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Intro to Business (BUAD 1010) > Exam 1 > Flashcards

Exam 1 Flashcards

(103 cards)

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1
Q

Business

A

Organization that provides goods or services to earn profit

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2
Q

Profit

A

Revenue - Expenses = Profit

Difference in revenue and expenses

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3
Q

What are the dimensions of the external environment of business?

A

Economic Environment
Technological Environment
Sociocultural Environment
Domestic Business Environment
Global Business Environment
Political/Legal Environment

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4
Q

Explain the economic dimension of the external environment of business

A

GDP, growth, inflation, unemployment

Relevant conditions that exist in the economic system which a company operates

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5
Q

Explain the technological dimension of the external environment of business

A

Ways by which firms create value for their constituents

Creation of technological companies, way technology transforms companies

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6
Q

Explain the sociocultural dimension of the external environment of business

A

Customs, morals, values, and demographic characteristics of the society

Determines business standards that a society will likely value and accept

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7
Q

Explain the political-legal dimension of the external environment of business

A

Relationship between government and business

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8
Q

Explain the global dimension of the external environment of business

A

International forces that affect a business and include international trade agreements, international economic conditions, and political unrest

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9
Q

Explain the domestic dimension of the external environment of business

A

Environment which a firm conducts operation and derives revenues

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10
Q

What are the five factors of production

A

Labor
Capital (money)
Entrepreneurs
Physical Resources
Informational Resources

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11
Q

What are factors of production? (define)

A

Resources that a country’s businesses use to produce goods and services

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12
Q

What is economic system

A

Nation’s system for allocating its resources among its citizens, both individuals and organizations

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13
Q

Labor

A

Human resources - Physical/intellectual contributions people make while engaged in economic production

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14
Q

Capital

A

Financial resources needed to operate business

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15
Q

Entrepreneur

A

Person who accepts risks and opportunities entailed in creating new business opportunities

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16
Q

Physical resources

A

Tangible things organizations use to conduct business - Include natural resources

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17
Q

Informational resources

A

data, such as market forecasts and economic data

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18
Q

Planned economy

A

Economy that relies on central government to control all/most factors of production and make all or most production and allocation decisions

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19
Q

What are successful economies moving towards as the most important factors of production?

A

entrepreneurial and informational technology skills

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20
Q

Communism

A

Political system which government owns and operates all factors of production

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21
Q

Socialism

A

Planned economic system which government owns and operates only selected major sources of production

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22
Q

Market economy

A

Individual producers and consumers control production/allocation by creating combinations of supply/demand (Political basis is often capitalism)

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23
Q

Capitalism

A

System that sanctions private ownership of factors of production; encourages entrepreneurship by offering products as incentive

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24
Q

Mixed market

A

Features characteristics of both planned and market (political basis often socialism) ex: China is moving towards socialism

