BADM COMPREHENSIVE STUDY GUIDE
TESTED QUESTIONS AND VERIFIED
ANSWERS
●● Profit
Answer: Revenue minus expenses. The reward for risk-taking.
●● Revenue
Answer: Total money a business takes in from selling goods and
services.
●● Loss
Answer: When expenses exceed revenues.
●● Risk
Answer: The chance of losing time and money on a venture that may not
succeed.
●● Stakeholders
Answer: All who gain or lose by a business's activities — customers,
employees, stockholders, suppliers, community.
,●● Entrepreneur
Answer: Person who risks time and money to start and manage a
business.
●● Standard of living
Answer: The amount of goods/services people can buy with their
income.
●● Quality of life
Answer: Broader well-being — freedoms, environment, health,
education, safety.
●● Outsourcing
Answer: Contracting work to other firms (often overseas).
●● Insourcing
Answer: Foreign firms operating in the U.S.
●● E-commerce
Answer: Online buying and selling. B2B = business-to-business; B2C =
business-to-consumer.
●● Five Factors of Production
,Answer: Land, labor, capital, entrepreneurship, and KNOWLEDGE.
●● Five Elements of the Business Environment
Answer: Economic/legal, technological, competitive, social, and global.
●● Profit ↔ Risk Trade-off
Answer: Higher potential profit generally requires accepting higher risk.
●● Goods → Services Shift
Answer: U.S. economy moved from manufacturing to services.
●● Economics
Answer: Study of how society uses scarce resources to produce and
distribute goods/services.
●● Macroeconomics
Answer: Studies the economy as a whole.
●● Microeconomics
Answer: Studies individual markets and decisions.
●● Capitalism
, Answer: Private ownership; markets set prices; profit motive drives
behavior.
●● Socialism
Answer: Government owns key industries; emphasizes equality.
●● Communism
Answer: Government owns nearly all production and makes nearly all
decisions.
●● Mixed economy
Answer: Blend of free markets and government planning — most
modern economies.
●● Supply / Demand
Answer: Supply: quantity sellers offer at various prices. Demand:
quantity buyers want at various prices.
●● GDP
Answer: Total value of final goods/services produced in a country in a
year.
●● CPI
TESTED QUESTIONS AND VERIFIED
ANSWERS
●● Profit
Answer: Revenue minus expenses. The reward for risk-taking.
●● Revenue
Answer: Total money a business takes in from selling goods and
services.
●● Loss
Answer: When expenses exceed revenues.
●● Risk
Answer: The chance of losing time and money on a venture that may not
succeed.
●● Stakeholders
Answer: All who gain or lose by a business's activities — customers,
employees, stockholders, suppliers, community.
,●● Entrepreneur
Answer: Person who risks time and money to start and manage a
business.
●● Standard of living
Answer: The amount of goods/services people can buy with their
income.
●● Quality of life
Answer: Broader well-being — freedoms, environment, health,
education, safety.
●● Outsourcing
Answer: Contracting work to other firms (often overseas).
●● Insourcing
Answer: Foreign firms operating in the U.S.
●● E-commerce
Answer: Online buying and selling. B2B = business-to-business; B2C =
business-to-consumer.
●● Five Factors of Production
,Answer: Land, labor, capital, entrepreneurship, and KNOWLEDGE.
●● Five Elements of the Business Environment
Answer: Economic/legal, technological, competitive, social, and global.
●● Profit ↔ Risk Trade-off
Answer: Higher potential profit generally requires accepting higher risk.
●● Goods → Services Shift
Answer: U.S. economy moved from manufacturing to services.
●● Economics
Answer: Study of how society uses scarce resources to produce and
distribute goods/services.
●● Macroeconomics
Answer: Studies the economy as a whole.
●● Microeconomics
Answer: Studies individual markets and decisions.
●● Capitalism
, Answer: Private ownership; markets set prices; profit motive drives
behavior.
●● Socialism
Answer: Government owns key industries; emphasizes equality.
●● Communism
Answer: Government owns nearly all production and makes nearly all
decisions.
●● Mixed economy
Answer: Blend of free markets and government planning — most
modern economies.
●● Supply / Demand
Answer: Supply: quantity sellers offer at various prices. Demand:
quantity buyers want at various prices.
●● GDP
Answer: Total value of final goods/services produced in a country in a
year.
●● CPI
