Chapter 1. Taking Risks and Making Profits within the Dynamic Business Environment Flashcards
Business
an activity that seeks to provide goods and services to others while operating at a profit
Goods
tangible products such as computers, food, clothing, cars, and appliances
Services
Intangible products (that can’t be held in your hand) such as education, health care, insurance, recreation, and travel
Entrepreneur
a person who risks time and money to start and manage a business
Revenue
Total amount of money a business takes in during a given period by selling goods and services
Profit
amount of money a business earns above and beyond what it spends for salaries and other expenses
Loss
When a business’s expenses are more than its revenues
Risk
the chance an entrepreneur takes of losing time and money on a business that may not prove profitable
Standard of living
the amount of goods and services people can but with the money they have
Quality of life
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
Stakeholders
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
Outsourcing
contracting with other companies (often in other countries) to do some functions of a firm, like production or accounting
Nonprofit organization
an organization whose goals do not include making a personal profit for its owners or organizers
Factors of production
the five resources used to create wealth:
1. land (or natural resources)
2. labor (workers)
3. Capital
4. Entrepreneurship
5. Knowledge
Business environment
the surrounding factors that either help or hinder the development of business
- economic and legal environment
- technological environment
- competitive environment
- social environment
- global business environment
How can the government promote entrepreneurship?
- allowing private ownership of business
- minimizing interference with the free exchange of goods and services
- Passing laws that enable businesspeople to write enforceable contracts
- establishing a currency that’s tradable in world markets
- minimizing corruption
Technology
everything from phones to computers and the various software programs that make business processes more effective, efficient, and productive
Productivity
the amount of output you generate given the amount of input (for example, hours worked)
Circular economy
keeping products in the value circle
E-commerce
the buying and selling of goods over the internet
B2C
business-to-customer
B2B
business-to-business
Database
an electronic storage file for information
Identity theft
the obtaining of individuals’ personal information such as social security and credit card numbers, for illegal purposes
Empowerment
giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to the customer requests
demography
the statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income
Climate change
the movement of the temperature of the planet up or down over time
greening
the trend toward saving energy and producing products that cause less harm to the environment
