BIG Business Set (Midterm 1; Ch. 1-8)
The four basic rights of free-market capitalism
1)The right to own private property 2)The right to own a business and keep all that business's profits 3)The right to freedom of competition 4)The right to freedom of choice
Supply
The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time
Demography
The statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.
Economics
The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals
Resource development
The study of how to increase resources and to create the conditions that will make make better use of those resources
National debt
The sum of government deficits over time
Gross domestic product (GDP)
The total value of final goods and services produced in a country in a given year
Efficiency
producing goods and services using the least amount of resources.
Standard of living
refers to the amount of goods and services people can buy with the money they have.
Quality of life
refers to the general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide.
Goods
tangible products such as computers, food, clothing, cars, and appliances.
Profit
the amount of money a business earns above and beyond what it spends for salaries and other expenses needed to run the operation.
Risk
the chance an entrepreneur takes of losing time and money on a business that may not prove profitable.
Loss
occurs when a business's expenses are more than its revenues.
Market price
The price determined by supply and demand
Diversity
*Diversity efforts include hiring women, older adults, people with disabilities, people with different sexual orientations, atheists, religious people, extroverts, introverts, married people, and single people. *It also means dealing sensitively with workers and cultures around the world
Diversity
*Diversity efforts include hiring women, older adults, people with disabilities, people with different sexual orientations, atheists, religious people, extroverts, introverts, married people, and single people.*It also means dealing sensitively with workers and cultures around the world
What does the future look like for tomorrow's college students?
*Heavily technology based (or online) *Most everyone will work in the service industry at one point *Early retirement
Inclusion vs. Belonging
*Inclusion is about having a voice that is heard. *Belonging is about feeling part of a community.
What are the five factors of production? Which ones seem to be the most important for creating wealth?
*Land, Labor, Capital, Entrepreneurship, and Knowledge. *Entrepreneurship and Knowledge seem to be the most important for creating wealth (as seen within some rich countries) *Entrepreneurs use what they've learned (knowledge) to grow their businesses and increase wealth. *Economic and political freedom also matter.
What benefits do you lose by being an entrepreneur, and what do you gain?
*Lose: any benefits such as paid vacation time, day care, a company car, or health insurance. *Gain: freedom to make your own decisions, opportunity, and possible wealth.
What are some of the major issues affecting the economy today? (Fact check this one)
*Military workers *Retirement rate *Realistic quality vs. quantity *Managing diversity *Others?
What are some advantages of working for others?
*Somebody else assumes the company's entrepreneurial risk and provides you with benefits like paid vacation time and health insurance. *You're not in charge of your own time, which is a good thing for some people; more structure, less freedom of your career.
Globalization
*World Trade*Globalization has greatly improved living standards around the world.
Technology
*everything that makes business processes more effective, efficient, and productive. *from phones to computers, mobile devices, medical imaging machines, robots, the Internet, social media, and the various software programs and apps
Circular economy
*refers to reusing, redistributing, refurbishing, and recycling products instead of dumping them in landfills *in other words, keeping products in the value circle.
State Capitalism
A combination of freer markets and some government control
State capitalism
A combination of freer markets and some government control
Oligopoly
A degree of competition in which just a few sellers dominate the market
Monopoly
A degree of competition in which only one seller controls the total supply of a product or service, and sets the price
Inflation
A general rise in the prices of goods and services over time
Gross output (GO)
A measure of total sales volume at all stages of production
Invisible hand
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all
Depression
A severe recession, usually accompanied by deflation
Deflation
A situation in which price increases are slowing (the inflation rate is declining)
Disinflation
A situation in which price increases are slowing (the inflation rate is declining)
Stagflation
A situation when the economy is slowing but prices are going up anyhow
All sectors of the economy
Agricultural, Industrial, and Service
Entrepreneurship (a factor of production)
All the resources in the world have little value unless entrepreneurs are willing to take the risk of starting businesses to use those resources.
Communism
An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production
Socialism
An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people
Capitalism
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit
Capitalism
An economic system in which all/most of the factors of production and distribution are privately owned and operated for profit
Database
An electronic storage file for information
Producer price index (PPI)
An index that measures the change in prices at the wholesale level
An economic boom
Businesses are doing well
Core inflation
CPI minus food and energy costs
Command economies
Economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow
Free-market economies
Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows
Empowerment
Giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests.