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25
Privatization
Process of converting government enterprises to privately owned companies
26
demand
willingness/ability of buyers to purchase a product (good/service)
27
what is the driving force of a free market economy
customers
27
law of demand
buyers purchase more as price drops
28
surplus
situation which supplied exceeds quantity demanded
28
supply
willingness of/ability of producers to offer a good/service for sale
29
Law of supply
Producers offer more for sale as price increases
30
Shortage
situation which quantity demanded exceeds quantity supplied
31
Equilibrium price
point at which price that suppliers can charge is the same price as the number that is the maximum number of customers is willing to pay (supply matches demand)
32
Private enterprise system
Ownership of resources used to create wealth in the hands of individuals
33
Freedom of choice
You can sell labor to employer of your choice
34
Private property rights
one that allows individuals to pursue their own interests with minimal government restriction
35
Profits
lure of profits leads some people to abandon security of working for someone else and assume risks of entrepreneurship Critical to innovation and creativity
36
Competition
occurs when 2 or more businesses vie for the same resources/customers; motivates firms to be more efficient
37
Economic indicators
statistics that show whether economic system is strengthening, weakening, stable assess performance of economy
38
what are the characteristics of competition
perfect competition monopolistic competition oligopoly monopoly
39
Describe a perfect competition
local farmer many competitors relatively easy entry into industry identical goods offered by competing firms no control of price by individual firms
40
Describe a monopolistic competition
Stationery store many competitors, but fewer than in perfect competition fairly easy ease of entry to industry similar goods offered by competing firms some control over price by individual firms
41
Describe an oligopoly
Steel industry few competitors difficult ease of entry to industry can be similar or different goods offered by competing firms some level of control over price by individual firms
42
Describe a monopoly
public utility no competitors ease of entry into industry is regulated by government no directly competing goods or services considerable level of control over price by individual firms
43
business cycle
pattern of short-term ups and downs (expansions and contractions) in economy
44
Aggregate output
total quantity of goods and services produced by economic system during given period primary measure of growth in business cycle
45
Standard of living
total quantity of goods and services that can be produced with the currency used in an economic system
46
GNP
Gross national profit Total value of all goods/services produced by national economy within given period regardless of location of factors of production
47
GDP
Gross domestic profit Total value of all goods/services produced within given period by national economy through domestic production factors measure of aggregate output
48
Nominal GDP
GDP measured in current dollars or with components valued at current prices
49
Purchasing Power Parity
Principle that exchange rates are set so the prices of similar products in different countries are about the same (can compare to standard of living globally)
50
What happens when output grows faster than population
output per capita increases system provides more of goods/services people want
51
Productivity
inputs divided by outputs measure of economic growth that compares to how much a system produces with resources needed to produce it standard of living improves only through productivity increases
52
Balance of trade
economic value of all products that a country exports minus economic value of inputs can be positive or negative
53
National debt
amount of money government owes creditors financed through debts (bonds) tax dollars pay interest not tother government needs investor money is taken out of market where it would be invested in productive enterprises
54
stability
condition which amount of money available in an economic system and the quantity of money available in an economic system and the quantity of goods and services produced are growing at same rate
55
inflation
occurs when widespread price increases occur through economic system too many dollars chasing too few goods
56
consumer price index (CPI)
measure of prices of typical products purchased by consumers living in urban areas
57
unemployment
level of joblessness among people actively seeking work in an economic system
58
recession
period during which aggregate output, as measured by GDP, declines (2 successive quarters)
59
depression
deep, prolonged recession
60
fiscal policy
used by government regarding how it collects and spends revenue tax rates
61
monetary policy
used by government to control size of its money supply federal reserve injects capital into economy
62
stabilization
government economic policy intended to smooth out fluctuations in output and unemplyment and stabilize prices
63
import
product made or grown abroad but sold domestically
64
Export
product made or grown domestically but sold abroad
65
globalization
process by which the world economy is becoming a single interdependent system
66
NAFTA
North American Free Trade Agreement Agreement to gradually eliminate tariffs and trade barriers among U.S., Canada, and Mexico
67
What replaced NAFTA
USMCA
68
EU
European Union Agreement among major European nations to eliminate or make uniform most trade barriers affecting group members
69
ASEAN
Association of southeast Asian nations Organization for economic, political, cultural, and social cooperation among Southeast Asian nations
70
GATT
General Agreement on Tariffs and Trade To encourage multilateral reduction or elimination of trade barriers
71
WTO
World trade organization Member nations negotiate trade agreements and resolve disputes about trade policies and practices (amendments to GATT)
72
Trade deficit
Imports exceed esports, creating negative balance of trade
73
Trade surplus
exports exceed imports, creating positive trade balance
74
balance of payments
flow of all money into or out of a country (balance of trade, but also includes tourists, foreign aid, buying/selling currency by governments in foreign markets)
75
euro
common currency shared among most members of EU
76
absolute advantage
ability to produce something more efficiently than any other country can
77
comparative advantage
ability to produce some products more efficiently than others
78
individualism
interests of individual
79
collectivism
interests of group
80
power respect
authority is inherent in position of hierarchy
81
power tolerance
authority assessed by personal investment
82
uncertainty acceptance
positive response to change/opportunity
83
uncertainty avoidance
prefer structure and routine
84
aggressive goal behavior
value material possessions, money, and assertiveness
85
passive goal behavior
value quality of life, welfare, social relevance
86
long term outlook
value dedication and hard work
87
short term outlook
value social obligations
88
social orientation
person's beliefs about relative importance of individual vs. groups to which they belong
89
uncertainty orientation
feeling individuals have regarding uncertain and ambiguous situations
90
goal orientation
manner in which people are motivated to work towards different kinds of goals
91
power orientation
beliefs that people in culture hold about appropriateness of power and authority differences in hierarchies such as business organizations
92
time orientation
extent to which members of a culture adopt a long-term vs. short-term outlook on work, life, and elements of society
93
quota
restriction on number of products of a certain type that can be imported
94
embargo
government order banning exportation and or importation of particular product or all products from particular country
95
tariff
tax levied on imported products
96
subsidy
government payment to help a domestic business compete with foreign firms
97
business practice law
law or regulation governing business practices in different countries
98
cartel
association of producers whose purpose is to control supply and prices ex: oil in the middle east
99
legal content law
law requiring that products sold in a particular country be at least partly made there
100
dumping
practice of selling a product abroad for less than the cost of production
101
protectionism
practice of protecting domestic business at the expense of free market competition

Intro to Business (BUAD 1010) (1 decks)

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