BUS 101 EXAM 1

Define sole proprietorship

A business owned by one person

CH3: _____ are goods and services that are made in one country and sold to other countries.

Exports

CH1: _____is the total market value of all final goods and services produced within a nation's borders each year.

GDP (Gross Domestic Product)

Define a limited liability companies

Hybrid organizations that appeal to smaller businesses because they are easy to set up and not subject to many restrictions. offers limited liability to owners

CH3: _____ are limitations on the quantity of certain types of goods that can be imported over a period of time.

Import quotas

What are stakeholders?

Individuals or groups to whom a business has a responsibility; include employees, customers, the general public, and investors.

What is the study of the economy as a whole?

Macroeconomics

CH1: ___________ refers to a government's programs for controlling the amount of money circulating in the economy and interest rates, conducted by the Federal Reserve (the Fed),

Monetary policy

CH3: The _____ created the world's largest free-trade zone.

NAFTA (North American Free Trade Agreement)

CH3: _____ refers to sending work functions to another country resulting in domestic workers losing their jobs.

Outsourcing

CH6: Define expert power.

Power that is derived from an individual's extensive knowledge in one or more areas.

CH5: A government agency that speaks on behalf of small business; specifically it helps people start and manage small businesses, advises them in the areas of finance and management, and helps them win federal contracts.

Small Business Administration (SBA)

CH1: _________ is an economic system in which the basic industries are owned by the government or by the private sector under strong government control.

Socialism

CH1: List 4 of the 7 of the external dynamic business environment

Technological Economic Political / Legal Demographic Social Competitive Global

What are macroeconomics?

The study of the economy as a whole

CH2: ____________ focuses on the consequences of an action taken by a person or organization seeking the greatest good for the greatest number.

Utilitarianism

CH5: Define a mission statement

What a business does.

CH5: Define a vision statement

Where a business wants to go, a future state of being

CH3: The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.

World Bank

Define partnership

a business owned by two or more people

What is corporate social responsibility?

a business's concern for society's welfare

What is a franchise?

a company that offers similar products or services in many locations

Define corporation

a legal entity subject to laws of the state in which it is formed where the right to operate as a business is issued by state charter.

What is economic growth?

a sustained increase in real GDP over time

Name some demographic factors

age, gender, race and ethnicity, and location.

What is capitalism?

an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

What is a depression?

an extreme fall in economic activity that lasts for years, rather than just several quarters.

CH5: Individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own funds.

angel investors

CH6: Directive leaders who prefer to make decisions and solve problems on their own with little input from subordinates

autocratic leaders

CH3: The _____ is defined as the difference in value of a country's exports and imports over a period of time.

balance of trade

CH4: A group of people elected by the stockholders to handle the overall management of a corporation, such as setting major corporate goals and policies, hiring corporate officers, and overseeing the firm's operations and finances.

board of directors

CH1: A ___________ is an organization that strives for a profit by providing goods and services desired by its customers.

business

CH5: A formal written statement that describes in detail the idea for a new business and how it will be carried out; includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan.

business plan

What is an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state?

capitalism

CH6: Power that is derived from an individual's ability to threaten negative outcomes.

coercive power

In which form of government are the means of production owned by the state with goods shared equally?

communism

CH6: A manager's ability to view the organization as a whole, understand how the various parts are interdependent, and assess how the organization relates to its external environment.

conceptual skills

What kind of merger joins firms in completely unrelated industries?

conglomerate

CH6: Plans that identify alternative courses of action for very unusual or crisis situations; typically stipulate the chain of command, standard operating procedures, and communication channels the organization will use during an emergency.

contingency plans

CH6: The process of assessing the organization's progress toward accomplishing its goals; includes monitoring the implementation of a plan and correcting deviations from the plan.

controlling

CH4: A _________is a legal entity with several corporate features, such as limited liability, an unlimited life span, an elected board of directors, and an administrative staff.

cooperative

CH6: The set of attitudes, values, and standards that distinguishes one organization from another.

corporate culture

What is a legal entity subject to laws of the state in which it is formed where the right to operate as a business is issued by state charter?

corporation

CH3: A country's _____ is the set of beliefs, values, and social norms shared by members of a society that determines what is socially acceptable.

culture

CH6: Leaders who solicit input from all members of the group and then allow the members to make the final decision through a vote.

democratic leaders

CH2: A philosophy in which a person will follow his or her obligations to an individual or society because upholding one's duty is what is ethically correct.

deontology

Why do Conglomerate mergers happen?

diversification, an expanded customer base, and increased efficiency.

