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110 Cards in this Set

  • Front
  • Back
What are the advantages of a sole proprietorship?
1. Owner retains all profit
2. Easy to form and dissolve
3. Owner has flexability
What are the disadvantages of a sole proprietorship?
1. Unlimited financial liability
2. Financial limitations
3. Management deficencies
4. Lack of continuity
What are the advantages of a partnership?
1. Easy to form
2. Can benefit from complementary management skills
3. Extended financial capacity
What are the disadvantages of a partnership?
1. Unlimited financial liability
2. Interpersonal conflict
3. Lack of continuity
4. Difficult to dissolve
What are the advantages of a coorporation?
1. Limited financial liability
2. Specialized management skills
3. Expanded financial capacity
4. Economies of scale
what are the disadvantages of a coorporation?
1. Difficult and costly to form and dissolve
2. Tax dissadvantages
3. Legal Restrictions
What is comparative advantage?
1.If you can make for less than you can buy you should make…if you can buy for less than you can make…you should buy
not-for-profit organization
A businesslike establishment that has primary objectives, such as public service, other than returning a profit to its owners.
Bretton Woods Facts
1. Small Town in New Hampshire
2. Economic Conference
3. 1944
4. 44 countries attended
Bretton Woods Focus
1. Financial Issues
2. Stability
3. International Trade
4. Comparative Advantage
Adam Smith
1. Wrote Wealth of Nations
2. Productivity and the invisible hand
battle among businesses for cosumer acceptance
advantages of small organizations
1. innovation
2. superior customer service
3. low costs
4. filling isolated market niches
disadvantages of small organizations
1. management shortcomings
2. inadequate financing
3. government regulation
relationship between the number of units produced and the number of human and other production imputs necessary to produce them.
all profit-seeking activities and enterprises that provide goods and services necessary to an economic system
rewards for businesspeople who take the risks involved to offer goods and servies to customers
factors of production
four basic inputs for efective operation: natural resources, captial, human resources, and entrepreneurship
private enterprise system
economic system that rewards businesses for their ability to identify and serve the needs and demands of customers
battle among businesses for consumer acceptance
risk taker in the private enterprise system
name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors' offerings
relationship management
collection of activities that build and maintain ongoing, mutually beneficial ties between a business and its customers and other parties
customer's perception of the balance between the positive traits of a good or service and its price
customer satisfaction
ability of a good or service to meet or exceed a buyer's needs and expectations
relationship between the number of units produced and the number of human and other production inputs necessary to produce them
the willingness to take risks to create and operate a business
social science that analyzes the choices made by people and governments in allocating scarce resources
study of small economic units, such as individual consumers, families, and businesses
study of a nation's overall economic issues, such as how an economy maintains and allocates resources and how government policies affect the standards of living of its citizens
willingness and ability of buyers to purchase goods and services
willingness and ability of sellers to provide goods and services
private enterprise system
economic system that rewards businesses for their ability to identify and serve the needs and demands of customers
pure competition
a market structure in which large numbers of buyers and sellers exchange homogeneous products, so no single participant has a significant influence on price.
monopolistic competition
a market structure in which large numbers of buyers and sellers exchange relatively well-differentiated products, so each participant has some control over price.
a market situation in which relatively few sellers compete and in which high start-up costs form barriers to keep out new competitors
a market structure in which a single seller dominates trade in a good or service for which buyers can find no close subsitutes
an economic system in which all property would be shared equally by the people of a community under the diretion of a strong central government
an economic system which is characterized by government ownership and operation of major industries, but allows private ownership in industries considered less crucial to social welfare.
cyclical economic contraction that lasts for six months or longer
planned economy
government controls determine business ownership, profits and resource allocation to accomplish government goals rather than those set by individual businesses.
relationship between the goods and services produced in a nation each year and the inputs needed to produce them.
rising prices caused by a combination of excess consumer demand and increases in the costs of raw materials, human resources, and other factors of production
monetary policy
government action to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans
fiscal policy
government spending and taxation decisions designed to control inflation, reduce unemployment, improve the general welfare of citizens, and encourage economic growth.
organization's plan for how it will raise and spend money during a given period of time
domestically produced goods and services sold in other countries
foreign goods and services purchased by domestic customers
balance of trade
difference between a nation's exports and imports
balance of payments
difference in money flows into or out of a country.
exchange rate
value of one nation's currency relative to the currencies of other countries
tax imposed on imported goods
World Trade Organization (WTO)
135-member international institiution that monitors GATT agreements and mediates international trade disputes
North American Free Trade Agreement (NAFTA)
1994 agreement among the U.S., Canada, and Mexico to break down tariffs and trade restricitons.
