Study Guide

Field 216: Business, Marketing, and Computer Education 
Sample Multiple-Choice Questions

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Each multiple-choice question has four answer choices. Read each question and its answer choices carefully and choose the ONE best answer.

During the test you should try to answer all questions. Even if you are unsure of an answer, it is better to guess than not to answer a question at all. You will NOT be penalized for choosing an incorrect response.

Objective 0001
Understand fundamental theories, functions, and procedures of business management.

1. A company is planning to manufacture 10,000 units of the same item each month. Assuming this is the company's only product, which of the following layouts would be best for organizing the company's manufacturing facility?

  1. a product layout where machines perform specific, standardized tasks
  2. a process layout where similar tasks can be performed at each station
  3. a cellular layout where machines are grouped together to perform a number of tasks
  4. a fixed position layout where the items produced remain stationary
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: A.
Because this company is manufacturing only one product, there is no particular benefit to arranging work stations and equipment to allow for flexible switching between projects or functions. Instead, a product layout such as an assembly line organizes the work and the equipment around the needs of the one product. At each work station, one discrete task is completed. The stations and tasks can be arranged in the order of assembly, to minimize time and effort in transporting the work in progress from station to station
Objective 0002
Understand basic principles of business law and issues related to business ethics.

2. In order to be most effective, a code of ethics for a company should:

  1. reflect the diversity of social norms and beliefs in the workforce.
  2. require employees to help enforce the provisions of the code.
  3. identify the behaviors that are acceptable and unacceptable.
  4. define the specific consequences for any violation of the code.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: C.
Ethics are the standards for human conduct based on principles of right and wrong. They exist as standards for human conduct and actions, determining which actions and behaviors are acceptable and unacceptable. Above all, delineating these guidelines in a way that can clearly inform employees' conduct is the essential purpose of an effective code of ethics.
Objective 0002
Understand basic principles of business law and issues related to business ethics.

3. According to Article 2 of the Uniform Commercial Code (UCC)link to footnote number 1 that governs sales, in which of the following cases would a retailer that terminates a contract most likely be held legally liable for breach of contract?

  1. The manufacturer tells the retailer that, due to a production slowdown, a shipment will arrive several weeks late.
  2. The retailer cancels a shipment from the manufacturer because sales have dropped and the retailer's inventory is too high.
  3. The manufacturer tells the retailer that rising prices of inputs have led to an increase in the price of the items shipped.
  4. The retailer finds that the items shipped exceed the minimum specifications that were agreed upon.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: B.
According to the Uniform Commercial Code (UCC) governing sales, "Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable." Essentially, one party cannot unilaterally cancel an agreement. Any adjustments or modifications to a contract must be agreed to by both parties.
Objective 0003
Understand accounting principles, the accounting cycle, and financial statements.

4. A company offers a one percent discount for all customers who pay their invoices within seven days. A customer bought $1,000 worth of goods and paid within seven days. Which of the following entries would be included in the cash receipts journal?

  1. $10 in the cash debit column
  2. $990 in the accounts receivable credit column
  3. $990 in the cash debit column
  4. $1,010 in the accounts receivable credit column
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: C.
A cash receipts journal is a specialized accounting journal used to record entry of cash as a debit, balanced by a credit to sales. Since the customer paid within seven days, the customer qualifies for the promotional offer and will receive a one percent discount equal to $10. The $990 cash received will be recorded in the receipts journal as $990 in the cash debit column, $10 in the Sales Discount debit column, and $1,000 in the accounts receivable credit column.
Objective 0004
Understand procedures for determining the value of assets, liabilities, and owner's equity according to generally accepted accounting principles.

5. A company has decided to buy an expensive piece of equipment. The company can either pay for it in full at the current time or with equal yearly payments over ten years. Which of the following factors is most important to consider in making the decision about how to pay for the equipment?

  1. standard cost and compounding rate
  2. amortization cost and annuity value
  3. leasing cost and asset valuation
  4. opportunity cost and interest rate
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: D.
Paying the purchase price for the equipment at the time of purchase is potentially preferable to financing the expense over ten years because financing would involve an additional interest expense. The interest expense that is avoided by paying up front can be viewed as a rate of return on the up-front payment. Whether this option is actually preferable to financing depends upon a comparison of that rate of return to the rate of return available to the company on the other options that it might have pursued with the same money. The return on foregone options is the opportunity cost of choosing the up-front payment option.
Objective 0005
Understand basic techniques of quantitative analysis in business situations.

