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Business > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

business

A

organization that provides goods or services to earn profits

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2
Q

profit

A

difference between an business’s revenues and its expenses

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3
Q

external environment

A

everything outside and organization’s boundaries that might affect it

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4
Q

domestic business environment

A

environment in which a firm conducts its operations and derives its revenues

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5
Q

global business environment

A

international forces that affect a business

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6
Q

technological environment

A

all the ways by which firms create value for their constituents

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7
Q

political-legal environment

A

relationship between business and government

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8
Q

sociocultural environment

A

customs, mores, values, and demographic characteristics of the society in which an organization functions

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9
Q

economic environment

A

relevant conditions that exist in the economic system in which a company operates

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10
Q

economic system

A

nation’s system for allocating its resources among its citizens

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11
Q

factors of production

A

resources used in the production of goods and services - labor, capital, entrepreneurs, physical resources, and information resources

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12
Q

labor (human resources)

A

physical and mental capabilities of people as they contribute to economic production

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13
Q

capital

A

funds needed to create and operate a business enterprise

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14
Q

entrepreneur

A

individual who accepts the risks and opportunities involved in creating and operating a new business venture

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15
Q

physical resources

A

tangible items that organizations use in the conduct of their businesses

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16
Q

information resources

A

data and other information that businesses use

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17
Q

planned economy

A

economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions

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18
Q

communism

A

political system in which the government owns and operates all factors of production

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19
Q

market economy

A

economy in which individuals control production and allocation decisions through supply and demand

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20
Q

market

A

mechanism for exchange between buyers and sellers of a particular good or service

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21
Q

capitalism

A

system that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive

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22
Q

mixed market economy

A

economic system featuring characteristics of both planned and market economies

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23
Q

privatization

A

process of converting government enterprises into privately owned companies

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24
Q

socialism

A

planned economic system in which the government owns and operates only selected major sources of production

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25
Q

demand

A

willingness and ability of buyers to purchase a good or service

26
Q

supply

A

willingness and ability of producers to offer a good or service for sale

27
Q

law of demand

A

principle that buyers will purchase (demand) more of a product as its prices drops and less as its price increases

28
Q

law of supply

A

principle that producers will offer (supply) more of a product for sale as its price rises and less as its price drops

29
Q

demand and supply

A

schedule assessment of the relationships among different levels of demand and supply at different price levels

30
Q

demand curve

A

graph showing how many units of a product will be demanded (bought) at different prices

31
Q

supply curve

A

graph showing how many units of a product will be supplied (offered for sale) at different prices

32
Q

market price (equilibrium)

A

profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal

33
Q

surplus

A

situation in which quantity supplied exceeds quantity demanded

34
Q

shortage

A

situation in which quantity demanded exceeds quantity supplied

35
Q

private enterprise

A

economic system that allows individuals to pursue their own interests without undue governmental restriction

36
Q

competition

A

vying among businesses for the same resources or customers

37
Q

perfect competition

A

market or industry characterized by numerous small firms producing an identical product

38
Q

monopolistic competition

A

market or industry characterized by numerous sellers trying to differentiate their products from those of competitors

39
Q

oligopoly

A

market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products

40
Q

monopoly

A

market or industry in which there is only one producer that can therefore set the prices of its products

41
Q

natural monopoly

A

industry in which one company can most efficiently supply all needed goods or services

42
Q

economic indicator

A

statistic that helps assess the performance of an economy

43
Q

business cycle

A

short-term pattern of economic expansions and contractions

44
Q

aggregate output

A

total quantity of goods and services produced by an economic system during a given period

45
Q

standards of living

A

total quantity and quality of goods and services people can purchase with the currency used in their economic system

46
Q

gross domestic product (GDP)

A

total value of all goods and services produced within a given period by a national economy through domestic factors of production

47
Q

gross national product (GNP)

A

total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located

48
Q

real GDP

A

GDP adjusted to account for changes in currency values and price changes

49
Q

nominal GDP

A

GDP measured in current dollars or with all components valued at current prices

50
Q

purchasing power parity

A

principle that exchange rates are set so that the prices of similar products in different countries are about the same price

51
Q

productivity

A

measure of economic growth that compares how much a system produces with the resources needed to produce it

52
Q

balance of trade

A

economic value of all the products that a country exports minus the economic value of all the products it imports

53
Q

national debt

A

amount of money the government owes its creditors

54
Q

stability

A

condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are rowing at about the same rate

55
Q

inflation

A

situation that occurs when widespread price increases occur throughout an economic system

56
Q

consumer price index (CPI)

A

measure of the prices of typical products purchased by consumers living in urban areas

57
Q

unemployment

A

level of joblessness among people actively seeking work in an economic system

58
Q

recession

A

period during which aggregate output, as measured by GDP, declines

59
Q

depression

A

prolonged and deep recession

60
Q

fiscal policies

A

policies that a government uses to direct how it collects and spends revenue

61
Q

monetary policies

A

policies that a government uses to control the size of its money supply

62
Q

stabilization policy

A

government economic policy intended to smooth out fluctuations in output and unemployment and to stabilize prices

Business (17 decks)

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