CH6: The ability to produce the desired result or good.

effectiveness

CH6: Using the least amount of resources to accomplish the organization's goals.

efficiency

CH5: People with vision, drive, and creativity who are willing to take the risk of starting and managing a business to make a profit, or greatly changing the scope and direction of an existing firm.

entrepreneurs

CH3: The _____ is the value of one currency in terms of another.

exchange rate

CH5: Entrepreneurs who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own.

intrapreneurs

CH4: In a _____________, two or more companies form an alliance to pursue a specific project, usually for a specified time period.

joint venture

CH1: List the 4 Factors of Production

land, labor, capital, and entrepreneurship

Who are shareholders?

legal owners of the firm

CH2: Certain rights are guaranteed by the government and its laws, and these are called ________.

legal rights

CH4: The biggest advantage of a corporation is _______.

limited liability

What are hybrid organizations that appeal to smaller businesses because they are easy to set up and not subject to many restrictions?

limited liability companies

CH4: A hybrid organization that offers the same liability protection as a corporation but may be taxed as either a partnership or a corporation.

limited liability company (LLC)

What is communism?

means of production are owned by the state and goods would be shared equally

CH4: The combination of two or more firms to form one new company.

merger

What is the study of how households and firms make decisions and how they interact in markets?

microeconomics

What is revenue?

money obtained from goods or services

What is a recession?

normal part of the business cycle that generally occurs when GDP contracts for at least two quarters.

CH4: An association of two or more individuals who agree to operate a business together for profit.

partnership

What is a business that is owned by two or more people called?

partnership

What are stockholders?

people that own shares of stock in a corporation

CH1: A decline in GDP that lasts for two consecutive quarters (each a three-month period) is called a _________________.

recession

Who are legal owners of the firm?

shareholders

CH2: The practice of limiting investments to securities of companies that behave in accordance with the investor's beliefs about ethical and social responsibility to encourage businesses to be more socially responsible.

social investing

What is a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole?

socialism

What is a business that is owned by one person called?

sole proprietorship

CH4: List 3 legal forms of business

sole proprietorship partnership corporation

CH2: Individuals or groups to whom a business has a responsibility; include employees, customers, the general public, and investors.

stakeholders

Who are people that own shares of stock in a corporation?

stockholders

CH3: A(n) _____ is a tax levied by a nation on imported goods.

tariff

What are expenses?

the costs of operating a business

What is socialism?

the economic system in which the people control production and distribution through the government and then the people share the profits. Under socialism, everything and everyone was equal.

What is a conglomerate merger?

the joining of firms in completely unrelated industries

What are microeconomics?

the study of how households and firms make decisions and how they interact in markets

What is gross domestic product?

the total value of goods and services produced in a country in a year

What is profit?

total revenue - total cost

CH5: Financing obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.

venture capital

What kind of merger does Walt Disney and Pixar best represent?

vertical merger

What merger occurs between two or more companies involved at different stages in the supply chain process?

vertical merger

What are the advantages and disadvantages of partnerships?

Advantages: Ease of formation Availability of capital Diversity of skills and expertise Flexibility No special taxes Relative freedom from government control Disadvantages: Unlimited liability Potential for conflicts between partners Complexity of profit sharing Difficulty exiting or dissolving a partnership

What are the advantages and disadvantages of sole proprietorship?

Advantages: Easy and inexpensive to form Profits all go to the owner Direct control of the business Freedom from government regulation No special taxation Ease of dissolution Disadvantages: Unlimited liability Difficulty raising capital Limited managerial expertise Trouble finding qualified employees Personal time commitment Unstable business life Losses are the owners responsibility

What are the advantages and disadvantages of a corporation?

Advantages: limited liability Ease of transferring ownership Unlimited life Tax deductions Ability to attract financing Disadvantages: Double taxation of profits Cost and complexity of formation More government restrictions

What is an example of conglomerate merging?

Amazon and wholefoods

CH5: List 3 characteristics of the entrepreneurial personality

Ambitious: Independent: Self-confident: Risk-takers: Visionary: Creative: Energetic: Passionate. Committed.

CH1: _________ also known as the private enterprise system, is based on competition in the marketplace and private ownership of the factors of production (resources).

Capitalism

CH2: _____________ is the concern of businesses for the welfare of society as a whole; consists of obligations beyond those required by law or contracts.

Corporate social responsibility (CSR)

CH1: _________ is the study of people's vital statistics, such as their age, gender, race and ethnicity, and location.

Demography

CH2: List the 4 levels of the Pyramid of Corporate Social Responsibility in order from base to top.

Economic Legal Ethical Philanthropic

CH1: ______________are the people who combine the inputs of natural resources, labor, and capital to produce goods or services with the intention of making a profit or accomplishing a not-for-profit goal.

Entrepreneurs

CH2: ____ is a set of moral standards for judging whether something is right or wrong.

Ethics

CH4: What are the two types of mergers and what is the difference?

horizontal and vertical A merger between Coca-Cola and the Pepsi beverage division, for example, would be horizontal in nature. The goal of a horizontal merger is to create a new, larger organization with more market share. A vertical merger joins two companies that may not compete with each other, but exist in the same supply chain. An automobile company joining with a parts supplier would be an example of a vertical merger.

What kind of merger does the integration of Facebook, Whatsapp, Instagram & Messenger best represent?

horizontal merger

What merger occurs between firms that operate in the same industry?

horizontal merger

CH2: The term _______________ implies that certain rights—to life, to freedom, to the pursuit of happiness—are bestowed at birth and cannot be arbitrarily taken away.

human rights