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50 Cards in this Set

  • Front
  • Back
any activity that seeks to provide goods and services to others while operating at a profit
the amount of money a business earns above and beyond what it spends for salaries and other expenses.
the total amount of money a business takes in during a given period by selling goods and services.
when a business's expenses are more than its revenues
the chance an entrepreneur takes of losing time and money on a business that may not prove profitable
Standard of Living
the amount of goods and services people can buy with the money they have.
Quality of Life
the general well-being of a society in terms of political freedom, a clean natural environment, education, health care, safety, free time and everything else that leads to satisfaction and joy.
the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals
a market in which there is only one seller for a product or service
a form of competition in which just a few sellers dominate the market
the part of economics that looks at the behavior of people and organizations in particular markets.
the part of economics that looks at the operation of a nation's economy as a whole.
Perfect Competition
the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.
an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
buying products from another country
selling products to another country
selling products in a foreign country at lower prices than those charged in the producing country
Comparative Advantage
theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently.
World Trade Organization
The international organization that replaced the General Agreement on Tariffs and Trade (GATT), and was assigned the duty to mediate trade disputes among nations.
taxes imposed on imports
Revenue Tariff
designed to raise money for the government; commonly used by developing countries to help infant industries compete in global markets.
Protective Tariff
import taxes; designed to raise the retail price of imported products so that domestic goods are more competitively priced (these tariffs are meant to save jobs for domestic workers and keep industries from closing down bc of foreign competition.
refers to laws we have written to protect ourselves from fraud, theft, and violence.
ethics- standards of moral behavior, that is, behavior that is accepted by society as right versus wrong
Compliance-based Code of Ethics
ethical standards that emphansize preventing unlawful behavior by increasing control and by penalizing wrongdoers
Integrity-based Code of Ethics
ethical standards that define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees.
Sole Proprietorship
a business that is owned, and usually managed, by one person.
a legal form of business with two or more owners
a legal entity with authority to act and have liability separate from its owners
Joint Venture
a partnership in which two or more companies (often from different countries) join to undertake a major project
Partnership Agreements
General Partnership: a partnership in which all owners share in operating the business and in assuming liability for the business's debts.

Limited partnership: a partnership with one or more general partners and one or more limited partners (general partner has unlimited liability and limited partner invests money but has no responsibility)
Limited Liability Partnership
a partnership that limits partners' risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision
a person who risks time and money to start and manage a business
creative people who work as entrepreneurs within corporations (the idea is to use a company's existing resources to launch new products and generate new profits)
Enterprise Zones
specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support.
Differences between business and non-profit groups
a non-profit organization is an organization whose goals do not include making a personal profit for its owners or organizers. The financial gains are used to meet the stated goals of the organization.
Who does a business attempt to meet the needs of?
a business provides consumers with necessities like food, clothing, housing, medical care, and transportation, as well as other goods and services that make our lives easier and better.
What happens to the price of a product when the supply drastically decreases?
when supply is low, the price goes up because the demand will go up.
What country is the largest global importer?
the united states

(the united states is also the largest exporting nation as well)
Sole Proprietorship advantages and disadvantages
Advantages: ease of start and ending the business, being own boss, pride of ownership, leaving a legacy, retention of company profit, no special taxes.

Disadvantages: unlimited liability- the risk of personal losses, limited financial resources, management difficulties, overwhelming time commitment, few fringe benefits, limited growth, limited life span
Partnerships advantages and disadvantages
Advantages: more financial resources, shared management and pooled/complementary skills and knowledge, longer survival, no special taxes.

Disadvantages: unlimited liability, division of profits, disagreements among partners, difficulty of termination.
Corporation advantages and disadvantages
Advantages: limited liability, more money for investment, size, perpetual life, ease of ownership change, ease of drawing talented employees, separation of ownership from management.

Disadvantages: extensive paperwork, double taxation, two tax returns, size, difficulty of termination, possible conflict with stockholders and board of directors, initial cost
What form of business makes up the most business in NUMBER of all businesses combined?

What form of business makes up the most in REVENUE of all businesses combined?
most in NUMBERS- sole proprietorships

most in REVENUE- corporations
Three Types of Business Mergers
1. Vertical Merger- joining of two firms involved in different stages of related business (ex: soft drink company and artificial sweetener company)

2. Horizontal Merger- joins two firms in the same industry and allows them to diversify their products (ex: soft drink company and mineral water company)

3. Conglomerate Merger- the joining of firms in completely unrelated industries (to diversify business operations and investments) (ex: soft drink company and snack company merger)
What percent of new jobs do small businesses create in the US?
What is the key to economic development?
Teach a person to start a fish farm, and he or she will be able to feed a village for a lifetime. (Business owners provide jobs and economic growth for their employees and communities as well as for themselves.
Is the Enron scandal illegal? Is it unethical?
Corporate Values (Corporate social responsibility?)
a business's concern for the welfare of society. It is based on a company's concern for the welfare of all its stakeholders. It is based on a commitment to such basic principles as integrity, fairness, and respect.
Situational Ethics
depends on the situation(?)
What are the primary concerns of someone starting a small business?
- many small businesses fail because of the managerial incompetence and inadequate financial planning.