Business Chapter 1
Consumer Price Index CPI
A monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
Conditions for Perfect Competition
A single product is involved. There are no restrictions on firms entering the industry. All sellers offer basically the same product. All buyers and sellers know everything there is to know about the market. The overall market is not affected by the actions of any one buyer or seller. The going price is set by forces of supply and demand.
Inflation Rate
An economic statistic that tracks the increase in prices of goods and services over a period of time; usually calculated on a monthly or annual basis
Producer Price Index PPI
An index that measures prices that producers receive for their finished goods Differs from CPI due to: Government subsidies Sales and excise taxes Distribution costs
productivity can be described as
Average level of output per work per hour
Competition
Competition is rivalry among businesses for sales to potential customers. In a capitalistic society, competition ensures only businesses that provide consumers with useful products and services at fair prices will survive.
What is manufacturing business?
Goods Producing, Keyboards, world wide
Barter System
Goods and services are directly exchanged.
Command Economy: Socialism
Government: Decides what will be produced, how it will be produced, and who owns and controls the factors of production. Owns and controls key industries. Workers may choose their own occupations. Goal is to equally distribute income, eliminate poverty, provide social services, and eliminate economic waste. Small-scale private businesses may be permitted.
Command Economy: Communism
Government: Owns and controls all factors of production. Plans production to meet the needs of the state. Dictates occupations, wages, and prices. The goal is to create a classless society where all contribute according to their ability and receive benefits according to their needs. No private businesses are allowed.
Free enterprise
Individuals are free to decide what to produce, how to produce it, and at what price to sell it
Capitalism
Individuals: Own and operate the majority of businesses that provide goods and services. Privately own resources. Decide what to buy. The market drives supply and price. Role of government is limited.
Federal Funds Rate
Interest rate banks charge one another for the use of Federal funds. The Fed indirectly controls this rate by the way it buys and sells Treasuries to the banks.
What does Joe Dudley sell and who is he?
He is one of the worlds most respected black business owners. He sells hair care snd cosmetic products
What four things does business need?
Human Resources, Material Resources, Informational Resources, Financial Resources
Monetary Policies
Monetary Policies are Federal Reserve decisions that determine the size of the supply of money in the nation and the level of interest rates.
When a firms expenses are greater than its sales revenue the firm has a ______
Negative cash flow
Conditions of Monopoly
One seller and no close substitute for the product or service sold Barriers to keep others from entering the market Seller must set its price based on the demand
The Relationship Between Sales Revenue and Profit
Profit is what remains after all business expenses have been deducted from sales revenue. A loss (negative profit) results when a firm's expenses are greater than its revenues.
Natural Monopoly
Public Utilities
What is service business?
Service Providing, health care, regional
Legal (Limited) Monopoly
Software
Stakeholders
Stakeholders are all the different people or groups of people who are affected by the policies and decisions made by an organization. Stakeholders include consumers, marketing intermediaries, stockholders, and employees.
Gross Domestic Product (GDP):
The total value of all goods and services produced by all people within the boundaries of a country during a one-year period
Inflation
The value of a dollar goes down. Demand rises.
Conditions of Oligopoly
There are few, large sellers. Considerable investment is required to enter market. Market actions of each seller have a considerable effect on competitors' sales and prices.
Conditions of Monopolistic Competition
There are many buyers and a large number of sellers. Products are similar in nature and intended to satisfy the same need. Sellers try to gain a competitive edge through product differentiation - unique features, attention-getting brand name, unique packaging, special services.
What two main questions can impact your carrer
What can I do that will make employers want to pay me a salary? What skills do I have that employers need? (baby em, I think you could say something with your paintings! because your really good!!!