6. A marketing manager notices that the age distribution curve for the company's customers is positively skewed, which means that:

  1. there is a greater age range among older customers than younger ones.
  2. the median age of customers is higher than the mean age.
  3. there are more younger customers than older ones.
  4. most of the company's new customers are older people.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: A.
A distribution curve that is positively skewed means that the tail on the right side is longer or extends farther than the tail on the left side. With the x-axis measuring age in this case, the range from the distribution's midpoint to the oldest customers on the right extreme is wider than the corresponding range from the midpoint to the youngest customers on the left side of the distribution. If the midpoint age of customers were 35, a positively skewed distribution might show a range of older customers' ages to be 35 to 85 while the range of younger customers' ages might be 15 to 35.
Objective 0006
Understand fundamental principles of economics, basic economic concepts, and the operation of the U.S. and other economies.

7. Use the graph below to answer the question that follows.

graph showing the supply versus demand for eggs

A graph entitled supply and demand for eggs. X axis is labeled quantity in dozens per week, and y axis is labeled price per dozen. Curve labeled supply slopes upward from lower left and curve labeled demand slopes downward from upper left. The two curves intersect at a price equal to one dollar and twenty cents.

If the price of eggs drops to 75 cents per dozen, which of the following is most likely to occur?

  1. There will be a shortage of eggs with upward pressure on prices.
  2. There will be a shortage of eggs with downward pressure on prices.
  3. The demand for eggs will fall and there will be upward pressure on prices.
  4. The demand for eggs will fall and there will be downward pressure on prices.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: A.
At the equilibrium price in the graph, the quantity of eggs that consumers are willing and able to buy is equal to the quantity of eggs that producers will make available in the market. A lower price than that, such as 75 cents, induces consumers to demand a larger quantity in keeping with the logic of the Law of Demand. A lower price also induces producers to produce a smaller quantity according to the Law of Supply. The result is likely a shortage of eggs. Consumers shut out by the shortage and producers looking to sell more eggs at a higher price will tend to bid up the price until it re-attains an equilibrium.
Objective 0007
Understand principles and practices in international business.

8. Country A can produce a ton of wheat with 100 labor hours and a ton of bananas with 100 labor hours. Country B can produce a ton of wheat with 50 labor hours and a ton of bananas with 200 labor hours. Other inputs to production are the same for both countries. In which of the following situations will both countries benefit from trade?

  1. Country A sells wheat to and buys bananas from Country B.
  2. Country A buys wheat from and sells bananas to Country B.
  3. Country A buys both wheat and bananas from Country B.
  4. Country A sells both wheat and bananas to Country B.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: B.
Country A enjoys an absolute advantage over Country B in the production of bananas, since Country A can produce the same quantity with a smaller labor input. By the same reasoning, Country B enjoys an absolute advantage over Country A in the production of wheat. In this situation, the total welfare of both countries can be increased if they both specialize in the product of their absolute advantage and trade their excess production with each other. In the end, both countries can end up with more wheat and bananas than either could have produced without specialization and trade. However, wheat farmers in Country A and banana producers in Country B will likely oppose such a free-trade arrangement since it means the likely loss of their livelihood.
Objective 0008
Understand principles and practices of business and personal finance.

9. Distinguished from a business's operating budget and cash budget, the capital budget is used for which of the following purposes?

  1. anticipating occasions when the business might have trouble paying employees on time
  2. comparing the business's actual revenues, costs, and expenses with previous projections
  3. planning for the expansion of the business into new product lines or service lines
  4. preparing a forecasted income statement expressing the business's priorities and likely profitability
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: C.
Capital budgeting is the process by which a business plans for major expenditures, typically for long-term investments that add value to the company. The capital budget is distinct from the operating budget, which involves day-to-day operations. Capital expenditures often do not produce a return for the first quarter or even the first several years. Capital expenditures often do not produce earnings until well after the project is completed.
Objective 0008
Understand principles and practices of business and personal finance.

10. When considering insurance coverage for automobiles and property, the choice of a higher deductible involves which of the following trade-offs of advantages and disadvantages according to the table below?

Line Advantage Disadvantage
1 higher maximum benefit coverage limited to actual cash value
2 coverage against more types of damage higher premiums
3 coverage against negligence larger co-payments
4 lower premiums higher out-of-pocket expenses

  1. Line 1
  2. Line 2
  3. Line 3
  4. Line 4
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: D.
The tradeoff of having lower premiums in auto insurance is typically to have a higher deductible and therefore higher out-of-pocket expenses in the event of a claim. Premiums are fixed payments due to the insurance carrier at a regular schedule, usually monthly, quarterly, or annually. A deductible is an amount of money that the insured party needs to pay before insurance coverage begins. A higher deductible means a less thorough degree of insurance coverage, so a person should expect to pay lower premiums for that coverage.
Objective 0009
Understand the principles of marketing, procedures for making marketing decisions, and the selling process.

