Chapter 1

Question 1

for profit business

Answer 1

company that produces or sells goods for the purpose of making a profit, with the profit, the business can:
- reinvest it to expand
- provide improved goods and service
- give the owners pocket money

Question 2

non-profit organization

Answer 2

an organization that does not seek profit as its primary motive, but instead raises funds for a specific purpose; they invest all earnings into their mission

ie/ red cross or canadian wildlife federation

Question 3

sole proprietor

Answer 3

a business owner by one person known as the proprietor

Question 4

partnership

Answer 4

a company owned by two or more partners, they share the costs and responsibilities

Question 5

corporation

Answer 5

an artificial “person” created by law and owned by shareholders

Question 6

franchise, franchisor, franchisee

Answer 6

franchisor: licenses the right to its name, operating procedure, designs, and business expertise to another business

franchisee: the other business that pays the franchise fee and exchange for the franchisers’s business system

ie/ mcdonald’s, wendy’s, goodlife fitness

Question 7

different channels of distribution

Answer 7

A business can be classified according to how it delivers goods and services to their customers

• brick and mortar: a physical business location (ie/ a grocery store)
• brick and click: a business model with both an in person store and an online presence (ie/ nike)

Question 8

profit

Answer 8

income left after costs and expenses are paid
- profit (or loss) = revenue - expenses

Question 9

revenue

Answer 9

the money received from selling goods and services

Question 10

expenses

Answer 10

the payments (costs) involved in running a business and the assets (things the business owns) that gets “used up” are while operating it
- rent
- salaries and wages
- insurance
- repairs

Question 11

solvent vs insolvent

Answer 11

• a business is solvent when it can pay off its debt and financial obligations
• a business is insolvent when it cannot pay off its debts and financial obligations

Question 12

producers

Answer 12

businesses that make goods or provide services

Question 13

consumers vs customers

Answer 13

consumers: the people who use or benefit from the product or service

customer: the people who purchase the goods or services

(the consumer and customer can be the same person)

Question 14

marketplace

Answer 14

a location where producers and consumers come together to buy and sell goods and services
- mall
- farmers market
- amazon
- facebook marketplace

Question 15

purchasing power

Answer 15

• it is how much an individual is able to buy with his or her money
• it gives individuals the control to buy goods and services at the prices they want and the locations they like

Question 16

difference between needs and wants

Answer 16

needs: basic necessities for survival like food, clothing, and shelter

wants: things that add comfort or pleasure to consumers’ lives

Question 17

tangible vs intangible

Answer 17

tangible: something that can be touched or felt (ie/ shoes, clothes, book, electronics)

intangible: something that cannot be touched or felt (ie/ services like tutoring, haircuts, software)

Question 18

products vs services

Answer 18

products: tangible things that individuals can buy (ie/ clothes, shoes, TVs)

services: action people pay for by experts (ie/ plumbing, gardening, tutoring)

Question 19

obsolete

Answer 19

products that are no longer sold or commonly used because consumers do not want or need them anymore
- typewriters
- VHS tapes
- encyclopedia thank you
- phonebooks

Question 20

factors of production (economic resources) — what are the 3 types?

Answer 20

• natural resources: includes raw materials and supplies, like freshwater, wood, minerals, and metals
• human resources: includes intelligence, ideas, and physical capabilities/labor
• capital resources: includes liquid capital like money or stocks and non-liquid capital like tools, machinery, and estate

Question 21

interdependence

Answer 21

relying on the goods and services provided by thousands of different businesses to satisfy our own needs and wants

Question 22

factors that affect supply

Answer 22

• change in number of producers
• price of the related good or service
• change in technology
• change in expectation
• change in cost of production

Question 23

factors that affect demand

Answer 23

• change in income
• change in tastes
• change in expectations
• change in population

Question 24

law of supply

Answer 24

as price increases, producers, make more revenue, more goods and services put onto the market, pay overtime, expand their factories, higher more shifts, buy more equipment

• if consumer demand for a product/service is high while the supply is low, prices will tend to be high and vice versa

Question 25

law of demand

Answer 25

- as price decreases, quantity demanded increases - as price increases, quantity demand demanded decreases

Question 26

supply

Answer 26

the quantity of good or service that producers are willing and able to provide within the range of prices that people are willing to pay

Question 27

demand

Answer 27

the quantity of a good or service that consumers are willing and able to buy at a particular price

Question 28

maslows level of hierarchy

Answer 28

lowest 1. physiological needs: air, water, food, shelter 2. safety needs: personal security, employment, health 3. love and belonging: friendship, family, sense of connection 4. esteem: respect, status, recognition, strength, freedom 5. self actualization: desire to become the most one can be highest