Chapter 1

Question 1

business

Answer 1

Any activity that seeks to
provide goods and services
to others while operating at
a profit

Question 2

goods

Answer 2

Tangible products such as
computers, food, clothing,
cars, and appliances.

Question 3

services

Answer 3

Intangible products (i.e., 
products that can’t be held in 
your hand) such as education, 
health care, insurance, 
recreation, and travel and 
tourism.

Question 4

entrepreneur

Answer 4

A person who risks time and
money to start and manage a
business.

Question 5

revenue

Answer 5

The total amount of money
a business takes in during
a given period by selling
goods and services.

Question 6

profit

Answer 6

The amount of money a
business earns above and
beyond what it spends for
salaries and other expenses

Question 7

loss

Answer 7

When a business’s expenses

are more than its revenues.

Question 8

risk

Answer 8

(1) The chance an 
entrepreneur takes of 
losing time and money on 
a business that may not 
prove profitable. (2) The 
chance of loss, the degree 
of probability of loss, and the 
amount of possible loss

Question 9

standard of living

Answer 9

The amount of goods and
services people can buy with
the money they have.

Question 10

quality of life

Answer 10

The general well-being 
of a society in terms of its 
political freedom, natural 
environment, education, 
health care, safety, amount 
of leisure, and rewards that 
add to the satisfaction and 
joy that other goods and 
services provide.

Question 11

stakeholders

Answer 11

All the people who stand to 
gain or lose by the policies 
and activities of a business 
and whose concerns the 
business needs to address.

Question 12

outsourcing

Answer 12

Contracting with other 
companies (often in other 
countries) to do some or all 
of the functions of a firm, like 
its production or accounting 
tasks.

Question 13

factors of production

Answer 13

The resources used to create
wealth: land, labor, capital,
entrepreneurship, and
knowledge

Question 14

productivity

Answer 14

The amount of output you
generate given the amount
of input (e.g., hours worked).

Question 15

e-commerce

Answer 15

The buying and selling of

goods over the Internet

Question 16

demography

Answer 16

The statistical study of the 
human population with 
regard to its size, density, 
and other characteristics 
such as age, race, gender, 
and income.