Business Study Guide questions Chp 1

4. What are four types of economies systems? Can you provide an examples of a country using each type?

1. Communism: Russia, Poland, Hungary 2. Socialism: Sweden, India, and Israel 3. Capitalism (free enterprise): Unites States, Canada, Japan, and Australia 4. Mixed Economies: Great Britain. Mexico

6. List the four types of competitive environments and provide an example of a product of each environment.

1. Pure Competition: wheat, corn, and cotton 2. Monopolistic Competition: aspirin, soft drinks, and vacuum cleaners 3. Oligopoly: airlines 4. Monopoly: electricity, natural gas, and water

9. How did the Industrial Revolution influence the growth of the American economy? Why do we apply the term service economy to the United States today?

It help with faster transportation and efficiency to allow for production to be quicker and prices to be lower. Making it possible for more all kinds of people to buy the products causing the demand to increase making the supply increase and helping the economy grow. After world war II Americans had more money to spend on luxuries, meaning they started to pay other people for what they originally did like cleaning and laundry. Making the US more of a service economy. Service Economy: one devoted to the production of services, especially in the areas of finance and information technology.

5. Explain the terms supply, demand, equilibrium price, and competition. How do these forces interact in the American economy?

Supply: the number of products-- goods and services-- that businesses are willing to sell at different prices at specific times. Demand: the number of goods and services that consumers are willing to buy at different prices at a specific time. Equilibrium Price: the price at which the number pf products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time. Competition: the rivalry among businesses for consumers' dollars. Because the supply and demand curves intersect to make them equal ( this is the equilibrium price) they are all connected and the supply and demand are partly determined by the competition in the area. With more competition this could effect supply and demand negatively, but with less competition supply and demand could increase.

2. Name the forms a product may take and give some examples of each?

The forms that a product takes is tangible: which is computers, phone, clothing; but products can also take intangible forms through services: such as, dry cleaning, checkups, or a performance by a sports player or entertainer.

10. Explain the federal government's role in the American economy?

The government regulates business to preserve competition and protect consumers and employees.

3. Who are the main participants of business? What are the main activities? What other factors have an impact on the conduct of business in the United States?

The main participants of business are employees, customers, and owners. Their main activities are finance for the customers, marketing for the employees, and management for the owners. Other factors that have an impact are the economy, competition, social responsibility, information technology, and legal, political, and regulatory forces.

1. What is the fundamental goal of business? Do all organizations share this goal?

The primary goal of all businesses is to earn a profit.

7. List and define the various measures governments may use to gauge the state of their economies. If unemployment is high, will the growth of GDP be great or small?

Trade of Balance: the difference between our exports and our imports. Consumer Price Index: measures changes in prices of good and services purchased for consumption by typical urban households Per Capita Income: indicates the income level of "average" Americans. Useful in determining how much "average" consumers spend and how much money Americans are earning. Unemployment Rate: indicates how many working-age Americans are not working who otherwise want to work. Inflation: monitors price increases in consumer goods and services over specified periods of time. Used to determine if costs of goods and services are exceeding worker compensation over time. Worker Productivity: the amount of goods and services produced for each hour worked. The GDP would be small.