Ch. 1

Question 1

Business

Answer 1

an organization that strives for a profit by providing goods and services desired by its customers.

Question 2

Goods

Answer 2

are tangible items manufactured by businesses, such as laptops.

Question 3

services

Answer 3

are intangible offerings of businesses that can’t be held, touched, or stored. Physicians, lawyers, hairstylists are examples of those who provide services.

Question 4

standard of living

Answer 4

of any country is measured by the output of goods and services people can buy with the money they have.

Question 5

revenue

Answer 5

the amount of money a company brings in

Revenues - costs = profit

Question 6

non-profit organization

Answer 6

is an organization that exists to achieve some goal other than the usual business goal of profit.

Question 7

Factors of production

Answer 7

Natural resources
Labor (human resources)
Capital
Entrepreneurship
Knowledge

Question 8

Business environmental influences (PESTLE)

Answer 8

Politcal & legal
demographic
social
technology
global
competitive

Question 9

Political & legal influences

Answer 9

the amount of government activity, types of laws, & political stability.

Question 10

demographic influences

Answer 10

vital statistics, such as their age, gender, race and ethnicity, and location.

Question 11

social influences

Answer 11

attitudes, values, ethics, and lifestyles - influence

Question 12

technology influences

Answer 12

application of science and engineering skills and knowledge to solve production and organizational problems.

Question 13

global influences

Answer 13

social issues that affect those in other countries, their cultural norms, consumer trends and economic status.

Question 14

competitve influences

Answer 14

What are competitors doing?

Question 15

economic system

Answer 15

The combination of policies, laws, and choices, and by its government to establish the systems that determine what goods and services are produced and how they are allocated.

Question 16

economics

Answer 16

the study of how a society uses scarce resources to produce and distribute goods and services.

Question 17

Capitalism

Answer 17

Businesses are privately owned
freedom of trade

strong incentives to work hard to earn profit

companies are managed by private owners

ex: US

Question 18

Communism

Answer 18

government owns all or most enterprises

complete government control of markets

no incentive to work hard or produce quality products

centralized management by the government bureaucracy. little or no flexibility in decision-making at the factory level.

no growth and perhaps disappearance

Ex: cuba, north korea

Question 19

Socialism

Answer 19

basic industris such as railroads are owned by government

some markets are controlled and some are free.

private-sector incesntives are the same as capitalism

significanat government planning and regulation

stable with probable slight growth

Ex: Finland, India

Question 20

Mixed Economy

Answer 20

private owenership of land and businesses, but government control some enterprises

some markets such as nuclear energy are regulated by the government

private sector incentives are the same as capitalism

Question 21

Capitalism

Answer 21

the private enterprise system, is based on competition in the marketplace and private ownership of the factors of production (resources).

Question 22

4 capitalist rights

Answer 22

Right to own property
Right to make a profit
Right to make free choices
Right to compete

Question 23

Macroeconomics

Answer 23

the study of the economy as a whole. It looks at aggregate data for large groups of people, companies, or products considered as a whole.

Question 24

microeconomics

Answer 24

focuses on individual parts of the economy, such as households or firms.

Question 25

economic growth

Answer 25

an increase in a nation's output of goods and services. The more the nation produces, the higher its standard of living.

Question 26

GDP

Answer 26

Gross domestic product. The total market value of all final goods and services produced within a nation's borders each year. When GDP rises, the economy is growing.

Question 27

growth

Answer 27

an increase in a nation's output of goods and services. The more the nation produces, the higher its standard of living.

Question 28

Macroeconomic goals

Answer 28

Economic growth Full employment Price stability

Question 29

Business cycles

Answer 29

the upward and downward changes of economic activity

Question 30

Recession

Answer 30

A decline in GDP that lasts for two consecutive quarters

Question 31

Economic unemployment rate

Answer 31

the rate indicates the percentage of the total labor force that is not working but is actively looking for work.

Question 32

5 types of unemployment

Answer 32

frictional structural cyclical seasonal

Question 33

Frictional Unemployment

Answer 33

short-term unemployment that is not related to the business cycle - People who are unemployed while waiting to start a better job - Those who are reentering the job market - Those entering for the first time, such as new college graduates

Question 34

Structural unemployment

Answer 34

caused by a mismatch between available jobs and the skills of available workers in an industry or a region - Unrelated to business cycle but is not involuntary.

Question 35

Cyclical unemployment

Answer 35

occurs when a downturn in the business cycle reduces the demand for labor throughout the economy - In large recession, cyclical unemployment is widespread, and even people with good job skills can't find jobs

Question 36

Seasonal unemployment

Answer 36

occurs during specific times of the year in certain industries

Question 37

purchasing power

Answer 37

the value of what money can buy. It's affected by: Inflation income

Question 38

Inflation types

Answer 38

Demand - pull cost - push

Question 39

Demand inflation

Answer 39

occurs when the demand for goods and services is greater than the supply - Buyers have more money available than the amount needed to buy - Demand, which exceeds the supply, tends to pull prices up

Question 40

Cost inflation

Answer 40

Is triggered by increases in production costs, such as expenses for materials and wages - Theses increases push up the prices of final goods and services - Wage increases are a major cause

Question 41

monetary policy

Answer 41

refers to a government's programs for controlling the amount of money circulation in the economy and interest rates - Changes in the money supply affect both the level of economic activity and rate inflation

Question 42

federal reserve system

Answer 42

the banking system of the United States, prints money and controls how much of it will be in circulation - The increase or decrease of money in circulation affects inflation - The Fed can use monetary policy to contract or expand the economy.

Question 43

contractionary policy

Answer 43

increase interest rate, increase unemployment, increase inflation, decrease spending - The result is slows economy

Question 44

expansionary policy

Answer 44

decrease interest rate, decrease unemployment, decrease inflation, increase spending - The result is growing economy

Question 45

fiscal period

Answer 45

the government's program of taxation and spending taxes are the major source of revenue for our government

Question 46

demand

Answer 46

the quantity of a good or service that people are willing to buy at various prices - The higher the price the lower the quantity demanded - On a graph the demand curve slopes a graph of this relationship is called a demand curve

Question 47

supply

Answer 47

the quantity of a good or service that businesses are willing to make available at various prices. - The higher the price the higher the price, the greater the number a supplier will produce - On a graph the supply curve slopes

Question 48

equilibrium point

Answer 48

where the supply and demand curves intersect

Question 49

relationship management

Answer 49

building, maintaining, and enhancing interactions with customers and other parties to develop long-term satisfaction through mutually beneficial partnerships

Question 50

strategic alliances

Answer 50

cooperative agreements between business firms