Business Final Exam-Graded A
profit - correct answer-money a business earns above and beyond the money that it
spends for salaries and other expenses. (Ch.1)
risk - correct answer-the chance an entrepreneur takes of losing time and money on a
business that may not prove profitable (Ch.1)
statistic about risk - correct answer-80-90% of small businesses fail (Ch.1)
loss - correct answer-when a business's expenses are more than its revenues (Ch.1)
revenue - correct answer-the total amount of money a business takes in during a given
period by selling goods and services (Ch.1)
stakeholders - correct answer-all the people who stand to gain or lose by the policies
and activities of a business and whose concerns the business needs to address.
Include customers, employees, stockholders, suppliers, dealers, bankers, the media,
etc (Ch.1)
standard of living - correct answer-the amount of goods and services people can buy
with the money they have (Ch.1)
quality of life - correct answer-the general wellbeing of a society in terms of its political
freedom, natural environment, education, health care, safety, amount of leisure, and
rewards that add to the satisfaction and joy that other goods and services provide
(Ch.1)
advantages of entrepreneurship - correct answer-advantages - freedom to make your
own decisions, more opportunity, and possible wealth (Ch.1)
disadvantages of entrepreneurship - correct answer-disadvantages - taking risks and
losing benefits of working for someone else including paid vacations and health
insurance (Ch.1)
factors of production - correct answer-the resources used to create wealth: land, labor,
capital, entrepreneurship, and knowledge. (last two most important) (Ch.1)
empowerment - correct answer-giving frontline workers the responsibility, authority,
freedom, training, and equipment to respond quickly to customer requests (Ch.1/7)
,business environment - correct answer-the surrounding factors that either help or hinder
the development of businesses (Ch.1)
elements of the business environment - correct answer-economic & legal, technological,
competitive, social, and global business (Ch.1)
economics - correct answer-the study of how society chooses to employ resources to
produce goods and services and distribute them for consumption among various
competing groups and individuals (Ch.2)
macroeconomics - correct answer-the part of economics study that looks at the nation's
economy as a whole (Ch.2)
microeconomics - correct answer-the part of economics study that looks at the behavior
of people and organizations in particular markets (Ch.2)
resource development - correct answer-the study of how to increase resources and
create the conditions that will make better use of them (Ch.2)
invisible hand - correct answer-a phrase coined by Adam Smith to describe the process
that turns self-directed gain into social and economic benefits for all. Part of how
capitalism benefits economic growth (Ch.2)
capitalism - correct answer-an economic system in which all or most of the factors of
production and distribution are privately owned and operated for profit (Ch.2)
state capitalism - correct answer-a combination of freer markets and some government
control (Ch.2)
basic rights of capitalism - correct answer-the right to own private property, the right to
own a business & keep all that business's profit, the right to freedom of competition, and
the right to freedom of choice (Ch.2)
free market - correct answer-buyers and sellers negotiating prices for goods and
services influence the decisions about what gets produced and in what quantities (Ch.2)
price - correct answer-the mechanism that allows free markets to work (Ch.2)
supply - correct answer-the quantity of products that manufacturers or owners are
willing to sell at different prices at a specific time (Ch.2)
demand - correct answer-the quantity of products that people are willing to buy at
different prices at a specific time (Ch.2)
market price - correct answer-the price determined by supply and demand (Ch.2)
, perfect competition - correct answer-the degree of competition in which there are many
sellers in a market and none is large enough to dictate the price of a product. Ex:
farming (Ch.2)
monopolistic competitions - correct answer-the degree of competition in which a large
number of sellers produce very similar products that buyers nevertheless perceive as
different due to advertising, branding, etc. Ex: fast food (Ch.2)
oligopoly - correct answer-a degree of competition in which just a few sellers dominate a
market (often bc the initial investment required to enter the business is tremendous) Ex:
tobacco, gas, cars, airplanes (Ch.2)
monopoly - correct answer-a degree of competition in which only one seller controls the
total supply of products or services and sets the price. Illegal in the US (Ch.2)
socialism - correct answer-the economic system based on the premise that some
businesses should be owned by the government (Ch.2)
advantages of socialism - correct answer-advantages - more social equity; workers
receives more education, healthcare, and other benefits; works have fewer hours with
longer vacations (Ch.2)
disadvantages of socialism - correct answer-disadvantages - major: lowers the incentive
to start a business or to work hard; higher unemployment rate; slower growth rate; the
"brain drain" (Ch.2)
brain drain - correct answer-the loss of the best and brightest ppl to other countries (this
happens in socialist countries because the rich don't want the high tax) (Ch.2)
communism - correct answer-an economic and political system in which the government
makes almost all economic decisions and owns almost all the major factors of
production (Ch.2)
free market economies - correct answer-economic systems in which the market largely
determines what goods and services get produced, who gets them, and how the
economy grows (capitalism) (Ch.2)
command economies - correct answer-economic systems in which the government
largely decides what goods and services will be produced, who will get them, and how
the economy will grow (socialism and communism) (Ch.2)
mixed economies - correct answer-economic systems in which some allocation of
resources is made by the market and some by the government. Ex: United States
(Ch.2)
profit - correct answer-money a business earns above and beyond the money that it
spends for salaries and other expenses. (Ch.1)
risk - correct answer-the chance an entrepreneur takes of losing time and money on a
business that may not prove profitable (Ch.1)
statistic about risk - correct answer-80-90% of small businesses fail (Ch.1)
loss - correct answer-when a business's expenses are more than its revenues (Ch.1)
revenue - correct answer-the total amount of money a business takes in during a given
period by selling goods and services (Ch.1)
stakeholders - correct answer-all the people who stand to gain or lose by the policies
and activities of a business and whose concerns the business needs to address.
