Study Guide

Field 040: Business Education 
Sample Selected-Response Questions

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General Test Directions

This test consists of two sections: 1) a section with selected-response questions and 2) a constructed-response section.

Each question in the first section is a selected-response question with four answer choices. Read each question and answer choice carefully and choose the  start uppercase ONE end uppercase  best answer.

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  start uppercase NOT end uppercase  be penalized for guessing.

The second section of this test consists of one constructed-response assignment. You will be asked to provide a written response to the assignment. Directions for completing your written response to the constructed-response assignment appear immediately before the assignment.

You may  start uppercase NOT end uppercase  use any type of calculator or reference materials during the test session.

Sample Selected-Response Questions

Competency 0001 
Understand the functions of business management in contemporary and historical contexts.

1. Which of the following is an example of the organizing function of business management?

  1. deciding to expand the range of products and services the business provides
  2. determining the financial resources needed to achieve short-term business goals
  3. deciding how much decision-making authority should be given to each position in the business
  4. forecasting the business's personnel needs and devising effective strategies for filling them

Correct Response: C. Managers of a business enterprise are exercising the organizing function of business management when they determine how to most effectively use the human resources of the enterprise for the purpose of achieving the business's long-term and short-term goals. An important step in organizing a business is to determine effective ways of distributing decision-making authority between various divisions, departments, and positions.

Competency 0003 
Understand human resource management and development.

2. The primary purpose of the Equal Employment Opportunity Commission ( E E O C ) in regulating human resource management within a business organization is to ensure that:

  1. underrepresented groups within the local population are proportionally represented among the organization's employees.
  2. all job applicants have an equal chance of being selected, regardless of work history or other background factors.
  3. recruitment efforts are not targeted toward any particular community or geographic area.
  4. all decisions about hiring, discipline, and termination are based on objective, job-related criteria.

Correct Response: D. The Equal Employment Opportunity Commission (E E O C) is a five-member commission appointed by the president for five-year terms to administer the Civil Rights Acts of 1964, 1972, and 1991; the Equal Pay Act; the Age Discrimination in Employment Act; and the Americans with Disabilities Act. The acts administered by the E E O C are all designed to ensure that any criteria used in employee selection are bona fide occupational qualifications. For example, a factor such as age cannot be used to disqualify a job applicant unless the employer can prove that the applicant's age makes him or her incapable of performing the essential functions of the job.

Competency 0006 
Understand basic principles and applications of accounting.

3. By correctly taking a trial balance at the end of an accounting period, an accountant can establish with certainty that:

  1. every transaction that occurred during the accounting period has been recorded.
  2. all transactions that occurred during the accounting period have been posted to the correct accounts in the ledger.
  3. the total debits recorded during the accounting period equal the total credits recorded during the period.
  4. all accounts have been debited or credited appropriately for each transaction that occurred during the accounting period.

Correct Response: C. The purpose of taking a trial balance at the end of an accounting period is to verify that the total credits recorded for the period equal the total debits recorded for the period. Credits need not equal debits for each individual account, only for all accounts taken together. The procedure of taking a trial balance will not detect any accounting errors that do not result in an imbalance between total debits and total credits for the accounting period.

Competency 0008 
Understand accounting concepts and procedures.

4. Compared with the first in, first out ( F I F O ) method of inventory accounting, the last in, first out ( L I F O ) method of inventory accounting has which of the following characteristics?

  1. The cost of goods sold is closer to prices at the time of sale.
  2. The cost of goods sold tends to magnify net income.
  3. Balance sheet figures provide a more accurate assessment of inventory value.
  4. The cost of goods sold is lower in times of rising prices.

Correct Response: A. Because of increases in the price of goods over time, a decision must be made about how inventory items are to be valued for purposes of financial reporting. According to the last in, first out (L I F O) method of inventory accounting, it is assumed that items remaining in inventory at the end of an accounting period were purchased earlier than the items that were sold during the period. The L I F O method therefore yields a higher reported cost of goods sold and a lower reported net income than does the first in, first out (F I F O) method.

Competency 0010 
Analyze factors affecting business marketing decisions.

5.  start bold Use the chart below to answer the question that follows. end bold 


The title of the chart is Product Distribution Channels. There are four channels depicted in parallel, each with options for Manufacturer, Agent/Broker, Wholesaler, Retailer, and Users. In each case, a box represents the use of that option. Channel A has a box for Manufacturer and a box for Users. Channel B has a box for Manufacturer, a box for Retailer, and a box for Users. Channel C has a box for Manufacturer, a box for Wholesaler, a box for Retailer, and a box for Users. Channel D has a box for Manufacturer, a box for Agent/Broker, and a box for Users.