European Union (EU)
24-nation European economic alliance
multinational corporation (MNC)
firm with significant operations and marketing activities outside its home country
global business strategy
offering a standardized, worldwide product and selling it in essentially the same manner throughout a firm's domestic and foreign markets.
multidomestic business strategy
developing and marketing products to serve different needs and tastes of separate national markets.
small business
firm that is independently owned and operated, not dominant in its field, and meets industry-specific size standards for income or number of employees
business plan
written document that provides an orderly statement of a company's goals, the methods by which it intends to achieve those goals, and the standards by which it will measure achievements.
Small Business Administration (SBA)
federal agency that assists small businesses by providing management training and consulting, financial advice, and support in securing government contracts.
business incubator
organization that provides low-cost, shared facilities on a temporary basis to small start-up ventures
contractual agreement that specifies the methods by which a dealer can produce and market a supplier's good or service.
sole proprietorship
form of business ownership in which the company is owned and operated by one person
form of business ownership in which the company is operated by two or more people who are co-owners by voluntary legal agreement
business that stands as a legal entity with assets and liabilites separate from those of its owner(s)
person or organization who owns shares of stock in a corporation
board of directors
elected governing body of a corporation
combination of two or more firms to form one company
procedure in which one firm purchases the property and assumes the obligations of another
person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business
classic entrepreneur
person who identifies a business opportunity and allocates available resources to tap that market
entrepreneurially oriented person who develops innovations within the context of a large organization
change agent
manager who tries to revitalize an established firm to keep it competitive
seed captial
initial funding needed to launch a new venture
debt financing
borrowed funds that entrepreneurs must repay
equity financing
funds invested in new ventures in exchange for part ownership
venture capitalists
business firm or group of individuals who invest in new and growing firms
angel investors
wealthy individuals who investdirectly in a new venture in exchange for an equity stake
process of promoting innovation within the structure of an existing organization
4 Business Environments
1. Legal and Regulatory
2. Social and Cultural
3. Competitive and Technological
4. Economic and Political
Legal and Regulatory Environment
1. ensures competition
2. employment practicies
3. environment and product safety
Social and Cultural Environment
1. demographics
2. lifestyle
3. changing values
competitive and Technological Environment
1. using technology
2. change and flexibility
3. workforce skill
4. research and development
5. exponential changes over time
Economic and Political Environment
1. supply-side vs. keynesian economics
2. republicans vs. democrats
3. global economy
1. aging of America
2. increasing minority populations
3. declining birthrate
1. time conscious
2. delaying marriage
3. more divorce
Changing Values
1. no longer homogeneous
2. more diversified
3. huge media role
Stages in Business
1. production
2. product
3. selling
4. marketing
5. social responsibility
Production Stage
mass production
Product Stage
1. color
2. size
3. improvement
Selling Stage
1. pressurized sales
2. getting people to buy stuff
3. post world war 2
marketing Concept Stage
1. find out what people want before we make it
2. market research
Social responsibility
1. Present?
2. legal or illegal
3. responsible or irresponsible
Pure Competition
1. hard to differentiate
2. natural resource
3. lots of suppliers
4. no control of price
Monopolist Competition
1. product differentiation
2. some control of price
3. retail items
1. few large competitors
2. barriers to entry
3. more control over price
1. regulated entities
2. one provider
3. complete control over price
something that happens by accident
goal-oriented action
Accomplishment of Bretton Woods Conference
1. created world bank
2. created International Monetary Fund
3. fixed the price of gold
Problems with Comparative Advantage
1. monoplies formed
2. alternative products caused disruptions
3. man-made advantages not counted on
4. goal was a static environment but problems caused dynamicenvironment
older organization
1. set culutre
2. bureaucracy
3. limited high-impact opportunities
younger organization
1. constant change
2. more work
3. contribution significance
small organization
1. growth potential
2. cross-trained
3. relate to finished product
4. limited resources
5. risky (less stable)
large organization
1. stable
2. more resources
3. pigeon-holed
for profit organization
1. money is primary score card
2. private risk
not for profit organization
1. primary mission is betterment of society
2. must operate in the black
3. private business concepts are necessary
1. convertingraw materials
2. value added
3. high paying
4. technical skills
5. union based
6. heavy cost of entry
7. decline
1. one owner; profits
2. lower wages for many
3. low-to-no value added
4. lower skills needed
5. time conscience
6. reflect higher standards of living
7. dramatic increase