Business chapter 1: exploring World of business and economics – Flashcards
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the system of business in which individuals are free to decide what to produce, how to produce it, and at what price to sell it
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free enterprise
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differences among people in a workforce owing to race, ethnicity, and gender
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cultural (or workplace diversity)
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ability to deal effectively with individual employees, other managers within the firm, and people outside the firm
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interpersonal skills
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ability to identify problems correctly, generate reasonable alternative, and select the "best" alternatives to solve problems
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analytic skills
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skills required to accomplish specific kind of work being done in an organization
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technical skills
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ability to think in abstract terms in order to see the "big picture." conceptual skills help managers understand how the various parts of an organization or idea can fit together
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conceptual skills
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the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs
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business
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what remains after all business expenses have been deducted from sales revenue
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profit
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all the different people or groups of people who are affected by the policies and decisions made by an organization
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stakeholders
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the study of how wealth is created and distributed
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economics
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the study of the decisions made by individuals and businesses
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microeconomics
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study of the national economy and the global economy
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macroeconomics
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the way in which people deal with the creation and distribution of wealth
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economy
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resources used to produces goods and services -land and natural resources: elements that can be used in the production process to make things ie: crude oil, forests, minerals, water and even air -labor: time and effort that we use to produce; includes human resources ie managers and employees -capital: money, facilities, equipment and machines -entrepreneurship: activity that organizes land, labor and capital; willingness to take risks/ knowledge and ability to use the other factors of production efficiently
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factors of production
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a person who risks time, effort and money to start and operate a business
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entrepreneur
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an economic system in which individuals own and operate the majority of businesses that provide goods and services
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capitalism
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a term created by Adam Smith to describe how an individual's personal gain benefits others and a nation's economy
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invisible hand
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an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices
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market economy
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economy that exhibits elements of both capitalism and socialism
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mixed economy
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goods and services purchased by individuals for personal consumption
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consumer products
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economic system in which the government decides what goods and services will be produces, how, for whom available goods and services will be produces, and who owns and controls the major factors of production
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command economy
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in a socialist economy key industries are owned and controlled by the government - transportation, utilities, communications, banking etc land, buildings and raw materials may also be the property of the state
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socialism
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-father: Karl Marx -North Korea, Cuba (since Soviet Union and China reforms) -classless society who citizens together owned all economic resources -all citizens contribute according to ability and receive benefits according to their need -centralized government plans: emphasis on production of goods government needs rather than products that consumers want --> shortage of consumer goods
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communism
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The average level of output per worker per hour
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Productivity
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The total dollar value of all goods and services produced by allallall byall people within the boundaries of a country during a one year period
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Gross domestic product (GDP)
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A general rise in the level of prices jstuttered
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Inflation
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A general decrease in the level of prices
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Deflation
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The percentage of a nation's labor force unemployed at anytime
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Unemployment rate
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Monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
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Consumer price index (CPI)
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And index that measures prices that producers receive for their finished goods
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Producer price index (PPI)
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The recurrence of periods of growth and recession in a nations economic activity
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Business cycle
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Two or more consecutive three month period of decline in a country's GDP
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Recession
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A severe recession that last longer than a typical recession and has a larger decline in business activity when compared to a recession
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Depression
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Federal reserve decisions that determine the size of the supply of money in the nation in the level of interest rates
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Monetary policies
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Government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending
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Fiscal policy
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A shortfall created when the federal government spends more in a fiscal year than it receives
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Federal deficit
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The total of all federal deficits
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National debt
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Rivalry among businesses for sales to potential customers
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Competition
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The total value of a nation's exports minus the total value of its imports over a specific period of time
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1. Balance of trade
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A measure of how optimistic or pessimistic consumers are about the nations economy. This measure is usually reported on a monthly basis
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2. Consumer confidence index
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The total amount of profits made by corporations over a selected.
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3. Corporate profits
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An economic statistic that tracks the increase in prices of goods and services over a period of time. The measure is usually calculated on a monthly basis
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4. Inflation rate
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The total income earned by various segments of the population including employees self-employed individuals and corporations and other types of income
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5. National income
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The total number of new home started during a specific period
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6. New housing starts
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The lowest interest rate that banks charge their most credit worthy customers
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7. Prime interest rate
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The market situation in which there are many buyers and sellers of a product and no single buyer or seller is powerful enough to affect the price of that product
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Perfect (or pure) competition
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The quantity of a product that producers are willing to sell at each of various prices
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Supply
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The quantity of a product that buyers are willing to purchase at each of various prices
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Demand
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1. Perfect - corn, wheat, peanuts 2. Monopolistic - clothing, shoes 3. Oligopoly - automobiles, cereals 4. Monopoly - software protected get copyright, many local public utilities
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Types of competition
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The price at which the quantity demanded is exactly equal to the quantity supplied
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Market price
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A market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors
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Monopolistic competition
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The process of developing and promoting differences between one's product and all competitive product
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Product differentiation
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A market (or industry) in which there are a few
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Oligopoly
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A market with only one seller and there are barriers to keep other firms from entering the interest
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Monopoly
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And industry requiring huge investment in capital and within which any duplication of facilities would be wasteful and that's not in the public interest
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Natural monopoly
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Loose subjective measure of how well off an individual or a society is mainly in terms of want satisfaction through goods and services
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Standard of living
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I system of exchange in which goods or services are traded directly for other goods or services without using money
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Barter
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A method of manufacturing in which an entrepreneur distributes Rob materials to various homes where families process them into finished goods to be offered for sale by the merchant entrepreneur
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Domestic system
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A system of manufacturing in which all materials machinery and workers required to manufacture a product are assembled in one place
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Factory system
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The separation of a manufacturing process into distinct task and the assignment of different task to different individuals
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Specialization
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The organized effort of individuals to produce and sell through the Internet, for a profit, the products and services that satisfy societies needs
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E-business
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And economy in which more effort is devoted to the production of services Dan to the production of goods
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Service economy
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The online interaction that allows people and businesses to communicate and share ideas personal information and information about products or services
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Social media
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Meeting the needs of the present without compromising the ability of future generations to meet their own needs
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Sustainability
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Economic system in which the factors of production are owned by private entities and all individuals are free to use their resources as they see fit prices are determined by the workings of supply and demand in competitive markets in the economic role of government is limited to rule maker and umpire
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Laissez-faire
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1. The peak (prosperity 2. Recession 3. The trough 4. Recovery (expansion)
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Phases of business cycle
