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Introduction to Business Chapter 1 > Introduction to Business Chapter 1 > Flashcards

Introduction to Business Chapter 1 Flashcards

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1
Q

Business

A

Organization that provides goods or services to earn profits

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2
Q

Profits

A

difference between a business’s revenues and its expenses

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3
Q

External Environment

A

everything outside an organization’s boundaries that might affect it

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4
Q

Domestic Business Environment

A

the environment in which a firm conducts its operations and derives its revenues

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5
Q

Global Business Environment

A

the international forces that affect a business

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6
Q

Factors affecting the global environment at a general level include

A

International trade agreements, international economic conditions, and political unrest

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7
Q

Technological Environment

A

Generally includes all the ways by which firms create value for their constituents

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8
Q

Political Environment

A

Reflects relationship between business and government, usually in the form of government regulations of business

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9
Q

Sociocultural Environment

A

includes the customs,mores,values and demographic characteristics of the society in which an organization functions.

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10
Q

Economic Environment

A

refers to relevant conditions that exist in the economic system in which a company operates

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11
Q

Factor of production

A

the resources that a country’s businesses use to produce goods and service

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12
Q

Labor

A

sometimes called human resources of human capital, includes the physical and intellectual contributions people make while engaced in economic production

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13
Q

Capital

A

the financial resources needed to operate a business

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14
Q

Entrepreneurs

A

a person who accepts the risks and opportunities entailed in creating and operating a new business

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15
Q

Physical Resources

A

the tangible things that organizations use to conduct their business

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16
Q

Information resources

A

data and other information used by other businesses

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17
Q

Planned Economy

A

economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions

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18
Q

Market Economy

A

Economy in which individuals control production and allocation decisions through supply and demand

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19
Q

Communism

A

political system in which the government owns and operates all factor of production

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20
Q

Market

A

mechanism for exchange between buyers and sellers of a particular good or service

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21
Q

Capitalism

A

system which allows the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive

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22
Q

Mixed Market Economy

A

economic system featuring characteristics of both planned and market economies

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23
Q

Privatization

A

process of converting government enterprises to privately owned companies

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24
Q

Socialism

A

partially planned system when the government owns and operates selected major industries

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25
Demand
the willingness and ability of buyers to purchase a products (a good or service)
26
Supply
the willingness and ability of producers to offer a good or service for sale
27
The law of demand
Buyers will purchase (demand) more of a product as its price drops and less of a product as its price increases
28
The law of supply
producers will offer (supply) more of a product for sale as its price rises and less of a product as its price drops
29
Demand and supply schedule
reveal the relationships among different levels of demand and supply at different price levels
30
demand curve
graph showing how many units of a product will be demanded (bought) at a different price
31
supply curve
graph showing how many units of a product will be supplied (offered for sale) at different prices
32
Market price (equilibrium price)
the price at which the quantity of goods demanded and the quantity of goods supplied are equal
33
Surplus
situation in which the quantity supplied exceed the quantity demanded
34
Shortage
the quantity demanded will be greater than the quantity supplied
35
Private Enterprise
system that allows individuals to purchase their own interests with minimal government restriction
36
Competition
when two or more businesses vie for the same resource or customers
37
Private enterprise requires presence of four elements
1. Private property rights 2. Freedom of choice 3. Profits 4. Competition
38
Monopolistic Competition
Market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors
39
Oligopoly
market or industry characterized by a handful of generally large sellers with the power to influence the prices of their products
40
Monopoly
when an industry of market has only one producer (or else is so dominated by one producer that other firms cannot compete with)
41
Natural Monopoly
Industry in which one company can most efficiently supply all needed goods or services
42
Economic indicators
43
Business Cycle
the pattern of short term ups and downs in an economy
44
Aggregate Cycle
the total quantity of goods and services produced by an economic system during a given period
45
Standard of living
the total quantity and quality of goods and services people can purchase with the currency used in their economic system
46
Gross Domestic Product (GDP)
total value of all goods and services produced by within a given period by a national economy through domestic factors of production
47
Gross National Product (GNP)
total value of all goods and services produced by a national economy within a giving period regardless of where the factors of production are located
48
GDP Per Capita
GDP per individual person
49
Real GDP
GDP that has been adjusted to account for changes in currency values and price changes
50
Nominal GDP
GDP measured in current dollars or with all components valued at certain prices
51
Purchasing Power Parity
the principle that exchange rates are set so that the prices of similar products in different countries are about the same
52
Productivity
a measure of economic growth that compares how much a system produces with the resources needed to produce it
53
Balance of trade
the economic value of all the products that a country exports minus the economic value of all the products it imports
54
National Debt
the amount of money the government owes its creditors
55
Stability
is a condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate
56
Inflation
occurs when an economic system experiences widespread price increases
57
Consumer Price Index (CPI)
a measure of the prices of typical products purchased by consumers living in urban areas
58
Unemployment
the level of joblessness among people actively seeking work in an economic system
59
Recession
a period during which aggregate output as measured by GDP declines
60
Depression
a prolonged and deep recession
61
Fiscal Policies
policies used by a government regarding how it collects and spends revenues
62
Monetary Policies
policies used by government to control the size of its money supplies
63
Stabilization Policy
Government economic policy intended to smooth out fluctuations in output and unemployment and to stabilize prices

Introduction to Business Chapter 1 (4 decks)

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