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Intro To Business > Chapter 1: What Is Business > Flashcards

Chapter 1: What Is Business Flashcards

1
Q

Identify the three major factors that are impacting business today

A
  1. Global
  2. Information technology
  3. Ethics
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2
Q

Summarize the evolution of business in the United States and explain the key issues that are impacting its outlook for the future.

A
  1. Industrial revolution
  2. The railroad era
  3. The assembly line era
  4. The globalization era
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3
Q

Define Business

A

Those organizations that try to create value for the customer.

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4
Q

What is profit?

A

The difference between revenue (income or sales) and expenditure (cost of goods or services sold).

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5
Q

What is a Not for profit business?

A

Organizations whose primary objective is to provide goods and services to society without the goal of making a profit.

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6
Q

What is risk?

A

the probability that the business will fail.

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7
Q

Define factory system.

A

A method of mass production in which raw materials, machinery, and labor are brought together in large volumes in one location to produce goods less expensively than in dispersed locations

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8
Q

Specialization of Labor

A

Grouping employees to work on assigned tasks on the basis of their specific skills and factory demand

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9
Q

Define Laissez Faire

A

The economic doctrine that advocates total government inaction in business, so businesses are free to do what and as they please.

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10
Q

What is market domination?

A

A strategy of either acquiring competitors or colluding with them to control product prices and prevent new competitors from entering the market

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11
Q

What are anti-trust policies?

A

Government laws designed to break up monopolies and control monopoly abuses by business?

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12
Q

What is globalization?

A

globalization The process of integrating the market for goods and services worldwide

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13
Q

What is the new economy?

A

An economy largely driven by developments in information technology and the Internet

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14
Q

What are knowledge workers?

A

Employees whose jobs require formal and advanced schooling

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15
Q

What are economic resources?

A

Land, labor, capital, and technology that are scarce

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16
Q

What is the free enterprise or capitalist society?

A

capitalism The economic system that is based on private property rights, the free market system, the pursuit of self-interest, the freedom to choose, and the ability to borrow money.

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17
Q

What is the free market system?

A

The economic system in which consumers demand certain goods and services and are willing to pay a price based on their budget, and producers are willing to supply the goods and services on the basis of a price that will cover their costs and provide a profit margin.

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18
Q

What is the theory of law and demand?

A

The statement, which appears to hold, that consumers will buy more when prices fall and less when prices increase.

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19
Q

What is the demand curve?

A

The curve that shows the relationship between the quantity demanded and the price of a product or service for a particular customer, group of consumers, or even a whole country (It is downward sloping.)

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20
Q

What is the price inelastic demand?

A

The demand where significant increases in the price of a product or service will have little effect on the quantity of the product or service demanded

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21
Q

What is the price elastic demand?

A

The demand where a small change in the price will have a significant impact on the quantity demanded of a product or service

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22
Q

What is the theory or law of supply?

A

The statement, which appears to hold, that producers will be willing to sell more when prices rise and less when prices fall

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23
Q

What is the supply curve?

A

The curve that shows the relationship between the quantity supplied and the price of a product or service (It is upward sloping.)

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24
Q

What is the price inelastic supply?

A

The supply where a large change in the price will have little impact on the quantity of a good or service supplied by the producer

