BUSN115 Midterm Study Guide

The BUSN115 midterm exam is 2 pages long. It is a timed exam worth 140 points that you may enter only once. You have 2 hours to complete the exam. It consists of 20 multiple choice questions worth 5 points each. There are 2 essay questions worth 20 points each. Be sure to save and save often while you are working on the exam, but do not submit your exam until you are finished with both pages!

To earn full credit for the essay questions, your response to each question should answer the question completely in approximately 2 – 3 paragraphs. The exam reflects the following course objectives and possible topics:

TCO 1: Given a description of a typical business, demonstrate how that business acts within our economic system to achieve its goals as well as those of society, along with an understanding of how the future may impact these goals.

Know how government regulation affects the economy. Show the relationship of supply and demand as illustrated on supply and demand

curves. Define elements of productivity and how it can be increased. Define “quality of life”. Know the similarities and differences between for profit and not-for-profit

organizations. Know the role of the US Federal Reserve and what tools they use to implement

their policies. Know what a free market economy is and its relationship to the distribution of

wealth. Define a socialist economic system. Know how profit is determined for a business. Know who the stakeholders are of a business. Know what constitutes US fiscal policy and how is it used to manage the

economy. Define gross domestic product (GDP). Know and explain the “rights of capitalism”.

TCO 2: Given the importance of ethics in business, be able to understand and address ethical dilemmas that may occur in workplace activities and offer suggestions to prevent their recurrence.

Be able to define ethics. Know how compliance is related to ethics. What some ethical concerns are as described in the text? List and explain the steps to be considered when determining the ethics of an

action. Know the relationship of ethics and leadership.

TCO 3: Given the need to increase profits through cost reductions, describe the use of globalization strategies to accomplish this initiative, along with a discussion of the pros and cons of this approach.

Define and apply tariffs, import quotas and subsidies as applied to foreign trade. Know what trade protectionism is. Define a favorable and unfavorable balance of trade. Define exchange rate, and explain floating, pegged and fixed exchange rates. Know what the General Agreement on Tariffs and Trade (GATT) is and its

purpose. Know the meaning of currency devaluation. Know what is meant by “balance of payments” as related to foreign trade. Explain the advantages of free trade. Define what creditor and debtor nations are.

TCO 4: Given understanding of entrepreneurship, be able to describe the major elements necessary for success, along with an understanding of the potential risks associated with starting a business venture.

Describe the forms of business ownership, know how they are used and the advantages and disadvantages of each one.

Describe a franchise and know its advantages and disadvantages. Define a business merger. Know the purpose of a limited liability company. Know what advantages a small business may have when entering a foreign

countries market. Know why women as a group are successful in franchises. Define a farm cooperative. Know what is the difference between a privately and publicly-owned business. Know reasons why some people become entrepreneurs. Know some of the reasons for the success and failure of small businesses. Define intrapreneur. Know the steps that should be taken in the buying of a franchise. Know about the Small Business Microloan program. Know which business sector offers the most opportunity for profit for an

entrepreneur. Know what SCORE is. Know what is considered “a self-nurturing business person”. Know what the aspects of a limited liability company are.