What are four ways the government can foster entrepreneurship?
Help Promote: *Allow private ownership of businesses *Minimize interference with the free exchange of goods and services. *Establish a currency that's tradable in world markets. (That is, the currency lets you buy and sell goods and services anywhere in the world when it is easily exchanged for that of the other countries where you do business.)*Help minimize corruption in business and in its own ranks. Lessen Risks: *By passing laws that enable businesspeople to write enforceable contracts.
The right to own private property
Individuals can buy, sell, and use land, buildings, machinery, inventions, and other forms of property, as well as pass property onto their children. The most fundamental of all rights under capitalism
Knowledge
Information technology has revolutionized business, making it possible to quickly determine wants and needs and to respond with desired goods and services.
Land (or natural resources); (a factor of production)
Land and other natural resources are used to make homes, cars, and other products.
The 5 factors of production
Land, Labor, Capital, Entrepreneurship, Knowledge
Macroeconomics
The part of economics study that looks at the operation of a nation's economy as a whole
Consumer price index (CPI)
Monthly statistics that measure the pace of inflation or deflation
Hydroponics
New ways of creating needed goods and services such as nanotechnology
Natural gas for autos
New ways of growing food
Recovery
Occurs when the economy stabilizes and starts to grow
The right to freedom of choice
People are free to choose where they want to work and what career they want to follow. And what they buy and sell
Profit
Profit = revenues - expenses
The right to own a business and keep all that business's profits
Profits act as important incentives for business owners
Unemployment rate
The percentage of the civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks
Stakeholders
all the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.
What is the difference between revenue and profit?
Revenue is the total amount of money a business takes in during a given period of time. Profit is the amount of money a business earns ABOVE and BEYOND what it spends for salaries and other expenses during a given period; ("extra money").
What is risk and how is it related to profit?
Risk is the chance an entrepreneur takes of LOSING TIME AND MONEY on a business that may not prove profitable. It is directly related to the amount of money a business brings in (profit), in the sense that the risk in the situation is how much profit comes from starting this business.
Greening
Saving energy and producing products that cause less harm to the environment, such as solar energy.
What is the difference between standard of living and quality of life?
Standard of living refers to the AMOUNT of goods and services people can buy with the money they have. Quality of life refers to the GENERAL WELL-BEING of a society in terms of its political freedom, natural environment, education, health care, etc. that add to the SATISFACTION that other goods and services provide.
What major factor caused people to move from farming to manufacturing and from manufacturing to the service sector?
Technology
Product differentiation
The attempt to make buyers think similar products are different in some way
E-commerce
The buying and selling of goods online
Monopolistic competition
The degree of competition in which a large number off sellers produce very similar products that buyers nevertheless perceive as different
Perfect competition
The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product
Brain drain
The loss of the best and brightest people to other countries
Monetary policy
The management of the money supply and interest rates by the Federal Reserve Bank
Climate change
The movement of the temperature of the planet up or down over time.
Identity theft
The obtaining of individuals' personal information (such as Social Security and credit card numbers, for illegal purposes).
Microeconomics
The part of economics study that looks at the behavior of people and organizations in particular markets
Recession
Two or more consecutive quarters of decline in the GDP
The right to freedom of competition
Within certain guidelines established by the government, individuals are free to compete with other individuals or businesses in selling and promoting goods and services.
Entrepreneur
a person who risks time and money to start and manage a business.
A business
any activity that seeks to provide goods and services to others while operating at a profit.
Business environment
consists of the surrounding factors that either help or hinder the development of businesses.
Non-profit organization
contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks.
Outsourcing
contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks.
Services
intangible products (products that can't be held in your hand) such as education, health care, insurance, recreation, and travel and tourism.
Intellectual capital
includes employee knowledge and skills that can be used to create now products, attract new customers, and increase profits.
Business cycles
the periodic rises and falls that occur in economies over time
Insourcing
the practice of using an organization's own personnel or other resources (contracting within your own company) to accomplish a task that was previously outsourced.
Demand
the quantity of products that people are willing to buy at different prices at a specific time
Revenue
the total amount of money a business takes in during a given period by selling goods and services.