1. Which of the following is an economic consequence of a decision to open another factory?

a. Newspapers carry a story about the employment expected in the new factory

b. Morale of employees improves because of the expansion

c. Money is borrowed to finance the construction of the new factory

d. A competitor visits the location of the new factory.

2. The purpose of the first step in economic decision making, define the problem, is to

a. determine the best alternative

b. quantify the decision

c. evaluate non quantitative factors

d. clarify the need for a decision

3. Determining what the organization wants to achieve is what component of the decision model?

a. Specify the goal

b. Predict possible outcomes

c. Collect additional quantitative data

d. Identify feasible alternatives

4. Sue Barnesha, has just graduated from college and is looking for a job. She has identified three goals in her decision making process– location, salary, and job advancement. She has had two job offers and is trying to decide which job to take. For the first job offer alternative, which of the following would be considered to be an outcome in the decision-making process?

a. The first job offer is in a great location

b. The first job offer does not provide a very high salary and the chance for job advancement is limited

c. The first job offer is not in a very good location, but does offer a good salary with an acceptable chance of job advancement.

d. All of the above would be considered to be outcomes in this decision.

5. For each feasible alternative:

a. identify the mutually exclusive decision to be made

b. redefine the goal of the organization based upon the alternative

c. predict the possible outcomes

d. None of the above

6. Mr. Q has just purchased a business and is trying to decide which bank to use to finance the purchase of some equipment. Which one of the following represents qualitative information that is relevant to the decision?

a. Schools near Bank A are better than Bank B

b. Mr. Q finds the service of Bank B to be better than Bank A

c. The interest rate of Bank A is lower than Bank B

d. Two of the above answers are correct..

7. Deciding to overstate revenues of a dot.com company when the management knows it is stretching the truth is an example of:

a. a feasible alternative

b. GAAP

c. a violation of ethical principles

d. an example of an ethical theory

8. A stakeholder is (are)

a. An individual or organization that will be affected in some way by the decision.

b. The same as a stockholder

c. The employees and top management of the organization.

d. All of the above

9. If you observed voting irregularities in the student government elections, ethical behavior would suggest that you should:

a. maintain silence since it was not your behavior that was unethical

b. predict the possible outcomes

c. ignore the whole affair since your favorite candidate won anyway

d. apply the ethical principle of integrity

10. Nonethical principles such as wealth, safety, and self esteem are

a. an integral part of all ethical decision making processes

b. included in the list of ethical principles developed by the Josephson Institute of Ethics

c. ethically neutral and are not necessarily inconsistent with ethical behavior

d. not consistent with ethical behavior