b) A business owned and operated by a single individual
c) A business owned by shareholders
d) A non-profit organization
Answer:
b) A business owned and operated by a single individual
Explanation:
A sole proprietorship is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity.
2. What is 'e-commerce'?
a) Electronic components of a computer
b) Trading in commodities
c) Buying and selling goods and services over the internet
d) Economies of scale in production
Answer:
c) Buying and selling goods and services over the internet
Explanation:
E-commerce refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions.
3. What does 'B2B' stand for in business terminology?
a) Business 2 Business
b) Back to Basics
c) Buy 2 Bargain
d) Build 2 Buy
Answer:
a) Business 2 Business
Explanation:
B2B stands for Business to Business, which refers to transactions conducted between two businesses rather than between a business and individual consumers.
4. What is 'market segmentation'?
a) Dividing a market into distinct sections of buyers
b) The process of setting prices in different markets
c) Creating various products for different markets
d) Analyzing the stock market
Answer:
a) Dividing a market into distinct sections of buyers
Explanation:
Market segmentation is the process of dividing a target market into smaller, more defined categories. It segments customers and audiences into groups that share similar characteristics such as demographics, interests, needs, or location.
5. What is 'corporate social responsibility' (CSR)?
a) A business model for maximizing profits
b) A company's initiative to assess and take responsibility for its effects on the environment and social well-being
c) A strategy for global expansion
d) A financial strategy for reducing tax liabilities
Answer:
b) A company's initiative to assess and take responsibility for its effects on the environment and social well-being
Explanation:
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. By practicing CSR, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
6. What is 'outsourcing' in business?
a) The internal organization of a company’s departments
b) Buying products from another company to resell
c) Hiring another company to perform tasks, handle operations or provide services
d) Exporting goods to foreign countries
Answer:
c) Hiring another company to perform tasks, handle operations or provide services
Explanation:
Outsourcing in business refers to the practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company's own employees and staff.
7. What does 'SWOT analysis' stand for?
a) Strengths, Weaknesses, Opportunities, Threats
b) Sales, Worth, Output, Turnover
c) System, Work, Operation, Technology
d) Service, Warranty, Offer, Trade
Answer:
a) Strengths, Weaknesses, Opportunities, Threats
Explanation:
SWOT analysis is a strategic planning technique used to help a person or organization identify Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.
8. What is a 'franchise'?
a) A government grant for starting a business
b) A business owned and operated by a single individual
c) The right granted to an individual or group to market a company's goods or services
d) A type of joint venture
Answer:
c) The right granted to an individual or group to market a company's goods or services
Explanation:
A franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business's (franchisor) proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business's name.
9. What is 'brand equity'?
a) The total value of a company’s assets
b) The cost of starting a new brand
c) The commercial value derived from consumer perception of the brand name
d) The financial investment put into creating a brand
Answer:
c) The commercial value derived from consumer perception of the brand name
Explanation:
Brand equity refers to the value a company gains from having a well-known brand name, compared to its generic equivalent. It's based on the idea that firms with well-known brand names can generate more revenue.
10. What is 'inflation' in the context of economics?
a) The reduction of a currency's value
b) The increase in prices over a period of time
c) The decrease in demand for goods and services
d) The increase in stock market values
Answer:
b) The increase in prices over a period of time
Explanation:
Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.
11. What is 'venture capital'?
a) Capital raised by governments for public projects
b) Funds provided by investors to small businesses with long-term growth potential
c) A company's retained earnings
d) Short-term loans provided to large corporations
Answer:
b) Funds provided by investors to small businesses with long-term growth potential
Explanation:
Venture capital is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
12. What does 'B2C' stand for in commerce?
a) Business 2 Consumer
b) Business 2 Company
c) Buy 2 Cancel
d) Budget 2 Cost
Answer:
a) Business 2 Consumer
Explanation:
B2C stands for Business to Consumer, which refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services.
13. What is 'globalization' in the context of business?
a) The process of a business expanding into one additional country
b) The integration of national economies through trade, investment, and capital flow
c) The process of a business adopting a new global currency
d) The global standardization of business laws and practices
Answer:
b) The integration of national economies through trade, investment, and capital flow
Explanation:
Globalization in business refers to the process by which businesses or other organizations develop international influence or start operating on an international scale, integrating and interconnecting with other businesses around the world.
14. What is 'market capitalization'?
a) The total value of a company's outstanding shares
b) The total sales revenue of a company
c) The total market value of a company's assets
d) The total worth of a company's inventory
Answer:
a) The total value of a company's outstanding shares
Explanation:
Market capitalization refers to the total value of a company's outstanding shares of stock. It is calculated by multiplying a company's shares outstanding by the current market price of one share.
