Buss Chapter 1

9/26/2012

Taking Risks and Making Profits within the DYNAMIC

Chapter 1:

Environment

BUSINESS

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True or False?

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

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Profit = Revenue – Expenses

Profit = Revenue – Costs – Expenses

(Chapter 17 version)

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

True or False?

Backstreet Books generated total revenues of $15 million while incurring expenses of $12 million. Backstreet Books earned a profit of $3 million.

True or False?

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If people living in San Jose on average earn more money than people living in Richmond, VA, then it must be the case that the citizens of San Jose enjoy a higher standard of living.

True or False?

True or False?

An effort to please one group of stakeholders eventually pleases all stakeholders.

What makes each group a stakeholder?

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True or False?

Insourcing creates new U.S. jobs and helps offset the number of jobs being outsourced.

True or False?

A charitable organization such as the Red Cross or Salvation Army is classified as a forprofit organization.

True or False? A major difference between businesses and nonprofit organizations is that only businesses can increase the standard of living while only nonprofit organizations can increase the quality of life.

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True or False?

Women currently own less than ten percent of all U.S. businesses.

The number of Hispanicowned U.S. businesses has grown dramatically in recent years.

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True or False?

T

True or False? Dishonest business practices followed by mortgage brokers and lending companies such as Countrywide Financial during the period 20002006 was one of the primary causes of the worldwide recession that began in 2008.

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