Chapter 1 Vocabulary

Question 1

Activity that provides goods or services to consumers for the purpose of making a profit.

Answer 1

Profit-making Business

Question 2

Difference between the revenue that a company brings in from selling goods and services and the costs of generating this revenue.

Answer 2

Profit

Question 3

Organizations established to provide social or educational services.

Answer 3

Not-for-profit Organizations (Nonprofit)

Question 4

A business that, beyond the profit motive, has a social mission built into its business model.

Answer 4

For-profit Social Enterprise

Question 5

Process of planning for, organizing, directing, and controlling a company’s resources so that it can achieve its goals.

Answer 5

Management

Question 6

Person who designs and oversees the process that converts resources into goods or services.

Answer 6

Operations Manager

Question 7

The activity, set of institutions, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Answer 7

Marketing

Question 8

Financial advisor responsible for measuring, summarizing, and communicating financial and managerial information.

Answer 8

Accountant

Question 9

Activities involved in planning for, obtaining, and managing a company’s funds.

Answer 9

Finance

Question 10

Resources consisting of land, labor, capital (money, buildings, and equipment), and entrepreneurial skills combined to produce goods and services.

Answer 10

Factors of Production

Question 11

Means by which a society makes decisions about allocating resources to produce and distribute products.

Answer 11

Economic System

Question 12

Economic system featuring the highest level of government control over allocation and distribution.

Answer 12

Communism

Question 13

Economic system falling between communism and capitalism in terms of government control over allocation and distribution.

Answer 13

Socialism

Question 14

Economic system in which most businesses are owned and operated by individuals.

Answer 14

Free Market System

Question 15

Economic system featuring the lowest level of government control over allocation and distribution.

Answer 15

Capitalism

Question 16

Economic system that relies on both markets and government to allocate resources.

Answer 16

Mixed Market Economy

Question 17

Process of converting government-owned businesses to private ownership.

Answer 17

Privatization

Question 18

The study of the production, distribution, and consumption of goods and services.

Answer 18

Economics

Question 19

Market in which many consumers buy standardized products from numerous small businesses.

Answer 19

Perfect Competition

Question 20

Quantity of a product that buyers are willing to purchase at various prices.

Answer 20

Demand

Question 21

Graph showing the quantity of a product that will be bought at certain prices.

Answer 21

Demand Curve

Question 22

Quantity of a product that sellers are willing to sell at various prices.

Answer 22

Supply

Question 23

Graph showing the quantity of a product that will be offered for sale at certain prices.

Answer 23

Supply Curve

Question 24

Price at which buyers are willing to buy exactly the amount that sellers are willing to sell.

Answer 24

Equilibrium Price

Question 25

Market in which many sellers supply differentiated products.

Answer 25

Monopolistic Competition

Question 26

Market in which a few sellers supply a large portion of all the products sold in the marketplace.

Answer 26

Oligopoly

Question 27

Market in which there is only one seller supplying products at regulated prices.

Answer 27

Monopoly

Question 28

Monopoly in which, because of the industry’s importance to society, one seller is permitted to supply products without competition.

Answer 28

Natural Monopoly

Question 29

Monopoly in which one seller supplies a product or technology to which it holds a patent.

Answer 29

Legal Monopoly

Question 30

Measure of the market value of all goods and services produced by a nation’s economy in a given year.

Answer 30

Gross Domestic Product (GDP)

Question 31

Pattern of expansion and contraction in an economy.

Answer 31

Business Cycle

Question 32

Economic slowdown measured by a decline in gross domestic productivity.

Answer 32

Recession

Question 33

Severe, long-lasting recession.

Answer 33

Depression

Question 34

Condition under which about 95 percent of those who want to work are employed.

Answer 34

Full Employment

Question 35

Percentage of the total labor force that’s currently unemployed and actively seeking work.

Answer 35

Unemployment Rate

Question 36

Conditions under which the prices for products remain fairly constant.

Answer 36

Price Stability

Question 37

Rise in the overall price level.

Answer 37

Inflation

Question 38

Decrease in overall price level.

Answer 38

Deflation

Question 39

Index that measures inflation by measuring the prices of goods purchased by a typical consumer.

Answer 39

Consumer Price Index (CPI)

Question 40

Statistic that provides information about trends in the economy.

Answer 40

Economic Indicator

Question 41

Statistical data that measures economic trends after the overall economy has changed.

Answer 41

Lagging Economic Indicator

Question 42

Statistical data that predict the status of the economy three to twelve months in the future.

Answer 42

Leading Economic Indicator

Question 43

Measure of optimism that consumers express about the economy as they go about their everyday lives.

Answer 43

Consumer Confidence Index

Question 44

Efforts exerted by the Federal Reserve System (“the Fed”) to regulate the nation’s money supply.

Answer 44

Monetary Policy

Question 45

Governmental use of taxation and spending to influence economic conditions.

Answer 45

Fiscal Policy

Question 46

Total amount of money owed by the federal government.

Answer 46

National Debt