Question 1

According to John Kay the profit-seeking paradox is that:
A) The most profitable companies are not the most profit-oriented
B) The most profitable companies are the most vulnerable to takeover
C) The most profitable companies give their customers the worst deal
D) The most profitable companies pay the highest wages to employees

Accepted Answer

John Kay's profit-seeking paradox suggests that companies which do not prioritize profit maximization above all else, but instead focus on delivering value, innovation, or quality, often end up being more profitable in the long run.

Question 2

Christine Lagarde is head (in 2018) of which international organization?
A) World Bank
B) International Monetary Fund (IMF)
C) United Nations
D) International Labour Organization (ILO)

Accepted Answer

Christine Lagarde was the head of the International Monetary Fund (IMF) in 2018.

Question 3

The basic economic problem facing society is:
A) Inflation
B) Scarcity
C) Greed
D) Pollution

Accepted Answer

Scarcity is the basic economic problem facing society because it means that there are not enough resources to satisfy all of society's wants and needs.

Question 4

The definition of a stakeholder in a private sector business is:
A) Just the owners and managers of the business
B) Just the owners, managers, and employees
C) The owners, managers, employees, and customers
D) Any individual or group that is affected by a decision of the business

Accepted Answer

Stakeholders in a private sector business encompass a wide range of individuals or groups that are affected by the business's decisions, not just the owners, managers, employees, and customers, but also suppliers, creditors, the community, and even competitors. This broad definition recognizes the interconnectedness of businesses with their wider environment and the various interests that can be impacted by business activities.

Question 5

Which four economies constitute the BRIC group?
A) Bulgaria, Romania, Italy, Cyprus
B) Brazil, Russia, India, Cuba
C) Brazil, Russia, India, China
D) Brazil, Russia, Indonesia, China

Accepted Answer

The BRIC group consists of Brazil, Russia, India, and China, which are considered major emerging national economies.

Question 6

In the UK the hourly rate below which, by law, pay for employees aged over 25 years must not be allowed to fall is known as the:
A) National living wage
B) National minimum wage
C) Jobseeker's allowance
D) Decency threshold

Accepted Answer

The National Living Wage is the hourly rate below which pay for employees aged over 25 years must not fall by law in the UK, designed to ensure a minimum living standard.

Question 7

The private sector of the economy is characterized by the following features: (Please select all that apply.)
A) Profit motive
B) Central planning of production by government
C) Competition between businesses
D) Production of goods and services for sale

Accepted Answer

The private sector is driven by the profit motive (A), characterized by competition between businesses (C), and involves the production of goods and services for sale (D). Central planning of production by the government (B) is a characteristic of the public sector, not the private sector.

Question 8

Tax avoidance may be defined or characterized as: (Please select all that apply.)
A) An illegal activity of non-payment of tax
B) A legal activity of tax planning by large companies to minimize corporation tax on the economic activity they conduct in a specific jurisdiction
C) A way of minimizing tax liabilities that is not illegal but might be judged to be immoral
D) Using tax law to gain a tax advantage not intended by Parliament

Accepted Answer

Tax avoidance involves legally minimizing tax liabilities, often through strategic financial planning, and may include exploiting loopholes or inconsistencies in tax law, which might not align with the intentions of lawmakers or may be considered immoral by some, but it is not illegal like tax evasion.

Question 9

Adam Smith characterized the operation of the market system in the following terms: (Please select all that apply.)
A) Private businesses are motivated by the goal of serving the common good
B) Though motivated by self-interest private businesses are inadvertently led to serve the common good
C) To make a profit businesses are led to serve the needs of customers
D) The common good is never realized through the pursuit of self-interest in the market

Accepted Answer

Adam Smith argued that although individuals and businesses are motivated by self-interest, this self-interest inadvertently leads them to serve the common good by providing goods and services that others need, in pursuit of profit. This concept is often summarized by the metaphor of the "invisible hand," suggesting that self-interested actions can lead to positive societal outcomes.

Question 10

In addition to a specific business organization or firm, the term 'business' may be used to refer to: (Please select all that apply.)
A) A specific legal form such as a public limited company
B) The business system,
C) The activities of a voluntary organization seeking to influence decisions taken by a business
D) The business community

Accepted Answer

A specific legal form such as a public limited company, the business system, and the business community are all examples of the term 'business'.

