business vocabulary Flashcards
business vocabulary (26 cards)
Avoidance
A risk-response strategy that involves choosing not to do something that is considered risky.
Business risk:
The possibility of loss (failure) or gain (success) inherent in conducting business.
Cost of goods
The amount of money a business pays for the products it sells or for the raw materials from which it produces goods to sell; the amount of money a business pays for the products (or for any part of the products) it sells.
Direct competition
Rivalry between or among businesses that offer similar types of goods or services.
Economic risk
The possibility of loss or failure that occurs as a result of the economy.
Expenses
The money that a business spends.
Gross profit:
Gross profit: Money left after the cost-of-goods expense is subtracted from total income (income from sales - cost of goods = gross profit).
Human risks:
Human risks: The possibility of loss or failure from human error.
Income
Income: The money received by resource owners and by producers for supplying goods and services to customers.
Indirect competition
Indirect competition: Rivalry between or among businesses that offer dissimilar goods or services.
Monopoly
Monopoly: A type of market structure in which a market is controlled by one supplier, and there are no substitute goods or services readily available.
Natural risks
Natural risks: The possibility of loss or failure from nature.
Net profit
Net profit: Money left after the cost-of-goods expense and the operating expense are each subtracted from the total income (gross profit - operating expense = net profit).
Nonprice competition
Nonprice competition: A type of rivalry between or among businesses that involves factors other than price.
Oligopoly
Oligopoly: A market structure in which there are relatively few sellers, and industry leaders usually determine prices.
Operating expenses
Operating expenses: All of the expenses involved in running a business.
Perfect competition
Perfect competition: A market structure in which there are many businesses selling a lot of identical products for about the same price to many buyers; also known as pure competition.
Price competition
Price competition: A type of rivalry between or among businesses that focuses on the use of price to attract scarce customer dollars.
Profit
Profit: Monetary reward a business owner receives for taking the risk involved in investing in a business; income left once all expenses are paid (income – expense = profit).
Pure risks
Pure risks: Chances of loss that carry with them the possibility of loss or no loss.
21.
- Reduction: A risk-response strategy that involves trying to reduce the chance of loss or severity of loss.
Regulated monopolies
Regulated monopolies: Monopolies that the government allows to exist legally under controlled conditions.
Retention
Retention: A risk-response strategy that involves assuming responsibility for the risk rather than transferring it.
Speculative risks
Speculative risks: Chances of loss that may result in loss, no change, or gain.
