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Busn 1001 > Exam 1 (Chapters 1-2) > Flashcards

Exam 1 (Chapters 1-2) Flashcards

1
Q

measurement of happiness

A

quality of life

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2
Q

what can affect the standard of living?

A

location, education, etc.

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3
Q

money carries ______

A

value

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4
Q

what makes the goal more “real?”

A

having a deadline or date

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5
Q

what has a large impact on the ability to live the “good life?”

A

government (taxes), regulations, businesses, other consumers, economic cycles, and inflation (3-3.5%)

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6
Q

when you have more liabilities than assets.

AKA negative net worth

A

insolvent

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7
Q

running total showing you where your money goes

A

income statement

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8
Q

set of goals and limitations

A

budget

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9
Q

what are 3 mistakes when saving for retirement?

A
  1. starting too late
  2. saving too little money each money
  3. investing too conservatively
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10
Q

process that considers elements of your financial affairs in order to fulfill your financial goals

A

financial planning

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11
Q

a medium of exchange that is used as a measure of value in financial transactions

A

money

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12
Q

the amount of satisfaction that is received from purchasing certain quantities of goods and services

A

utility

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13
Q

describes a person’s financial position at a given point in time

A

balance sheet

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14
Q

a financial statement that measures financial performance over expenses

A

income statement

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15
Q

a detailed financial report that looks forward, based on expected income and expenses

A

budget

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16
Q

the ability that an asset has to quickly be turned into cash

A

liquidity

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17
Q

assets that are held in the form of cash or can readily be converted to cash with little or no loss in value

A

liquid assets

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18
Q

assets such as stocks, bonds, mutual funds, and real estate that are acquired in order to earn a return rather than provide a service

A

investments

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19
Q

these are assets that are not very liquid, and that may take some considerable to time to convert into cash. additionally, if you need to quickly get rid of a long-term asset, you can expect that you would have to considerably lower its price to sell it

A

long-term assets

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20
Q

tangible assets that are immovable: land and anything fixed to it, such as a house

A

real property (fixed assets)

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21
Q

tangible assets that are moveable and used in everyday life.
examples: your car, your clothes, electronics, etc.

A

personal property

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22
Q

any debt due within 1 year of the date of the balance sheet

A

current liabilities (short-term)

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23
Q

current liabilities that represent the balances outstanding against established credit lines

A

open account (credit lines, credit cards)

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24
Q

any liability due 1 year or more from the date of the balance sheet

A

long-term liabilities

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25
Q

the actual ownership interest in a specific asset or group of assets

A

equity

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26
Q

an individual’s or family’s actual wealth

A

net worth

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27
Q

the financial state in which net worth is less than zero

A

insolvency

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28
Q

earnings received as wages, salaries, bonuses, commissions, interest and dividends, and proceeds from the sale of assets

A

income

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29
Q

money spent on living expenses and to pay taxes, purchase assets, or repay debt

A

expenses

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30
Q

contractual, predetermined expenses involving equal payments each period

A

fixed expenses

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31
Q

expenses involving payment amounts that change from one time period to the next

A

variable expenses

32
Q

an excess amount of income over expenses that results in increased net worth

A

cash surplus

33
Q

an excess amount of expenses over income, resulting in insufficient funds as well as in decreased net worth

A

cash deficit

34
Q

a program provided by the federal government that taxes individuals that are currently employed in order to provide retirement income for people who are currently retired, disabled, or unable to work

A

social security

35
Q

the condition in which a dollar received today is with more than a dollar received sometime in the future

A

time value of money

36
Q

type of interest that is paid on top of interest

A

compound interest

37
Q

you can calculate what the value of a certain amount of savings will be in the future by using what equation?

A

FV=PV(1+i)^N

FV= future value of your savings
PV= your current savings that you are investing
i= the interest rate that your investment will earn over time
N= the number of compounding periods
38
Q

an investment such as your 401K or retirement account

A

annuity

39
Q

an organization whose purpose is to generate profits through the sale of goods and services that are desired by customers

A

business

40
Q

tangible items that are manufactured by businesses

A

goods

41
Q

intangible offerings that cannot be held, touched, or stored, but that generate satisfaction to their end user

A

services

42
Q

the proceeds from selling a good or service

A

revenue

43
Q

when revenues are higher than expenses

A

profit

44
Q

when revenues are lower than expenses

A

loss

45
Q

the chance that a business will lose time and money in its pursuit to realize profits

A

risk

46
Q

exist to achieve goals other than profits

A

not for profit organizations (non-profit)

47
Q

what are the factors of production?

