Chapter 1: Business Fundmentals Flashcards
Goods
Tangible products such as computers, food, clothing, cars, and appliances
Services
Intangible products (items that can’t be held in your hand) such as education, health care, insurance, travel and tourism
Business
Any activity that seeks to provide goods and services to others while operating at a profit
Entrepreneur
Person who risks time and money to start and manage a business
Revenue
Total amount of money received during a given period for goods sold and services rendered and from other financial sources
Profit
The amount of money a business earns above and beyond what it spends for salaries and other expenses
Loss
Occurs when a business’ expenses are more than its revenue
Risk
Refers to the chance of loss, the degree or probability of loss, and the amount of possible loss
Standard of living
Refers to the amount of goods and services people can buy with money they have
Quality of life
Refers to the general well being of a society in terms of its political freedom, natural environment, education, health care, safety, and rewards that add to the satisfactions and joy that other goods and services provide
Stakeholders
Are all of the people who stand to gain or lose by the policies and activities of a business whose concerns the business needs to address
Stakeholders include: customers, stockholders, employees, dealers, bankers, anyone involved
Offshoring
Entails sourcing part of the purchased inputs outside of the country
Outsourcing
Means contracting with other companies to do some or all of the functions of a firm, such as producing or accounting
Insourcing
Assigning various functions that could go to an outside organization to employees in the company
Non profit organization
An organization whose goals do not include making a personal profit for its owners or organizers
Factors of production
The resources used to create wealth: land, labour, capital goods, entrepreneurship, and knowledge
Land (or natural resources)
Used to make homes, cars, and other products
Labour (workers)
People have been a valuable resource, although they’re being replaced by technology
Capital goods
Includes machines, tools, building, or whatever else is used in the production of goods
(Does not include money!)
Entrepreneurship
All the resources in the world ba e little value unless entrepreneurship are willing to take the risk or starting businesses to those resources
Knowledge
Information technology has revolutionized business, making is possible to quickly determine wants and needs and to respond with desired goods and services
What makes a country rich / two most valuable parts of factors of production
Combination of entrepreneurship and knowledge
Business environment
The surrounding factors that either help or hinder the development of a business
6 elements of business environment
1) the legal environment
2) the economic environment
3) the technological environment
4) the competitive environment
5) the social environment
6) the globe environment
