Buisness 101 Ch 1-5

Briefly describe these major trade agreementsor alliances a.North American Free Trade Agreement (NAFTA) b.TheEuropean Union (EU) c.The Association of Southeast Asian Nations (ASEAN) d.World Trade Organization (WTO)

NAFTA= REMOVES MOST ARIFFA AND OTHEE TRADE BARRIERS AMOUNG US, CANADA, MEXICO eu= largest free market place in the world, eliminted most quotas, set uniform tariff levels, elimanted interal trade barriers ASEAN= ORGANIZATION FOR ECONOMIC , POLITICAL SOCIAL AND CULUTRAL COOPERATON AMONG SOUTHWEST ASIAN NATIONS wto= global organization daling with trae among its 152 memeber countries

Economic Systems?

Planned Economy= relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions (communism , socialism) Market economy= indivdual producers and consumers control production and allocation by creating combinations of supply and demand. Mixed Market economy= features characterisrcs of both planned and market economies.

How is profit calculated?

Revenues- Expenses + profit

What is the most popular area of small business enterprise?

services

What is a surplus?

situation in which quanity supplied exceeds quality demanded

16.What is the most common type of business?

sole

Managerial ethics

standard of behavior that guide indicual managers in their work , behavior towards employess, organization and other economic agents

Describe the following corporate terms: Stockholders (or shareholders) .Stockc Dividend Board of directors .Chairman of the board Corporate officersg.CEO

stockholder= owner of shares of stock in corpotation board of directors= body of coprotation that reports to it sshareholders and delagtaed power to run it day to da operations officers= top managenebt tean of coropation

Describe balance of trade?

total economic value of all orodicts a country eports mnus economic valur of the products imports ( exports-imports)

Gross domestic product (GDP)

total value of all goods and services produced within a given period by a national economy through domestic factors of production

What is perfect competition?

all firms in industry must be small and the number of firms in the industry must be large products are so simmilar consumers see them as identical (ice cubes)

National debt

amount of money foverment ows its creditors

What is the law of supply?

as prices increase suppliers want to sell more

Embargo

ban on the export or import of proucts

Ethical behavior

behavior that conforms to indicidual beliefsand and social norms about what is right and good

Unethical behavior.

behaviuor that conforms to indivual belifes and social orms about wha is weong and bad

Ethics

beliefs about what is right and wrong

What is a sole proprietorship? What are the advantages of sole proprietorships? What are the disadvantages of sole proprietorships?

buisness owned and usually opereated by one person who us resondible for all its debts advantages= freedom , simple to form, low start upo ocst, tax benifits disadvant= unlimited liabiliy, limited resoures, limited fundraing capability, lack of contity

What are the three ways to start a small business?

buying an exsisting business, franchising, starting from scratch

Define entrepreneur and entrepreneurship.

entrepreneur= business person who accepts both risks and opportunites involved in creating/ opperating a new business ventire entreprenurship= process of seekung buisness opportunities under condions of risl

Business ethicse

ethical or unethical behaviors by employees in the context of jobs

What are some criticisms of globalization?

exploited works in less developked countires, allows avoidence of domestic enviornent and tax regulation loss of cultural heritages benfits to rich and not the poor

How does fiscal policy differ from monetary policy?

fiscal policy= policies used by goverment regarding how it collectd and spends revenue moneary policy=CONTROL SIZE OF IT S MONEY SUPPLUY

What is balance of payments?

flow of money into and out of a country

What is consumerism?

form of social activism dedicated to protecting the rights of consumers in their dealings with buisness

What is a multinational corporation?

form og coproation spanninh natianl boundreis

Subsidy

goverment payment to help domestic busness compete with forein firms

What is an organizational stakeholder?

groups, individuals oranization directly affected by the practices of an organziation and who therefore have a stake in its permormance

According to your textbook, why do small businesses succeed?

hard work ,drive, dedication, market demange for products servies being sold, managerical competence, luck

What are some benefits of globalization?

higher standards of living, imporoved buisness profitability

What is anLLC?

hybrid of piblicly helpd cooporation and a partnership in which owders are taxed as partnets but enjoy benfits of limited liabiiy

What is collusion?

illegal agreement between two or more ocmpanies to commit a wrongul act

What is an oligopoly?

influece prices of products few sellers who domante the market, phone stores

Why are small businesses important to the US economy?

job creation, innovation , contributions to big buisness

How does the textbook define small business?

one that is independet and that has relativly little linfluence on the markey

Define Buisness

organized efforts of individuals produce goods and services earn profit

private enterprise system

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

Outsourcing

paying supplieers and distrubutors to perform certian business processes or porvice needed material sand service.

.What is a high-income country?

per captia greater than 12, 476

What is the Great Recession?

period during which total outpiut as measured by real gdp declines

What are the sources of capital for small business owners? What is the most important source?

personal resources, loands from family friends, bank loans, venture captial companies, (small business investment companies (sbic)

.Protectionism

pracitce of proctecting domestic business at the epence of free markwt comletion

What is globalization??

process through which the worl economy is fast becoming an interdeptnedent system

What is an import

products made or grown abroad and sold domstically in the united states

.What is an export?

products made or grown in the us and shipped for sale abroad

What is a depression?

prolonged and deep reccession

What is a shortage?

quantity demanded exceeds quanity supplied

What characteristics do entrepreneurs possess?

resourcfulness , concern for goof, personal customer relations, strong desrie to be their own boss, deal with uncertainty risk, manage time well

Quota

restrictions on the number of typs of products that can ben imported.

