Chapter 1 & 2 Flashcards Preview

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Flashcards in Chapter 1 & 2 Deck (50):
1

Business

individuals or organizations who try to earn a profit by providing products that satisfy people's needs

2

product

a good/service with tangible or intangible characteristics that provide satisfaction and benefits

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profit

difference between what it costs to make and sell a product and what a customer pays for it

4

nonprofit organizations

organizations that may provide goods or services but do not have the fundamental purpose of earning profits

5

stakeholders

groups that have a stake in the success and outcomes of a business

6

economics

study of how resources are distributed for the production of goods and services within a social system

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natural resources

land, forests, minerals, water, and other things that are not made by people

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human resources
"labor"

physical and mental abilities that people use to produce goods and services

9

financial resources
"capital"

funds used to acquire natural and human resources needed to provide products

10

capital
"financial resources"

funds used to acquire natural and human resources needed to provide products

11

economic systems

description of how a particular society distributes its resources to produce goods and services

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communism

-karl Marx
-society in which ppl, without regard to class, own all nation's resources

13

socialism

economic systems in which gov. owns and operates basic industries but individuals own most businesses

14

Communism
Business ownership

Competition

Profits

-most business owned an operated by government

-government controls competition and regulates the economy

--excess income goes to gov.; gov supports economic and political institutions

15

Communism
Product availability and price

Employment options

-consumers have limited choice of G & S; prices usually high

-Little choice in choosing a career; most people work for gov-owned industries or farms

16

Socialism
Business Ownership

Competition

-gov. owns & operates some major industries; individuals own small businesses

-restricted in major industries; encouraged in small busi.

17

Socialism
Profits

profits earned by sm. businesses may be reinvested in business; profits from gov-owned industries go to the gov.

18

Socialism
product availability and price

employment options

-consumers have some choice of G & S; prices are determined by supply and demand

-more choice of careers; many people work in gov. jobs

19

Capitalism
Business Ownership

Competition

-individuals own and operate all businesses

-encouraged by market forces and gov. regulations

20

Capitalism
Profits

Product availability and price

Employment options

-individuals and businesses are free to keep profits and use them as they wish after paying taxes

-consumers have a wide choice of G & S; prices are determined by Supply and Demand

-Unlimited choice of careers

21

capitalism (free enterprise)

economic system in which individuals own and operate the majority of businesses that provide G & S

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free-market system

pure capitalism, in which all economic decisions are made w/o gov. intervention

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mixed economies

economies made up of elements from more than one economic system

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demand

number of G & S that consume are willing to buy @ diff. prices @ specific time

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supply

number of products- G & S - that businesses willing to sell @ diff. prices @ specific time

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equilibrium price

price @ which business willing to supply =consumers willing to buy

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competition

rivalry among businesses for consumers' dollars

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pure competition

market structure that exists when there are many small businesses selling on standardized product

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monopolistic competition

market structure that exists when there are fewer businesses than in pure-compeititon environment and differences among the goods they sell are small

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oligopoly

market structure that exists when very few businesses selling a product

31

monopoly

one business providing a product in market

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economic expansion

situation that occurs when economy is growing and ppl spending more money; purchases stimulate the production of G & S, in turn stimulates employment

33

inflation

condition characterized by continuing rise in prices

34

economic contraction

slowdown of economy characterized by a decline in spending and during which businesses cut back on production and lay off workers

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recession

decline in production, employment, and income

36

unemployment

percentage of population wants to work but unable to find jobs

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depression

kcondition of economy
unemployment very high, consumer spending is low, and business output is sharply reduced

38

gross domestic product (GDP)

sum of all goods and services produced in country during a yr

39

budget deficit

condition nation spends more than it takes in from taxes

40

standard of living

level of wealth and material comfort that people have available to them

41

entrepreneur

individual who risks his/her wealth, time, and effort to develop for profit an innovative product or way of doing something

42

business ethics

principles and standards that determine acceptable conduct in business

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social responsibility

business's obligation to maximize its positive impact and minimize its negative impact on society

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ethical issue

identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right/wrong, ethical/unethical

45

bribes

payments, gifts, special favors, intended to influence outcome of decision

46

codes of ethics

formalized rules and standards that describe what a company expects of its employees

47

whistleblowing

act of employee exposing an employer's wrongdoing to outsiders (media & gov regulatory agencies)

48

corporate citizenship

businesses meet legal, ethical, economic, and voluntary responsibilities placed on them by stakeholders

49

consumerism

activities that independent individuals, groups, and orgs. undertake to protect rights as consumers

50

sustainability

conducting activities for long-term well-being of natural environment
-assessment and improvement of business strategies, economic sectors, work practices, technologies, and lifestyles to maintain health of natural environ.