Chapter 1 The Economic Foundations Of Business.

Question 1

What’s economics? Explain.

Answer 1

The study af how resourcesare distributed for the production of goods and services within a social system.

Question 2

What are the four types of resources?

Answer 2

Natural resources,human resources (labor), financial resources (capital) and intangible resources.

Question 3

What are economic systems?

Answer 3

A description of how a particular society distributes its resources to produce goods and services’.

Question 4

What are the three main types of economic systems? What’s fourth one?

Answer 4

Communism, socialism and capitalism ( free enterprise). And mixed economies.

Question 5

Two types of capitalism.

Answer 5

Pure capitalism (free-market system) and modified capitalism.

Question 6

Business ownership in communism:

Answer 6

Most businesses are owned and operated by the government.

Question 7

Business ownership in socialism:

Answer 7

The government owns ardoperates some basic industries; individuals own businesses.

Question 8

Business ownership in capitalism:

Answer 8

Individuals own and operate all business.

Question 9

Competition in communism:

Answer 9

Government controls competition and the economy.

Question 10

Competition in socialism:

Answer 10

Restricted in basic industries. I encouraged in other business.

Question 11

Competition in capitalism:

Answer 11

Encouraged by market forces and government regulations.

Question 12

Profits in communism:

Answer 12

Excess income goes to the government. The government supports social economic institutions,

Question 13

Profits in socialism:

Answer 13

Profits earned by businesses may be reinvested in the business; profits from government-owned industries go to the government.

Question 14

Profits in capitalism:

Answer 14

Individuals and businesses are free to keep profits after paying taxes.

Question 15

Product availability and price in communism:

Answer 15

Consumers have a limited choice of goods and services; prices are usually high.

Question 16

Product availability in socialism:

Answer 16

Consumers have some choice of goods and services; prices are determined by supply and demand.

Question 17

Product availability and price in capitalism:

Answer 17

Consumers have a wide choice of goodsand services; prices are determined by supply and demand.

Question 18

Employment options in communism:

Answer 18

Little choice in choosing a career; most people work for government - owned industries or farms.

Question 19

Employment options in socialism:

Answer 19

More choice of careers,
Many people work in government jobs.

Question 20

Employment options:

Answer 20

Unlimited choice of careers.

Question 21

Free-enterprise system:

Answer 21

Allows a company to succeed or fail on the basis of market demand.

Question 22

2 facts abt free-enterprise system:

Answer 22

Many large economies are free - enterprise,suchas US Canada and Japan. Many communist and socialist counties apply free enterprise principles such as China and Russia.

Question 23

What are some basic individual business rights? For it to work

Answer 23

Right to own property. Right to earn profits and use them as one wishes. Right to determine business operations. Right on to dose a career, where to live or locate a business, what goods/services to purchase, and more.

Question 24

What’s demand?

Answer 24

The number of products that businesses are willing to sell at different prices at a specific time.

Question 25

What’s supply?

Answer 25

The number of products that businesses are willing to sell at diferent price at a specific time.

Question 26

What’s equilibrium price?

Answer 26

The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.

Question 27

What’s competition?

Answer 27

The rivalry among businesses for consumer’s dollars.

Question 28

What are four types of competitive environments?

Answer 28

Pure competition, monopolistic competition oligopoly and monopoly.

Question 29

What’s pure competition?

Question 30

What’s monopolistic competition?

Question 31

What’s oligopoly competition?

Question 32

What’s monopoly competition?

Question 33

What happens in economic expansion?

Answer 33

Inflation - a condition characterized by a continuing rise prices in.

Question 34

What happens in economic contraction?

Answer 34

Recession- a decline in population employment and income. Unemployment- a percentage of the population wants to work but is unable find jobs. Depression - unemployment is very high, consumer spending is low, and business output is sharp reduced.

Question 35

What’s gross domestic product? (GDP)

Answer 35

The sum of all goods and servicesproduced in a country during a year.

Question 36

What’s budget deficit?

Answer 36

The condition in which a nation spends more than it takes in from taxes.

Question 37

What’s trade balance?

Answer 37

The difference between our exports and our imports. If the balance is negative, as it has been since the mid-1980s, it is called a trade deficit and is generally viewed as unhealthy for our economy.

Question 38

Consumer price index?

Answer 38

Measures changes in prices of goods and services purchased for consumption by typicalurban households.

Question 39

What’s per capital income?

Answer 39

Indicates the income level of “average” Americans. Useful in determining how much “average” consumers spend and how much money Americans are earning.

Question 40

What’s unemployment rate?

Answer 40

Indicates how many working-age americans are not working who otherwise want to work.

Question 41

What’s inflation?

Answer 41

Monitors price increases in consumer goods and services over specified periods of time. Used to determine if costs of goods and services are exceeding worker compensation time.

Question 42

What’s worker productivity?

Answer 42

The amount of goods and services produced for each hour worked.

Question 43

Describe the American economy:

Answer 43

Mixed econ omy, foundation based on capitalism, standard living (the level of wealth and material comfort that people have available to them)

Question 44

What’s open economy?

Answer 44

An economy in which economic activities occur between the country , and the international community.

Question 45

3 economy assessed on several factors?

Answer 45

Growth in GDP and jobs, government policy, and tax revenue from individuals and businesses.

Question 46

Early economy:

Answer 46

Based on farming. (Agriculture)

Question 47

Industrial Revolution:

Answer 47

Manufacturing.

Question 48

Manufacturing and marketing economies:

Answer 48

Based on service.

Question 49

Service and economy now:

Answer 49

Digital economy- (Digital)

Question 50

Technology:

Answer 50

Includes the method and processes creating applications to solve problems, tasks perform and make decisions.

Question 51

Example of technology in the economy?

Answer 51

Artificial intelligence (AI), big data blockchain and drones.

Question 52

Entrepreneurs

Answer 52

An individual who risks money ,time and effort to develop for profit an innovative product or way of doing something.

Question 53

Two facts of entrepreneurs:

Answer 53

Let the free-enterprisesystem help them to succeed. Change business practices through new technology and innovative management techniques.

Question 54

What’s the role of government in the American economy;

Answer 54

Best described as modified capitalism,regulate business to preserve competition and protect consumers through laws and regulations. Intervene occasionalIy to regulate economy and spur growth

Question 55

What do you need to be successful in business:

Answer 55

Knowledge, skills experience and good judgment.

Question 56

Role of ethics and social responsibility in business?

Answer 56

Promote public confidence incorporate America, foster business ethics, encourage socially responsible behavior, aus diversity in montage, enhance reputation and drive profits.