What is a monopoly?

one company can only prodce that specific product ( water in chicago)

Private property rights=

one that allows indivudals tp pursue their own interesits with minimal goverment restreiction

Describe the four different approaches to social responsibility

.Obstructionist stance .Defensive stance Accommodative stanced. Proactive stance

What is an economic system?

An orgonized way in which a state or nation allocated its resources and apportions goods and services in the natural community. All economic systems face scarcity which is unlimited human wants and limited resources.

What is the law of demand?

As prices increase consumers will demand less of a product

What is a demand curve?

a curve that shows the relationship between the price of a product and the quantity of the product demanded

What is the market (equilibrium) price?

a point at which the price that suppliers can charge is the same as the price that a maximum number of customers are willing to pay

One way to classify economic systems is based on ownershipof economic resources. Basic distinctions are Communism, Socialism and Capitalism. Describe each.

communism= type of planned economy government makes most economic decisions and owns or controls most economic resources capatilism= indivuals and firms make economic decisons free makrey and private ownderships are the norm socialism= planned economy goverment makes some economic decsions owns controls some economic resources free markets abd private ownderships are widspread.

defensive stance

company meets only minimun legal requirments in its commitments to groups and indivuals in its social environment

accomodative stance

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

proactive stance

companyt actively seeks opportunites to ocntribute to th we;; being of groups abd indivuals n its social enviorment

.International firm

conduct a great desl of business aborat may have overseas manufcaturing facilities

Which type of business produces the largest percentage of sales revenue?What is a publicly held (or public) corporation?

coorporation

According to the stakeholder model of responsibility, what are the five major groups to which a firm is responsible?

customers, employees, investors, supplirtd, local communites where they do buisness

What is an exchange rate?

cuurency of one nation can be exchanged for that of another

.Multinational firm

design, prodice, and market products in many nations

What is a business plan?

document in which entreprenur desrbird her or his business stratgy for the new venture and demonstrates how ut will be implimented

obstructionist stance

doing as little as possivble may involve attempts to deny or cover up violations

.Balance of trade

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

Describe each of the factors of production: labor, capital,entrepreneurship, physical resources, and information resources.

labor= includes physcial and intellectual contributions people make while engaged in economic production capital= describes financial resources needed to operate a buisness entreprenuership= person who accepts risks and opportunities entailed in creating and operationg a new buisness venture physical resources= tangible things that organizations use to conduct their buisness and include natural resourcs and raw materials nformation resources= data and other info used by buisnesses and include market forecasts, the specialized knowledge of people and economuic data

What is a corporation? What are advantages of incorporation? What are the disadvantages of incorporation?

legally considered an entity sepeate from its ownders and is liablr for its own detsbts owners, liabilty extends to the limits of its investors advant= limited liabilty, contimuty, stronger fundraising capabiliy dis= can be taken against will iof management, double taxation of porifts, complicated extensive to form

What is unemployment.

level of joblessness among people ativlety seeking work in economic system

profts

lure of profits lead some people to abandon the securty of working for someone else and assume the risks of entrenpreur

What are some goals of entrepreneurs?

make a profit, succeed

According to your textbook, why do small businesses fail?

managerial incompetence or inexperience, neglect, weak control systmes, insuffecient capital

GDP per capita

means gdp per person

Real GDP

means that gdp has been adjusted for changes in currency values and price changes

Productivity

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

What is the consumer price index (CPI)

measure of prices of typicl products purched by consumers lving in urban areas

Briefly describe the major world marketplaces. (Don't confuse major marketplaces on pages 110-111 with the trade agreements and alliances on page 112-113!) a.North America b.Europe (Western and Eastern) c.Pacific Asia

north america= worlds largest marketplace/economy europe= eu transformed western europle into a important economc system pacific asia= japan, chinam thailand, malayasia, singapire, indonesia, south korea, taiwan, philipeans, australia

What is monopolistic competition?

numerous buyers and relativley numerous sellers trying to differenciate tgeur oriducts from those of competitiors (stationary store, many but fewer than in perfect competition, fairly easy entry, simiar prodcuts, have some control on prices (water bottle)

What is inflation? .

occurs during periods of widspread price increases throughtout the economic system

competition

occurs wen two or more businesses vie for the same reosurces or customers

.Tariff

taxes on importated products

Why is MVCC not a business?

they do not earn a profit

What is a partnership? What are the advantages of partnerships? What are the disadvantages?

two or more people in business together advantages= nire talent and money, more fundraising ability, relaitbly easy to form, limited liability for limited partners, tax benifts dis= inlimited liabilty, disagreents, lack of contimuty

What is insider trading?

using confidental info to ggain from the purchase of salr of stocks

Managers can use ethical norms when faced with ethical dilemmas. Describe each ofthe norms briefly discussed in youbook :a.Utility b.Rights c.Justiced. Caring

utility= does a particular act opitimize the bengifts to those who are affected by it? rights= does it respect the rights of thers involved justiced= is it fair caring= consistent with peoples responsivilityes to eachother

.What is a trade surplus?

when exports are greater than imports

What is a trade deficit?.

when imports are greater thann exports

What is demand?

willibgness and ability of buyers to purchase a producte

What is supply?

willingness and ability of producers to offer a good or service for sale

freedom of choice

you can sell your labor to any employer you chose