Fundamentals of Business Exam #1 with
Answers
value - correct answer-relationship between the price of a good/service and the benefits
that it offers
business - correct answer-any organization that provides goods/services in an effort to
earn a profit
profit - correct answer-money that a business earns in sales
loss - correct answer-when a business incurs expenses that are greater than its
revenue
entrepreneurs - correct answer-people who risk their time, money, and other resources
to start and manage a business
industrial revolution era - correct answer-mid 1700's - mid 1800's, mass production took
over, less skills/larger production
entrepreneurship era - correct answer-2nd half of 1800's, competition/manipulation,
business empires created/took over small businesses and raised standard of living
nationwide
production era - correct answer-early 1900's, major business began refining efficiency,
assembly line, no customer focus, post great depression, customer wants came into
play
marketing era - correct answer-post WWII, consumers have power, more choice, to
differentiate businesses developed branding, product differentiation
relationship era - correct answer-1900's on, aim to build long term relationships/brand
loyalty, technology as a source of collecting demographics about customers
nonprofits - correct answer-business like establishments that employ people and
produce goods/services with the fundamental goal of contributing to the community
rather than making a profit
factors of production - correct answer-four fundamental elements - natural, resources,
capital, human resources, entrepreneurship
, natural resources - correct answer-inputs that offer value in their natural state, value
rises with high demand, low supply, or both
capital - correct answer-machines, tools, buildings, information - synthetic resources
that businesses need to produce goods/services, NOT MONEY
human resources - correct answer-physical, intellectual/creative contributions within an
economy, technology replaces manual labor, education becomes more important,
employees
entrepreneurship - correct answer-economic freedom of who to hire, for instance, what
to produce, freedom from excess regulation, and freedom from too much taxation (key
to a nation's wealth)
5 key dimensions of business environment - correct answer-1) economic environment
2) workforce advantage 3) technological environment 4) social environment 6) global
environment
free trade - correct answer-international/economic/political movement designed to help
goods/services flow more freely across nations
general agreement on tariffs/trades (GATT) - correct answer-int. trade agreement that
has taken bold steps to lower tariffs and promote free trade
economy - correct answer-a financial and social system of how resources flow through
society from production to distribution to consumption
economics - correct answer-the study of the choices that people, companies and
governments make in allocating society's resources
macroeconomics - correct answer-the study of a country's overall economic dynamics,
such as the employment rate, the gross domestic product, and taxation policies
microeconomics - correct answer-the study of smaller economic units such as individual
consumers, families, and individual businesses
the american recovery and reinvestment act - correct answer-cutting taxes, building
infrastructure, investing $150 billion in green energy
fiscal policy - correct answer-gov efforts to influence the economy through taxation and
spending
budget surplus - correct answer-overage that occurs when revenue is higher than
expenses over a given period of time
Answers
value - correct answer-relationship between the price of a good/service and the benefits
that it offers
business - correct answer-any organization that provides goods/services in an effort to
earn a profit
profit - correct answer-money that a business earns in sales
loss - correct answer-when a business incurs expenses that are greater than its
revenue
entrepreneurs - correct answer-people who risk their time, money, and other resources
to start and manage a business
industrial revolution era - correct answer-mid 1700's - mid 1800's, mass production took
over, less skills/larger production
entrepreneurship era - correct answer-2nd half of 1800's, competition/manipulation,
business empires created/took over small businesses and raised standard of living
nationwide
production era - correct answer-early 1900's, major business began refining efficiency,
assembly line, no customer focus, post great depression, customer wants came into
play
marketing era - correct answer-post WWII, consumers have power, more choice, to
differentiate businesses developed branding, product differentiation
relationship era - correct answer-1900's on, aim to build long term relationships/brand
loyalty, technology as a source of collecting demographics about customers
nonprofits - correct answer-business like establishments that employ people and
produce goods/services with the fundamental goal of contributing to the community
rather than making a profit
factors of production - correct answer-four fundamental elements - natural, resources,
capital, human resources, entrepreneurship
, natural resources - correct answer-inputs that offer value in their natural state, value
rises with high demand, low supply, or both
capital - correct answer-machines, tools, buildings, information - synthetic resources
that businesses need to produce goods/services, NOT MONEY
human resources - correct answer-physical, intellectual/creative contributions within an
economy, technology replaces manual labor, education becomes more important,
employees
entrepreneurship - correct answer-economic freedom of who to hire, for instance, what
to produce, freedom from excess regulation, and freedom from too much taxation (key
to a nation's wealth)
5 key dimensions of business environment - correct answer-1) economic environment
2) workforce advantage 3) technological environment 4) social environment 6) global
environment
free trade - correct answer-international/economic/political movement designed to help
goods/services flow more freely across nations
general agreement on tariffs/trades (GATT) - correct answer-int. trade agreement that
has taken bold steps to lower tariffs and promote free trade
economy - correct answer-a financial and social system of how resources flow through
society from production to distribution to consumption
economics - correct answer-the study of the choices that people, companies and
governments make in allocating society's resources
macroeconomics - correct answer-the study of a country's overall economic dynamics,
such as the employment rate, the gross domestic product, and taxation policies
microeconomics - correct answer-the study of smaller economic units such as individual
consumers, families, and individual businesses
the american recovery and reinvestment act - correct answer-cutting taxes, building
infrastructure, investing $150 billion in green energy
fiscal policy - correct answer-gov efforts to influence the economy through taxation and
spending
budget surplus - correct answer-overage that occurs when revenue is higher than
expenses over a given period of time
