BMG100

Question 1

What is a business?

Answer 1

Individuals or organizations trying to earn a profit by providing products that satisfy peoples needs.

Question 2

What are examples of tangible goods?

Answer 2

Things you can hold: Loaf of bread, TV, Car, Computer.

Question 3

What are examples of services?

Answer 3

Dry cleaning, photo processing, checkups at the doctor, concerts, ski pass.

Question 4

What is the primary goal of a business?

Answer 4

To earn profit.

Question 5

What are stake holders?

Answer 5

Those that have a stake in the success and outcomes of a business are considered stake holders. Customers, employees, investors, government regulators, community and society.

Question 6

What are the 4 P’s

Answer 6

Product: Picking the right product, if product doesn’t sell well, get rid of it.
Price: Selecting the right price for products. Relates to profitability.
Place: Making sure products are available for customers in the right place at the right time. Promotion: Advertising, personal selling, sales, promotion and publicity

Question 7

Tangible Goods

Answer 7

A physical object
Ex. Cars, Phones, Clothes

Question 8

Command economy

Answer 8

Economic system the government decides what goods and services will be produced, how, whom they are available.

Question 9

Socialism

Answer 9

Economic system which the key industries are owned/controlled by the government. (Sweden, Israel, India).

Question 10

Comunism

Answer 10

An economic system where all property/profits are owned by the government which decides what goods/services will be produced. (Cuba).

Question 11

Capitalism

Answer 11

Economic system individuals own/operate majority of businesses.

Question 12

Free-market economy

Answer 12

Economic systems in which business + individuals decide what to produce/buy and the market determines prices/quantities that are sold.

Question 13

Mixed economy

Answer 13

Economic systems where most land/business are privately owned but with various levels of government involvement.

Question 14

Invisible hand

Answer 14

Describes how an individuals personal gain benefits others and a country’s economy.

Question 15

Competition

Answer 15

Rivalry among businesses for consumer dollars
Affects # of choices an individual has and the prices he/she pay for products
Helps business owners/employees to choose effective business strategies

Question 16

Monopoly

Answer 16

One business providing a product in a given market
Ex. LCBO, SAQ, HydroOne

Question 17

Oligopoly

Answer 17

Market/industry with few large sellers
Ex. Air Canda vs WestJet
Rogers vs Bell

Question 18

Monopolistic competition

Answer 18

Many buyers with a large # of sellers
All competing for the same customers
Ex. Adidas, Nike

Question 19

Pure/Perfect competition

Answer 19

Many small businesses in the same product market
Market prices determined by consumer demand
Ex. Farm, Stockmarket

Question 20

Concept of supply and demand

Answer 20

Market situation in which there are many buyers/sellers of a product
No buyer/seller is powerful enough to affect the price of a product
Distribution of resources/products and prices are decided by supply and demand

Question 21

Demand

Answer 21

of good services consumers are willing to buyout a given price and a specific time.

Question 22

Supply

Answer 22

of products businesses are willing to sell at a different prices at a specific time.

Question 23

Economic cycles/productivity

Answer 23

Economy expansion: Economy = growing and consumers are spending money
Economy contraction: Spending declines layoffs, economy slows down.

Question 24

Gross Domestic Product (GDP)

Answer 24

Total dollar value of goods and services produced by all people within the boundaries of a country during a 1 year period

Question 25

Consumer Price Index (CPI)

Answer 25

Monthly index that measures change in prices of a fixed basket of goods purchased by a typical consumer in a urban area

Question 26

Inflation / Deflation

Answer 26

Inflation: Tracks increase in general level of prices of goods and services over a period of time Low inflation (2%)= Stable economy high inflation (10%)= trouble because rising prices cause loss of purchasing power Deflation: Decrease price of goods and services Lead to declining profit for companies or unemployment

Question 27

Depression

Answer 27

High unemployment rates Consumer spending low

Question 28

Unemployment / Rate

Answer 28

Unemployment: % of population that want to work but are unable to find jobs

Question 29

Ethical Issue

Answer 29

An identifiable problem, solution, or opportunity that requires a person to choose from several actions, that are wrong, ethical, or unethical.

Question 30

Key ethical term: Whisleblower

Answer 30

An employee who exposes an employers wrong doing to outsiders, such as media or government regulatory agency

Question 31

Corporate Citizenship

Answer 31

Extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by stakeholders

Question 32

4 dimensions of social responsibility

Answer 32

1) Economic (Earning profits) 2) Legal (Complying with the law) 3) Ethical (Doing what is right and fair) 4) Voluntary (non required activities that promote human activities and good will)

Question 33

Why Do Nations Trade?

Answer 33

To obtain raw materials and goods that are unavailable to them in their religion but can be produced elsewhere at a lower price then they can produce themselves

Question 34

Multinational Corporation (MNC)

Answer 34

Corporation that operates on a world wide scale, without significant ties to any one nation or religion

Question 35

Absolute advantage

Answer 35

A monopoly that exist when a country is the only source of an item, the only producer / most efficient producer of an item.

Question 36

Comparative advantage

Answer 36

When a country specializes in products that it can supply more efficiently at a lower cost that it can produce other items

Question 37

Trade deficit

Answer 37

"Negative balance of trade" Harmful because can mean failure at a business, loss of Jobs, lower standard of living

Question 38

Trade surplus

Answer 38

Nation that exports more goods than it imports "favourable balance of trade"

Question 39

Tariff and trade restrictions

Answer 39

Part of nations legal structure Maybe established / removed for political reasons

Question 40

Import tariff

Answer 40

A tax levied by a nation on goods imported into the country

Question 41

Exchange control

Answer 41

Regulations that restrict the amount of currency that can be bought or sold

Question 42

Quota

Answer 42

A restriction on the # of units of a particular product that can be imported into a country

Question 43

Embargo

Answer 43

A prohibition on trade for a particular product

Question 44

Dumping

Answer 44

The act of a country / business selling products at less than what it costs

Question 45

Cartel

Answer 45

Groups of firms or nations that agree to act as a monopoly and not compete with each other, in order to generate a competitive advantage in world marcels

Question 46

Trading monopoly

Answer 46

Buys goods in one country and sells them to buyers of another country Handles all activities required to move products from one country to another

Question 47

Licensing

Answer 47

Trade arrangement where one company allows another company name, products, brands, m etc. in exchange for fee or royalty

Question 48

Franchising

Answer 48

Form of licensing where a company agrees to provide a franchise name, logo, etc. In return for financial commitment.

Question 49

Contract Manufacturing

Answer 49

Hiring a foreign company to provide a specified volume of the initiating company product to specification Final product carries domestic firms name common in high tech industries automotive and food

Question 50

Joint venture

Answer 50

The sharing of the costs of operations of a business between foreign company and a local partner

Question 51

strategic alliance

Answer 51

A partnership formed to create competitive advantage on a worldwide basis

Question 52

Direct investment

Answer 52

Ownership of overseas facilities