NEW YORK STATE FBLA BUSINESS OWNERSHIP & MARKETING

2009
PLEASE DO NOT OPEN THIS TEST UNTIL DIRECTED TO DO SO Test Directions 1. Complete the information requested on the answer sheet. PRINT YOUR NAME on the Name line. PRINT the name of the event, BUSINESS OWNERSHIP & MARKETING on the Subject line. PRINT the name of your CHAPTER on the DATE line. 2. All answers will be recorded on the answer sheet. Please do not write on the test booklet. Scrap paper will be provided. 3. Read each question completely before answering. With a NO. 2 pencil, blacken in your choices completely on the answer sheet. Do not make any other marks on the answer sheet, or the scoring machine will reject it. 4. You will be given 60 minutes for the test. You will be given a starting signal and a signal after 50 minutes have elapsed. 5. Tie will be broken using the last 10 questions of the test.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING a. c. 2. 1. Disadvantages of owning your own business include uncertain income. b. risk. working long hours. d. all of these.

Characteristics of successful business owners include a. optimism. b. independence. c. self-control. d. indiscretion. Which of the following is a retailing business? a. jewelry store b. c. appliance repair shop d. paper mill orange grower

3.

4.

Setting specific financial goals before starting a business a. helps you compare different business opportunities. b. is not necessary for most entrepreneurs. c. ensures the business is able to earn the profits you want. d. will increase your personal satisfaction. To determine if a business opportunity is realistic, you should find out a. how much money is needed to start the business. b. the rate of failure for this type of business. c. how many hours a week it is likely to take to run the business. d. all of these. Information about business opportunities is available from a. the Postal Service. b. most banks. c. the Small Business Administration. d. none of these. Which of the following is a service business? a. hardware store b. c. travel agency d. lumber mill strawberry grower

5.

6.

7.

8.

Characteristics of successful entrepreneurs include a. ambition. b. loyalty. c. self-confidence. d. self-control. Problems in business often occur because people a. fail to listen to each other. b. do not speak loud enough. c. ask too many questions. d. take incomplete notes. To help them make decisions and solve problems, business owners often use a. decision building. b. a formal problem-solving model. c. an organizational chart. d. none of these.

9.

10.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 11. Which of the following is not a step in the decision-making process? a. define the problem b. take action c. identify various solutions d. define the solution A problem-solving method that builds trust among employees is called a. consensus building. b. brainstorming. c. idea evaluating. d. defining the problem.

12.

13.

Which of the following is not an important tip to keep in mind when conducting a business conversation on the telephone? a. take notes b. speak clearly c. thank the person at the end d. speak politely A company that has a monopoly a. controls all of the market. b. must be licensed. c. cannot compete in a market economy. d. can receive a subsidy from the government. The fixed costs of a business a. are different each month. b. include interest on business loans. c. include the cost of production materials. d. are based on the quantity of goods produced. If a business owner decides to increase advertising rather than buy new equipment, the cost of the advertising is a. an opportunity cost. b. a variable cost. c. the value of the new equipment. d. all of these. Variable costs of a business a. are the same each month. b. include the interest on loans. c. include the cost of insurance. d. are based on the quantity of goods produced. The advantage of buying an existing business is that a. a large amount of capital is not required. b. policies and procedures are already established. c. it is financially viable. d. it has a reputation with customers.

14.

15.

16.

17.

18.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 19. When buying business, you should do all of the following except a. have an accountant write the sales contract. b. analyze financial reports for the past three years. c. determine how to finance the business. d. have an expert determine the value of the business.

20.

When starting your own business, an important consideration is a. the location. b. what product or service to offer. c. what employees to hire. d. all of these. A disadvantage of a partnership is that partners share a. decision-making. b. c. management responsibilities. d. losses. profits.

21.

22.

An advantage of setting up a business as a corporation is the a. distribution of profits. b. ability to raise capital. c. taxation benefits. d. ease of establishment. When buying a business, you should do all of the following except a. have a lawyer draw up the sales contract. b. analyze financial reports for at least the past seven years. c. determine how to finance the business. d. write specific objectives about the kind of business you want to buy. Before buying a franchise, you should a. determine all costs and royalty fees. b. have an attorney examine the agreement. c. find out if you are guaranteed an exclusive territory. d. all of these. There is limited liability for businesses that are a. corporations or S corporations. b. partnerships or corporations. c. sole proprietorships or partnerships. d. sole proprietorships or S corporations. Which of the following is not a purpose of a business plan? a. to explain how your product or service will be produced b. to describe how you expect to achieve specific objectives c. to describe how you will locate reliable suppliers d. to spell out how your product or service will be sold

23.

