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Intro to Business (BUAD 1010) > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Business

A

Organization that provides goods or services to earn profit

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2
Q

Profit

A

Revenue - Expenses = Profit

Difference in revenue and expenses

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3
Q

What are the dimensions of the external environment of business?

A

Economic Environment
Technological Environment
Sociocultural Environment
Domestic Business Environment
Global Business Environment
Political/Legal Environment

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4
Q

Explain the economic dimension of the external environment of business

A

GDP, growth, inflation, unemployment

Relevant conditions that exist in the economic system which a company operates

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5
Q

Explain the technological dimension of the external environment of business

A

Ways by which firms create value for their constituents

Creation of technological companies, way technology transforms companies

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6
Q

Explain the sociocultural dimension of the external environment of business

A

Customs, morals, values, and demographic characteristics of the society

Determines business standards that a society will likely value and accept

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7
Q

Explain the political-legal dimension of the external environment of business

A

Relationship between government and business

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8
Q

Explain the global dimension of the external environment of business

A

International forces that affect a business and include international trade agreements, international economic conditions, and political unrest

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9
Q

Explain the domestic dimension of the external environment of business

A

Environment which a firm conducts operation and derives revenues

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10
Q

What are the five factors of production

A

Labor
Capital (money)
Entrepreneurs
Physical Resources
Informational Resources

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11
Q

What are factors of production? (define)

A

Resources that a country’s businesses use to produce goods and services

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12
Q

What is economic system

A

Nation’s system for allocating its resources among its citizens, both individuals and organizations

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13
Q

Labor

A

Human resources - Physical/intellectual contributions people make while engaged in economic production

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14
Q

Capital

A

Financial resources needed to operate business

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15
Q

Entrepreneur

A

Person who accepts risks and opportunities entailed in creating new business opportunities

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16
Q

Physical resources

A

Tangible things organizations use to conduct business - Include natural resources

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17
Q

Informational resources

A

data, such as market forecasts and economic data

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18
Q

Planned economy

A

Economy that relies on central government to control all/most factors of production and make all or most production and allocation decisions

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19
Q

What are successful economies moving towards as the most important factors of production?

A

entrepreneurial and informational technology skills

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20
Q

Communism

A

Political system which government owns and operates all factors of production

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21
Q

Socialism

A

Planned economic system which government owns and operates only selected major sources of production

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22
Q

Market economy

A

Individual producers and consumers control production/allocation by creating combinations of supply/demand (Political basis is often capitalism)

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23
Q

Capitalism

A

System that sanctions private ownership of factors of production; encourages entrepreneurship by offering products as incentive

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24
Q

Mixed market

A

Features characteristics of both planned and market (political basis often socialism) ex: China is moving towards socialism

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25
Q

Privatization

A

Process of converting government enterprises to privately owned companies

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26
Q

demand

A

willingness/ability of buyers to purchase a product (good/service)

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27
Q

what is the driving force of a free market economy

A

customers

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27
Q

law of demand

A

buyers purchase more as price drops

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28
Q

surplus

A

situation which supplied exceeds quantity demanded

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28
Q

supply

A

willingness of/ability of producers to offer a good/service for sale

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29
Q

Law of supply

A

Producers offer more for sale as price increases

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30
Q

Shortage

A

situation which quantity demanded exceeds quantity supplied

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31
Q

Equilibrium price

A

point at which price that suppliers can charge is the same price as the number that is the maximum number of customers is willing to pay (supply matches demand)

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32
Q

Private enterprise system

A

Ownership of resources used to create wealth in the hands of individuals

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33
Q

Freedom of choice

A

You can sell labor to employer of your choice

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34
Q

Private property rights

A

one that allows individuals to pursue their own interests with minimal government restriction

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35
Q

Profits

A

lure of profits leads some people to abandon security of working for someone else and assume risks of entrepreneurship

Critical to innovation and creativity

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36
Q

Competition

A

occurs when 2 or more businesses vie for the same resources/customers; motivates firms to be more efficient

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37
Q

Economic indicators

A

statistics that show whether economic system is strengthening, weakening, stable

assess performance of economy

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38
Q

what are the characteristics of competition

A

perfect competition
monopolistic competition
oligopoly
monopoly

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39
Q

Describe a perfect competition

A

local farmer
many competitors
relatively easy entry into industry
identical goods offered by competing firms
no control of price by individual firms

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40
Q

Describe a monopolistic competition

A

Stationery store
many competitors, but fewer than in perfect competition
fairly easy ease of entry to industry
similar goods offered by competing firms
some control over price by individual firms

41
Q

Describe an oligopoly

A

Steel industry
few competitors
difficult ease of entry to industry
can be similar or different goods offered by competing firms
some level of control over price by individual firms

42
Q

Describe a monopoly

A

public utility
no competitors
ease of entry into industry is regulated by government
no directly competing goods or services
considerable level of control over price by individual firms

43
Q

business cycle

A

pattern of short-term ups and downs (expansions and contractions) in economy

44
Q

Aggregate output

A

total quantity of goods and services produced by economic system during given period

primary measure of growth in business cycle

45
Q

Standard of living

A

total quantity of goods and services that can be produced with the currency used in an economic system

