BUS 101 Case Study#1

Business - correct answer Organization that provides goods or services for profit Profit - correct answer differences between a business's revenues and its expenses External Environment - correct answer everything outside an organization's boundaries that might affect it Economic System - correct answer nation's system for allocating its resources among citizens Factors of production - correct answer resources used in the production of goods and services- labor, capital, entrepreneurs, physical resources and information resources Labor (human resources) - correct answer physical and mental capabilities of people as they contribute to economic production Capital - correct answer funds needed to create and operate a business enterprise Entrepreneur - correct answer individual who accepts the risks and opportunities involved in creating and operating a new business venture Planned economy - correct answer economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions Communism - correct answer political system in which the government owns and operates all factors of production Market economy - correct answer economy in which individuals control production and allocation decisions through supply and demand Market - correct answer mechanism for exchange between buyers and sellers of a particular good or service Capitalism - correct answer system that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive Privatization - correct answer process of converting government enterprises into privately owned companies Socialism - correct answer planned economic system in which the government owns and operates only selected major sources of production Demand - correct answer the willingness and ability of buyers to purchase a good or service Supply - correct answer the willingness and ability of producers to offer a good or service for sale Private enterprise - correct answer economic system that allows individuals to pursue their own interests without undue governmental restriction Competition - correct answer vying among businesses for the same resources or customers Perfect competition - correct answer market or industry characterized by numerous small firms producing an identical product Monopolistic competition - correct answer market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors Monopoly - correct answer market or industry in which there is only one producer that can therefore set the prices on all of its products Natural monopoly - correct answer industry in which one company can most efficiently supply all needed goods or services Standard of living - correct answer the total quantity and quality of goods and services people can purchase with the currency used in their economic system Gross Domestic Product (GDP) - correct answer total value of all goods and services produced within a given period by a national economy through domestic factors of production Gross National Product (GNP) - correct answer total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located Real GDP - correct answer gross domestic product (GDP) adjusted to account for changes in currency values and price changes Purchasing Power Party - correct answer the principal that exchange rates are set so that the prices of similar products in different countries are about the same Inflation - correct answer occurs when widespread price increases occur throughout an economic system Unemployment - correct answer the level of joblessness among people actively seeking work in an economic system Recession - correct answer period during which aggregate output, as measured by GDP, declines Depression - correct answer prolonged and deep recession Ethics - correct answer beliefs about what is right or wrong and good or bad in actions that affect others Ethical Behavior - correct answer behavior conforming to generally accepted social norms concerning beneficial and harmful actions Unethical Behavior - correct answer behavior that does not conform to generally accepted social norms concerning beneficial and harmful actions Business Ethics - correct answer ethical or unethical behaviors by employees in the context of their jobs Social Responsibility - correct answer the attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities Organizational Stakeholders - correct answer those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance Whistle Blower - correct answer employee who detects and tries to put an end to a company's unethical, illegal, or socially irresponsible actions by publicizing them Insider Trading - correct answer illegal practice of using special knowledge about a firm for profit or gain Small Business Administration (SBA) - correct answer government agency charged with assisting small businesses, a govt agency that helps small business owners develop business plan and obtain financing and other support for their companies Small Business - correct answer independently owned business that has relatively little influence in the market Business Plan - correct answer document in which an entrepreneur summarizes his or her business strategy for a proposed new venture and how that strategy will be implemented Franchise - correct answer arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser) Venture Capital Company - correct answer group of small investors who invest money in companies with rapid growth potential Sole Proprietership - correct answerbusiness owned and usually operated by one person who is responsible for all its debts Unlimited Liability - correct answerlegal principal holding owners responsible for paying off all debts of a business General Partnership - correct answerbusiness with two or more owners who share in both the operation of the firm and the financial responsibility for its debts Limited Partnership - correct answertype of partnership consisting of limited partners and a general (or active) partner Limited Partner - correct answerpartner who does not share in a firm's management and is liable for its debts only to the limits of said partner's investment General (Active) Partner - correct answerpartner who actively manages a firm and who has unlimited liability for its debts Corporation - correct answerbusiness that is legally considered an entity separate from its owners and is liable for its own debts; owners' liabilities extend to the limits of their investments Limited Liability - correct answerlegal principal holding investors liable for a firm's debts only to the limits of their personal investments in it Closely Held (or Private) Corporation - correct answercorporation whose stock is held by only a few people and is not available for sale to the general public Publicly Held (or Public) Corporation - correct answercorporation whose stock is widely held and available for sale to the general public S Corporation - correct answerhybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes