LHR 427 EXAM 1 STUDY GUIDE
business - Answer -any activity that seeks to provide goods and services to others
while operating at a profit
What are some advantages of being an entrepreneur? - Answer -¤Freedom to succeed
¤Make your own decisions
¤Possible wealth
¤Sense of self-actualization
What are some disadvantages of being an entrepreneur? - Answer -¤Freedom to fail
¤No paid vacations
¤No health insurance
¤Responsible for others' welfare
¤Ego depletion
¤Personal sacrifices
standard of living - Answer -The amount of goods and services people can buy with the
money they have.
Quality of life - Answer -The general well-being 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
Stakeholders - Answer -All the people or, in general, entities who stand to gain or lose
by the policies and activities of a business and whose concerns the business needs to
address.
Shareholders - Answer -All the people or, in general, entities who own a part pf a
publicly traded firm via a share or stock.
For-profit organizations - Answer -formed to make money, or profits, by offering
products or services
Nonprofit organizations - Answer -organizations that may provide goods or services but
do not have the fundamental purpose of earning profits
Social enterprises - Answer -Revenue-generating business with social objectives at the
core of their operations. They can be for-profit or non-profit businesses, but all profits or
surpluses are reinvested for that social purpose rather than being distributed to
shareholders and owners.
Five Factors of Production - Answer -land, labor, capital, entrepreneurship, knowledge
Economic and Legal Environment - Answer -1. Freedom of ownership
, 2. Contract laws
3. Elimination of corruption
4. Tradable currency
5. Minimum taxes and regulation
Technological Environment - Answer -forces that create new technologies, creating
new product and market opportunities
The competitive environment - Answer -customer service, stakeholder recognition,
employee service, concern for the environment
social environment - Answer -diversity, demographic changes, family changes
Communism - Answer -First described by Karl Marx as a society in which the people,
without regard to class, own all the nation's resources
Socialism - Answer -An economic system in which the government owns and operates
basic industries, but individuals own most businesses
Capitalism - Answer -An economic system based on private ownership of capital
Pure capitalism - Answer -or free-market system happens when all economic decisions
are made without government intervention; also called laissez-faire capitalism
Modified capitalism - Answer -differs from pure capitalism in that the government
intervenes and regulates business to some extent
pure competition - Answer -The market structure that exists when there are many small
businesses selling one standardized product
monopolistic competition - Answer -Fewer businesses than in a pure competition
environment and the differences among the goods they sell are small
Oligopoly - Answer -The market structure that exists when there are very few
businesses selling a product
Monopoly - Answer -The market structure that exists when there is only one business
providing a product in a given market
Oligopsony - Answer -The market structure that exists when there are very few buyers
for a specific product
Monopsony - Answer -The market structure that exists when there is only one buyer for
a specific product
business - Answer -any activity that seeks to provide goods and services to others
while operating at a profit
What are some advantages of being an entrepreneur? - Answer -¤Freedom to succeed
¤Make your own decisions
¤Possible wealth
¤Sense of self-actualization
What are some disadvantages of being an entrepreneur? - Answer -¤Freedom to fail
¤No paid vacations
¤No health insurance
¤Responsible for others' welfare
¤Ego depletion
¤Personal sacrifices
standard of living - Answer -The amount of goods and services people can buy with the
money they have.
Quality of life - Answer -The general well-being 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
Stakeholders - Answer -All the people or, in general, entities who stand to gain or lose
by the policies and activities of a business and whose concerns the business needs to
address.
Shareholders - Answer -All the people or, in general, entities who own a part pf a
publicly traded firm via a share or stock.
For-profit organizations - Answer -formed to make money, or profits, by offering
products or services
Nonprofit organizations - Answer -organizations that may provide goods or services but
do not have the fundamental purpose of earning profits
Social enterprises - Answer -Revenue-generating business with social objectives at the
core of their operations. They can be for-profit or non-profit businesses, but all profits or
surpluses are reinvested for that social purpose rather than being distributed to
shareholders and owners.
Five Factors of Production - Answer -land, labor, capital, entrepreneurship, knowledge
Economic and Legal Environment - Answer -1. Freedom of ownership
, 2. Contract laws
3. Elimination of corruption
4. Tradable currency
5. Minimum taxes and regulation
Technological Environment - Answer -forces that create new technologies, creating
new product and market opportunities
The competitive environment - Answer -customer service, stakeholder recognition,
employee service, concern for the environment
social environment - Answer -diversity, demographic changes, family changes
Communism - Answer -First described by Karl Marx as a society in which the people,
without regard to class, own all the nation's resources
Socialism - Answer -An economic system in which the government owns and operates
basic industries, but individuals own most businesses
Capitalism - Answer -An economic system based on private ownership of capital
Pure capitalism - Answer -or free-market system happens when all economic decisions
are made without government intervention; also called laissez-faire capitalism
Modified capitalism - Answer -differs from pure capitalism in that the government
intervenes and regulates business to some extent
pure competition - Answer -The market structure that exists when there are many small
businesses selling one standardized product
monopolistic competition - Answer -Fewer businesses than in a pure competition
environment and the differences among the goods they sell are small
Oligopoly - Answer -The market structure that exists when there are very few
businesses selling a product
Monopoly - Answer -The market structure that exists when there is only one business
providing a product in a given market
Oligopsony - Answer -The market structure that exists when there are very few buyers
for a specific product
Monopsony - Answer -The market structure that exists when there is only one buyer for
a specific product
