Chapter 1-3

Question 1

business

Answer 1

any organization or activity that provides goods and services in an effort to earn a profit

Question 2

profit

Answer 2

the money that a business earns in sales (or revenue), minus, expenses, such as the cost of goods and the cost of salaries

Question 3

loss

Answer 3

when a business incurs expenses that are greater than it’s revenue

Question 4

entrepreneur

Answer 4

people who risk their time, money, and other resources to start and manage a business

Question 5

standard of living

Answer 5

the quality and quantity of goods and services available to a population

Question 6

quality of life

Answer 6

the overall sense of well-being experienced by either an individual or a group

Question 7

nonprofits

Answer 7

business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain

Question 8

factors of production

Answer 8

four fundamental elements-natural resources,capital,human resources, and entrepreneurship-that businesses need to achieve their objectives

Question 9

business environment

Answer 9

the setting in which business operates. the five key components are economic environment, competitive environment, technological environment, social environment, and global environment.

Question 10

business technology

Answer 10

any tools-especially computers, telecommunications, and other digital products-that businesses can use to become more efficient and effective

Question 11

value

Answer 11

businesses have to explain why you need the product, and why it’s priced that way

Question 12

economy

Answer 12

a financial and social system of how resources flow through society, from production to distribution, to consumption

Question 13

economics

Answer 13

the study of the choices that people, companies, and governments make in allocating society’s resources

Question 14

macroeconomics

Answer 14

the study of a country’s overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies

Question 15

microeconomics

Answer 15

the study of smaller economic units such as individual consumers, families, and individual businesses

Question 16

gross domestic product

Answer 16

the total value of all final goods and services produced within a nation’s physical boundaries over a given period of time

Question 17

economic system

Answer 17

a structure for allocating limited resources

Question 18

capitalism

Answer 18

an economic system-also known as the private enterprise or free market system-based on private ownership, economic freedom, and fair competition

Question 19

supply

Answer 19

the quantity of products that producers are willing to offer for sale at different market prices

Question 20

demand

Answer 20

the quantity of products that consumers are willing to buy at different market prices

Question 21

socialism

Answer 21

an economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare

Question 22

communism

Answer 22

an economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government

Question 23

mixed economies

Answer 23

economies that emo body elements of both planned and market-based economic systems

Question 24

opportunity cost

Answer 24

the opportunity of giving up the second-best choice when making a decision

Question 25

absolute advantage

Answer 25

the benefit a country had in a given industry when it can produce more of a product than other nations using the same amount of resources

Question 26

comparative advantage

Answer 26

the benefit a country has in a given industry if it can make products at a lower opportunity cost than other countries

Question 27

balance of trade

Answer 27

a basic measure of the difference in value between a nation’s exports and imports, including both goods and services

Question 28

trade surplus

Answer 28

overage that occurs when the total value of a nation’s exports is higher than the total value of its imports

Question 29

trade deficit

Answer 29

shortfall that occurs when the total value of a nation’s imports is higher than the total value of its exports

Question 30

sociocultural differences

Answer 30

differences among cultures in language, attitudes, and values

Question 31

infrastructure

Answer 31

a country’s physical facilities that support economic activity

Question 32

protectionism

Answer 32

national policies designed to restrict international trade, usually with the goal of protecting domestic businesses

Question 33

tariffs

Answer 33

taxes levied against imports

Question 34

quotas

Answer 34

limitations on the amount of specific products that may be imported from certain countries during a given time period

Question 35

exchange rate

Answer 35

a measurements of the value of one nation’s currency relative to the currency of other nations

Question 36

countertrade

Answer 36

international trade that involves the barter of products for products rather than for currency

Question 37

foreign outsourcing

Answer 37

(also contract manufacturing) contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production

Question 38

importing

Answer 38

buying products domestically that have been produced or grown in foreign nations

Question 39

exporting

Answer 39

selling products in foreign nations that have been produced or grown domestically

Question 40

embargo

Answer 40

a complete ban on international trade of a certain item, or a total halt in trade with a particular nation

Question 41

free trade

Answer 41

the unrestricted movement of goods and services across international borders

Question 42

world trade organization (wto)

Answer 42

a permanent global institution to promote international trade and to settle international trade disputes