Business Flashcards
Define for profit and not for profit organizations and provide examples for each
For profit: Provides goods or services to consumers for the purpose of making a profit (Ex: Apple, Delta Airlines, Ford)
Not for profit: Provides goods or services to the consumers in order to generate income that furthers its mission (Ex: American Red Cross, Feed America, Salvation Army)
Compare for profit and nonprofit organization
For profit: Uses profit to pay owners, partners, and shareholders, operated by individuals, partners, and shareholders, profits are subject to taxation by local state and federal authorities
Non-profit: Uses profit to further mission of organization, operated by a board of directors, trustees, or managers, profits are not subject to taxation by local state and federal authorities
Define the 6 types of businesses and provide examples of each
Producers: A business that gathers raw materials (fishing, forestry, mining)
Processors: Change raw materials into more finished products (sugarcane into sugar, crude oil into gasoline)
Manufacturers: Makes finished products out of processed goods (cars, computers, paint)
Intermediaries: A business that moves goods from one business to another (real estate agent, insurance agent)
Wholesalers: A business that distributes goods (Costco)
Retailers: A business that purchases goods from wholesalers then sells them to customers the final buyers of goods (Grocery store, clothing store)
List the 5 functions of business and describe what each function accomplishes for the business
Management: Plans, organizes, controls, leads
Operations: Transforms resources into products
Marketing/sales: Works to identify and meet customer needs
Finance: Plans, obtains, manages company funds
Research and development: Provides knowledge and ideas that help a company keep up and ahead of competition
Define each of the 4 factors of production and provide examples of each
Natural resources: Any natural resource (sun, wind, water)
Labor: Any human service, physical or intellectual (farmer, teacher, workers)
Capital: Anything that’s manufactured in order to be used in goods or services (equipment, delivery trucks, warehouses)
Entrepreneurship: Ability to recognize profit, opportunity, organize other factors of production and accept risk (Jeff Bezos, Walt Disney, Network of contacts)
Compare internal and external forces of influence (stakeholders) on a business and provide examples of each
Internal: Groups of people who work directly within the business (managers, employees, owner)
External: Groups outside the business or people who don’t work inside the business but are affected in some way by the decisions of the business (customers, creditors, suppliers)
Define the internal environment of business and include what areas the business has control over
The day to day decisions business owners and managers make which they have control over
The supplies they purchase
The employees they hire
The products they sell
Where they sell their products
Define the external environment of business and include what areas the business has control over
Economic: Growing economy, inflation and interest rates, supply and demand
Legal: Minefield of regulations, laws, and liabilities that companies must cope in order to stay in business, affects what companies sell how their products manufactured, marketed, and labeled
Competitive: New tech, opening of foreign markets, rise of consumer expectation,
Technological: New software and equipment that can improve productivity
Social: Our attitudes, ethics, values, and lifestyle
Global: Free trade
Define needs and wants
Needs; sought out of necessity
Wants: non essential desire
Define what resources are and how scarcity affects them
Resources: Items that people can use to make or obtain what they need or want. Scarcity affects them because allocating
What is the invisible hand
The name of the market forces that are at work as buyers and sellers negotiate prices and seek their own self interest
List the 5 steps in the decision making process in order
Identify the situation
Identify possible courses of action
Determine pros and cons
Make a decision
Evaluate decision
Compare and contrast the 4 global economic systems and provide and example for each
Capitalism: Incentive is profit, private ownership, little to no gov control
Communism: Everyone is equal, full gov control
Socialism: Social and economic equality, production controlled by gov
Mixed: Balance between private ownership and gov intervention
Define macroeconomics and microeconomics
Macro: The subarea of economics that studies the economy as a whole. It looks at aggregate data for large groups of people, companies, or products considered as a whole
Micro: The subarea of economics that focuses on individual parts of the economy, such as households or firms
What are the indicators of a nation’s economic health and how is a nation’s economic health measured
Growing economy, full employment, and price stability
Measured by GDP
