Understanding Business 11th Edition by William Nickels -Test Bank

ISBN-10: 0078023165, ISBN-13‎: 978-0078023163

• Businesses provide goods, jobs, and services to others. True False

• Businesses seek to earn a profit by providing goods and services to others. True False

• Revenue is the amount a business earns above and beyond what it spends for expenses and costs. True False

• Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses.

True   False

• Since all businesses make a profit, starting a business is not risky. True False

• An entrepreneur risks time and money to start and manage a business. True False

• If a business’s costs and expenses are greater than its revenue, it will suffer a loss. True False

• Profits of a business include the salaries paid to its employees. True False

• Revenue is the total amount of money a business takes in during a given period by selling goods and services.

True   False

• Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable.

True   False

• The United States has one of the highest standards of living in the world. True False

• The term “standard of living” refers to the amount of debt people can incur on a given income. True False

• Health care availability, a clean environment, and good schools all contribute to a high quality of life. True False

• Maintaining a high quality of life requires the combined efforts of businesses, nonprofit organizations, and government agencies.

True   False

• Stakeholders are all the people who stand to gain or lose by the policies and activities of a business. True False

• Stakeholders include customers, employees, stockholders, suppliers, dealers, bankers, government officials and environmentalists.

True   False

• Outsourcing means selling goods and services to people in other countries. True False

• Outsourcing has caused many complications in many states where jobs have been lost to overseas companies.

True   False

• Insourcing refers to the practice of global companies setting up design and production facilities in the United States.

True   False

• The knowledge and skills learned in business courses are seldom relevant to students who work for nonprofit organizations or volunteer groups.

True   False

• Businesses and nonprofit organizations often strive to accomplish the same objectives. True False

• Nonprofit organizations use financial gains to meet stated social or educational goals of the organization rather than personal profit.

True   False

• Social entrepreneurs are people who start and manage organizations that are not-for-profit. Their mission is to help others improve their quality of life.

True   False

• The only real purpose of a business is to make money for entrepreneurs. True False

• The only way a firm can increase its profits is to increase its sales revenue. True False

• The amount of profit or loss earned by a business can be found by subtracting the firm’s expenses from its revenues.

True   False