Chapters 1-4 Flashcards
(123 cards)
1
Q
Define Business
A
A business is any activity that seeks to provide goods and services to others while operating at a profit.
2
Q
Define goods
A
Goods are tangible products such as computers, food, clothing, cars, and appliances.
3
Q
Define services
A
Services are intangible products (i.e., products that can’t be held in your hand) such as education, health care, insurance, recreation, and travel and tourism.
4
Q
Define an entrepreneur
A
An entrepreneur is a person who risks time and money to start and manage a business.
5
Q
Define revenue
A
Revenue is the total amount of money a business takes in during a given period by selling goods and services.
6
Q
Define profit
A
Profit is the amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the operation.
7
Q
When does a loss occur?
A
A loss occurs when a business’s expenses are more than its revenues.
8
Q
Define risk
A
Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable.
9
Q
Define the term “standard of living”
A
The term standard of living refers to the amount of goods and services people can buy with the money they have.
10
Q
Define the term “quality of life”
A
The term quality of life refers to the general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide.
11
Q
Define stakeholders
A
Stakeholders are all the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address (customers, employees, government, stockholders, etc.).
12
Q
Define outsourcing
A
Outsourcing means contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks.
13
Q
What does insourcing create?
A
Insourcing creates many new U.S. jobs and helps offset those jobs being outsourced.
14
Q
What are nonprofit organizations
A
A nonprofit organization is an organization whose goals do not include making a personal profit for its owners or organizers. Nonprofit organizations often do strive for financial gains, but they use them to meet their social or educational goals rather than for personal profit.
15
Q
List the five factors of production;
A
- Land (or natural resources). Land and other natural resources are used to make
homes, cars, and other products. - Labor (workers). People have always been an important resource in producing goods
and services, but many people are now being replaced by technology. - Capital. This includes machines, tools, buildings, or whatever else is used in the
production of goods. It might not include money; money is used to buy factors of
production but is not always considered a factor by itself. - Entrepreneurship. All the resources in the world have little value unless entrepreneurs
are willing to take the risk of starting businesses to use those resources. - Knowledge. Information technology has revolutionized business, making it possible
to quickly determine wants and needs and to respond with desired goods and
services.
16
Q
What are factors of production?
A
The resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge.
17
Q
What is the business environment?
A
The surrounding factors that either help or hinder the development of businesses.
18
Q
What factors the business environment?
A
- The economic and legal environment.
- The technological environment.
- The competitive environment.
- The social environment.
- The global business environment.
19
Q
What is the UCC
A
In the United States, the Uniform Commercial Code, for example, regulates business agreements such as contracts and warranties so that firms know they can rely on one another.
20
Q
Define technology;
A
Technology means everything from phones to computers, mobile devices, medical imaging machines, robots, the Internet, social media, and the various software programs and apps that make business processes more effective, efficient, and productive.
21
Q
Define efficiency
A
Efficiency means producing goods and services using the least amount of resources.
22
Q
Define productivity
A
Productivity is the amount of output you generate given the amount of input, such as the number of hours you work. The more you can produce in any given period, the more money you are worth to companies.
23
Q
What is E-commerce
A
E-commerce is the buying and selling of goods online. There are two major types of e-commerce transactions: business-to-consumer (B2C) and business-to-business (B2B).
24
Q
Define database
A
database, an electronic storage file for information.
25
Define Identity Theft
Identity theft is the obtaining of individuals’ personal information, such as Social Security and credit card numbers, for illegal purposes.
26
Define empowerment;
Giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer request.
27
What is demography
Demography is the statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.
28
What is inclusion
Inclusion is about having a voice that is heard.
29
What is belonging
Belonging is about feeling part of a community
30
What is greening?
Saving energy and producing products that cause less harm to the environment, products that cause less such as solar energy, is called greening.
31
Define Economics
Economics is the study of how society chooses to employ resources to produce goods
and services and distribute them for consumption among various competing groups and
individuals.
32
What does macroeconomics look at?
macroeconomics looks at the operation of a nation’s economy as a whole (the whole United States),
33
What does microeconomics look at?
microeconomics looks at the behavior of people and organizations in markets for particular products or services.
34
What is resource development?
Resource development is the study of how to increase resources (say, by getting oil and gas from shale and tar sands) and create conditions that will make better use of them (like recycling and conservation).
35
What is the invisible hand?
invisible hand is used to describe the process that turns self-directed gain into social and economic benefits for all.
36
What is capitalism?
Under capitalism all or most of the factors of production and distribution—such as land, factories, railroads, and stores—are owned by individuals. They are operated for profit, and businesspeople, not government officials, decide what to produce and
how much, what to charge, and how much to pay workers.
