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Exam 1 Ol110
| Question | Answer |
|---|---|
| Business | any activity that seeks to provide a good or service to others while operating at a profit. |
| Entrepreneur | a person who risks time and money to start and manage a business |
| Non profit organization | an organization whose goals are for the betterment of the community, not financial gains. Ex: American red Cross, United Way, Snhu |
| Goods | tangible products such as computers, food, clothing cars and applications |
| Services | intangible products that can’t be held in your hand like, education, healthcare, insurance, recreation and travel |
| Success in Business | • Filling a markets needs: making money for yourself and provide jobs to others • Strategy of finding a need and filling it |
| Revenue | the total amount of money a business takes in during a given period by selling goods and services |
| Profit | the amount of money a business earns above and beyond what it spends for expenses |
| Loss | occurs when a business’ expenses are more than its revenue |
| Risk | the chance of entrepreneur takes of losing time and money on a business that may not prove profitability |
| Standard of Living | the amount of goods and services people can buy with the money they have |
| Quality of life | the general well-being of a society in terms of its political freedom, natural environment, education, healthcare, safety, amount of leisure and rewards that add to personal satisfaction |
| Stakeholders | all the people who stand to gain or lose by the policies and activities of a business and whose concerns the businesses need to address |
| Outsourcing/offshoring | contracting with other companies to do some of the firm’s functions |
| Insourcing | foreign companies opening offices and factories in the united states |
| Economics | the study of how a society employs resources to produce goods and services for consumption among various groups and individuals |
| Macroeconomics | concentrates on the operations of the nations economy |
| Microeconomics | concentrates on the behavior of people and organizations in markets |
| Thomas Malthus | (person) rich had most of the wealth and poor had most of the population, resources would run out |
| Non-Malthusians | believe the opposite and too many people in the world is bad and they needed radical birth control |
| Adam Smith | (person) believed freedom was vital to the economy, freedom to own land or property, believed people will work hard if they think they'll be rewarded |
| Invisible Hand | when self-directed gains leads to social and economic benefits for the whole community |
| Capitalism | All of most of the land, factories, and stores are owned by individuals, not the government, and operated for profit. Most capitalist countries are moving to socialism |
| Free market | decisions about what and how much to produce are decided by the market. Customers send signals about what they like and how they like it |
| price | tells companies how much of a product they should produce. If something is wanted, but hard to get, the price will rise until more products are available |
| Supply | the quantities of products businesses are willing to sell at different prices |
| Demand | the quantities of products consumers are willing to sell at different prices |
| Market price(equilibrium point) | determined by supply and demand, this is the negotiated price |
| Perfect competition | tons of sellers |
| monopolistic competition | many sellers (college and fast food) |
| oligopoly | few sellers (tobacco and cars) |
| monopoly | one seller (diamonds, utilities, microsoft) |
| Socialism | basic businesses like utilities are owned by the government in order to evenly distribute profits among people |
| Communism | economic and political system where the government makes almost all economic decisions and owns all the major factors of production |
| free-market economies | the market largely determines what goods and services are produced, who gets them, and how the economy grows |
| command economies | the government largely determines what goods and services are produced, who gets them, and how the economy grows |
| mixed economies | some allocation of the resources is made by the market and some by the government |
| Gross domestic product (GDP) | total value of final goods and services produced in a country in a given year. As long as a company is within a country's border, their numbers go into the country's GDP |
| unemployment rate | the percentage of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks |
| inflation | the general rise in the prices of goods and services over time |
| disinflation | prices are declining because too few dollars are chasing too many goods |
| stagflation | economy is slowly declining but prices are going up |
| consumer price index | monthly stats that measure the pace of inflation or deflation |
| business cycle | economic boom, recession, depression, recovery |
| recession | two or more consecutive quarters of decline in the GDP |
| Depression | a severe recession |
| recovery | when the economy stabilizes and stats to grow |
| fiscal policy | the fed. Gov.. efforts to keep the economy stable by increasing or decreasing taxes on government spending |
| monetary policy | the management of the monetary supply and interest rates by the federal reserve bank |
| National Deficit | the amount of money the federal government spends beyond what it gathers in taxes |
| National Debt | the sum of government deficits over time |
