Essential Concepts in Business Administration for DECA SL

Question 1

What are the main types of economic systems?

Answer 1

Market Economy, Command Economy, Mixed Economy

Examples include the U.S. for Market Economy, North Korea for Command Economy, and most modern economies for Mixed Economy.

Question 2

What is a Market Economy?

Answer 2

Businesses and individuals make production decisions based on supply and demand

Example: The U.S.

Question 3

What is a Command Economy?

Answer 3

The government makes all economic decisions

Example: North Korea.

Question 4

What is a Mixed Economy?

Answer 4

A combination of government intervention and free-market principles

Example: Most modern economies.

Question 5

What does the Law of Demand state?

Answer 5

When prices increase, demand decreases; when prices decrease, demand increases.

Question 6

What does the Law of Supply state?

Answer 6

When prices increase, businesses supply more; when prices decrease, businesses supply less.

Question 7

What is Equilibrium Price?

Answer 7

The price where supply meets demand.

Question 8

Define Sole Proprietorship.

Answer 8

One person owns the business, takes all profits, and has unlimited liability.

Question 9

Define Partnership.

Answer 9

Two or more people own the business and share profits and liabilities.

Question 10

Define Corporation.

Answer 10

A separate legal entity from its owners, offering limited liability but more regulations.

Question 11

What is a Franchise?

Answer 11

A business model where an individual (franchisee) operates under an established brand (franchisor) using a proven system.

Question 12

What are the main business functions?

Answer 12

• Operations
• Marketing
• Finance
• Human Resources (HR)

Question 13

What is Operations in a business context?

Answer 13

Day-to-day activities that keep a business running (e.g., logistics, supply chain management).

Question 14

What is Marketing?

Answer 14

Creating and delivering value to customers through products, promotions, and pricing strategies.

Question 15

What does Finance encompass in a business?

Answer 15

Managing money, investments, and business expenses.

Question 16

What is Human Resources (HR)?

Answer 16

Hiring, training, and managing employees.

Question 17

What is Corporate Social Responsibility (CSR)?

Answer 17

Businesses aim to be socially responsible by reducing environmental harm, engaging in philanthropy, and ensuring fair labor practices.

Question 18

Give examples of Corporate Social Responsibility.

Answer 18

• Companies going carbon-neutral
• Donating to charities
• Implementing ethical sourcing.

Question 19

What is the Marketing Mix?

Answer 19

The Marketing Mix consists of 4Ps: Product, Price, Place, and Promotion.

Question 20

What does ‘Product’ refer to in the Marketing Mix?

Answer 20

Product refers to what the business sells, including goods, services, and ideas.

Question 21

What does ‘Price’ refer to in the Marketing Mix?

Answer 21

Price refers to how much customers are charged, including strategies like penetration pricing and price skimming.

Question 22

What does ‘Place’ refer to in the Marketing Mix?

Answer 22

Place refers to where the product is sold and how it is distributed, such as retail stores and e-commerce.

Question 23

What does ‘Promotion’ refer to in the Marketing Mix?

Answer 23

Promotion refers to how the product is advertised, including TV ads and social media.

Question 24

What is Target Market & Market Segmentation?

Answer 24

It involves identifying ideal customers based on demographics, psychographics, behavior, and geography.

Question 25

What is Branding?

Answer 25

Branding is creating a unique image for a business, such as Nike's 'Just Do It' slogan.

Question 26

What is Positioning?

Answer 26

Positioning is how a product is perceived in the market, for example, Tesla as luxury electric cars.

Question 27

What are Promotion Strategies?

Answer 27

Promotion strategies include advertising, personal selling, public relations, and sales promotions.

Question 28

What is Customer Relationship Management (CRM)?

Answer 28

CRM is a business strategy focused on building long-term relationships with customers through personalized service.

Question 29

What are Basic Financial Statements?

Answer 29

Basic financial statements include the Income Statement, Balance Sheet, and Cash Flow Statement.

Question 30

What does an Income Statement show?

Answer 30

It shows revenue, expenses, and profit/loss over a period.

Question 31

What does a Balance Sheet list?

Answer 31

It lists a company’s assets, liabilities, and equity at a specific time.

Question 32

What does a Cash Flow Statement track?

Answer 32

It tracks how money flows in and out of a business.

Question 33

What is the difference between Revenue and Profit?

Answer 33

Revenue is the total money made from sales, while profit is the money left after subtracting expenses.

Question 34

What is Gross Profit?

Answer 34

Gross Profit is calculated as Revenue minus Cost of Goods Sold (COGS).

Question 35

What is Net Profit?

Answer 35

Net Profit is Gross Profit minus Operating Expenses.

Question 36

What is the purpose of Budgeting & Financial Planning?

Answer 36

Businesses create budgets to plan spending and ensure profitability.

Question 37

What are Fixed Costs?

Answer 37

Fixed Costs are costs that stay the same, such as rent and salaries.

Question 38

What are Variable Costs?

Answer 38

Variable Costs are costs that change with production levels, such as raw materials.

Question 39

What are Sources of Business Financing?

Answer 39

Sources include loans, venture capital, and crowdfunding.

Question 40

What is the role of Credit & Interest Rates in business?

Answer 40

Businesses use credit to finance operations, and interest rates determine repayment amounts on loans.

Question 41

What is Effective Communication in Business?

Answer 41

It includes verbal, non-verbal, and written communication, with active listening and clear messaging.

Question 42

What are Leadership Styles?

Answer 42

Leadership styles include autocratic, democratic, and laissez-faire.

Question 43

What is Maslow’s Hierarchy of Needs?

Answer 43

It states that employees perform better when basic and psychological needs are met.

Question 44

What is Herzberg’s Two-Factor Theory?

Answer 44

It suggests job satisfaction is influenced by motivators and hygiene factors.

Question 45

What are the elements of a contract?

Answer 45

Elements include offer, acceptance, consideration, and legality.

Question 46

What can a breach of contract lead to?

Answer 46

It can lead to lawsuits.

Question 47

What is the Fair Credit Reporting Act (FCRA)?

Answer 47

It regulates credit information.

Question 48

What do Truth in Advertising Laws prevent?

Answer 48

They prevent false or misleading advertisements.

Question 49

What is Copyright?

Answer 49

Copyright protects creative works such as books and movies.

Question 50

What do Trademarks protect?

Answer 50

Trademarks protect brand names and logos.

Question 51

What do Patents protect?

Answer 51

Patents protect inventions.

Question 52

What are Trade Secrets?

Answer 52

Trade Secrets are confidential business information, like Coca-Cola’s recipe.

Question 53

What is Ethical Decision-Making in Business?

Answer 53

It involves being honest, fair, and socially responsible.

Question 54

What are the Steps of the Sales Process?

Answer 54

Steps include approach, needs discovery, presentation, handling objections, closing the sale, and follow-up.

Question 55

How should a business handle customer complaints?

Answer 55

Listen carefully, apologize, take action, and follow up to ensure satisfaction.

Question 56

What is E-Commerce & Digital Marketing?

Answer 56

It involves using websites, social media, and online ads to sell products.

Question 57

What is GDPR?

Answer 57

GDPR is a European law protecting personal data.

Question 58

What is CCPA?

Answer 58

CCPA protects consumer data in California.

Question 59

How does AI & Automation improve business?

Answer 59

AI and automation enhance efficiency through chatbots, data analysis, and automated marketing.

Question 60

What is Cloud Computing in business?

Answer 60

Cloud computing involves using cloud storage and software like Salesforce and QuickBooks for operations.