction for the decision-making process and ensures that the subsequent steps are focused and effective.

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  • 7. 

    Which of these is NOT a strategy for dealing with conflict?

    • A.

      Multicultural

    • B.

      Win/lose

    • C.

      Avoidance

    • D.

      Compromise

    Correct Answer
    A. Multicultural
    Explanation
    Multicultural is not a strategy for dealing with conflict because it refers to the coexistence and acceptance of different cultures, rather than a specific approach to resolving conflicts. Strategies for dealing with conflict typically involve techniques such as win/lose, avoidance, or compromise, which are focused on resolving or managing conflicts between individuals or groups. Multiculturalism, on the other hand, promotes diversity and inclusivity, but does not provide a specific method for addressing conflicts.

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  • 8. 

    Which law requires that pre-employment testing must be related to job requirements?

    • A.

      Civil Rights Act of 1964

    • B.

      Employment Non-Discrimination Act

    • C.

      Fair Hiring Act of 1983

    • D.

      Equal Pay Act of 1963

    Correct Answer
    A. Civil Rights Act of 1964
    Explanation
    The Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin. This law requires that pre-employment testing must be related to job requirements in order to ensure that employers do not use discriminatory practices in their hiring process. By linking testing to job requirements, employers can ensure that they are making fair and unbiased decisions when selecting candidates for employment.

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  • 9. 

    Employers are NOT legally required to do which of these?

    • A.

      Ensure employees have comfortable working conditions.

    • B.

      Ensure employees have safe working conditions.

    • C.

      Compensate employees at least the legally set minimum.

    • D.

      Give employees time off to attend to certain family medical situations.

    Correct Answer
    A. Ensure employees have comfortable working conditions.
    Explanation
    Employers are legally required to ensure employees have safe working conditions, compensate employees at least the legally set minimum, and give employees time off to attend to certain family medical situations. However, there is no specific legal requirement for employers to ensure employees have comfortable working conditions. While it is generally considered good practice to provide a comfortable work environment, it is not a legal obligation.

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  • 10. 

    Entrepreneurs

    • A.

      Come from all age categories and educational backgrounds.

    • B.

      Must have a very low tolerance for ambiguity.

    • C.

      Almost always own their first business while in their teens.

    • D.

      Must have a business degree to be successful.

    Correct Answer
    A. Come from all age categories and educational backgrounds.
    Explanation
    This answer is correct because it states that entrepreneurs can come from any age category and educational background. This means that anyone, regardless of their age or educational qualifications, can become an entrepreneur. It emphasizes the inclusivity and diversity of the entrepreneurial field, highlighting that success in entrepreneurship is not limited to a specific age group or educational background.

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  • 11. 

    Which of these allows an individual entrepreneur the most flexibility in decision-making?

    • A.

      Proprietorship

    • B.

      Partnership

    • C.

      Corporation

    • D.

      Limited liability company

    Correct Answer
    A. Proprietorship
    Explanation
    A proprietorship allows an individual entrepreneur the most flexibility in decision-making because it is a business structure where a single person owns and operates the business. The owner has complete control over all decisions and can make changes or adjustments quickly without having to consult with partners or shareholders. This flexibility allows the entrepreneur to respond rapidly to market changes, adapt strategies, and make decisions based on their own judgment and vision for the business.

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  • 12. 

    Who bears the most risk of loss as well as the chances of benefits in a business?

    • A.

      The owner

    • B.

      Management

    • C.

      Employees

    • D.

      Customers

    Correct Answer
    A. The owner
    Explanation
    The owner bears the most risk of loss as well as the chances of benefits in a business. As the owner, they have invested their own capital and resources into the business, making them responsible for any financial losses that may occur. Additionally, they have the potential to reap the rewards and profits generated by the business. Management, employees, and customers may also have some level of risk and benefit, but the owner ultimately holds the highest level of responsibility and potential gain or loss.

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  • 13. 

    Which of these is NOT a risk involved in business ownership?

    • A.

      Excess job security

    • B.

      Technological changes

    • C.

      Changing legal or political environment

    • D.

