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Business 100 > First Test > Flashcards

First Test Flashcards

1
Q

business

A

organization that provides goods or services to earn a profit

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2
Q

profits

A

difference between a business’s revenues and its expenses

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3
Q

external environment

A

everything outside of an organization’s boundaries that might affect it

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4
Q

economic system

A

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

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5
Q

factors of production

A

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

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6
Q

planned economy

A

economy that relies on a centralized government to control all or most factors of production and allocation decisions

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7
Q

market economy

A

individual producers and consumers control production and allocation by creating combinations of supply and demand

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8
Q

mixed market economy

A

features characteristics of both planned and market economies

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9
Q

privatization

A

process of converting government enterprises into privately owned companies

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10
Q

demand

A

the willingness and ability of buyers to purchase a product

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11
Q

private enterprise system

A

one that allows individuals to pursue their own interests with minimal government restriction; private property rights, freedom of choice, profits, and competition

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12
Q

private property rights

A

ownership of the resources used to create wealth is in the hands of the individuals

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13
Q

freedom of choice

A

you can sell your labor to any employer you choose

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14
Q

profits

A

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

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15
Q

competition

A

occurs when two or more businesses vie for the same resources or customers

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16
Q

What are the two conditions required perfect competition?

A
  1. All firms must be small
  2. The number of firms must be large
    Many firms create equality in price and consistent customer streams
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17
Q

monopolistic competition

A

market or industry characterized by numerous buyers and sellers trying to differentiate their products from their competitiors

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18
Q

oligopoly

A

market or industry characterized by a handful of large sellers with the power to influence the prices of its products

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19
Q

monopoly

A

market or industry in which there is only one producer that can therefore set the prices of its products

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20
Q

natural monopoly

A

industry in which one company can most efficiently supply all needed goods or services

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21
Q

economic indicators

A

statistics that show whether an economic system is strengthening, weakening, or remaining stable; assesses performance of an economy

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22
Q

business cycle

A

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

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23
Q

aggregate output

A

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

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24
Q

standard of living

A

the total quantity and quality of goods and services that people can purchase with the currency used in their economic system

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25
Q

gross national product (GNP)

A

refers to the total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located

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26
Q

purchasing power parity

A

the principle that exchange rates are set so that the prices of similar products in different countries are about the same

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27
Q

productivity

A

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

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28
Q

balance of trade

A

the economic value of all products that a country exports minus the economic value of imported products

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29
Q

national debt

A

the amount of money the government owes to its creditors

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30
Q

stability

A

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

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31
Q

inflation

A

occurs when widespread price increases occur throughout an economic system

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32
Q

unemployment

A

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

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33
Q

recession

A

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

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34
Q

depression

A

a prolonged and deep recession

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35
Q

fiscal policies

A

policies used by a government regarding how it collects and spends revenue

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36
Q

monetary policies

A

policies used by a government to control the size of its money supply

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37
Q

stabilization policy

A

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

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38
Q

ethics

A

beliefs about what is right and wrong or good and bad in actions that affect others

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39
Q

business ethics

A

refers to ethical or unethical behaviors by employees in the context of their jobs

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40
Q

ethical behavior

A

behavior that conforms to individual beliefs and social norms about what’s right and good

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41
Q

unethical behavior

A

behavior that conforms to individual beliefs and social norms about what is defined as wrong and bad

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42
Q

managerial ethics

A

standards of behavior that guide individual managers in their work (towards employees, the organization, and other economic agents

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43
Q

How do you assess ethical behavior?

A
  1. Gather the relevant factual
    information
  2. Analyze the facts to determine the most appropriate moral values
  3. Make an ethical judgement based on how right or wrong the proposed activity or policy is
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44
Q

What are the four ethical norms?

A

Utility, rights, justice, and caring

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45
Q

social responsibility

A

refers to the overall way in which a business attempts to balance its commitments to relevant groups and individuals in its social environment

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46
Q

organizational stakeholders

A

those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance

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47
Q

What are the five groups that companies strive to concentrate on?

A

Customers, employees, investors, supplies, and local communities where they do business

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48
Q

the concept of accountablility

A

the expectation of an expanded role for business in protecting and enhancing the general welfare of society

49
Q

insider trading

A

using confidential information to gain from the purchase or sale of stocks

50
Q

obstructionist stance

A

involves doing as little as possible and may involve attempts to deny or cover up violations

51
Q

defensive stance

A

company meets only minimum legal requirements in its commitments to groups and individuals its social environment

52
Q

accomodative stance

A

a company, if specifically asked to do so, exceeds legal minimums in its commitments to groups

53
Q

proactive stance

A

a company actively seeks opportunities to contribute to the well-being of groups and individuals in its social environment

54
Q

regulation

A

the establishment of laws and rules that dictate what organizations can and cannot do (direct and indirect)

55
Q

political action committees (PACs)

A

special organizations created to solicit money and then distribute it to political candidates

56
Q

lobbying

A

the use of persons or groups to formally represent an organization or group of organizations before political bodies

57
Q

legal compliance

A

the extent to which the organization conforms to local, state, federal, and international laws

58
Q

ethical compliance

A

the extent to which the members of the organization follow basic ethical and legal standards of behavior

59
Q

philanthropic giving

A

the awarding of funds or gifts to charities or other worthy causes

60
Q

corporate social audit

A

systematic analysis of a firm’s success in using finds earmarked for meeting its social responsibility goals

61
Q

small business

A

one that is independent (not part of a larger business) and that has relatively little influence in its market

62
Q

small business administration (SBA)

A

government agency charged with assisting small businesses

63
Q

What are the three most important things about small businesses?