15. What does the term 'merger' mean in business?
a) The process of reducing the size of a business
b) The process of one company buying another
c) The combination of two companies to form a new entity
d) The diversification of a company's product line
Answer:
c) The combination of two companies to form a new entity
Explanation:
A merger in business is a legal consolidation of two entities into one entity. In a merger, two companies agree to combine their operations and assets under a new entity.
16. What is 'corporate governance'?
a) The laws that regulate corporate taxation
b) The process of electing a CEO
c) The system of rules, practices, and processes by which a company is directed and controlled
d) The structure of a company's executive board
Answer:
c) The system of rules, practices, and processes by which a company is directed and controlled
Explanation:
Corporate governance involves balancing the interests of a company's many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community.
17. What is an 'IPO' in the context of the stock market?
a) Internal Purchase Option
b) Initial Public Offering
c) Immediate Profit Objective
d) International Payment Order
Answer:
b) Initial Public Offering
Explanation:
An IPO, or Initial Public Offering, is the first sale of stock by a company to the public. Prior to an IPO, a company is considered private, with a relatively small number of shareholders made up primarily of early investors and professional investors.
18. What is 'sustainable business practice'?
a) A business practice that ensures the company will remain profitable for the long term
b) A practice that meets the needs of the present without compromising the ability of future generations
c) A business model that focuses solely on environmental conservation
d) A practice that involves recycling and reusing materials
Answer:
b) A practice that meets the needs of the present without compromising the ability of future generations
Explanation:
Sustainable business practices are those that operate in the best interest of the environment and society as a whole. They are designed to minimize environmental impact and ensure longevity, resource efficiency, and social responsibility.
19. What is 'market research'?
a) The process of researching new markets to enter
b) The practice of analyzing the stock market for investment opportunities
c) The systematic gathering, recording, and analyzing of data about customers, competitors, and the market
d) The process of setting market prices for products
Answer:
c) The systematic gathering, recording, and analyzing of data about customers, competitors, and the market
Explanation:
Market research is the process of assessing the viability of a new good or service through research conducted directly with potential customers. It allows a company to discover the target market and record opinions and other input from consumers regarding interest in the product.
20. What is 'consumer behavior' in marketing?
a) The behavior exhibited by salespeople
b) The buying habits and patterns of consumers in the purchase of goods and services
c) The way consumers interact with advertisements
d) The legal behavior required by consumers when purchasing goods
Answer:
b) The buying habits and patterns of consumers in the purchase of goods and services
Explanation:
Consumer behavior refers to the study of how individual customers, groups, or organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.
21. What is 'business ethics'?
a) The study of appropriate business policies and practices
b) The legal framework governing business operations
c) The analysis of consumer satisfaction
d) The financial management of a company
Answer:
a) The study of appropriate business policies and practices
Explanation:
Business ethics refers to the study of proper business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.
22. What is 'supply chain management'?
a) Managing the company’s internal supplies
b) The coordination of production, inventory, location, and transportation among participants in a supply chain
c) The process of buying and storing supplies
d) Managing the supply and demand of a product
Answer:
b) The coordination of production, inventory, location, and transportation among participants in a supply chain
Explanation:
Supply chain management is the handling of the entire production flow of a good or service — starting from the raw components all the way to delivering the final product to the consumer.
23. What does 'CRM' stand for in business?
a) Cost Reduction Management
b) Customer Relationship Management
c) Corporate Resource Management
d) Consumer Retention Mechanism
Answer:
b) Customer Relationship Management
Explanation:
CRM stands for Customer Relationship Management. It refers to the principles, practices, and guidelines that an organization follows when interacting with its customers. It often involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.
24. What is a 'business plan'?
a) A statement issued by a company to its shareholders
b) A document setting out a business's future objectives and strategies for achieving them
c) A yearly financial statement of a company
d) A record of all the investments made by a company
Answer:
b) A document setting out a business's future objectives and strategies for achieving them
Explanation:
A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on the organization, the organization's financial projections, and the strategies it intends to implement to achieve the stated targets.
25. What is 'market penetration'?
a) The process of introducing a new product into the market
b) The degree to which a product or service is known and/or used by customers
c) The process of increasing market share through aggressive marketing
d) The act of setting prices lower than competitors
Answer:
b) The degree to which a product or service is known and/or used by customers
Explanation:
Market penetration is a measure of the amount of sales or adoption of a product or service compared to the total theoretical market for that product or service. It is also used as a measure in marketing management. It can be increased by increasing the number of customers or increasing the usage among existing customers.