Study Guide

Field 069: Business and Marketing

Expand All | Collapse All

Sample Selected-Response Questions

Competency 0001
Business Management, Entrepreneurship, and Ownership

1. Which statement accurately describes a key difference between corporations and general partnerships?

  1. Unlike general partnerships, corporations must register their companies with the states in which they plan to operate and obtain local or state business licenses and permits.
  2. In corporations, multiple owners share management functions and responsibility for a business; in general partnerships, two owners each own 50 percent of a business and share management functions and responsibility equally.
  3. Unlike general partnerships, corporations are not taxed on business profits; instead, profits pass through corporations to stockholders, who report income and losses on personal tax returns.
  4. In corporations, owners or stockholders are liable for their actual investments in a company but not for corporate actions and debts; in general partnerships, owners or partners are personally liable for business actions and debts.
Answer
Correct Response: D. This question requires examinees to understand differences in types of business ownership. A corporation is an entity legally separate from its owners (stockholders). The corporation itself is liable for the actions and debts of the business. Stockholders may lose some or all of what they invested in the company, but that is the limit of their liability. In a general partnership, each partner has individual unlimited liability for the actions and debts of the business.

Competency 0002
Business Law, Ethics, and Social Responsibility

2. Which case would most likely be litigated under the provisions of the New York Uniform Commercial Code?

  1. An animal rights organization files a complaint with the New York Division of Consumer Protection alleging that a cosmetic company registered in the state has falsely claimed that no animal testing is used for its products; the cosmetic company denies the allegations.
  2. After discovering financial irregularities, a technology company learns that the New York broker who manages its investment portfolio for its 401(k) used some of the employees' 401(k) contributions for a personal investment.
  3. A New York distributor of business machines receives a shipment that is returned to the manufacturer because the machines do not meet contract specifications; the distributor requests a refund on shipping costs; the manufacturer refuses the request.
  4. After a New York medical supply company learns of an impending FDA recall on medical devices it manufactures, the owners of the company sell a majority of their shares in the company.
Answer
Correct Response: C. This question requires examinees to apply knowledge of the New York Uniform Commercial Code. The underlying purposes of the New York Uniform Commercial Code are to simplify, clarify, and modernize the laws governing commercial transactions in New York. Of the options presented, only response C depicts a commercial transaction that would be covered under the Code.

Competency 0003
Financial Management, Accounting, and Business and Marketing Mathematics

3. Use the balance sheet below to answer the question that follows.

According to the information on the balance sheet, what is the debt ratio of XYZ Inc. as of December 31?

  1. 0.35
  2. 0.45
  3. 0.50
  4. 0.55
Answer
Correct Response: D. This question requires examinees to apply basic principles of financial management. A company's debt ratio is a measure of the extent to which a company is leveraged. It is calculated by dividing the company's total debt (or liabilities) by its total assets, in this case, $550,000 divided by $1,000,000, or 0.55.

Competency 0004
Business and Marketing Information Technology

4. In a high school business and marketing class, students in small groups are investigating types of e-commerce businesses. One group researches e-commerce businesses known as aggregators—Internet distribution businesses that act as intermediaries who market and sell products manufactured by a variety of companies. To attract customers and promote consumer purchasing through their Web sites, aggregators typically provide

  1. analyses of consumers' recent online shopping and purchasing behaviors to target products in which consumers are most likely to be interested
  2. readily accessible information on products and price transparency that allows consumers to find competitive prices for the same and similar products
  3. customized ordering systems that allow consumers to choose and order products according to their personal and unique specifications
  4. wholesale prices on select products offered directly to consumers by manufacturers with whom the aggregator has exclusive contracts
Answer
Correct Response: B. This question requires examinees to apply knowledge of e-commerce businesses and of pricing, promoting, and selling products on the Internet. E-commerce aggregators typically do not create or warehouse any products. They typically provide an online environment where shoppers, using a single site, can easily price and compare many similar products offered by competing online businesses.

Competency 0005
Business and Marketing Communication

5. A business and marketing educator asks students to design a marketing campaign for a company's new clothing line targeted at adolescents and young adults. Students will form teams of three to develop a promotional strategy for the company. Each team is assigned a different medium—for example, print magazine advertisement, podcast, radio spot, billboard, video clip, TV commercial, or Internet advertisement. After the teams develop their promotional strategies, they will present and discuss their strategies with the class, and each student in the class will chart the various media and the communication skills required. This type of project is likely to be particularly effective in promoting students' ability to

  1. analyze and evaluate the characteristics of different communication methods in terms of how they affect consumer decisions
  2. listen and look for multiple levels of meaning, both articulated and unspoken, in various communication contexts
  3. use the perspectives of other individuals, groups, and recognized experts to create multimedia marketing presentations
  4. synthesize information from diverse communication sources and digital media by condensing, combining, or categorizing facts and ideas
Answer
Correct Response: A. This question requires the examinee to apply knowledge of communication technologies and their uses in business. Modern marketing uses a variety of communication methods and technologies. Having groups of students engaged in creating marketing messages and then presenting them to the entire class provides students with the opportunity to evaluate how different communication methods can affect consumer decisions.

