MSB 201 Midterm Study Guide #1
With Complete Solutions
Why do we organize? - ANSWER To improve quality of life
To solve problems
To promote certain values
To make preparations
To help God's children thrive
To connect with others
The Family - ANSWER this course is to help you strengthen your ability to lead in
your own family
William Bennett, The family is the nucleus of civilization and the basic social unit
of society.. For a civilization to succeed, the family must succeed..."
For-profit organizations - ANSWER Strive to make a profit as they provide and
sell products and services desired by their customers.
Not-for-profit organizations - ANSWER An organization that exists to achieve
some goal other than profit. Charities such as Habitat for Humanity
Public organizations - governments - are the largest and most pervasive not-for-
profit group.
Factors of production - ANSWER Natural resources,
Labor (human resources),
Capital, and
Entrepreneurship
Knowledge
Productivity equation - ANSWER x = Outputs / Inputs
Economics of scale - ANSWER For many goods, as the level of production
increases, the average cost of producing each individual unit declines.
Microeconomics - ANSWER Focuses on the decisions and actions of individual
agents within the economy, like households, workers, and businesses.
, Macroeconomics - ANSWER The study of economy-wide phenomena, including
inflation, unemployment, and economic growth
Specialization - ANSWER Adam Smith observed that when we divide and
subdivide the tasks involved with producing a good or service, workers and
businesses can produce a greater quantity of output
Circular flow diagram - ANSWER Depicts the economy as consisting of two
groups—households and firms (or businesses). These groups interact with one
another through trade in two markets:
Product Market - ANSWER in which firms sell and households buy goods and
services.
The outer circle in the diagram below represents the two sides of the product
market
Labor market - ANSWER in which households sell labor to business firms or
other employees in exchange for wages, salaries and benefits.
The inner circle in the diagram below represents the two sides of the labor
market in which households supply and firms demand
Conflict of Interest - ANSWER A situation where personal interests clash with
professional duties.
Playing Dirty - ANSWER Engaging in unethical tactics to gain advantage over
others.
Standing up to Power - ANSWER Challenging authority to uphold ethical
standards.
Suspicion without Enough Evidence - ANSWER Doubting someone's integrity
without sufficient proof.
Unfair Advantage - ANSWER Gaining benefits through unethical means over
competitors.
Normative Ethics - ANSWER The study of what is right and wrong
Built on theology and philosophy
Showing Mercy - ANSWER Could grant forgiveness, but unclear if it is deserved
Sacrificing personal values - ANSWER Living true to beliefs imposes burdens on
others
With Complete Solutions
Why do we organize? - ANSWER To improve quality of life
To solve problems
To promote certain values
To make preparations
To help God's children thrive
To connect with others
The Family - ANSWER this course is to help you strengthen your ability to lead in
your own family
William Bennett, The family is the nucleus of civilization and the basic social unit
of society.. For a civilization to succeed, the family must succeed..."
For-profit organizations - ANSWER Strive to make a profit as they provide and
sell products and services desired by their customers.
Not-for-profit organizations - ANSWER An organization that exists to achieve
some goal other than profit. Charities such as Habitat for Humanity
Public organizations - governments - are the largest and most pervasive not-for-
profit group.
Factors of production - ANSWER Natural resources,
Labor (human resources),
Capital, and
Entrepreneurship
Knowledge
Productivity equation - ANSWER x = Outputs / Inputs
Economics of scale - ANSWER For many goods, as the level of production
increases, the average cost of producing each individual unit declines.
Microeconomics - ANSWER Focuses on the decisions and actions of individual
agents within the economy, like households, workers, and businesses.
, Macroeconomics - ANSWER The study of economy-wide phenomena, including
inflation, unemployment, and economic growth
Specialization - ANSWER Adam Smith observed that when we divide and
subdivide the tasks involved with producing a good or service, workers and
businesses can produce a greater quantity of output
Circular flow diagram - ANSWER Depicts the economy as consisting of two
groups—households and firms (or businesses). These groups interact with one
another through trade in two markets:
Product Market - ANSWER in which firms sell and households buy goods and
services.
The outer circle in the diagram below represents the two sides of the product
market
Labor market - ANSWER in which households sell labor to business firms or
other employees in exchange for wages, salaries and benefits.
The inner circle in the diagram below represents the two sides of the labor
market in which households supply and firms demand
Conflict of Interest - ANSWER A situation where personal interests clash with
professional duties.
Playing Dirty - ANSWER Engaging in unethical tactics to gain advantage over
others.
Standing up to Power - ANSWER Challenging authority to uphold ethical
standards.
Suspicion without Enough Evidence - ANSWER Doubting someone's integrity
without sufficient proof.
Unfair Advantage - ANSWER Gaining benefits through unethical means over
competitors.
Normative Ethics - ANSWER The study of what is right and wrong
Built on theology and philosophy
Showing Mercy - ANSWER Could grant forgiveness, but unclear if it is deserved
Sacrificing personal values - ANSWER Living true to beliefs imposes burdens on
others