24.

25.

26.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 27. Without a business plan you will not be able to a. manage your business. b. obtain a business loan. c. to make sales projections. d. find a location for your business. The cover letter of a business plan should a. explain what you plan to do with the loan money if you receive it. b. briefly describe your business and its potential for success. c. be used to write the executive summary. d. list the material included in the main body of the plan.

28.

29.

Data that describe a group of people in terms of their age, marital status, family size, ethnicity, gender, profession, education, and income are a. demographics. b. demonstration data. c. psychographics d. psychology data. A system for collecting, recording, and analyzing information about customers, competitors, goods, and services is a. secondary research. b. market research. c. customer research. d. market segmenting. The reason a bank may turn down your loan application is a. you have not owned a business before. b. a start-up business is less likely to default on a loan. c. your business plan is poorly written. d. you have invested too much of your own money. The SBA helps small businesses by a. providing collateral for secured loans. b. guaranteeing loans made by commercial banks. c. locating venture capitalists. d. buying their products or services. All of the following are important types of insurance for your business except a. casual insurance. b. workers compensation. c. life insurance. d. property insurance. Installing point-of-exit sensors can help to a. prevent robberies. b. reduce the use of stolen credit cards. c. prevent or reduce shoplifting. d. locate employees who steal.

30.

31.

32.

33.

34.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 35. Stand-alone stores can be good locations for businesses because a. there are no anchor stores to distract customers. b. there is no competition next door. c. they do not need to advertise heavily. d. they attract walk-in customers.

36.

All of the following are disadvantages of locating a business in a downtown area except a. lack of parking spaces. b. there are not many customers in the evenings. c. offices and professional buildings are located there. d. suburbs are too far away. Home-based businesses are ideal for small companies a. if customers need not visit the premises. b. if zoning laws allow you to legally operate your business from your home. c. because many costs are reduced or eliminated. d. all of these. A goal of the layout for a retail business should be to a. design window displays that are different from those of the competition. b. attract customers to the store. c. make sure all supplies are easy to find. d. keep popular items near the cash register. A disadvantage of a stand-alone store is that a. there are no anchor stores to attract customers. b. rent is often high. c. it only attracts customers who live in the area. d. there is a lack of parking spaces. Businesses should always set their prices a. lower than their competitors prices. b. high enough so that revenues exceed expenses. c. to maximize sales. d. by using cost-based pricing. The different products and services a business sells is a a. marketing mix. b. feature of the products. c. distribution mix. d. product mix. Advertising can be very important for new businesses because it a. helps set up a network of reliable distributors. b. lets potential customers know what kinds of products or services you offer. c. is a free form of promotion. d. provides an incentive to customers.

37.

38.

39.

40.

41.

42.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 43. A written marketing plan should a. help you determine your strategies and goals. b. define your networking objectives. c. identify your overall marketing strategy. d. not be changed for five years. Alternatives to hiring permanent employees include a. freelancers. b. c. temporary workers. d. As part of their benefits, almost all employers offer a. health benefits. b. c. pension plans. d. interns. all of these. paid vacations. dental insurance.

44.

45.

46.

All of the following are ways to motivate employees except to a. treat everyone differently. b. praise them frequently. c. give them adequate responsibility. d. pay them well. The appraisal form used to evaluate employee performance should include a. the original job description. b. areas in which the employee needs to improve. c. goals for last year. d. all of these. To be a good employer, you need to a. follow through on commitments. b. enforce employee policies. c. work well with others. d. all of these. A want ad should a. be sent to employment agencies in your area. b. be placed in your store window. c. briefly describe the position you want to fill. d. be used when evaluating an employee. A job description should indicate a. duties and responsibilities of the position. b. personal characteristics required. c. where to recruit the employee. d. desirable leadership characteristics.

47.

48.

49.

50.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 51. During the job interview, an employer should a. try to put the job candidate at ease. b. make a list of the questions you want to ask. c. review the applicants resume. d. write a summary of your impression of the candidate. A business keeps tax records to record payments for a. sales tax. b. c. income tax. d. payroll deductions. all of these.

52.

53.