Competency 0006
Economics and Personal Finance

Use the information below to answer the two questions that follow.

An individual has accepted a job with a salary of $50,000 at a company that offers a 401(k) with a 50% match of up to 6% of gross earnings with immediate vesting.

6. If the individual contributes 6% of his or her salary to the 401(k) program, what will be the total amount of money contributed to the account at the end of the first year of work?

  1. $1,500
  2. $3,000
  3. $4,500
  4. $6,000
Answer
Correct Response: C. This question requires the examinee to apply knowledge of saving and investing. A 401(k) is a tax-deferred retirement plan to which employees contribute. Some employers offer matching contributions. In this case, if the employee contributes 6% of his or her salary, then the employee’s contribution is (0.06)($50,000) = $3,000 per year. The employer will match 50% of that amount, or $1,500. Hence, the total contribution is $3,000 + $1,500 = $4,500.

7. When completing taxes at the end of one full year of work, the individual's standard deduction and personal exemptions total $7,000. If there is no other source of income besides the individual's salary, which of the following is the likely adjusted taxable income?

  1. $38,500
  2. $40,000
  3. $43,000
  4. $47,000
Answer
Correct Response: B. This question requires the examinee to apply processes for managing personal finances, in this case, calculating taxes for completing tax forms. As mentioned above, a 401(k) account is tax-deferred. This means that the amount of taxable income is lowered by the amount contributed to the 401(k). Therefore the taxable income prior to deductions or exemptions is $50,000 – $3,000 = $47,000. Subtracting further deductions and exemptions results in an adjusted taxable income of $47,000 – $7,000 = $40,000.

Competency 0007
Marketing and International Business

8. In international trade, which economic consideration is likely to be most important in determining whether one country has a comparative advantage over another country in producing a particular product or service?

  1. the opportunity cost of producing the particular product or service in each country
  2. one country has an efficiency or advantage over the other country in all the products and services that both countries produce
  3. the number of domestic competitors who produce the same product or service in each country
  4. one country has a more diverse mix of goods or services in the same category as the particular product or service under consideration
Answer
Correct Response: A. This question requires the examinee to analyze economic factors such as opportunity costs that affect international marketing and trade. Comparative advantage is based on the notion of the relative economic costs of producing goods in different countries. Even if country A can produce two commodities more efficiently than country B, it may still be advantageous for country A to trade with country B for one of the goods instead of producing both. This can be determined by analyzing the opportunity costs, or costs associated with producing one product over another. An analysis of opportunity cost may show that it is more profitable for country A to focus its scarce resources on producing one product and trading that product for the second.

Competency 0008
Business and Marketing Career and Professional Development

9. Which of the following best outlines an effective procedure for developing a career plan?

  1. Step 1: forming the plan
    Step 2: gathering and analyzing information
    Step 3: identifying career goals
    Step 4: evaluating the plan
    Step 5: implementing the plan
  2. Step 1: identifying career goals
    Step 2: gathering and analyzing information
    Step 3: forming the plan
    Step 4: implementing the plan
    Step 5: evaluating the plan
  3. Step 1: forming the plan
    Step 2: identifying career goals
    Step 3: gathering and analyzing information
    Step 4: evaluating the plan
    Step 5: implementing the plan
  4. Step 1: identifying career goals
    Step 2: forming the plan
    Step 3: implementing the plan
    Step 4: gathering and analyzing information
    Step 5: evaluating the plan
Answer
Correct Response: B. This question requires the examinee to apply knowledge of career strategies that include a comprehensive set of goals and an individual career plan. The first step in developing a career plan requires identifying one’s career goals. This can be done by assessing one’s personal characteristics such as strengths and weaknesses, interests and abilities, etc. Next, one needs to gather and analyze information related to the careers listed in the goals. Now the actual plan describing the actions that need to be taken to obtain a chosen career can be completed, and the plan can be implemented. The last step requires evaluating the plan to determine whether or not one is on track to achieve the stated career goals.