Include customers, employees, stockholders, suppliers, dealers, bankers, the media,
etc (Ch.1)
standard of living - correct answer-the amount of goods and services people can buy
with the money they have (Ch.1)
quality of life - correct answer-the general wellbeing of a society in terms of its political
freedom, natural environment, education, health care, safety, amount of leisure, and
rewards that add to the satisfaction and joy that other goods and services provide
(Ch.1)
advantages of entrepreneurship - correct answer-advantages - freedom to make your
own decisions, more opportunity, and possible wealth (Ch.1)
disadvantages of entrepreneurship - correct answer-disadvantages - taking risks and
losing benefits of working for someone else including paid vacations and health
insurance (Ch.1)
factors of production - correct answer-the resources used to create wealth: land, labor,
capital, entrepreneurship, and knowledge. (last two most important) (Ch.1)
empowerment - correct answer-giving frontline workers the responsibility, authority,
freedom, training, and equipment to respond quickly to customer requests (Ch.1/7)
,business environment - correct answer-the surrounding factors that either help or hinder
the development of businesses (Ch.1)
elements of the business environment - correct answer-economic & legal, technological,
competitive, social, and global business (Ch.1)
economics - correct answer-the study of how society chooses to employ resources to
produce goods and services and distribute them for consumption among various
competing groups and individuals (Ch.2)
macroeconomics - correct answer-the part of economics study that looks at the nation's
economy as a whole (Ch.2)
microeconomics - correct answer-the part of economics study that looks at the behavior
of people and organizations in particular markets (Ch.2)
resource development - correct answer-the study of how to increase resources and
create the conditions that will make better use of them (Ch.2)
invisible hand - correct answer-a phrase coined by Adam Smith to describe the process
that turns self-directed gain into social and economic benefits for all. Part of how
capitalism benefits economic growth (Ch.2)
capitalism - correct answer-an economic system in which all or most of the factors of
production and distribution are privately owned and operated for profit (Ch.2)
state capitalism - correct answer-a combination of freer markets and some government
control (Ch.2)
basic rights of capitalism - correct answer-the right to own private property, the right to
own a business & keep all that business's profit, the right to freedom of competition, and
the right to freedom of choice (Ch.2)
free market - correct answer-buyers and sellers negotiating prices for goods and
services influence the decisions about what gets produced and in what quantities (Ch.2)
price - correct answer-the mechanism that allows free markets to work (Ch.2)
supply - correct answer-the quantity of products that manufacturers or owners are
willing to sell at different prices at a specific time (Ch.2)
demand - correct answer-the quantity of products that people are willing to buy at
different prices at a specific time (Ch.2)
market price - correct answer-the price determined by supply and demand (Ch.2)
, perfect competition - correct answer-the degree of competition in which there are many
sellers in a market and none is large enough to dictate the price of a product. Ex:
farming (Ch.2)
monopolistic competitions - correct answer-the degree of competition in which a large
number of sellers produce very similar products that buyers nevertheless perceive as
different due to advertising, branding, etc. Ex: fast food (Ch.2)
oligopoly - correct answer-a degree of competition in which just a few sellers dominate a
market (often bc the initial investment required to enter the business is tremendous) Ex:
tobacco, gas, cars, airplanes (Ch.2)
monopoly - correct answer-a degree of competition in which only one seller controls the
total supply of products or services and sets the price. Illegal in the US (Ch.2)
socialism - correct answer-the economic system based on the premise that some
businesses should be owned by the government (Ch.2)
advantages of socialism - correct answer-advantages - more social equity; workers
receives more education, healthcare, and other benefits; works have fewer hours with
longer vacations (Ch.2)
disadvantages of socialism - correct answer-disadvantages - major: lowers the incentive
to start a business or to work hard; higher unemployment rate; slower growth rate; the
"brain drain" (Ch.2)
brain drain - correct answer-the loss of the best and brightest ppl to other countries (this
happens in socialist countries because the rich don't want the high tax) (Ch.2)
communism - correct answer-an economic and political system in which the government
makes almost all economic decisions and owns almost all the major factors of
production (Ch.2)
free market economies - correct answer-economic systems in which the market largely
determines what goods and services get produced, who gets them, and how the
economy grows (capitalism) (Ch.2)
command economies - correct answer-economic systems in which the government
largely decides what goods and services will be produced, who will get them, and how
the economy will grow (socialism and communism) (Ch.2)
mixed economies - correct answer-economic systems in which some allocation of
resources is made by the market and some by the government. Ex: United States
(Ch.2)