37
What is compassionate capitalism?
compassionate capitalism is not just businesses but also stakeholders—from customers to environmentalists—should share in the benefits of capitalism.
38
What is state capitalism?
State capitalism is a combination of freer markets and some government control.
39
What is free market?
an economic system based on supply and demand with little or no government control
40
Under free-market capitalism, people have four basic rights what are those rights?
1. The right to own private property
2. The right to own a business and keep all that business’s profits.
3. The right to freedom of competition.
4. The right to freedom of choice.
41
What is supply?
Supply refers to the quantities of products manufacturers or owners are willing to sell at different prices at a specific time.
42
What is demand?
Demand refers to the quantity of products that people are willing to buy at different prices at a specific time.
43
What is the equilibrium point?
where quantity demanded and quantity supplied are equal/cross each other
44
What is market price
The price determined by supply and demand.
45
Does the supply curve rise or fall?
Rises (The supply curve rises from left to right)
46
Does the demand curve rise or fall?
Falls (the demand curve falls from left to right)
47
What are shortages?
not enough products
48
What are surpluses?
too many products
49
What are the four different degrees of competition?
(1) perfect competition
(2) monopolistic competition
(3)oligopoly
(4) monopoly.
50
What is perfect competition?
Perfect competition exists when there are many sellers in a market and none is large enough to dictate the price of a product.
51
What is monopolistic competition?
monopolistic competition a large number of sellers produce very similar products that buyers nevertheless perceive as different, such as hot dogs, sodas, laptop computers, and T-shirts.
52
What is oligopoly competition?
An oligopoly is a degree of competition in which just a few sellers dominate a market, as we see in tobacco, gasoline, automobiles, aluminum, and aircraft.
In an oligopoly, products from different companies tend to be priced about the same.
53
What is a monopoly?
A monopoly occurs when one seller controls the total supply of a product or service, and sets the price.
54
What is socialism?
Socialism is an economic system based on the premise that some, if not most, basic businesses (e.g., steel mills, coal mines, and utilities) should be owned by the government so that profits can be more evenly distributed among the people.
They believe the government should carry out the distribution and be much more involved in protecting the environment and providing for the poor.
55
What is brain drain?
The cause of many innovators, creative thinkers, doctors, lawyers, business owners, and others who earned a lot of money to leave the country/state. This loss of the best and brightest people to other countries is called a brain drain
56
What is communism?
Communism is an economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production.
57
What are some communist countries?
Today, only China, North Korea, Vietnam, Laos, and Cuba are communist countries.
58
What are free-market economies?
Free-market economies exist when the market largely determines what goods and services get produced, who gets them, and how the economy grows. Capitalism is the popular term for this economic system.
59
What are command economies?
Command economies exist when the government largely decides what goods and services will be produced, who gets them, and how the economy will grow. Socialism and communism are variations on this economic system.
60
What are mixed economies?
Mixed economies exist where some allocation of resources is made by the market and some by the government.
61
What are the three major indicators of economic conditions?
(1) the gross domestic product (GDP)
(2) the unemployment rate
(3) price indexes
62
What is Gross domestic product (GDP)
the total value of final goods and services produced in a country in a given year (the products).
63
What is Gross output (GO)?
Gross output (GO) is a measure of total sales volume at all stages of production. GO is almost twice the size of GDP and is considered a better indicator of the business cycle and more consistent with economic growth theory (not only the products but also the materials).
64
What is the unemployment rate?
The unemployment rate refers to the percentage of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks.
65
What is inflation?
Inflation is a general rise in the prices of goods and services over time
66
What is disinflation?
Disinflation occurs when price increases are slowing (the inflation rate is declining).
67
What is deflation?
Deflation means that prices are declining.
68
What is stagflation?
Stagflation occurs when the economy is slowing but prices are going up anyhow.
69
What is the consumer price index (CPI)?
The consumer price index (CPI) consists of monthly statistics that measure the pace of inflation or deflation.
70
What is core inflation?
a measure of inflation that indicates a long-term trend rather than local or temporary price increases.
71
What is the producer price index (PPI)?
The producer price index (PPI) measures the change in prices at the wholesale level.
72
What are business cycles?
Business cycles are the periodic rises and falls that occur in economies over time.
73
What are the stages of business cycles?
1. An economic boom is just what it sounds like—business is booming.
2. Recession is two or more consecutive quarters of decline in the GDP.
3. A depression is a severe recession, usually accompanied by deflation.
4. A recovery occurs when the economy stabilizes and starts to grow
74
What is the Keynesian increasing spending and economic theory
argues that government intervention is necessary to stabilize the economy during downturns like increase public spending, lower taxes, etc.