deflation
a general decrease in the level of prices
inflation
a general rise in the level of prices
standard of living
a loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services
oligopoly
a market (or industry) in which there are few sellers
monopoly
a market (or industry) with only one seller, and there are barriers to keep other firms from entering the industry
monopolistic competition
a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors
domestic system
a method of manufacturing in which an entrepreneur distributes raw materials to various homes, where families process them into finished goods to be offered for sale by the merchant entrepreneur
consumer price index (CPI)
a monthly index that measures the changes in prices of a fixed basket of goods purchased by a typical consumer in an urban area
entrepreneur
a person who risks time, effort, and money to start and operate a business
depression
a severe recession that lasts longer than a typical recession and has a larger decline in business activity when compared to a recession
federal deficit
a shortfall created when the federal government spends more in a fiscal year than it receives
barter
a system of exchange in which goods or services are traded directly for other goods or services without using money
factory system
a system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place
Invisible hand
a term created by Adam Smith to describe how an individual's personal gain benefits others and a nation's economy
Increased competition from firms in other nations is an example of the
lobal Environment
______ is the process of developing and promoting the difference between ones produces and other similair products
product differentation
factors of production
resources used to produce goods and services
competition
rivalry among businesses for sales to potential customers
relationship between sales and profits can be written as
sales revenue - expenses = profits
productivity
the average level of output per worker per hour
perfect (or pure) competition
the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product
social media
the online interaction that allows people and businesses to communicate and share ideas, personal information, and information about products or services
business
the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs
unemployment rate
the percentage of a nation's labor force unemployed at any time
market price
the price at which the quantity demanded is exactly equal to the quantity supplied
demand
the quantity of a product that buyers are willing to purchase at each of various prices
supply
the quantity of a product that producers are willing to sell at each of various prices
business cycle
the recurrence of periods of growth and recession in a nation's economic activity
economics
the study of how wealth is created and distributed
microeconomics
the study of the decisions made by individuals and businesses
macroeconomics
the study of the national economy and the global economy
free enterprise
the system of business in which individuals are free to decide what to produce, how to produce it, and at what price to sell it
gross domestic product (GDP)
the total dollar value of all goods and services produced by all people within the boundaries of a country during a one-year period
national debt
the total of all federal deficits
economy
the way in which people deal with the creation and distribution of wealth
recession
two or more consecutive three-month periods of decline in a country's GDP
profit
what remains after all business expenses have been deducted from sales revenue
Balance of Trade
The total value of a nation's exports minus the total value of its imports over a specific period of time
What are 5 ways to Improve your productivity
1. Focus on one task at a time 2. Make your workload more manageable 3. Organize your work space and your work day 4. Structure your time 5. Give your brain a break
What are some serious problems facing Americans
1. National Debt 2. High unemployment rate 3. Volatile Stock Market 4. Consumer Pessimism 5. Unstable Economy & Business Environment
monetary policies
Federal Reserve's decisions that determine the size of the supply of money in the nation and the level of interest rates
mixed economy
Businesses: Produce goods and services to exchange for revenues (money). Use revenues to purchase factors of production. Households: Consume goods and services. Own resources of some factors of production. Government: Provides public services in exchange for taxes.
Marketing intermediaries
Buy products from manufacturers and resell
Economics
Economics is the study of how wealth (anything of value) is created and distributed.
Domestic System
Entrepreneur distributes raw materials to homes. Families process materials into a finished good. Entrepreneur sells finished goods.
Federal Deficit
The Federal Deficit is a shortfall created when the federal government spends more in a fiscal year than it receives.
National Debt
The National Debt is the total amount the federal government owes.
Productivity:
The average level of output per worker per hour
Discount Rate
The interest rate the Fed offers to member banks who need to borrow money to keep their reserves at or above the minimum.
Prime Rate
The lowest interest rate that banks charge their most credit-worthy customers. Also the basis for many home loan programs. Always adjusts based on the discount rate.
What Is Business?
The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs
Unemployment Rate
The percentage of a nation's labor force unemployed from January 2002
product differentiation
The process of developing and promoting differences between one's products and all competitive products
specialization
The separation of a manufacturing process into distinct tasks and the assignment of the different tasks to different individuals
Microeconomics
The study of the decisions made by individuals and businesses
Macroeconomics
The study of the national and global economies
Define Free Enterprise
The system of business in which individuals are free todecide what to produce, how to produce it, and what price to sell it.
Economy
The system through which a society creates and distributes wealth
Corporate Profits
The total amount of profits made by corporations over selected time periods
command economy
an economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production
service economy
an economy in which more effort is devoted to the production of services than to the production of goods
mixed economy
an economy that exhibits elements of both capitalism and socialism
producer price index (PPI)
an index that measures prices that producers receive for their finished goods
stakeholders
all the different people or groups of people who are affected by an organization's policies, decisions, and activities
market economy
an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices
capitalism
an economic system in which individuals own and operate the majority of businesses that provide goods and services
fiscal policy
government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending
the ability to think in abstract terms while invisioning the biggere picture falls in the category of _____ deemed importan managment trait
conseptual skills
sustainability
creating and maintaining the conditions under which humans and nature can exist in productive harmony while fulfilling the social, economic, and other requirements of present and future generations
Cultural diversity
differences among people in a workforce owing to race, ethnicity, and gender
cultural (or workplace) diversity
differences among people in a workforce owing to race, ethnicity, and gender
consumer products
goods and services purchased by individuals for personal consumption