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25
What is the price elastic supply?
The supply where a small change in the price will bring about significant increases in the quantity of a product or service supplied by the producer.
26
What is market clearing or equilibrium price?
The price at which supply will equal demand
27
What is shortage?
The amount of a good or service that will not be available when the price of the good or service is set below the equilibrium price (Demand will exceed supply.)
28
What is surplus?
The amount of a good or service that will not be sold when the price of the good or service is set above the equilibrium price (Supply will exceed demand.)
29
What is the product life cycle?
The theory that explains the different stages—introduction, growth, maturity, and decline—that a product goes through before it fades away.
30
What is market structure?
The organization of an industry determined by the level of competition within the industry.
31
What is pure competition?
The industry market structure in which a large number of suppliers produce essentially identical products, which are sold at a price determined by the market
32
What is a monopoly?
The industry market structure in which there is essentially a single supplier of goods or services that has the power to set prices.
33
What is imperfect competition?
The industry market structure where the industry’s output of goods or services is supplied by a relatively small number of firms and price is largely determined by market forces
34
What are firm concentration ratios?
The percentage of total industry output that can be accounted for by the four largest firms and so a measure of the sellers’ market power
35
What are barriers to competition?
Barriers that arise when certain legal restrictions (patent protection, licensing, and tariffs) that reduce the level of competition are imposed on an industry
36
What are patents?
Awards to companies or individuals by governments to protect their inventions (intellectual property) by providing exclusive rights to the owner to produce the goods (e.g., pharmaceutical products) or services (e.g., software or operating systems) for a set period of time, thereby preventing others from doing so during that time period
37
What is licensing?
The practice by governments of selecting investors to operate certain types of businesses, thereby restricting entry into those businesses and reducing competition
38
What are tariffs?
Taxes on imports that raise the price of imports and consequently enable domestic competitors to raise prices as well
39
What is an oligopoly?
The industry market structure where a few producers of almost identical products cater to the needs of the whole market
40
What is product differentiation?
A strategy that firms employ to make their product seem different from those of their competitors
41
What is command or planned economic system?
The economic system in which the ownership and control of the factors of production are totally in government hands
42
What is a state enterprise?
Government-owned firms that produce goods and services, generally in command and mixed economic systems
43
What is a mixed economic system?
The economic system that exhibits elements of both the capitalist and the command economic systems
44
What is privatization?
The process of selling state enterprises to private entrepreneurs
45
What is economic transition?
The move from a command economic system to a capitalist economic system (in the direction of competitive, market-oriented economics) that is aimed at ending the inefficiencies of central planning.
46
What are outputs?
A wide array of useful goods or services that are either consumed or used for further production in business
47
What are inputs?
Factors of production (land, labor, capital, and technology), that is, commodities or services that are used by firms in their production processes
48
What are entrepreneurs?
People with initiative who seize opportunities as they see them to get things done or make things happen, generally for profit
49
What are capital goods?
Finished goods like machinery and equipment that can be used as inputs for further production of goods and services
50
What are investors?
Those who have a financial stake in a business, small or large, and expect to receive a return on their invested capital
51
What is revenue?
The sum of the quantities of all goods or services sold times their price.
52
What is the formula for revenue?
Revenue = (quantities of all goods sold) × (their price) + (quantities of all services sold) × (their price)
53
What are dividends?
The portion of profits distributed to stockholders
54
What are retained earnings?
The portion of profits not distributed as dividends but reinvested back into the company to generate additional profits in the future
55
What is maximize shareholder wealth?
Corporate policies that lead to high dividend payments and rising stock prices over a period of time
56
What is a stakeholder company?
A business that takes into consideration the interests of all its partners, including its customers, management, employees, suppliers, and society
57
What are business ethics?
The principles governing whether certain business practices are morally acceptable, especially when they have a detrimental impact on consumers, investors, or employees
58
What is productivity?
The dollar output of goods and services per dollar input of labor
59
What is inventory?
Unsold goods in stock
60
What is the consumer confidence index?
An indicator that measures the self-assurance of consumers and is crucial in determining consumer spending habits that have a direct impact on business prospects and the economy
61
What is the target group?
A population segment whose members have more or less similar consumption habits
62
What is market segmentation?
The breakdown of target consumers into categories on the basis of age, gender, education, ethnic background, or other criteria to determine the products or services that could be made to suit the segments’ specific needs
63
What are psychographics?
The analysis and understanding of the consumer’s mind to identify consumer likes, dislikes, or preferences and develop commercials that manipulate the recipient’s mind to create a need for certain new goods or services
64
What is culture?
The behavior patterns, beliefs, and institutions that underpin all human activities, explain much of our behavior, create an awareness for learning, and vary by social grouping
65
What is the gross national product (GNP)?
The value of all final goods and services produced in an economy and measured at current prices over a given time period, usually a year
66
What is gross national income (GNI)?
The expenditures that make up GNP and are equal to the income that the factors of production (land, labor, capital, and technology) receive
67
How do Economus generally divide GNP?
Consumption, Investment, Government expenditure, Net exports
68
What is government expenditure?
The amount spent by the government
69
What is investment?
The amount spent by private firms on new plants and equipment for future production and profit
70
What is consumption?
The amount used by private domestic residents
71
What is net exports?
Exports minus imports of goods and services
72
What is gross domestic product (GDP)?
The total dollar value of all final goods and services produced each year within a country’s borders
73
What is nominal GNI, GNP, or GDP?
Economic output measured in current prices
74
What is real GNI, GNP, or GDP?
Economic output measured on an inflation-adjusted basis
75
What are the business cycles?
The up- and downswings in real GNI, GNP, or GDP levels over time
76
What is the digital era?
The period of transformation within our lifestyle to make the Internet and related technologies a part of our everyday lives
77
What is bandwidth?
The amount of data and other information that can be transferred in a second via the Internet
78
What is B2C or B2B?
Business-to-consumer electronic commerce or Business-to-business electronic commerce

Intro To Business (2 decks)

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