      Changing economic conditions

    Correct Answer
    A. Excess job security
    Explanation
    Excess job security is not a risk involved in business ownership because it implies a guaranteed and stable income, which is typically not the case for business owners. Business ownership often involves financial risks, such as fluctuating revenues and potential business failure, which can lead to job insecurity. Therefore, excess job security is not a risk but rather a benefit for individuals who are not business owners.

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  • 14. 

    To which of these groups do business owners have obligations?

    • A.

      All of these

    • B.

      Customers

    • C.

      Employees

    • D.

      Investors

    • E.

      None of these

    Correct Answer
    A. All of these
    Explanation
    Business owners have obligations to all of these groups: customers, employees, and investors. They have a responsibility to provide quality products or services to customers, ensuring their satisfaction and safety. They also have obligations towards their employees, such as providing a safe working environment, fair wages, and benefits. Additionally, business owners have a duty towards investors to make informed decisions, provide accurate financial information, and ensure a return on investment. Therefore, the correct answer is that business owners have obligations to all of these groups.

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  • 15. 

    What follows prosperity in the normal business cycle?

    • A.

      Recession

    • B.

      Depression

    • C.

      Recovery

    • D.

      Prosperity

    Correct Answer
    A. Recession
    Explanation
    In the normal business cycle, prosperity is followed by a recession. This is because during a period of prosperity, the economy is growing, businesses are thriving, and there is high consumer spending. However, this growth eventually slows down, leading to a decline in economic activity. This decline is known as a recession, which is characterized by a decrease in GDP, rising unemployment rates, and a decrease in consumer spending. Therefore, recession is the logical next step after a period of prosperity in the business cycle.

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  • 16. 

    The point where the supply curve and the demand curve meet is called the

    • A.

      Market price.

    • B.

      Sale price.

    • C.

      Retail price.

    • D.

      Wholesale price.

    Correct Answer
    A. Market price.
    Explanation
    The point where the supply curve and demand curve intersect is known as the market price. This is because it represents the equilibrium point where the quantity of a good or service that producers are willing to supply matches the quantity that consumers are willing to demand at a given price. At this price, the market is in balance, and there is neither excess supply nor excess demand. Therefore, market price is the correct term to describe this intersection point.

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  • 17. 

    What does it mean to say that "the dollar is weak"?

    • A.

      All of these.

    • B.

      People prefer to have other forms of currency.

    • C.

      The dollar has less purchasing power in other countries.

    • D.

      Foreign currency has more purchasing power in the US.

    Correct Answer
    A. All of these.
    Explanation
    When it is said that "the dollar is weak," it means that the dollar has less value compared to other currencies. This can be understood in multiple ways. Firstly, people may prefer to have other forms of currency because they believe it is more stable or has better purchasing power. Secondly, the dollar may have less purchasing power in other countries, meaning that it can buy fewer goods and services compared to other currencies. Lastly, foreign currency may have more purchasing power in the US, making it more valuable when exchanged for dollars. Overall, all of these factors contribute to the notion that "the dollar is weak."

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  • 18. 

    With a website, a business can get customers from

    • A.

      All of these.

    • B.

      The local neighborhood.

    • C.

      Almost anywhere in the world.

    • D.

      Nationwide.

    Correct Answer
    A. All of these.
    Explanation
    A website allows a business to reach customers from all of these options because it has a global reach and can attract customers from anywhere in the world. It can also target customers in the local neighborhood by optimizing for local search and using location-based marketing strategies. Additionally, a website can help a business expand its customer base nationwide by promoting its products or services to a wider audience across the country. Therefore, having a website enables a business to tap into all of these potential customer sources.

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  • 19. 

    Which of these affects a country's exchange rate?

    • A.

      All of these

    • B.

      Balance of payments

    • C.

      Political stability

    • D.

      Economic conditions

    Correct Answer
    A. All of these
    Explanation
    The exchange rate of a country is influenced by various factors, including the balance of payments, political stability, and economic conditions. The balance of payments refers to the difference between the country's exports and imports, which affects the supply and demand for its currency. Political stability is crucial as it influences investor confidence and perception of risk, which can impact the value of the currency. Economic conditions, such as inflation, interest rates, and economic growth, also play a significant role in determining the exchange rate. Therefore, all of these factors affect a country's exchange rate.