75
What is the national deficit?
The national deficit is the amount of money the federal government spends beyond what it collects in taxes for a given fiscal year.
76
What is the national debt
The national debt is the sum of government deficits over time.
77
What is the monetary policy?
Monetary policy is the management of the money supply and interest rates by the Federal Reserve Bank.
78
What is fiscal policy?
A fiscal period refers to the specific time frame used by a business, government, or organization for financial reporting and budgeting.
79
What is importing?
importing is buying products from another country.
80
What is exporting
Exporting is selling products to another country.
81
What is free trade?
Free trade is the movement of goods and services among nations without political or economic barriers.
82
What is the comparative advantage theory?
Comparative advantage theory states that a country should sell to other countries those products it produces most effectively and efficiently, and buy from other countries those products it cannot produce as effectively or efficiently.
83
Absolute Advantage
The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.
84
What two indicators do nations rely on when measuring global trade?
Balance of trade and balance of payments
85
What is the Balance of Trade?
The total value of a nation’s exports compared to its imports over a particular period
86
What is trade surplus?
A favorable balance of trade; occurs when the value of a country’s exports exceeds that of its imports.
87
What is a trade of deficit?
An unfavorable balance of trade; occurs when the value of a country’s imports exceeds that of its exports.
88
What is the balance of payments?
The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment.
89
What is dumping?
Selling products in a foreign country at lower prices than those charged in the producing country.
90
What is licensing?
A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty).
91
What is Export Assistance Centers (EACs)
EACs provide hands-on exporting assistance and trade- finance support for small and medium-sized businesses that wish to directly export goods and services.
92
What is contract manufacturing?
A foreign company’s production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing
93
What is joint venture?
A foreign company’s production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing
94
What is strategic alliance?
A long-term partnership between two or more companies established to help each company build competitive market advantages
95
What is foreign direct investment (FDI)?
The buying of permanent property and businesses in foreign nations.
96
What is foreign subsidiary?
A company owned in a foreign country by another company, called the parent company.
97
What is multinational corporation?
An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management.
98
What is sovereign wealth funds (SWFs)?
Investment funds controlled by governments holding large stakes in foreign companies.
99
What is ethnocentricity?
An attitude that your own culture is superior to other cultures.
100
What is exchange rate?
The value of one nation’s currency relative to the currencies of other countries.
101
What is devaluation?
Lowering the value of a nation’s currency relative to other currencies
102
What is bartering?
the exchange of merchandise for merchandise or service for service with no money traded.
103
What is countertrading?
a complex form of bartering in which several countries each trade goods or services for other goods or services
104
What is trade protectionism?
The use of government regulations to limit the import of goods and services.
105
What are tariffs?
A tax imposed on imports.
making imported goods more expensive to buy.
106
What are import quotas?
A limit on the number of products in certain categories that a nation can import.
107
Define Embargo
A complete ban on the import or export of a certain product, or the stopping of all trade with a particular country.
108
What is the General Agreement on Tariffs and Trade (GATT)
General Agreement on Tariffs and Trade (GATT), a global forum for reducing trade restrictions on goods, services, ideas, and cultural programs.
109
What is the World Trade Organization (WTO)?
The international organization that replaced the General Agreement on Tariffs and Trade, and was assigned the duty to mediate trade disputes among nations.
110
What is the common market?
A common market (also called a trading bloc) is a regional group of countries with a common common market
external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members.
111
What is the North American Free Trade Agreement (NAFTA)?
Agreement that created a free-trade area among the United States, Canada, and Mexico
112
What is the United States-Mexico-Canada Agreement (USMCA)?
Free-trade agreement among the U.S., Mexico, and Canada that replaced NAFTA in an effort to create more balanced and reciprocal trade.
113
What is outsourcing?
Contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks.
114
What is ethics?
Standards of moral behavior; that is, behavior accepted by society as right versus wrong.
115
What are the Compliance-based ethics codes?
Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.
116
What are the integrity-cased ethics codes?
Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers.
117
Who are whistleblowers?
insiders who report illegal or unethical behavior
118
What is the corporate social responsibility (CSR)?
A business’s concern for the welfare of society
119
What is the corporate philanthropy?
The dimension of social responsibility that includes charitable donations.
120
What is the corporate social initiatives?
Enhanced forms of corporate philanthropy directly related to the company’s competencies.
121
What is the corporate responsibility?
The dimension of social responsibility that includes everything from hiring minority workers to making safe products.
122
What is the corporate policy?
The dimension of social responsibility that refers to the position a firm takes on social and political issues.
123
What is insider trading?
An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends.