11. Marketing specialists can best help management answer which of the following product development questions?

  1. What are the costs of producing a new product?
  2. How broadly should the product line be promoted?
  3. How will production of the product affect labor requirements?
  4. How much testing should the product undergo?
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: B.
Marketing specialists develop strategies for the promotion of products. They can best help management by developing marketing plans, analyzing data to determine the effectiveness of alternative campaigns, and communicating the results to the company's senior management team. Marketing specialists will also typically be engaged with the company's Web site and social media outlets in implementing marketing strategies.
Objective 0010
Understand communication and human relations skills.

12. Which of the following strategies is most appropriate for using visual aids in a business presentation?

  1. restricting the use of visual aids to illustrating only a few concepts
  2. using vertical and diagonal wording to focus the audience's attention
  3. adding color and large lettering to emphasize major ideas
  4. keeping the visual aids simple with a few words to highlight key ideas
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: D.
Visual aids are important parts of a presentation that help to keep the audience engaged and to emphasize certain points. However, visual aids should not be too complex, use overly verbose explanations, or employ superfluous technology. Whether using presentation software, a white board, handouts, or other media, visual aids are best when they are simple and use few words to highlight important ideas.
Objective 0011
Understand principles and procedures related to entrepreneurship.

13. Which of the following steps is most important for a small business owner to complete first when starting a new business?

  1. preparing an organizational mission statement that describes the purpose and goals of the business
  2. developing a formal business plan that includes detailed operations, marketing, and financing components
  3. identifying a location that will be convenient for customers, suppliers, and employees
  4. determining whether the business should be operated as a sole proprietorship, partnership, or corporation
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: B.
A well-constructed business plan is essential for the success of a business. A business plan needs to provide all the relevant information—such as a description of the company, the product, organizational structure, and financial projections—that is needed to provide a clear direction for the enterprise. This plan will be instrumental for securing funding from investors or lenders for the newly established business.
Objective 0012
Understand business careers and career development.

14. Many students in a business class have never held jobs that require them to follow company rules and standards. Which of the following types of exercises would most help these students learn about the importance of understanding workplace expectations?

  1. scheduling a class field trip to a local business to observe how employees interact with supervisors and coworkers in the workplace
  2. asking students to reflect on how their personal characteristics influence their social interactions with friends and authority figures
  3. using scripts, role-playing, and discussion to demonstrate strategies for dealing with various workplace situations
  4. cooperating with local businesses to provide students with the opportunity to shadow an employee during a workday
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: C.
Role-playing exercises are a highly effective way to prepare people for unfamiliar situations, such as a first job. By acting out scenarios, participants can experience how other people respond in various situations and how certain behaviors or approaches compare to others. Additionally, through the strategies learned from scripts and role-playing, self-confidence improves and students can become better prepared to handle real-life situations.
Objective 0013
Understand how to plan, deliver, and evaluate instruction based upon knowledge of subject matter in the content area of business, marketing, and computer education.

15. A business teacher is considering using simulation software to create different marketing strategies and product life cycles for a variety of product mixes. Which of the following questions is most important for the teacher to consider when choosing a simulation program?

  1. Are students able to simulate scenarios other than marketing?
  2. Does it enable the teacher to track student progress?
  3. Can students effectively run simulations without teacher supervision?
  4. Does it effectively reproduce real-world marketing scenarios?
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: D.
The purpose of using marketing simulation software in a business classroom is to allow students to design and implement a marketing strategy, make decisions, and test theories in a completely fictitious electronic market. The software allows users to analyze a marketing strategy during its prototype phase and study its outcome and behavior under different sets of parameters. Such a program is only as useful as the assumptions and information programmed into it. Software options available to teachers can vary considerably in the realism of the scenarios they model.
Objective 0014
Understand the process of reading and apply knowledge of strategies for promoting students' reading development in the content area of business, marketing, and computer education.