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  • 20. 

    Most business transactions take place

    • A.

      Entirely within one country.

    • B.

      Between two countries.

    • C.

      Between three or more countries.

    • D.

      Between large corporations.

    Correct Answer
    A. Entirely within one country.
    Explanation
    The correct answer is "entirely within one country" because most business transactions typically occur within the borders of a single country. This is because businesses primarily operate within their domestic market, serving local customers and engaging in domestic trade. While international transactions do occur, they are generally less common compared to domestic transactions.

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  • 21. 

    A positive balance of trade means that

    • A.

      A country exports more than it imports.

    • B.

      A country imports more than it exports.

    • C.

      A country brings in more money than it sends out.

    • D.

      A country sends out more money than it brings in.

    Correct Answer
    A. A country exports more than it imports.
    Explanation
    A positive balance of trade means that a country exports more than it imports. This indicates that the country is selling more goods and services to other countries than it is buying from them. As a result, the country is earning more revenue from its exports, which contributes to economic growth and can lead to a surplus in its trade balance.

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  • 22. 

    Selling the right to use some intangible property for a fee or royalty is called

    • A.

      Licensing.

    • B.

      A joint venture.

    • C.

      Franchising.

    • D.

      A free-trade agreement.

    Correct Answer
    A. Licensing.
    Explanation
    Licensing refers to the act of selling the right to use intangible property, such as patents, trademarks, or copyrights, in exchange for a fee or royalty. This allows the licensee to use the property without owning it, while the licensor retains ownership. Joint venture refers to a business arrangement between two or more parties, franchising involves granting the right to operate a business using a well-established brand and business model, and a free-trade agreement is a pact between countries to promote trade by reducing barriers.

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  • 23. 

    Which of these is a good source for researching an international market?

    • A.

      All of these

    • B.

      United States Department of State

    • C.

      Companies that specialize in international business research

    • D.

      Businesses that are located in a particular market

    Correct Answer
    A. All of these
    Explanation
    All of the options mentioned in the question are good sources for researching an international market. The United States Department of State provides valuable information on various countries, including economic and business-related data. Companies that specialize in international business research have expertise in analyzing and providing insights on global markets. Additionally, businesses that are located in a particular market can offer firsthand knowledge and insights about the local market conditions, consumer preferences, and competition. Therefore, all of these options are reliable sources for conducting research on an international market.

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  • 24. 

    A complete ban on trade of a certain item or with a certain country is called a(n)

    • A.

      Embargo

    • B.

      Tariff

    • C.

      Quota

    • D.

      Free-trade zone

    Correct Answer
    A. Embargo
    Explanation
    An embargo refers to a complete ban on trade of a certain item or with a certain country. This means that no trade activities, such as imports or exports, can take place involving the restricted item or country. Embargoes are often imposed for political or economic reasons, such as to express disapproval or to protect domestic industries. Unlike tariffs, which are taxes on imported goods, embargoes completely prohibit trade rather than imposing additional costs. Quotas, on the other hand, limit the quantity of goods that can be imported or exported, while free-trade zones promote trade by reducing or eliminating trade barriers within a specific geographic area.

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  • 25. 

    Goods shipped into a country are called

    • A.

      Imports.

    • B.

      Exports.

    • C.

      Domestic trade.

    • D.

      Interstate trade.

    Correct Answer
    A. Imports.
    Explanation
    Imports refer to goods that are shipped into a country from another country. This term is used to describe the process of bringing in products or services from foreign nations. It is the opposite of exports, which refers to goods that are shipped out of a country to be sold or traded in other countries. Domestic trade, on the other hand, refers to the exchange of goods and services within a country's borders, while interstate trade specifically refers to the trade that occurs between different states within a country.

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  • 26. 

    The internet

    • A.

      Allows businesses to sell their products almost anywhere in the world.

    • B.

      Restricts trade to only advanced nations.