| National Surplus | when government takes in more money than it spends |
| Importing(U.S is largest) | buying products from another country |
| Exporting (U.S is second largest) | selling products to another country |
| Free Trade | the movement of goods and services among nations without political or economic barriers |
| Global Trade | allows countries to produce what they can make best and buy what they need from others |
| Comparative Advantage | A country should sell the products it produces most efficiently and buy from other countries the products it cannot produce as efficiently |
| Absolute Advantage | a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries. ` |
| Balance of trade | the total value of a nation’s exports compared to its imports measured over time |
| Trade Surplus: | when the value of a country’s exports is more than that of its imports |
| trade deficit | when the value of a country’s exports is less than that of its imports |
| balance of payments | the difference between money coming into a country (exports) and money leaving the country (imports) plus other money flows |
| Unfavorable balance | when more money flows out of a country |
| dumping | selling products in a foreign country at lower prices than those charges in the producing country to gain market share and gain a monopoly |
| culture | learned, shared and transmitted from one generation to the next |
| Exchange Rate | the value of one nation’s currency relative to the currencies of other countries |
| Trade Protectionism: | the use of government regulations to limit the import of goods and services |
| Tariffs | taxes on imports |
| Protective | raise the retail price of imports so domestic goods are competitively priced |
| Revenue | raise money for governments |
| Import Quota | limits the number of products in certain categories a nation can import |
| Embargo | a complete ban on the import or export of a certain product or the stopping of all trade with a particular country |
| General Agreement on Tariffs and Trade(GATT) | a global forum for reducing trade restrictions on goods, services, ideas and cultural problems |
| World Trade Organizations(WTO)- | headquarters in Geneva, its an independent entity of 152 member nations whose purpose is to oversee cross border trade issues and global business practices |
| common market | a regional group of countries with a common external tariff, no internal tariff and coordinated laws to facilitate exchange among members |
| North American Free Trade Agreement(NAFTA) | ratified in 1994, created a free trade area among the United States, Canada and Mexico |
| Central American Free Trade Agreement(CAFTA) | passed in 2005 created a free trade zone with costa rica, Dominican republic, el Salvador |
| Ethics | the standards of moral behavior that is accepted by society as right versus wrong. |
| Preconventional | person is just looking out for themselves |
| Conventional | person considers the interests and expectations of others in decision making |
| Post conventional | considers personal, groups, and societal interests when making decisions. |
| Code of Conduct | formal statement that defines how the organization expects and requires employees to resolve ethical questions |
| Ethical reasoning | sorting through several options to arrive at suitable decisions |
| Ethical Action | proving structures and approaches that allow decisions to be turned into ethical actions |
| Ethical leadership | ethical behavior demonstrated by executives- especially in extreme or emergency situations |
| Utilitarianism | trying to compare the price as the benefits of the action to see if the good out weighs the costs. (see which one costs less) |
| Rights | rights should be respected, rights are correlated with duties and are not absolute (fix the car right away after one accident) |
| justice | fairness: to see if benefits and costs under utilitarianism is distributed fairly |
| Distributive | Refers to distribution of benefits and burdens |
| Retributive | punishing wrong doing. |
| Compensatory | compensate some one for an injury/death |
| Amorality | when in business do what you need to do to be successful |
| Moral Unity | ethics apply to everything, if its unethical in personal life then its unethical in business as well. |
| Compliance-based ethics code | preventing unlawful behavior by increasing control and penalizes wrong doing |
| Integrity-based ethics code | defines the organizations guiding values, create an environment that supports ethically sound behavior and stress a shared accountability among employees |
| Corporate Social Responsibility(CSR)- | the concern businesses have for the welfare of society, it is based on integrity, fairness, and respect. Proponents argue that businesses owe their existence to the societies they serve and cannot exist in societies that fail. |
| Corporate Philanthropy | charity donations |
| Corporate social initiatives | enhanced forms of corporate philanthropy |
| Corporate responsibility | everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and providing a safe work environment. |
| Corporate Policy | the position a firm takes on social and political issues |
| Social obligation | profits should not be spent on social programs, meet the minimum regulations and business practices |
| Social Reaction approach | will sponsor activities, IF ASKED TO |
| Social Response Approach | considered most liberal approach, actively seek out social projects |
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