Bus 051 - Exploring Business - Ch. 1

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BUSINESS

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Any activity that provides goods or services to consumers for the purpose of making a profit

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PROFIT

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Difference between the revenue a company brings in from selling goods and services and the costs of generating this revenue

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NOT-FOR-PROFIT (NON-PROFIT) ORGANIZATIONS

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Organizations that has a purpose other than returning profits to owners

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MANAGEMENT

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Process of planning for, organizing, directing, and controlling a company's resources so that it can achieve its goals

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OPERATIONS MANAGER

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Person who designs and oversees the process that converts resources into goods or services

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MARKETING

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Set of process for creating, communicating, and delivering value to customers and for improving customer relationships

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ACCOUNTANTS

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Financial adviser responsible for measuring, summarizing, and communicating financial and managerial information

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FINANCIAL ACCOUNTANTS

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Prepare financial statements to help users, both inside and outside the organization, assess the financial strength of the company

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MANAGERIAL ACCOUNTANTS

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Prepare information, such as reports on the costs of materials used in the production process, for internal use only

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FINANCE

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Activities involved in planning for, obtaining, and managing a company's funds

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ECONOMICS

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Study of how scarce resources are used to produce output - goods and services - that are distributed among people

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RESOURCES

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Inputs used to produce outputs: land & natural resources, labor (physical or mental), capital (buildings, equipment, money), and entrepreneurship

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FACTORS OF PRODUCTION

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Resources consisting of land, labor, capital, and entrepreneurial skills combined to produce goods and services

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ECONOMICS SYSTEM

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Means by which a society makes a decisions about allocating resources to produce and distribute products

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COMMUNISM

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Economic system featuring the highest level of government control over allocation and distribution

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SOCIALISM

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Economic system falling between communism and capitalism in terms of government control over allocations and distributions

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FREE-MARKET SYSTEM

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Economic system in which most businesses are owned and operated by individuals

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CAPITALISM

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Economic system featuring the lowest level of government control over allocation and distribution

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MIXED-MARKET ECONOMY

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Economic system that relies on both markets and government to allocate resources

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PRIVATIZATION

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Process of converting government-owned business to private owners

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PERFECT COMPETITION

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Market in which many consumers buy standardized products from numerous small businesses

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DEMAND

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Quantity of a product that buyers are willing to purchase at various prices

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DEMAND CURVE

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Graph showing the quantity of a product that will be bought at certain prices

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SUPPLY

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Quantity of a product that sellers are willing to sell at various prices

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SUPPLY CURVE

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Graph showing the quantity of a product that will be offered for sale at certain prices

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EQUILIBRIUM PRICE

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Price at which buyers are willing to buy exactly the amount that sellers are willing to sell

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MONOPOLISTIC COMPETITION

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Market in which many sellers supply differentiated products

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OLIGOPOLY

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Market in which a few sellers supply a large portion of all products sold in the marketplace

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MONOPOLY

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Market in which there is only one seller supplying products at regulated prices

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NATURAL MONOPOLY

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Monopoly in which because of the industry's importance to society, one seller is permitted to supply products without competition

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LEGAL MONOPOLY

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Monopoly in which one seller supplies a product or technology to which it holds a patent

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GROSS DOMESTIC PRODUCT (GDP)

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Measure of the market value fo all goods and services produced by a nation's economy in a given year

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BUSINESS CYCLE

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Pattern of expansion and contraction in an economy

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RECESSION

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Economic slowdown measured by a decline in gross domestic production

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DEPRESSION

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Severe, long-lasting recession

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FULL EMPLOYMENT

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Condition under which about 95% of those who want to work are employed

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UNEMPLOYMENT RATE

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Percentage of the total labor force that's currently unemployed and actively seeking work

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PRICE STABILITY

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Conditions under which the prices for products remain fairly constant

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INFLATION

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Rise in overall price level

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DEFLATION

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Decrease in overall price level

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CONSUMER PRICE INDEX (CDI)

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Index that measures inflation by measuring the prices of goods purchased by a typical consumer

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ECONOMIC INDICATOR

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Statistic that provides information about trends in economy

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LOGGING ECONOMIC INDICATOR

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Statistical data that measure economic trends after overall economy has changed

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LEADING ECONOMIC INDICATOR

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Statistical data that predict status of economy 3-12 months in the future

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CONSUMER CONFIDENCE INDEX

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Measure of optimism that consumers express about economy during everyday lives

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MONETARY POLICY

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Efforts exerted by the federal reserve system (FED) to regulate nation's money supply

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FISCAL POLICY

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Governmental use of taxation and spending to influence economic conditions

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NATIONAL DEBT

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Total amount of money owed by federal government