A

Job creation, innovation, and contributions to big business

64
Q

entrepreneur

A

businessperson who accepts both the risks and the opportunities involved in creating and operating a new business venture

65
Q

entrepreneurship

A

the process of seeking business opportunities under conditions of risk

66
Q

established market

A

one in which many firms compete according to relatively well-defined criteria

67
Q

niche

A

a segment of a market that is not currently being exploited

68
Q

first-mover advantage

A

any advantage that comes to a firm because it exploits an opportunity before any firm does

69
Q

business plan

A

document in which the entrepreneur describes her or his business strategy for the new venture and demonstrates how it will be implemented

70
Q

franchise

A

arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser)

71
Q

venture capital company

A

group of small investors who invest money in companies with rapid growth potential

72
Q

small-business investment company (SBIC)

A

government-regulated investment company that borrows money from the SBA to invest in or lend to a small business

73
Q

e-commerce

A

the Internet provides fundamentally new ways of doing business

74
Q

sole proprietorship

A

business owned and usually operated by one person who is responsible for all of its debts

75
Q

general proprietorship

A

business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts

76
Q

limited partnership

A

allows for limited partners who invest money but are liable to debts only to the extent of their investments

77
Q

master limited partnership

A

master partner has majority ownership and runs the businesses; minority partners have no management voice

78
Q

corporation

A

business that is legally considered an entity separate from its owners and is liable for its own debts; owners’ liability extends to the limits of their investments

79
Q

closely held/private corporation

A

a corporation whose stock is held by only a few people and is not available for sale to the general public

80
Q

publicly held/public corporation

A

a corporation whose stock is widely held and available for sale to the general public

81
Q

S corporation

A

a hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes

82
Q

limited liability corporation (LLC)

A

hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability

83
Q

multinational/transnational corporation

A

form of corporation spanning national boundaries

84
Q

corporate governance

A

roles of shareholders, directors, and other managers in corporate decision making and accountability

85
Q

stock/shareholder

A

owner of share of stock in a corporation

86
Q

board of directors

A

governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets

87
Q

officers

A

top management team of a corporation

88
Q

What are the four special issues in corporate ownership?

A

Joint ventures and strategic alliances, employee stock ownership plans, institutional ownership plans, mergers and acquisitions

89
Q

globalization

A

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

90
Q

import

A

product made or grown abroad but sold domestically

91
Q

export

A

product made or grown domestically but shipped or sold abroad

92
Q

What are the four distinctions based on wealth?

A
  1. High-income countries
  2. Upper-middle-income countries
  3. Lower-middle-income countries
  4. Low-income countries
93
Q

North American Free Trade Association (NAFTA)

A

agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada, and Mexico

94
Q

European Union (EU)

A

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

95
Q

Association of Southeast Asian Nations (ASEAN)

A

organization for economic, political, social, and cultural cooperation among Southeast Asian nations

96
Q

General Agreement on Tariffs and Trade (GATT)

A

international trade agreement to encourage the multilateral reduction or elimination of trade barriers

97
Q

World Trade Organization (WTO)

A

organization through which member nations negotiate trade agreements and resolve disputes about trade policies and practices

98
Q

trade deficit

A

situation in which a country’s imports exceed its exports, creating a negative balance of trade

99
Q

trade surplus

A

situation in which a country’s exports exceed its imports, creating a positive balance of trade

100
Q

balance of payments

A

flow of all money into or out of a country

101
Q

exchange rate

A

rate at which the currency of one nation can be exchanged for the currency of another nation

102
Q

euro

A

a common currency shared among most of the European Union (excluding Denmark, Sweden, and the UK)

103
Q

absolute advantage

A

the ability to produce something more efficiently than any other country can

104
Q

comparative advantage

A

the ability to produce some products more efficiently than others

105
Q

exporter

A

firm that distributes and sells products to one or more foreign countries

106
Q

importer

A

firm that buys products in foreign markets and then imports them for resale in its home country

107
Q

international firm

A

firm that conducts a significant portion of its business in foreign countries

108
Q

multinational firm

A

firm that designs, produces, and markets products in many nations

109
Q

independent agent

A

foreign individual or organization that agrees to represent an exporter’s interests

110
Q

quota

A

restriction on the number of products that can be imported into a country

111
Q

embargo

A

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

112
Q

tariff

A

tax levied on imported products

113
Q

subsidy

A

government payment to help a domestic business compete with foreign firms

114
Q

protectionism

A

the practice of protecting domestic business at the expense of free market competition; may drive up prices by reducing competition

115
Q

local content law

A

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

116
Q

business practice law

A

law or regulation governing business practices in a given countries

117
Q

cartel

A

association of producers whose purpose is to control supply and prices

118
Q

dumping

A

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

Business 100 (9 decks)

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