Chapters 1 & 2

Question 1

an activity that seeks to provide goods and services to others while operating at a profit

Answer 1

business

Question 2

tangible products such as computers, food, clothing, cars, and appliances

Answer 2

goods

Question 3

intangible products (products that can’t be held in you hands) such as education, health care, insurance, recreation, and travel and tourism

Answer 3

services

Question 4

a person who risks time and money to start and manage a business

Answer 4

entrepreneur

Question 5

the total amount of money a business takes during a given period by selling goods and services

Answer 5

revenue

Question 6

the amount of money a business earns above and beyond what it spends for salaries and other expenses

Answer 6

profit

Question 7

when a business’s expenses are more than its revenues

Answer 7

loss

Question 8

the chance an entrepreneur takes of losing time and money on a business that may not prove profitable

Answer 8

risk

Question 9

the amount of goods and services people can buy with the money they have

Answer 9

standard of living

Question 10

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

Answer 10

quality of life

Question 11

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

Answer 11

stakeholders

Question 12

contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks

Answer 12

outsourcing

Question 13

an organization whose goals do not include making a personal profit for its owners or organizers

Answer 13

nonprofit organization

Question 14

the resources used to create wealth: land, labor, capitol, entrepreneurship, and knowledge

Answer 14

factors of production

Question 15

the surrounding factors that either help or hinder the development of businesses

Answer 15

business environment

Question 16

everything from phones and copiers to computers, mobile devices, medical imaging machines, and the various software programs and apps that make business processes more effective, efficient, and productive

Answer 16

technology

Question 17

the amount of output you generate given the amount of input (hours worked)

Answer 17

productivity

Question 18

the buying and selling of goods over the internet

Answer 18

e-commerce

Question 19

an electronic storage file for information

Answer 19

database

Question 20

the obtaining of individuals’ personal information, such as Social Security and credit card numbers, for illegal purposes

Answer 20

identity theft

Question 21

giving frontline workers the responsibility, authority, freedom, training, and equipment the need to respond quickly to customer request

Answer 21

empowerment

Question 22

the statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income

Answer 22

demography

Question 23

the movement of the temperature of the planet up or down over time

Answer 23

climate change

Question 24

the trend toward saving energy and producing products that causes less harm to the environment

Answer 24

greening

Question 25

the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals

Answer 25

economics

Question 26

the part of economics study that looks at the operation of a nation's economy as a whole

Answer 26

macroeconomics

Question 27

the part of economics study that looks at the behavior of people and organizations in particular markets

Answer 27

microeconomics

Question 28

the study of how to increase resources and to create the conditions that will make better use of those resources

Answer 28

resource development

Question 29

a phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all

Answer 29

invisible hand

Question 30

an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit

Answer 30

capitalism

Question 31

a combination of freer markets and some government control

Answer 31

state capitalism

Question 32

the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time

Answer 32

supply

Question 33

the quantity of products that people are willing to buy at different prices at a specific time

Answer 33

demand

Question 34

the price determined by supply and demand

Answer 34

market place

Question 35

the degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product

Answer 35

perfect competition

Question 36

the degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different

Answer 36

monopolistic competition

Question 37

a degree of competition in which just a few sellers dominate the market

Answer 37

oligopoly

Question 38

a degree of competition in which only one seller controls the total supply of a product or service, and sets the price

Answer 38

monopoly

Question 39

an economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people

Answer 39

socialism

Question 40

the loss of the best and brightest people to other countries

Answer 40

brain drain

Question 41

economic systems in which the market largely determines what goods and services get produced, who gets them, and ho the economy grows

Answer 41

free-market economies

Question 42

economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow

Answer 42

command economies

Question 43

economic systems in which some allocation of resources is made by the market and some by the government

Answer 43

mixed economies

Question 44

the total value of final goods and services produced in a country in a given year

Answer 44

gross domestic product (GDP)

Question 45

a measure of total sales volume at all stages of production

Answer 45

gross output (GO)

Question 46

the number of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks

Answer 46

unemployment rate

Question 47

a general rise in prices of goods and services over time

Answer 47

inflation

Question 48

a situation in which price increases are slowing (the inflation rate is declining)

Answer 48

disinflation

Question 49

a situation in which prices are declining

Answer 49

deflation

Question 50

a situation when the economy is slowing but prices are going up anyhow

Answer 50

stagflation

Question 51

monthly statistics that measure the pace of inflation of deflation

Answer 51

consumer price index (CPI)

Question 52

an index that measures prices at the wholesale level

Answer 52

producer price index (PPI)

Question 53

the periodic rises and falls that occur in economies over time

Answer 53

business cycles

Question 54

tow or more consecutive quarters of decline in the GDP

Answer 54

recession

Question 55

a severe recession, usually accompanied by deflation

Answer 55

depression

Question 56

the sum of government deficits over time

Answer 56

national debt

Question 57

the theory that a government policy of increasing spending could stimulate the economy in a recession

Answer 57

Keynesian economic theory

Question 58

the management of the money supply and interest rates by the Federal Reserve

Answer 58

monetary policy