Social security and Medicare contributions by employees are shown a. in a sales journal. b. on a voucher check statement. c. on a bank statement. d. in an accounts receivable ledger. The financial statement that shows what a business owes and what it owns is the a. income statement. b. bank statement. c. cash flow statement. d. balance sheet. The periodic inventory method involves a. using stock cards to record information. b. using a computer to track inventory levels. c. taking weekly or monthly physical inventories. d. calculating carrying costs. An inventory record in a perpetual inventory method should show all of the following except a. the current amount in inventory. b. the cost of the item. c. the reorder point. d. the stock number of the item. The financial statement that shows what a business is worth at a particular point in time is the a. bank statement. b. balance sheet. c. income statement. d. cash flow statement. Above the break-even point, a. revenues exceed expenses. b. you neither make nor lose money. c. expenses exceed revenue. d. you will lose money. Below the break-even point, a. sales equal expenses. b. you neither make nor lose money. c. expenses exceed revenues. d. revenues exceed expenses.

54.

55.

56.

57.

58.

59.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 60. E-mail is a popular form of business communication because a. there is only a small charge for sending a message. b. messages can be read at the recipients convenience. c. messages are received the next day. d. messages are more formal than memos. A business web site should a. list your products and services. b. let customers know how to place an order. c. tell customers how to contact you if they have any questions. d. all of these.

61.

62.

To prepare budgets, measure performance, and create financial statements, a business owner should use a. word processing software. b. graphics software. c. spreadsheet software. d. database software. The legal right to exclusive publication, production, sale, or distribution of a literary or artistic work is a a. patent. b. trademark. c. copyright. d. license to publish. The Consumer Product Safety Act sets safety standards for a. foods and drugs. b. products other than food and drugs. c. licensed products. d. businesses. Regulations that protect employees involve a. discrimination in the workplace. c. minimum wages. A written code of ethics for your business a. is not necessary if you have no employees. b. is required to get a license. c. helps employees make ethical decisions. d. should be sent to your competitors. As a business owner, you have responsibilities to a. your investors. c. your community. Benefits of global competition include a. increased sales. c. less dependence on current suppliers. b. d. b. d. your suppliers. all of these. reduced costs. all of these. b. d. working conditions. all of these.

63.

64.

65.

66.

67.

68.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 69.

As a business owner, you need to appreciate different cultures for all of the following reasons except a. you will be able to market your business more effectively. b. the United States is a multicultural society. c. you may buy from and sell to people from different culture. d. People from different cultures have the same needs and wants. What term is used to describe people born between 1946 and 1964? a. the Baby Boom Generation b. Generation Y c. Generation X d. Generation Z What do geographics, demographics, psychographics and product benefits have in common? a. They are methods that can be used to segment a market. b. They are examples of mass-marketing approaches. c. They are terms used frequently in sales-oriented companies. d. They are unrelated to one another and therefore should not be used in combination to market a product. Product, place, price, and promotion strategies a. comprise the marketing mix. b. must all be directed toward a well-defined target market in order to achieve success. c. are known as the four Ps of marketing. d. all of the above. Why is the United States known as a consumer-oriented society? a. all the goods produced by the U.S. consumers are made in the United States. b. Consumers decide the fate of products and businesses, as well as the prices of goods and services sold in the United States. c. U.S. consumers are very conscious of the prices they pay for goods and services. d. U.S. consumers will buy goods and services even if they must charge their purchases. The law of demand states that a. demand goes up when prices go down. b. Demand goes down when prices go down. c. Supply is more important than demand. d. Equilibrium is controlled primarily by demand. When do shortages of goods occur? a. When supply exceeds demand. b. When equilibrium is reached. c. When manufacturers sell all their inventory and customers buy the entire available product. d. When demand exceeds supply.

70.

71.

72.

73.

74.

75.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 76.

10

Businesses generally expand their operations during two phases of the business cycle: a. recession and recovery. b. recovery and prosperity. c. prosperity and recession. d. depression and recovery. The EPA regulates business to a. ensure employee benefits. c. promote consumerism. b. d. combat corporate profits. protect the environment.

77.

78.

A salesperson should begin determining a customers needs a. after the product presentation begins. b. as soon as possible in the sales process. c. before closing the sale. d. when the customer introduces an objection. A retail stationary store that sells products to consumers for their personal use and businesses for use in their operations would be considered a. a retailer in the consumer market. b. an industrial distributor in the industrial market. c. a producer in any market. d. a user of multiple channels of distribution. For a small manufacturer that wants to sell its products in a new marketplace, the most economical decision would be to a. hire a direct sales force that could be trained to sell the manufacturers products. b. hire independent sales agents to sell its products. c. maintain complete control over its sales function. d. relinquish some control over how sales are made to keep costs down. A franchised operation is an example of what type of distribution policy? a. intensive b. selective c. exclusive d. integrated A purchasing agent for a manufacturing business would be involved with a. production planning. b. the preparation and/or implementation of a master production schedule. c. the responsibility for materials requirement planning. d. buying goods for resale purchases. Business people who buy goods for resale include a. purchasing agents. b. c. wholesale buyers. d. procurement managers. all of these.

