Business Essentials Chp.1 Questions

Front 1

Simple definition-
Business

Back 1

Organization that provides goods or services to earn profits.

Front 2

Simple definition-
Profits

Back 2

Difference between a business's revenues and its expenses.

Front 3

Simple definition-
Domestic Business Environment

Back 3

The environment in which a firm conducts its operations and derives its revenues.

Front 4

Simple definition-
Global Business Environment

Back 4

The international forces that affect a business.

International Level: Trade agreements, international economic conditions, political unrest, etc..

Immediate Level: Suppliers, cultures, competitors, currency values.

Front 5

Simple definition-
Technological Environment

Back 5

All the ways by which firms create value for their constituents.

Front 6

Simple definition-
Political-Legal Environment

Back 6

The relationship between business and government.

Front 7

Simple definition-
Sociocultural Environment

Back 7

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

Front 8

Simple definition-
Economic Environment

Back 8

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

Front 9

Simple definition-
Economic System

Back 9

A nation's system for allocating its resources among its citizens.

Front 10

Simple definition-
Factors Of Production

Back 10

Resources used in the production of goods and services.
Labor, capital, entrepreneurs, physical resources, and information resources.

Front 11

Simple definition-
Labor (Human Resources)

Back 11

Physical and mental capabilities of people as they contribute to economic production.

Front 12

Simple definition-
Capital

Back 12

Funds needed to create and operate a business enterprise.

Front 13

Simple definition-
Entrepreneur

Back 13

Individual who accepts the risks and opportunities involved in creating and operating a new business venture.

Front 14

Simple definition-
Physical Resources

Back 14

Tangible items organizations use in the conduct of their businesses.

Front 15

Simple definition-
Information Resources

Back 15

Data and other information used by businesses.

Front 16

List me:
Factors of Production

Back 16

Labor
Capital
Entrepreneurs
Physical Resources
Information Resources

Front 17

List me:
Dimensions of the External Business Environment

Back 17

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

Front 18

Simple definition-
Planned Economy

Back 18

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.

Front 19

Simple definition-
Market Economy

Back 19

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

Front 20

Simple definition-
Communism

Back 20

Political system in which the government own and operates all factors of production.

Front 21

Simple definition-
Market

Back 21

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

Front 22

Simple definition-
Capitalism

Back 22

System that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive.

Front 23

Simple definition-
Mixed market Economy

Back 23

Economic system featuring characteristics of both planned and market economies.

Front 24

Simple definition-
Privitization

Back 24

Process of converting government enterprises into privately owned companies.

Front 25

Simple definition-
Socialism

Back 25

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

Front 26

Simple definition-
Demand

Back 26

The willingness and ability of buyers to purchase a good or service.

Front 27

Simple definition-
Supply

Back 27

The willingness and ability of producers to offer a good or service for sale.

Front 28

Simple definition-
Law of Demand

Back 28

Principle that buyers will purchase (demand) more of a product as its price drops and less as its price increases.

Front 29

Simple definition-
Law of Supply

Back 29

Principle that producers will offer (Supply) more of a product for sale as its price rises and less as its price drops.

Front 30

Simple definition-
Demand and Supply Schedule

Back 30

Assessment of the relationships among different levels of demand and supply at different price levels.

Front 31

Simple definition-
Demand Curve

Back 31

Graph showing how many units of a product will be demanded (bought) at different prices.

Front 32

Simple definition-
Supply Curve

Back 32

Graph showing how many units of a product will be supplied (offered for sale) at different prices.

Front 33

Simple definition-
Market Price (Equilibrium Price)

Back 33

Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

Front 34

Simple definition-
Surplus

Back 34

Situation in which quantity supplied exceeds quantity demanded.

Front 35

Simple definition-
Shortage

Back 35

Situation in which quantity demanded exceeds quantity supplied.

Front 36

Simple definition-
Private Enterprise

Back 36

Economic system that allows individuals to pursue their own interests without undue governmental restriction.

Front 37

List me:
The four elements of Private Enterprise

Back 37

1. Private Property Rights
2. Freedom of choice
3. Profits
4. Competition

Front 38

Simple definition-
Perfect Competition

Back 38

Market or industry characterized by numerous small firms producing an identical product.

Front 39

What two conditions must be met in order for "Perfect Competition" to exist?

Back 39

Conditions:
1. All firms in an industry must be small.
2. The number of firms in the industry must be small

Front 40

Simple definition-
Natural Monopoly

Back 40

Industry in which one company can most efficiently supply all needed goods or services.