Business 9 Chapter 1 Test Flashcards
What does business mean?
Business is an organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers for the purpose of making a profit.
What’s an Entrepreneur?
A person who takes risks and starts a venture to solve a problem or to take advantage of an opportunity; a person who provides an innovative product or service to meet consumer’s wants or needs.
What is the purpose of a business?
To make a profit
How can a business be defined?
- The type of ownership
- The goods it produces or the services it offers
- The different functions that it performs in its community - charity for example
- The types of jobs it provides
What’s a need?
An item that is necessary for survival, such as food, clothing or shelter
What’s a want?
An item that is not necessary for survival, but it adds pleasure and comfort to life
What does tangible mean?
Something you can see and touch (a good)
What does intangible mean?
Not capable of being seen or touched (a service)
What does “not for profit organization” mean?
A business that doesn’t seek to make a profit. (usually an organization)
Define co-branding:
Having two or more businesses under one roof
True or false: A person can be both a producer and a consumer of the same product
True
What’s a consumer?
A person who buys goods and services
What’s a producer?
An individual or business that makes a product. (Examples: computer manufacturer)
Define the term “Capital Resource”
A resource such as equipment, a building, or money that is used to produce goods and services
What does “Human Resource” mean?
“Labor.” People, who work to create the goods and services, (examples: farmers, nurses, and teachers).
Define the term “Natural resources”
Raw materials that come from earth, water and air. (Examples: Iron, oil, trees, fish).
What does Economic resource mean?
The means through which goods and services are made available to consumers; natural recourses and capital resources. (Also known as factors of production)
Providing services requires ______ and _______.
skills and effort
Goods are created by…?
Basic components
What are three essential goods?
food, clothing, and shelter
Name three essential services;
heating, lighting, and water
Name three Luxury goods;
laptops, smartphones, gourmet food
Name three luxury services;
spa, limousine ride, post-secondary education
Define the term “Demand”
the quantity of a good or service that consumers are willing and able to buy at a particular price.
Different needs and wants =
Different demands
What is the Law of demand?
The economic principle that demand goes up when prices come down, and demand comes down when prices go up.
What are four conditions that create demand?
- The consumer must be aware of or interested in the good or service.
- Having an ample supply of the good or service available for the consumer.
- Establishing prices that are reasonable and competitive.
- Accessibility; the good or service must be conveniently located for purchase (location, location, location)
What are factors that affect demand?
- Change in the consumers’ income
- Increase in income; in most cases, people buy more of a product than before. Or the opposite may happen and a change in the type of product purchased may occur.
- Change in consumers’ taste (fashion, music)
- Expectations of future conditions
- Changes in population
What is supply?
Supply is the quantity of a good or service that businesses are willing and able to provide within a range of prices that people would be willing to pay.
What is the Law of Supply?
The economic principle that supply goes up when prices go up, and supply comes down when prices come down.
Conditions that affect supply?
- Cost of production
- The price people are willing to pay
- A change in the number of producers
- The price of related goods
- Change in technology
- A change in expectations
What is price determined by?
Price is determined by many factors, including both supply and demand
True or False: Supply and demand are constantly changing
True
What is price influenced by?
Price is influenced by the cost of producing good or service
What do low prices do? What do high prices do?
Low prices tend to increase the consumer demand. High prices usually decrease demand
What is the goal of business?
It is the goal of business to make profit and supply goods and services to meet consumers demands
What is Profit?
The income that is left after all costs and expenses have been paid
What are “Expenses?”
Those expenditures that are involved when running a business (wages, rent)
What are “Costs?”
The amount of money required to reach for each stage of production
Increase in costs and expenses =
Less profit
What does making a profit do?
It allows a business to put more money back into the operation for expansion and growth
Define “Solvent”
Having the ability to pay all debts and other obligations
What does Competition mean?
A situation in which two or more business try to sell the same type of product or service to the same customer
What does “Free Enterprise” mean?
An economic system in which economic resources are privately owned and decisions about what to produce are made freely by individual owners
What are some keys to a businesses survival?
- A business cannot survive unless it produces goods or services that people need or want
- Over the years many products become obsolete (no longer in use)
- Successful businesses change as the needs and wants of consumers change
Describe “Interdependence”
- Our society is interdependent: We rely on the goods and services provided by thousands od different businesses to satisfy our needs and wants
- Businesses are also interdependent
- Businesses need you and you need businesses
True or False: Determining how much inventory a business must carry to satisfy the needs and wants of consumers is important.
True
What does inventory mean?
goods and materials kept on hand
What’s the decision making model?
- Define the decision to be made
- Identify the alternatives
- Evaluate the advantages and disadvantages of each alternative
- Make a decision and take action
- Evaluate the decision