    • C.

      Requires individual businesses and customers to invest in large amounts of infrastructure.

    • D.

      Makes international communications more expensive.

    Correct Answer
    A. Allows businesses to sell their products almost anywhere in the world.
    Explanation
    The correct answer is that the internet allows businesses to sell their products almost anywhere in the world. This is because the internet provides a global platform for businesses to showcase and sell their products, reaching a vast customer base beyond their local market. It eliminates geographical barriers and allows businesses to expand their reach internationally without the need for physical presence in different countries. With the internet, businesses can easily set up online stores, market their products, and engage with customers from different parts of the world, thereby increasing their potential for sales and growth.

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  • 27. 

    Which of these has the most impact on location of a manufacturing business?

    • A.

      Ease of access to shipping

    • B.

      Visibility to customers

    • C.

      Easy-to-remember address

    • D.

      Convenience to customers

    Correct Answer
    A. Ease of access to shipping
    Explanation
    The most impactful factor on the location of a manufacturing business is the ease of access to shipping. This is because manufacturing businesses rely heavily on transportation and logistics to move their products to customers. Having easy access to shipping facilities, such as ports, airports, or major highways, allows for efficient and cost-effective transportation of goods. It also enables businesses to reach a wider market and expand their customer base.

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  • 28. 

    Which of these is NOT a function of government in business?

    • A.

      Ensure businesses earn a profit

    • B.

      Prohibit unfair trade practices

    • C.

      Loan money to businesses for startup or expansion

    • D.

      Create and enforce environmental regulations

    Correct Answer
    A. Ensure businesses earn a profit
    Explanation
    The function of government in business is not to ensure businesses earn a profit. While the government may create policies and regulations that support business growth and economic development, it is not their role to guarantee profits for individual businesses. The government's main functions in business include prohibiting unfair trade practices, providing financial support through loans for startup or expansion, and creating and enforcing environmental regulations to protect the environment and public health.

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  • 29. 

    Which organization enforces workplace safety regulations?

    • A.

      Occupational Safety and Health Administration

    • B.

      Environmental Protection Agency

    • C.

      Institute for Business and Home Safety

    • D.

      National Injury Prevention Council

    Correct Answer
    A. Occupational Safety and Health Administration
    Explanation
    The Occupational Safety and Health Administration (OSHA) is responsible for enforcing workplace safety regulations. OSHA is a federal agency under the United States Department of Labor, and its main goal is to ensure safe and healthy working conditions for employees. OSHA sets and enforces standards, provides training and education, and conducts inspections to ensure compliance with regulations. The other options listed, such as the Environmental Protection Agency, Institute for Business and Home Safety, and National Injury Prevention Council, are not specifically focused on workplace safety regulations.

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  • 30. 

    Regulations aimed at protecting the environment

    • A.

      Cost businesses money, but that cost is deemed to be worth it.

    • B.

      Have no costs to business.

    • C.

      Are always effective.

    • D.

      Always cost businesses more than it benefits the environment.

    Correct Answer
    A. Cost businesses money, but that cost is deemed to be worth it.
    Explanation
    The explanation for the given correct answer is that regulations aimed at protecting the environment require businesses to invest money in implementing environmentally friendly practices and technologies. While this does incur costs for businesses, it is deemed to be worth it because it helps preserve and protect the environment for future generations. These regulations are put in place to ensure that businesses operate in a sustainable and responsible manner, and the benefits of protecting the environment outweigh the financial costs for businesses.

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  • 31. 

    A written grant of agency authority is called

    • A.

      Power of attorney

    • B.

      Apparent authority

    • C.

      Implied authority

    • D.

      Limited power of attorney

    Correct Answer
    A. Power of attorney
    Explanation
    A written grant of agency authority is called a power of attorney. This legal document allows an individual (known as the principal) to grant another person (known as the agent or attorney-in-fact) the power to act on their behalf in various matters, such as financial or legal decisions. The power of attorney specifies the extent and limitations of the agent's authority, and it can be revoked or modified by the principal at any time. This document is commonly used in situations where the principal is unable to handle their own affairs due to illness, disability, or absence.