46
Q

GNP

A

Gross national profit

Total value of all goods/services produced by national economy within given period regardless of location of factors of production

47
Q

GDP

A

Gross domestic profit

Total value of all goods/services produced within given period by national economy through domestic production factors

measure of aggregate output

48
Q

Nominal GDP

A

GDP measured in current dollars or with components valued at current prices

49
Q

Purchasing Power Parity

A

Principle that exchange rates are set so the prices of similar products in different countries are about the same (can compare to standard of living globally)

50
Q

What happens when output grows faster than population

A

output per capita increases

system provides more of goods/services people want

51
Q

Productivity

A

inputs divided by outputs

measure of economic growth that compares to how much a system produces with resources needed to produce it

standard of living improves only through productivity increases

52
Q

Balance of trade

A

economic value of all products that a country exports minus economic value of inputs

can be positive or negative

53
Q

National debt

A

amount of money government owes creditors

financed through debts (bonds)

tax dollars pay interest not tother government needs

investor money is taken out of market where it would be invested in productive enterprises

54
Q

stability

A

condition which amount of money available in an economic system and the quantity of money available in an economic system and the quantity of goods and services produced are growing at same rate

55
Q

inflation

A

occurs when widespread price increases occur through economic system

too many dollars chasing too few goods

56
Q

consumer price index (CPI)

A

measure of prices of typical products purchased by consumers living in urban areas

57
Q

unemployment

A

level of joblessness among people actively seeking work in an economic system

58
Q

recession

A

period during which aggregate output, as measured by GDP, declines

(2 successive quarters)

59
Q

depression

A

deep, prolonged recession

60
Q

fiscal policy

A

used by government regarding how it collects and spends revenue

tax rates

61
Q

monetary policy

A

used by government to control size of its money supply

federal reserve injects capital into economy

62
Q

stabilization

A

government economic policy intended to smooth out fluctuations in output and unemplyment and stabilize prices

63
Q

import

A

product made or grown abroad but sold domestically

64
Q

Export

A

product made or grown domestically but sold abroad

65
Q

globalization

A

process by which the world economy is becoming a single interdependent system

66
Q

NAFTA

A

North American Free Trade Agreement
Agreement to gradually eliminate tariffs and trade barriers among U.S., Canada, and Mexico

67
Q

What replaced NAFTA

A

USMCA

68
Q

EU

A

European Union
Agreement among major European nations to eliminate or make uniform most trade barriers affecting group members

69
Q

ASEAN

A

Association of southeast Asian nations
Organization for economic, political, cultural, and social cooperation among Southeast Asian nations

70
Q

GATT

A

General Agreement on Tariffs and Trade
To encourage multilateral reduction or elimination of trade barriers

71
Q

WTO

A

World trade organization
Member nations negotiate trade agreements and resolve disputes about trade policies and practices (amendments to GATT)

72
Q

Trade deficit

A

Imports exceed esports, creating negative balance of trade

73
Q

Trade surplus

A

exports exceed imports, creating positive trade balance

74
Q

balance of payments

A

flow of all money into or out of a country (balance of trade, but also includes tourists, foreign aid, buying/selling currency by governments in foreign markets)

75
Q

euro

A

common currency shared among most members of EU

76
Q

absolute advantage

A

ability to produce something more efficiently than any other country can

77
Q

comparative advantage

A

ability to produce some products more efficiently than others

78
Q

individualism

A

interests of individual

79
Q

collectivism

A

interests of group

80
Q

power respect

A

authority is inherent in position of hierarchy

81
Q

power tolerance

A

authority assessed by personal investment

82
Q

uncertainty acceptance

A

positive response to change/opportunity

83
Q

uncertainty avoidance

A

prefer structure and routine

84
Q

aggressive goal behavior

A

value material possessions, money, and assertiveness

85
Q

passive goal behavior

A

value quality of life, welfare, social relevance

86
Q

long term outlook

A

value dedication and hard work

87
Q

short term outlook

A

value social obligations

88
Q

social orientation

A

person’s beliefs about relative importance of individual vs. groups to which they belong

89
Q

uncertainty orientation

A

feeling individuals have regarding uncertain and ambiguous situations

90
Q

goal orientation

A

manner in which people are motivated to work towards different kinds of goals

91
Q

power orientation

A

beliefs that people in culture hold about appropriateness of power and authority differences in hierarchies such as business organizations

92
Q

time orientation

A

extent to which members of a culture adopt a long-term vs. short-term outlook on work, life, and elements of society

93
Q

quota

A

restriction on number of products of a certain type that can be imported

94
Q

embargo

A

government order banning exportation and or importation of particular product or all products from particular country

95
Q

tariff

A

tax levied on imported products

96
Q

subsidy

A

government payment to help a domestic business compete with foreign firms

97
Q

business practice law

A

law or regulation governing business practices in different countries

98
Q

cartel

A

association of producers whose purpose is to control supply and prices

ex: oil in the middle east

99
Q

legal content law

A

law requiring that products sold in a particular country be at least partly made there

100
Q

dumping

A

practice of selling a product abroad for less than the cost of production

101
Q

protectionism

A

practice of protecting domestic business at the expense of free market competition

Intro to Business (BUAD 1010) (1 decks)

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