16. Before assigning a complex business text to students to read independently, a business teacher uses think-aloud and modeling to demonstrate how to annotate the text while reading. The teacher reads aloud the first couple paragraphs of the text, pausing frequently to consider and mark the text's key vocabulary, the author's thesis or argument, the claim or claims presented in each paragraph, and the evidence used to support each claim. The teacher also notes sections of the text that are confusing and require rereading and or self-questioning. The teacher then has students work with a partner to annotate the next few paragraphs as the teacher monitors their work. Finally, the teacher asks students to read and annotate the rest of the text independently. The teacher's actions promote the students' discipline-specific reading primarily by:

  1. teaching them strategies that support close reading of complex expository/informational texts.
  2. helping them determine the meaning of new discipline-specific vocabulary in texts by using context clues.
  3. showing them how to evaluate the credibility of sources when reviewing expository/informational texts.
  4. encouraging them to synthesize information from multiple sources and different formats in texts.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: A.
Various factors contribute to text complexity, including use of unfamiliar discipline-specific vocabulary and/or academic language structures, accessibility of the text's content, and clarity of the author's arguments. Complex texts may require careful reading and analysis for the reader to achieve even a literal understanding of the text's content. In this lesson, the business teacher first models all the essential components of a close-reading protocol that is designed to scaffold students' reading comprehension of a complex text. The teacher reads the text carefully while annotating it with regard to key vocabulary, the author's thesis or argument, and the claims the author presents to support their argument. In addition, the teacher marks sections of the text that are unclear and require rereading or self-questioning for clarity. Finally, the teacher follows up the modeling with guided practice with teacher monitoring followed by independent practice. Together, these actions promote the students' discipline-specific reading by helping them internalize key processes involved in effective close reading of complex academic texts.
Objective 0015
Understand basic computer technology principles, terminology, and keyboarding applications.

17. A small business has a computer that performs adequately when only one or two software applications are running but that slows significantly as additional programs are opened. Which of the following actions is most likely to improve the performance of the computer?

  1. installing an external storage device
  2. removing any unnecessary peripherals
  3. increasing the computer's RAM
  4. using a utility program to clean up the hard drive
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: C.
When a computer application launches, it is retrieved from the hard drive and loaded into random access memory (RAM). RAM is temporary, volatile storage that acts as a temporary workspace, allowing users to interact with the application more quickly than if data is being read from and written to the hard drive. By increasing the RAM, more applications can be stored in the temporary workspace simultaneously, decreasing the time it takes to work in or switch between applications.
Objective 0015
Understand basic computer technology principles, terminology, and keyboarding applications.

18. Which of the following functions is performed by a network operating system?

  1. creating databases
  2. allocating memory resources
  3. scanning for viruses
  4. encrypting data files
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: B.
A network operating system coordinates the activities of multiple computers, peripherals, and devices across a network. Some of the functions of the network operating system are specialized, such as network security and administration. Other functions, such as memory and hardware device management, are similar to the functions of operating systems found on individual computers.
Objective 0016
Understand principles and procedures related to computer software, programming, and information management.

19. Use the algorithm below to answer the question that follows.

i = 1
place pencil down
While i is less than or equal to 4
move forward 20 units
rotate 90 degrees clockwise
end while

A student has written the algorithm to draw a square. Which of the following modifications shown in boldface text is necessary to correct an error in the algorithm?

  1. i = 1
    place pencil down
    While i is less than or equal to 4
    move forward 20 units
    rotate 90 degrees clockwise
    pick pencil up
    end while

  2. i = 0
    place pencil down
    While i is less than or equal to 4
    move forward 20 units
    rotate 90 degrees clockwise
    end while

  3. i = 1
    place pencil down
    While i is less than or equal to 4
    move forward 20 units
    rotate 90 degrees clockwise
    i = i + 1
    end while

  4. i = 1
    place pencil down
    While i is less than 5
    move forward 20 units
    rotate 90 degrees clockwise
    end while

Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: C.
The While loop in the student's algorithm requires that a terminating condition be reached in order for the loop to end. In the student's algorithm, the loop counter i is never incremented and, as a result, the statement i is less than or equal to 4 will never be true. Adding the statement i = i + 1 within the loop allows the loop counter to be incremented correctly and the terminating condition to be reached.
Objective 0017
Understand principles and procedures related to computer networks and the Internet and the maintenance, security, ethics, and integrity of technology systems.

20. A company is considering upgrading its peer-to-peer local area network (LAN) to a server-based LAN. Which of the following statements best describes one advantage of upgrading to a network that includes a file server?

  1. The workstations are able to assist in managing network data flow.
  2. A file server is significantly less expensive than a workstation.
  3. The workstations can still exchange information if the file server crashes.
  4. A file server can provide employees with remote access to shared data.
Answer and Rationale. Enter to expand or collapse. Answer expanded
Correct Response: D.
A file server is a computer on a network that provides shared storage of computer files. It allows all users on the network, including those accessing it remotely, to access shared data files that might be inaccessible if they were stored on individual computers.

Acknowledgments

footnote number 1 Uniform Commercial Code (UCC) copyright © 2011 by The American Law Institute and the National Conference of Commissioners on Uniform State Laws. Reproduced with the permission of the Permanent Editorial Board for the UCC. All rights reserved.