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  • 32. 

    Which of these is NOT necessary for a legally enforceable contract?

    • A.

      A written document with all the terms of the agreement.

    • B.

      Offer and acceptance of the same terms.

    • C.

      Consideration.

    • D.

      Legal subject matter.

    Correct Answer
    A. A written document with all the terms of the agreement.
    Explanation
    A written document with all the terms of the agreement is not necessary for a legally enforceable contract. Contracts can be verbal or implied, and they can still be legally binding as long as there is an offer and acceptance of the same terms, consideration (something of value exchanged between the parties), and a legal subject matter. Written contracts are often preferred as they provide clarity and evidence of the agreement, but they are not a requirement for enforceability.

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  • 33. 

    Which of these is NOT covered by the Statute of Frauds?

    • A.

      Contracts for items that do not exist.

    • B.

      Contracts for the sale of land.

    • C.

      Contracts involving marriage (prenuptials).

    • D.

      Contracts that take longer than one year to perform.

    Correct Answer
    A. Contracts for items that do not exist.
    Explanation
    The Statute of Frauds is a law that requires certain types of contracts to be in writing in order to be enforceable. It typically covers contracts for the sale of land, contracts involving marriage (prenuptials), and contracts that take longer than one year to perform. However, contracts for items that do not exist are not covered by the Statute of Frauds because they are considered to be void and unenforceable from the beginning. Therefore, they do not require written documentation to be valid.

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  • 34. 

    A remedy for a breached contract in which the breaching party is required to do what it promised is called

    • A.

      Specific performance.

    • B.

      Rescission and restitution.

    • C.

      Consequential damages.

    • D.

      Mitigation.

    Correct Answer
    A. Specific performance.
    Explanation
    Specific performance is a remedy for a breached contract where the breaching party is required to fulfill their promise as originally agreed upon. This means that they must perform the specific actions or deliver the goods or services that were promised in the contract. Specific performance is often sought when monetary damages are not sufficient to fully compensate the non-breaching party, as it ensures that they receive the exact performance they were promised.

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  • 35. 

    Which of these would make a contract to build a house unenforceable?

    • A.

      A hurricane destroys the piece of land on which it was to be built.

    • B.

      The price of building supplies increases dramatically after the contract is made.

    • C.

      All of the builder's employees quit.

    • D.

      The buyer is unable to pay.

    Correct Answer
    A. A hurricane destroys the piece of land on which it was to be built.
    Explanation
    If a hurricane destroys the piece of land on which the house was supposed to be built, it would make the contract unenforceable. This is because the contract becomes impossible to fulfill due to an unforeseen event that is beyond the control of both parties involved. The destruction of the land would make it physically impossible to build the house as agreed upon in the contract.

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  • 36. 

    Sources of job satisfaction include

    • A.

      Recognition from supervisors for a job well done.

    • B.

      Assignments employees do not like.

    • C.

      Ineffective communication.

    • D.

      Poor working conditions.

    Correct Answer
    A. Recognition from supervisors for a job well done.
    Explanation
    Recognition from supervisors for a job well done is a source of job satisfaction because it acknowledges and validates an employee's hard work and achievements. When supervisors recognize and appreciate their employees' efforts, it boosts their morale and motivation, making them feel valued and appreciated. This recognition also fosters a positive work environment and encourages employees to continue performing at their best, leading to higher job satisfaction levels.

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  • 37. 

    This federal law prohibits job discrimination based on race, color, religion, gender and national origin.

    • A.

      Civil Rights Act of 1964

    • B.

      Age Discrimination Act of 1967

    • C.

      Fair Hiring Act of 1983

    • D.

      Americans with Disabilities Act of 1990

    Correct Answer
    A. Civil Rights Act of 1964
    Explanation
    The correct answer is the Civil Rights Act of 1964. This federal law prohibits job discrimination based on race, color, religion, gender, and national origin. It was a landmark legislation that aimed to end segregation and discrimination in various aspects of American society, including employment. The Act played a crucial role in promoting equal opportunities and protecting the rights of individuals from various backgrounds in the workplace.

