Retail and Manufacturing Quiz

Many service providers are considered retailers because they

• employ only a small number of people.

• sell their services from a single store location.

• require a high initial start-up cost.

• focus on large market segments and institutional buyers.

• provide their services directly to ultimate consumers.

In the manufacturing sector, small businesses sometimes have an advantage over large firms because small businesses

• are exempted from paying taxes in most countries.

• can customize products to meet specific customer needs and wants.

• have better access to highly-skilled workers.

• can mass produce and supply goods in bulk.

• have better access to funds and can invest on sophisticated equipment.

Which of the following is a difference between high technology businesses and other small businesses?

• High technology businesses never start in garages, basements, kitchens, or dorm rooms, while some other types of small businesses can start in these places.

• High technology businesses are less innovative than other small businesses.

• High technology businesses require greater capital and have higher initial startup costs than other small businesses.

• High technology businesses are the only type of small business that uses technology.

• High technology businesses have lower initial startup costs than other small businesses.

Which of the following is a challenge associated with the sharing economy?

• pressure over whether workers are independent contractors or employees

• lack of flexibility

• competition from established firms

• inability to set rates

• the higher cost of services through this model

Which of the following is an advantage of a small business?

• the opportunity to compete in the mass market or for large market segments

• more money available for wages and salaries, rent, utilities, and other expenses

• greater adaptability to changing market demands

• the support that an office provides

• multiple layers of management to help make difficult decisions

When a small business begins to see significant growth, it requires the owner to

• disregard narrow niches.

• reduce the workforce.

• give up a certain amount of direct authority.

• delay decision making.

• decrease the levels of management.

Which of the following is a source of equity financing?

• borrowing money from friends

• securing government loans

• receiving trade credit from suppliers

• securing short-term loans from a family member

• selling personal assets to raise funds

If a small business fails to repay a bank loan, what will the lending institution do to recover its loss?

• sell stock in the business

• claim and rent out the business

• claim and sell the collateral or mortgage

• take over the business and keep profits

• claim and sell all the owner's personal property

Chang is an interior designer who starts his own consulting firm. His friend Rachel is the owner of a coffee shop. Chang decorates Rachel's new coffee shop in exchange for a supply of coffee whenever his clients visit his office. Which of the following sources of funding does this scenario best illustrate?

• trade credit

• equity financing

• mortgaging

• line of credit

• bartering

Which of the following statements is true of franchising?

• A franchisee often receives building specifications and designs from the franchiser.

• A franchisee does not receive accounting support from the franchiser.

• An individual experiences the most freedom in this form of business ownership.

• An individual only acquires the rights to a name and not the rights to methods of operation.

• A franchisee receives cash payments from the franchiser on a monthly basis.