Which distribution channel would most likely be used in the sale of industrial products?

  1. Channel A
  2. Channel B
  3. Channel C
  4. Channel D

Correct Response: A. Industrial products are usually sold directly by the manufacturer to the industrial user. Many products, such as machine tools, are made to order. Manufacturers of industrial products typically employ their own salespeople and often maintain sales offices at strategic locations to provide information and services for customers.

Competency 0013 
Understand principles and procedures related to career development.

6. Many résumés, especially those submitted to large companies, are now screened electronically. Because of this process, it is most important to include which of the following when preparing a résumé for a specific position?

  1. personal interests that are related to the job
  2. a list of individuals who will provide references
  3. a description of academic courses taken
  4. key words related to the job description

Correct Response: D. Most companies use recruiting management software to screen résumés and manage applicant information. These programs use search algorithms to rank applicants by matching key words and phrases considered essential to the job opening with those found on electronically submitted résumés. It is therefore important to understand the key words associated with a job description and to include them strategically when writing a résumé.

Competency 0016 
Understand principles and procedures related to information management and information systems.

7. An associate is using presentation software to create a slideshow for an upcoming business meeting. Which of the following design approaches would likely be most effective in giving the presentation a cohesive and unified look?

  1. utilizing the same font size on all slides
  2. employing an identical column format on all slides
  3. applying the same theme elements on all slides
  4. using at least two or more bulleted animations on all slides

Correct Response: C. Using the same design elements on all slides in a presentation will provide a cohesive and unified look. This includes using the same font family, color scheme, and page layout and design. These features are typically referred to as themes and provide an efficient and easy way to ensure a consistent appearance in a slide show presentation.

Competency 0017 
Understand principles and procedures related to telecommunications and applications of telecommunications in business.

8. A Web designer would most likely use the view page source feature of a Web browser for which of the following purposes?

  1. reviewing the  H T M L  code of a Web page
  2. determining the  U R L  of a Web page
  3. locating the  I P  address of a Web site
  4. assessing the security risks of a Web site

Correct Response: A. Web pages are written in hypertext markup language (H T M L), and a Web browser is a computer application that retrieves and displays Web pages by interpreting the H T M L to display content such as text, images, video, or audio. The view page source feature of a Web browser allows any user to see the H T M L code used to create the Web page that he or she is viewing. This is a very useful tool for reviewing H T M L code.

Competency 0019 
Understand basic principles and applications of macroeconomics.

9. In general, which of the following results occurs when a country imposes a tariff on an imported product?

  1. Foreign producers of the product increase supply to stimulate demand.
  2. Domestic producers of the product increase their prices.
  3. Foreign producers of the product gain a comparative advantage.
  4. Domestic producers of the product become more efficient.

Correct Response: B. When a tariff is imposed on an imported product, foreign producers have to increase their prices to compensate for their increased costs. Domestic producers will consequently experience less price competition from foreign producers. The immediate effect of diminished price competition from foreign producers will therefore typically be an increase in domestic producers' prices because the domestic producers perceive that they can raise their prices without forfeiting market share.

Competency 0020 
Understand basic principles and applications of microeconomics.

10.  start bold Use the supply curve below to answer the question that follows. end bold 


   

The title of the graph is Supply Curve for Ice Cream. The horizontal axis is labeled Number of Half-gallons in thousands, with values marked from 0 to 800 in increments of 100. The vertical axis is labeled Price per Half-gallon, with values marked from 3.20 dollars to 3.50 dollars in increments of 10 cents. Supply curve S sub 1 starts at 3.10 dollars at 50,000 half-gallons and curves upward to a value of 3.50 dollars at about 550,000 half-gallons. An arrow points from supply curve S sub 1 to supply curve S sub 2. Supply curve S sub 2 starts at 3.10 dollars at 150,000 half-gallons and curves upward to a value of 3.50 dollars at 700,000 half-gallons.


Which of the following developments would most likely prompt an ice cream company to shift output from  S sub 1  to  S sub 2 

  1. increased competition from substitute goods
  2. an increase in the price of cream
  3. the introduction of more efficient production methods
  4. a decline in consumer demand for ice cream

Correct Response: C. The introduction of more efficient production methods means that the cost of producing each half-gallon of ice cream will decrease. The effect of this change is that the company can now produce an increased quantity of ice cream at each possible price. This increased output can be seen on the graph as a shift of the supply curve to the right, to S sub 2.