79.

80.

81.

82.

83.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 84. Criteria that buyers use to select supply sources include a. production capabilities. b. previous experience with a vendor. c. product offerings and terms. d. all of these.

11

85.

On a merchandising plan, planned retail reductions take into account reductions in the selling price, as well as shortages of merchandise caused by a. defective merchandise returned to the vendor. b. employee pilferage. c. customer shoplifting. d. all of these. The prices a business charges its customers for its products are important because they establish and maintain a firms a. image, competitive edge, and profits. b. ability to control competition. c. costs and expenses. d. ability to manipulate elastic and inelastic consumer demand. If you sell a product for $18.98 and it costs you $16.50 to make and market it, your profit on that product would be a. $3.48 b. $2.52 c. $2.48 d. $3.52 To maintain a firms profits in the face of rising costs and expenses or declining sales, businesses might do all the following except a. reduce the size of the product to maintain or lower the price. b. decrease the price by reducing the number of product features. c. improve product quality and increase the number of features to justify a higher price. d. maintain prices while increasing product size and or features. A manufacturer plans to produce 300,000 dolls that will be sold to wholesalers and retailers for $15 each. Unit costs and expenses associated with making and distributing one doll are $12. The point at which this manufacturer will break even is a. 375,000 dolls. b. 200,000 dolls. c. 240,000 dolls. d. 100,000 dolls. When a person is at a vacation resort where the only food service available is affiliated with the resort, prices will most likely be higher than normal because a. the food service would be considered a luxury. b. the law of diminishing marginal utility says so. c. all consumers are brand loyal. d. the demand is inelastic because of the lack of substitutes.

86.

87.

88.

89.

90.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING 91. Cost-plus pricing is used primarily by a. consumers. c. retailers. b. d. manufacturers. wholesalers.

12

92.

The consumers perceived value of an item is the basis for a. competition-oriented pricing. b. cost-oriented pricing. c. demand-oriented pricing. d. mark-up oriented pricing. The main goal of marketers is to keep products in the a. decline stage. b. c. introduction stage. d. growth stage. maturity stage.

93.

94.

To suggest a bargain and help increase sales volume, some businesses make it a practice to a. price items in multiples, like 3 for $1. b. set prices that end in even numbers, like $30. c. use prestige pricing. d. price just above a round amount, like $31. A special type of promotional discount that goes directly to buyers when they sell back an old model of the product they are purchasing is called a a. rebate. b. loss leader. c. trade-in allowance. d. special deal. The formula for calculating retail price is a. cost markup = retail price. b. cost + markup = retail price. c. retail price + cost markup = final retail price. d. retail price = markup cost. The total exterior of a business including the entranceways, display windows, marquee, and the design and setting of the building itself is the a. display. b. entrance. c. layout. d. storefront. Before entering into a new business venture, successful entrepreneurs analyze the business environment and the market in which it operates. Which of the following would they perform? a. a SWEAT analysis b. a PERK test c. a SWOT analysis d. a PORK test What are the 4 key phases of the business cycle? a. inflation, stagflation, deflation, and recession b. expansion, recession, trough, and recovery c. inflation, recession, expansion, and recovery d. expansion, stagflation, recovery, and inflation

95.

96.

97.

98.

99.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING

13

100.

To help them make decisions and solve problems, small business owners often use a. a formal problem-solving model. b. consensus building. c. brainstorming. d. all of these.

NYS FBLA SLC 2009 BUSINESS OWNERSHIP & MARKETING Answer Key 1. D 2. D 3. A 4. A 5. D 6. C 7. C 8. B 9. A 10. B 11. D 12. A 13. A 14. A 15. B 16. A 17. D 18. D 19. A 20. D 21. D 22. B 23. B 24. D 25. A 26. C 27. B 28. B 29. A 30. B 31. C 32. B 33. A 34. C 35. A 36. C 37. D 38. B 39. A 40. B 41. D 42. B 43. C 44. D 45. B 46. A 47. D 48. D 49. C 50. A 51. A 52. D 53. B 54. D 55. C 56. B 57. B 58. A 59. C 60. B 61. D 62. C 63. C 64. B 65. D 66. D 67. D 68. D 69. D 70. A 71. A 72. C 73. B 74. A 75. D 76. B 77. D 78. B 79. A 80. B 81. C 82. C 83. D 84. D 85. D 86. A 87. C 88. D 89. D 90. D 91. C 92. C 93. B 94. A 95. C 96. B 97. D 98. C 99. B 100.D

14