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BUSA 101 > Chapters 1, 4, 5 > Flashcards

Chapters 1, 4, 5 Flashcards

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1
Q

Business Goal

A

Earn a profit

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2
Q

Profit

A

The difference between what it cost to make and sell a product and what a customer pays for it

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3
Q

Non-profit Organization

A

-Purpose isn’t to earn profits
-May provide goods or services
-Engage in fund raising
-Engage in management, marketing, and finance to reach goals

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4
Q

Stakeholders

A

Groups that have a stake in the success and outcomes of a business

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5
Q

People & activities of business

A

Management (Competition/social responsibility and ethics)- Involves the functions of planning, organizing, leading, and controlling (employees)

Marketing (Legal, political, regulatory forces, and digital tech)- Focus of all marketing activities is satisfying customers (customers)

Finance (Economy)- Refers to all activities concerned with obtaining money and using it effectively (owners)

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6
Q

Economics

A

The study of how resources are distributed for the production of goods and services within a social system

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7
Q

Factors of Production

A

Land, labor, capital, and enterprise (Natural, human, and financial resources)

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8
Q

Communism

A

-Owned/operated by government
-Government controls competition/economy
-Excess income goes to gov. The gov supports social/economic institutions
-Consumers have limited choices of goods/services, prices are higher
-Little choice in career, most work for gov own industries or farms

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9
Q

Socialism

A

-Gov owns/operates some basic industries, individuals own small businesses
-Comp restricted in basic industries, encouraged in small businesses
-Small business profit may be reinvested into the business, profit in gov owned industries goes to gov
-Consumers have some choice of goods and services, prices determined by supply/demand
-More choice of career, many work gov jobs

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10
Q

Capitalism (Free enterprise)

A

-Individuals own and operate all businesses
- Comp Encouraged by market forces and gov regulations
-Individuals and businesses are free to keep profits after paying taxes
-Consumers have a wide choice of goods and services, prices determined by supply/demand
-Unlimited choice of careers

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11
Q

Mixed market

A

-No country has a pure form of communism, socialism, or capitalism
-Most nations operate with elements from more than one system

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12
Q

Supply Vs Demand and price

A

Supply- The number of products, goods, and services that businesses are willing to sell at different prices at a specific time

Demand- The number of goods and services that consumers are willing to buy at different prices at a specific time

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13
Q

Equilibrium Price

A

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 time

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14
Q

Pure Competition

A

The market structure that exists when there are many small businesses selling one standardized product

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15
Q

Monopolistic Competition

A

The market structure that exists when there are fewer businesses that in a pure competition environment and the differences among the goods they sell are small

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16
Q

Oligopoly

A

The market structure that exists when there are very few businesses selling a product (Airlines)

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17
Q

Monopoly

A

The market structure that exists when there is only one business providing a product in a given market (Utilities)

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18
Q

Economic expansion (inflation) Vs contraction

A

Expansion- Occurs when an economy is growing and people are spending more money. Purchases stimulate production and employment

Contraction- Slowdown of the economy characterized by a decline in spending and during which businesses cut back and production and lay off workers

Inflation- A condition characterized by a continued rise in prices

19
Q

Recession Vs Depression

A

Recession- A decline in production, employment, and income

Depression- A condition of the economy in which unemployment is very high, consumer spending is low, and businesses output is sharply reduced

20
Q

Gross Domestic Product (GDP)

A

The sum of all goods and services produced in a country during a year

21
Q

Budget deficit/surplus

A

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

Surplus- Income or revenue exceeds expenditures

22
Q

Sole proprietorship (7 Adv V 6 Dis)

A

Def- Businesses owned and operated by one individual

Adv- Ease/cost of formation, secrecy, distribution/use of profit, flexibility/control of the business, gov regulation, taxation, closing the business

Dis- Unlimited liability, limited source of funds, limited skills, lack of continuity, lack of qualified employees, taxation

23
Q

Partnership (5 Adv V 5 Dis and articles)

A

Def- An association of two or more persons who carry on as co-owners of a business for profit

Adv- Ease of organization, availability of capital/credit, combined knowledge/skills, decision making, regulatory controls

Dis- Unlimited liability, Business responsibility, life of the partnership, distribution of profits, limited source of funds

Articles- legal documents that set forth the basic agreement between partners

24
Q

Corporation (5 Adv V 4 Dis)

A

Def- A legal entity, created by the state, whose assets and liabilities are separate from its owners

Adv- Limited liability, Ease of transfer of ownership, perpetual life, external source of funds, expansion potential

Dis- Double taxation, forming a corporation, disclosure of information, employee-owner separation

25
Q

Dividends

A

Profits of a corporation that are distributed in the form of cash payments to stockholders

26
Q

Public versus private corporation

A

Public- a corporation whose stock anyone may buy, sell, or trade

Private- A corporation owned by just one or a few people who are closely involved in managing the business

27
Q

Preferred versus common stock

A

Preferred- Owners not generally having a say in running the company, have a claim to profits before other stockholders

Common- Owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends

28
Q

IPO (initial public offering)

A

Selling a corporation’s stock on public markets for the first time

29
Q

Non profit corporation

A

Corporations that focus on providing a service rather than earning a profit but are not owned by a government entity

30
Q

Joint venture

A

A partnership established for a specific project or for a limited time

31
Q

Mergers

A

The combination of two companies to form a new company

32
Q

Acquisitions

A

The purchase of one company by another, usually by buying its stock

33
Q

Entrepreneurship

A

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

34
Q

Entrepreneurship V Social entrepreneurship V intraprenuerhsip

A

Entrepreneurship- Process of creating and managing a business to achieve desired objectives (Profit)

Social- Individuals who use entrepreneurship to address social problems

Intra- Support from an existing organization

35
Q

Benefits of a small business in the economy

A

Job creation, innovation,

36
Q

Small Business (Adv V Dis)

A

Def- Any independently owned and operated business that is not dominant in its competitive area and does not employ more then 500 people

Adv- Independence, costs, flexibility, focus, reputation

Dis- High stress level, high failure rate

37
Q

Primary small business industries

A

Retailing, wholesale, services, manufacturing, technology, sharing economy

38
Q

Reasons small and new businesses fail (8)

A

Underfunded, not understanding your competitive niche, lack of social media, bad prices, lack of plan, employees, legal responsibilities, lack of partners (Main problem is financial problems0

39
Q

Business plan (purposes/function)

A

Purpose- Statement of the rationale for the business

Function- Step by step explanation of how to achieve goals

40
Q

Financial resources for small businesses (Equity V debut)

A

Equity- Use of personal assets rather than borrowing funds, venture capitalist

Debt- Loans obtained from banks or the small business administration

41
Q

Franchise

A

A license to sell another’s products or to use another’s name in business or both

42
Q

Franchiser

A

The company that sells a franchise

43
Q

Franchisee

A

The purchaser of a franchise

44
Q

Trends for small business focus

A

Demographic, technological, economical,

BUSA 101 (4 decks)

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