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  • 38. 

    Which of the following emphasizes the importance of self-actualization and is often pictured as a pyramid?

    • A.

      Maslow's Hierarchy of Needs

    • B.

      Herzberg's Motivational Theory

    • C.

      Sigmund Freud's Dream Theory

    • D.

      B.F. Skinner's Operant Conditioning

    Correct Answer
    A. Maslow's Hierarchy of Needs
    Explanation
    Maslow's Hierarchy of Needs emphasizes the importance of self-actualization and is often pictured as a pyramid. This theory suggests that individuals have a hierarchy of needs, starting with basic physiological needs like food and shelter, followed by safety needs, social needs, esteem needs, and finally, the need for self-actualization. The pyramid shape represents the idea that individuals must fulfill their lower-level needs before they can progress to higher-level needs. Self-actualization refers to the desire to reach one's full potential and become the best version of oneself.

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  • 39. 

    The process of choosing which wants, among several options, will be satisfied.

    • A.

      Economic decision-making

    • B.

      Tradeoff

    • C.

      Opportunity Cost

    • D.

      None of these

    Correct Answer
    A. Economic decision-making
    Explanation
    Economic decision-making refers to the process of selecting one option from several alternatives based on wants and needs. It involves evaluating the tradeoffs and considering the opportunity cost of each choice. This decision-making process is crucial in economics as it helps individuals and organizations allocate their limited resources efficiently to maximize their satisfaction or profits. Therefore, economic decision-making is the most appropriate explanation for the given answer.

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  • 40. 

    This type of influence results from the leader's ability to give or withhold rewards or punishments.

    • A.

      Reward Influence

    • B.

      Position Influence

    • C.

      Expert Influence

    • D.

      Identity Influence

    Correct Answer
    A. Reward Influence
    Explanation
    Reward influence refers to the leader's ability to give or withhold rewards or punishments. This means that the leader has the power to provide incentives, such as promotions, bonuses, or recognition, to motivate and influence their followers. On the other hand, they can also use punishments, such as demotions or reprimands, to discourage certain behaviors or actions. This type of influence is based on the leader's control over resources and their ability to use them to shape the behavior and performance of their subordinates.

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  • 41. 

    Which management theory holds that people are lazy by nature and will work only when threatened?

    • A.

      Theory X

    • B.

      Theory Y

    • C.

      Theory Z

    • D.

      All of these

    Correct Answer
    A. Theory X
    Explanation
    Theory X is a management theory that holds the belief that people are inherently lazy and will only work when threatened or coerced. This theory assumes that individuals lack motivation and need to be closely monitored and controlled in order to perform their job responsibilities effectively. It suggests that managers should use a more authoritarian approach, with strict rules and punishments, to ensure productivity.

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  • 42. 

    Which is a way to expand a business using the investments of others while maintaining control over the name, product quality, and operating procedures?

    • A.

      Franchise

    • B.

      Cooperative

    • C.

      Limited Liability Company

    • D.

      Joint Venture

    Correct Answer
    A. Franchise
    Explanation
    A franchise is a way to expand a business using the investments of others while maintaining control over the name, product quality, and operating procedures. In a franchise agreement, the franchisor grants the franchisee the right to operate a business using its established brand, systems, and support in exchange for fees and royalties. This allows the franchisor to expand their business without having to invest their own capital, while still maintaining control over important aspects of the business.

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  • 43. 

    This function of management involves analyzing information, setting goals, and making decisions about what needs to be done.

    • A.

      Planning

    • B.

      Organizing

    • C.

      Controlling

    • D.

      Implementing

    Correct Answer
    A. Planning
    Explanation
    Planning is the correct answer because it involves analyzing information, setting goals, and making decisions about what needs to be done. In the management process, planning is crucial as it helps in determining the direction and objectives of the organization. It involves assessing the current situation, identifying potential opportunities and threats, and developing strategies to achieve the desired outcomes. Planning provides a roadmap for the organization, ensuring that resources are allocated effectively and goals are achieved efficiently.

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  • 44. 

    Which type of organization chart is organized according to job function?