A 
capital
entrepreneurs
knowledge
labor
natural resources
48
Q

inputs such as equipment, buildings, and tools that are used to produce goods and services for customers

A

capital

49
Q

people who combine different inputs and convert such inputs into finished products and services with the intention of generating a profit through the sale of those products and services to consumers

A

entrepreneurs

50
Q

the combined sills and talents of the labor pool

A

knowledge

51
Q

the human factor; the people that transform inputs into finished products

A

labor

52
Q

inputs also known as raw materials that will be transformed into finished products

A

natural resources

53
Q

businesses do not operate in a _____

A

vacuum

54
Q

in the external environment you can recognize forces that can dramatically affect the way a business operates. what are those forces?

A 
technological
global
competitive
social forces
demographic
political and legal
social forces
economic
55
Q

the internal environment also affects the way a business operates; however, businesses have more control over the internal than the external environment. what are 4 forces identified as being part of the internal environment?

A

entrepreneurs
managers
workers
customers

56
Q

how do businesses interact with consumers, retailers, households, and government?

A

by exchanging resources and capital to generate profits

57
Q

what is one of the most common ways to determine the economic health of any country?

A

by taking a look at the total value of that nation’s output of goods and services

58
Q

measured by the nation’s output of goods ands services that people can buy with the money they have

A

nation’s standard of living

59
Q

the total value of all of the goods and services that are produced in a particular country

A

gross domestic product (GDP)

60
Q

what country is the only country that doesn’t use GDP?

A

China

61
Q

system in which businesses are privately owned with minimal government ownership or interference. individuals own the factors of production

A

capitalism

62
Q

under this system, a centralized form of government owns most, if not all, enterprises and controls the markets

A

communism

63
Q

basic industries within the country are government owned. such industries may include oil production, utilities, transportation, etc. taxation is very high as the government tries to redistribute income from successful private business owners and entrepreneurs to the rest of the people in the country

A

socialism

64
Q

Finland, Venezuela, Bolivia, and Israel are examples of what?

A

socialist countries

65
Q

Cuba and North Korea are examples of what?

A

communist countries

66
Q

most countries in the world have what kind of economic system?

A

mixed economic system

67
Q

represents the number of goods and services that consumers like you are willing to buy at different prices at a specific time

A

demand

68
Q

the number of products that businesses are willing to sell to consumers at different prices at a specific time

A

supply

69
Q

what are some economic forces that affect consumption and production of goods and services?

A 
consumers' income
consumers' tastes and preferences
competition
expectations of future prices
prices of similar products
70
Q

what are some factors that affect the supply of a product or service?

A

prices of inputs (materials and labor) needed to produce it
technology available to produce it
prices of other goods that can be produced with the inputs —used or owned by the sellers
expectations about future prices
the number of sellers serving the market

71
Q

what are the four different market structures?

A 
perfect competition
pure monopoly
monopolistic competition
oligopoly
markets for factors of production
72
Q

under this structure, consumers rule because there are a large number of firms, offering basically the same product or serve ice, competing for your business

A

perfect competition

73
Q

what sets the price in a perfect competition?

A

competition

74
Q

under this structure, consumers are at the mercy of one producer of that particular good or service. this structure is characterized for having very high barriers to entry into that particular market; those barriers to entry are factors that make it very difficult for competitors to enter the market.

A

pure monopoly

75
Q

under this structure, consumers enjoy product and service offerings from many firms. the firms in that market offer products and services that are distinct enough, that people perceive those differences as important, therefore choosing a particular brand of product over a competitor’s offering

A

monopolistic competition

76
Q

restaurants are a good example of what kind of competition?

A

monopolistic

77
Q

characterized by few firms having a lot of market share of sales in the market. high barriers to entry keep the number of producer limited to just a few. under this structure, producers are constantly watching what their competitors are doing so that they can react quickly to new product offerings

A

oligopoly

Busn 1001 (2 decks)

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