Unit 1- Business Fundamentals Flashcards
What are the three types of businesses?
Service
Retail
Manufacturing
What is a not for profit organization?
A business with a purpose of something other than profit for themselves.
What is a business?
An organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers.
What is manufacturing?
A business that makes profit from raw materials and then sells them
Profit= ?
Profit= Revenue-costs-expenses
What is a profit?
What is left after costs and expenses are paid
What are expenses?
The cost of running a business
What are costs?
The amount of money required to make the product.
What are the factors of production?
Natural Resources
Human Resources
Capital Ressources
Entrepreneurship
What are natural resources?
Material supplied by nature
Ex. Soil, Trees, Wildfire
What are Human Resources?
The people who work to create the goods and services.
What are capital resources?
The buildings, equipment, and tools used
What is entrepreneurship?
A person who combines other factors of production to earn a profit.
What are the stages of Maslow’s Hierarchy of needs?
Physiological Needs Safety Needs Love and Belonging Needs Esteem Needs Self-Actualization
What are the factors that influence consumption?
- Income and Price
- Status
- Current Trends
- Customs and Habits
- Safety
- Promotion
- Situational Influences
- Time
- Physical and Social Surroundings (where)
- Terms and Conditions of Purchase
- Objective of Purchase (why)
- States and Moods
What are the types of business ownership?
- Sole Proprietorship
- Partnership
- Corporations
- Franchises
What are advantages of a sole proprietorship?
- You receive all profits
- You can be your own boss
- Easy startup
What are disadvantages of a sole proprietorship?
- Unlimited Liability
- You are responsible for all losses
- Harder to borrow money
- You may not be farmiliar with all aspect of the business
What are advantages of a partnership?
- Easier to borrow money
- Shared responsibilities
- Inexpensive to set up and organize
What are disadvantages of a partnership?
- Unlimited liability in a general partnership
- Difficult to find partners
- You may disagree on things
What are the advantages of a corporation?
- Limited liability
- Ran by a board of directors
- Ownership is easily transferable
- More financial resources
- Easier to get a loan from the bank
What are the disadvantages of a corporation?
- If you don’t own a lot of shares, you don’t have much influence
- Costly to start up
- Closing can be costly and time consuming
- Changes in the stock market could affect finances
What are the advantages of a franchise?
- Brand recognition
- Training period for franchisees and employees
- Shared advertising with other locations of the same franchise
- Less stress in initial set-up
What are the disadvantages of a franchise?
- Franchise fee
- Monthly fee
- Expensive to buy
- Little say in business decisions
What is the law of supply?
As prices go up, supply goes up
As prices go down, supply goes down
What is the law of demand?
As prices go up, demand goes down
As prices go down, demand goes up
What is the equilibrium?
Where demand and supply meet. This is where what consumers want to buy is equal to what producers want to sell.
What are the four factors that cause a change in demand?
- Change in income
- Change in population
- Change in consumer tastes/preferences
- Change in consumer expectations
What are the four factors that cause a change in supply?
- Change in the number of producers
- Change in the costs of production
- Changes in technology
- Changes in the environment
