Foundation of Business - Ch1 Quiz

Changes in the technological environment include the emergence of Information Technology that includes such tools as

-cell phones -computers -the Internet

Technology improves the productivity of a farmer by enabling access to the latest prices for commodities, using satellites to view his fields, and:

-communicating with farmers around the world -showing him which fields have the best yields -maximizing the use of seed and fertilizer by tracking yields to improve profits

Managing diversity means:

-creating a sense of belonging to a community -being sensitive to those from other cultures -being inclusive of those who are different

The purposes of nonprofit organizations include:

-filling a societal need -filling an educational need

Among the benefits businesses provide to their communities are:

-tax payments -jobs -goods and services

Which percentage of the value of the U.S. economy is generated by the service sector?

85 percent

Changes in the technological environment create increases in world wide ________________________ in all sectors of the economy, creating exciting challenges for future leaders.

Blank 1: competition

Globalization has led to increased __________________________ with countries such as China and India.

Blank 1: competition

One of the ways government can encourage business is to provide ________________ that is easily exchanged or traded for that of other countries.

Blank 1: currency or money

The study of the characteristics of human populations such as size, density, age, race, gender, and income is known as ________________.

Blank 1: demography or demographics

The buying and selling of goods over the Internet is known as ______________________.

Blank 1: e-commerce

Freedom of ownership is part of the _________________ and __________________ environment.

Blank 1: economic Blank 2: legal

The invention of farm equipment such as Cyrus McCormick's harvester and other such improvements has led to large-scale _______________ and increased the world's food supplies.

Blank 1: farming, agriculture, or production

The ________________________ environment of business impacts all of the other environmental influences.

Blank 1: global

As businesses expand to serve ____________________ markets, new jobs will be created in service and manufacturing. There will also be more _________________ to fill those jobs.

Blank 1: global Blank 2: competition

A business tries to earn a profit by providing ____________________ and _____________________ that satisfy people's needs and wants.

Blank 1: goods or products Blank 2: services

War and terrorism have helped some companies _______________________ , such as those that manufacture uniforms and armaments.

Blank 1: grow

The service era is giving way to a new era based on __________________ .

Blank 1: information

As the economy evolves, the use of new technologies means the need for jobs in some industries disappears and there are new ________________ in others.

Blank 1: opportunities, careers, or jobs

Commercial activity engaged in as a means of livelihood or profit.

Business

Globalization has improved living standards in developing countries such as:

China and India

Blackberry: When the Blackberry phone system quit working, 70 million customers were affected. Many of those customers turned to other cell phone providers that offered the reliable service business customers demand, often at a lower price.

Competitive

Statistical study of a population as to age, gender, income, education, and so on.

Demography

Jeffries Roofing: In its proposals, Jeffries Roofing describes the materials to be used and the price. When a customer signs a bid, it becomes an enforceable contract.

Economic and legal

Enabling/authorizing lower-level employees to take action and make decisions.

Empowerment

A person who risks time, energy, and money to start and manage a business.

Entrepreneur

Any physical products offered by a business.

Goods

LO 1-4 Describe the effects of technology on businesses.

How has technology benefited workers, businesses, and consumers? Technology enables workers to be more effective, efficient, and productive. Effectiveness means doing the right thing in the right way. Efficiency means producing items using the least amount of resources. Productivity is the amount of output you generate given the amount of input (e.g., hours worked).

Minimizing government interference with the free exchange of goods and services can help developing countries. Why?

It encourages entrepreneurs to start businesses that create jobs and wealth.

The end result if a business's expenses exceed the amount of money it earns during a given period.

Loss

Organization that operates for the common good and not to generate individual wealth.

Nonprofit organization

Income received by an organization from its normal business activities.

Revenue

Coca Cola and Wal-Mart are able to do business in Mexico and China because those countries have tradable _________________

currency

Businesses that send catalogs and direct mail advertising often buy information about consumers that is collected in an electronic ________________ that tells them what customers buy and from whom they buy merchandise.

database

Businesses are part of a country's:

economic system

Walmart: In China, Walmart has nearly doubled its presence, and U.S. Walmart locations now offer a range of products that are made in China.

global

The wars in Iraq and Afghanistan have ______ some sectors of the U.S. economy such as those that manufacture arms, but has ______ growth in others such as tourism.

grown; decreased benefited; slowed

One of the main explanations for the relatively sharp increases in the U.S. manufacturing sector productivity is:

improved technology makes the production process faster

Expenditures on war and terrorism creates much debate because:

it drains money from the economy

Companies strive for zero defects in making their products because

it increases customer satisfaction

The businesses that will succeed in today's economy will be those that are:

most responsive to customer wants and needs

One way for government to actively promote entrepreneurship is to allow private ___________________ of businesses.

ownership

Groups that have a strong interest in the success and outcomes of a business, such as employees, neighbors, or government regulators, are called _________________.

stakeholders

One of the advantages of working for a company instead of being an entrepreneur is that:

the company assumes the entrepreneurial risk of failure

The resources of land, labor, capital, entrepreneurship, and knowledge are:

the factors of production

The sector of the economy that has more high-paying jobs than the others is:

the service sector

An important effect of changed communication technology is that

those with fewer resources are able to compete with large companies through the internet.

The Internet has affected business because the explosion of B2B and B2C transactions means that:

websites have become as important as brick-and-mortar stores in our economy

Whether a business makes a profit or loss is determined by the difference between the total amount of money a business takes in from sales, known as its ___________________ , and the money needed to operate it, known as __________________ .

Blank 1: revenue or revenues Blank 2: expenses

Although entrepreneurs expect to succeed, they must be realistic and recognize that they are taking a(n) _______________ because many small businesses also fail every year.