Question 11

Firms may seek 'locational advantage' from which of the following? Please select all that apply.
A) The availability of skilled labour
B) The quality of infrastructure such as transport networks
C) The ethnic composition of the workforce
D) A favourable tax or regulatory environment

Accepted Answer

The availability of skilled labour (A), the quality of infrastructure such as transport networks (B), and a favourable tax or regulatory environment (D) are all factors that firms may seek 'locational advantage' from.

Question 12

When we refer to businesses as complex, internally differentiated systems, which of the following aspects of the business environment do we focus on? Please select all that apply.
A) General
B) Internal
C) Immediate
D) External

Accepted Answer

When referring to businesses as complex, internally differentiated systems, the focus is on the internal aspects of the business environment. This includes the organization's structure, culture, internal resources, and processes.

Question 13

Examples of the spatial scale of the business environment may include the following: (Please select all that apply.)
A) National
B) Oligopolistic
C) Monopolistic
D) Global

Accepted Answer

The spatial scale of the business environment refers to the geographical scope of the environment in which a business operates. National and global are both examples of spatial scale, as they refer to the national and global markets, respectively. Oligopolistic and monopolistic are not examples of spatial scale, as they refer to market structures rather than geographical scope.

Question 14

When we conduct a stakeholder analysis of business, which of the following statements are generally true? Please select all that apply.
A) All stakeholders have the same interests
B) All stakeholders are affected in some way by the business
C) All stakeholders are affected in the same way by the business
D) Stakeholders have varying degrees of influence over business decisions

Accepted Answer

Stakeholders are affected by the business in different ways and have varying degrees of influence over business decisions. They do not all have the same interests or are affected in the same way.

Question 15

The term business is only ever used to refer to private sector, profit-making companies.

Accepted Answer

The term "business" can refer to any organization engaged in commercial, industrial, or professional activities, including both profit-making companies in the private sector and non-profit organizations.

Question 16

In the 1980s Conservative governments used the policy of privatization to bring about a major shift in the boundary between the public and private sectors in the UK.

Accepted Answer

During the 1980s, under the leadership of Prime Minister Margaret Thatcher, the UK's Conservative government implemented widespread privatization policies, transferring ownership of numerous state-owned enterprises to the private sector, thus significantly altering the balance between public and private sectors in the country.

Question 17

Only poor societies and poor people in rich societies have to face the problem of scarcity.

Accepted Answer

Scarcity is a fundamental economic problem facing all societies, regardless of their wealth, because resources are limited while wants are unlimited.

Question 18

There is general agreement within society about how the success of private sector business is defined and measured.

Accepted Answer

Success in the private sector can be defined and measured in various ways, including profit, growth, market share, or social impact, and there is often significant debate and differing opinions on which metrics are most important.

Question 19

A market system can be characterized as a decentralized mechanism for deciding the allocation of resources.

Accepted Answer

In a market system, decisions about the allocation of resources are made by the interactions of individuals and businesses in the marketplace, rather than by a central authority, making it a decentralized mechanism.

Question 20

In reality there is no such thing as a free market in the sense of firms being left entirely free to make decisions for themselves.

Accepted Answer

In reality, all markets operate within a framework of rules and regulations set by governments, which can include taxes, subsidies, minimum wage laws, and environmental regulations, among others. These rules influence the decisions firms can make, meaning they are not entirely free to make decisions without any external constraints.

Quiz 1: Introduction: Business and Its Environment in a Globalizing World

According to John Kay the profit-seeking paradox is that:

Christine Lagarde is head (in 2018) of which international organization?

The basic economic problem facing society is:

The definition of a stakeholder in a private sector business is:

Which four economies constitute the BRIC group?

In the UK the hourly rate below which, by law, pay for employees aged over 25 years must not be allowed to fall is known as the:

The private sector of the economy is characterized by the following features: (Please select all that apply.)

Tax avoidance may be defined or characterized as: (Please select all that apply.)

Adam Smith characterized the operation of the market system in the following terms: (Please select all that apply.)

In addition to a specific business organization or firm, the term 'business' may be used to refer to: (Please select all that apply.)

Firms may seek 'locational advantage' from which of the following? Please select all that apply.

When we refer to businesses as complex, internally differentiated systems, which of the following aspects of the business environment do we focus on? Please select all that apply.

Examples of the spatial scale of the business environment may include the following: (Please select all that apply.)

When we conduct a stakeholder analysis of business, which of the following statements are generally true? Please select all that apply.