    • A.

      Functional organization chart

    • B.

      Matrix organization chart

    • C.

      Staff organization chart

    • D.

      Team organization chart

    Correct Answer
    A. Functional organization chart
    Explanation
    A functional organization chart is organized according to job function. This means that employees are grouped together based on their specific roles and responsibilities within the organization. Each department or division within the organization is represented on the chart, showing the hierarchy and reporting structure. This type of organization chart allows for clear lines of authority and communication within each functional area, making it easier for employees to understand their roles and work together towards common goals.

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  • 45. 

    They are the first level of management in a business.  They are responsible for the work of a group of employees.

    • A.

      Supervisors

    • B.

      Mid-managers

    • C.

      Executives

    • D.

      Representatives

    Correct Answer
    A. Supervisors
    Explanation
    Supervisors are the first level of management in a business and are responsible for overseeing the work of a group of employees. They play a crucial role in ensuring that tasks are completed efficiently and effectively, and they provide guidance and support to their team members. Supervisors are typically responsible for day-to-day operations and are accountable for achieving departmental goals. They act as a link between upper management and front-line employees, ensuring that organizational objectives are communicated and implemented at the team level.

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  • 46. 

    This function of management determines to what extent the business is accomplishing the goals it set out to reach in the planning stage.

    • A.

      Controlling

    • B.

      Planning

    • C.

      Organizing

    • D.

      Implementing

    Correct Answer
    A. Controlling
    Explanation
    Controlling is the correct answer because it involves monitoring and evaluating the progress of the business towards its goals. It ensures that the actions taken in the planning and organizing stages are effective and that any necessary adjustments are made to keep the business on track. Controlling involves comparing actual results with the planned goals and taking corrective actions if necessary.

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  • 47. 

    How does the government assist small businesses?

    • A.

      All of these

    • B.

      Government buys goods and services

    • C.

      Government employs workers

    • D.

      None of these

    Correct Answer
    A. All of these
    Explanation
    The government assists small businesses by engaging in various activities. Firstly, it buys goods and services from small businesses, which helps stimulate their growth and revenue. Secondly, the government employs workers, including those from small businesses, which provides job opportunities and stability. Therefore, all of these options accurately describe how the government assists small businesses.

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  • 48. 

    One government action meant to promote competition and fairness and avoid monopolies was the passage of

    • A.

      Antitrust laws

    • B.

      Fair employment laws

    • C.

      Competition laws

    • D.

      None of these

    Correct Answer
    A. Antitrust laws
    Explanation
    Antitrust laws were passed by the government to promote competition and fairness in the market and prevent the formation of monopolies. These laws aim to protect consumers by prohibiting anti-competitive practices such as price-fixing, collusion, and unfair business practices. By enforcing antitrust laws, the government ensures a level playing field for businesses, encourages innovation, and prevents the concentration of economic power in the hands of a few dominant players. This fosters competition, which ultimately benefits consumers by offering them more choices, better quality products, and lower prices.

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  • 49. 

    Which of the following type of business is subject to being taxed more than once?

    • A.

      Corporations

    • B.

      Proprietorships

    • C.

      Partnerships

    • D.

      S-Corporations

    Correct Answer
    A. Corporations
    Explanation
    Corporations are subject to being taxed more than once because they are considered separate legal entities from their owners. They are taxed at the corporate level for their profits, and then the owners are also taxed on any dividends or distributions they receive from the corporation. This double taxation can result in corporations paying higher overall taxes compared to other types of businesses like proprietorships, partnerships, or S-corporations.

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  • 50. 

    A government agency that helps small business owners develop business plans and obtain financing and other support for their companies.

    • A.

      Small Business Administration

    • B.

      Small Company Association

    • C.

      Standard Business Association

    • D.

      None of these

    Correct Answer
    A. Small Business Administration
    Explanation
    The correct answer is Small Business Administration. The Small Business Administration is a government agency that provides assistance to small business owners in developing business plans, obtaining financing, and accessing other forms of support for their companies. This agency plays a crucial role in promoting and supporting the growth of small businesses in the country.

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