Blank 1: risk, chance, or gamble

Legal and illegal immigrants have had a significant effect on businesses, ______________________ and _____________________________.

Blank 1: schools Blank 2: hospitals

Students today can expect to respond to rapid changes in the business environment by:

continuously educating themselves to meet new job opportunities

Assigning business functions like accounting or production to outside organizations.

Outsourcing

The amount of output per unit of input (e.g., labor, equipment).

Productivity

What is the definition of the standard of living?

The amount of goods and services people can buy with the money they have

Municipalities have adapted to increased diversity in their populations by:

adding languages other than English to their signs and websites

Dealing with a diverse workforce requires managers to:

be sensitive to workers and cultures around the world

LO 1-2 Explain how entrepreneurship and the other factors of production contribute to the creation of wealth.

-What are the advantages and disadvantages of entrepreneurship? Working for others means getting benefits like paid vacations and health insurance. Entrepreneurs take more risks and lose those benefits. They gain the freedom to make their own decisions, more opportunity, and possible wealth. -What are the five factors of production? The five factors of production are land, labor, capital, entrepreneurship, and knowledge. Of these, the most important are entrepreneurship and knowledge. Entrepreneurs are people who risk time and money to start and manage a business. What makes rich countries rich today is a combination of entrepreneurship and the effective use of knowledge.

LO 1-3 Analyze the effects of the economic environment and taxes on businesses.

-What can governments in developing countries do to reduce the risk of starting businesses and thus help entrepreneurs? The government may allow private ownership of businesses, pass laws that enable businesspeople to write contracts that are enforceable in court, establish a currency that's tradable in world markets, help lessen corruption in business and government, and keep taxes and regulations to a minimum. From a business perspective, lower taxes mean lower risks, more growth, and thus more money for workers and the government.

LO 1-8 Review how past trends are being repeated in the present and what those trends mean for tomorrow's college graduates.

-What is the history of our economic development in the United States, and what does it tell us about the future? Page 23 Agricultural workers displaced by improved farm technology went to work in factories. Improved manufacturing productivity and increased competition from foreign firms contributed to the development of a service economy in the United States. The service era is now giving way to an information-based global revolution that will affect all sectors of the economy. The secret to long-term success in such an economy is flexibility and continuing education to be prepared for the opportunities that are sure to arise. -What job opportunities for college graduates exist in the service sector? Check over Figure 1.4, which outlines the service sector. That is where you are most likely to find the fast-growing firms of the future.

LO 1-1 Describe the relationship between profit and risk, and show how businesses and nonprofit organizations can raise the standard of living for all.

-What is the relationship of businesses' profit to risk assumption? Profit is money a business earns above and beyond the money that it spends for salaries and other expenses. Businesspeople make profits by taking risks. Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable. A loss occurs when a business's costs and expenses are higher than its revenues. -Who are stakeholders, and which stakeholders are most important to a business? Stakeholders include customers, employees, stockholders, suppliers, dealers, bankers, the media, people in the local community, environmentalists, and elected government leaders. The goal of business leaders is to try to recognize and respond to the needs of these stakeholders and still make a profit.

LO 1-7 Identify what businesses must do to meet global challenges, including war and terrorism.

-Which countries are creating the greatest competitive challenges? China and India are two major competitors. -What will be the impacts of future wars and terrorism? Some businesses, such as those in the defense industry, may prosper. Others, such as tourism, may suffer. One way to minimize world tensions is to help less-developed countries become more prosperous.

Funding Social Security in the future is a problem because:

-there are fewer workers paying in than older people who are collecting benefits -the government has used Social Security funds for other purposes

The agriculture industry in the U.S. has changed from millions of ______________ farms to fewer _____________________ farms.

Blank 1: small Blank 2: large

Equipment such as phones, fax machines, and computers are all examples of the _______________ element of the business environment.

Blank 1: technological, technical, or technology

LO 1-6 Analyze the social changes affecting businesses.

How have social changes affected businesses? Diversity has come to mean much more than recruiting and keeping minority and female employees. Diversity efforts now include older adults, people with disabilities, people with different sexual orientations, atheists, religious people, extroverts, introverts, married people, and single people. Managing diversity means dealing sensitively with workers and cultures around the world. Providing Social Security benefits to older citizens in the future will draw huge amounts of money from the working population. That is why there is so much discussion about Social Security in the media today.

Financial benefit realized when the amount of revenue gained from a business activity exceeds its expenses.

Profit

General well-being of individuals and societies, measured by indicators such as health care, leisure, clean air, and so on.

Quality of life

The threat of loss due to some unforeseen internal or external occurrence.

Risk

Which demographic group is currently the richest in the United States?

Seniors 65 and older

Intangible products such as health care, insurance, and recreation.

Services

Snap for Seniors: Entrepreneur Eve Stern started a business to serve the growing number of older Americans. Snap for Seniors lists housing providers for seniors and, based on individual needs, matches them with elderly clients.

Social

Individuals and/or groups of people who stand to gain or lose by a business's policies and activities.

Stakeholders

Financial health of society, measured by income and consumption of goods and services.

Standard of living

Borders books and music: As customers began downloading digital books and music from the Internet, Borders struggled for years and eventually declared bankruptcy.

Technological

LO 1-5 Demonstrate how businesses can meet and beat competition.

What are some ways in which businesses meet and beat competition? Some companies have found a competitive edge by focusing on making high-quality products, all the way to zero defects. Companies also aim to exceed customer expectations. Often that means empowering frontline workers by giving them more training and more responsibility and authority.

Businesses use bar codes on products that you purchase in order to:

build databases about customer preferences

A business that sells goods and services over the Internet to businesses, but not to consumers is engaged in:

business to business commerce

An example of the effect of globalization on U.S. consumers is:

many goods and services are provided more cheaply by outsourcing their production to India or China