MGMT 2150 FINAL EXAM - LESSON 1-10 STUDY
GUIDE
Business - Answers - An organization that seeks profit by offering products to satisfy
society's needs
Good - Answers - A physical, tangible product that we can see and touch
Service - Answers - An intangible product that we can experience or use
5 factors affecting the business environment - Answers - 1. Economic
2. Competitive
3. Global
4. Technology
5. Social
Economy - Answers - the way in which people deal with the creation and distribution of
wealth
Capitalism - Answers - An economic system in which individuals own and operate the
majority of businesses that provide goods and services
Invisible Hand - Answers - Term created by Adam Smith to describe how an individual's
personal gain benefits others and a country's economy
Free-market economy - Answers - An economic system in which businesses and
individuals decide what to produce and buy and the market determines prices and
quantities sold
Mixed economy - Answers - Economic system where most land and business are
privately owned but with various levels of government involvement
Command economy - Answers - An economic system in which the government decides
what goods and services will be produced, how they will be produced, for whom
available goods and services will be produced and who owns and controls the factors of
production
Socialism - Answers - Economic system in which the key industries are owned and
controlled by the government
Communism - Answers - Economic system where all property and profits are owned by
the government, which then decides what goods and services will be produced
, Competition - Answers - Rivalry among businesses for sales to potential customers
perfect compeition - Answers - Market situation in which there are many buyers and
sellers of a product
equilibrium price - Answers - price at which the quantity demanded is exactly equal to
the quantity supplied
Supply - Answers - the quantity of a product that producers are willing to sell at each of
various prices
demand - Answers - the quantity of a product that buyers are willing to purchase at each
of various prices
monopolistic competition - Answers - Market situation in which there are many buyers
along with a relatively large number of sellers
Product differentiation - Answers - the process of developing and promoting differences
between one's products and all competitive products
Oligopoly - Answers - Market (or industry) in which there are few large sellers
Game theory - Answers - the study of how people behave in strategic situations
GDP - Answers - Total dollar value of all goods and services produced by all people
within the boundaries of a country during a one-year period
Unemployment rate - Answers - percentage of a country's labour force unemployed at
any time
Consumer Price Index (CPI) - Answers - A monthly index that measures the changes in
the prices of a fixed basket of goods typically purchased by typical consumer in an
urban area
Ethics - Answers - Study of right and wrong and of the morality of the choices
individuals make
Business ethics - Answers - Application of moral standards to business situations
3 components of business ethics - Answers - 1. competing fairly and honestly
2. avoiding conflicts of interest
3. being transparent
Economic model - Answers - Businesses exists to produce quality goods and services,
earn a reasonable profit, and provide jobs
GUIDE
Business - Answers - An organization that seeks profit by offering products to satisfy
society's needs
Good - Answers - A physical, tangible product that we can see and touch
Service - Answers - An intangible product that we can experience or use
5 factors affecting the business environment - Answers - 1. Economic
2. Competitive
3. Global
4. Technology
5. Social
Economy - Answers - the way in which people deal with the creation and distribution of
wealth
Capitalism - Answers - An economic system in which individuals own and operate the
majority of businesses that provide goods and services
Invisible Hand - Answers - Term created by Adam Smith to describe how an individual's
personal gain benefits others and a country's economy
Free-market economy - Answers - An economic system in which businesses and
individuals decide what to produce and buy and the market determines prices and
quantities sold
Mixed economy - Answers - Economic system where most land and business are
privately owned but with various levels of government involvement
Command economy - Answers - An economic system in which the government decides
what goods and services will be produced, how they will be produced, for whom
available goods and services will be produced and who owns and controls the factors of
production
Socialism - Answers - Economic system in which the key industries are owned and
controlled by the government
Communism - Answers - Economic system where all property and profits are owned by
the government, which then decides what goods and services will be produced
, Competition - Answers - Rivalry among businesses for sales to potential customers
perfect compeition - Answers - Market situation in which there are many buyers and
sellers of a product
equilibrium price - Answers - price at which the quantity demanded is exactly equal to
the quantity supplied
Supply - Answers - the quantity of a product that producers are willing to sell at each of
various prices
demand - Answers - the quantity of a product that buyers are willing to purchase at each
of various prices
monopolistic competition - Answers - Market situation in which there are many buyers
along with a relatively large number of sellers
Product differentiation - Answers - the process of developing and promoting differences
between one's products and all competitive products
Oligopoly - Answers - Market (or industry) in which there are few large sellers
Game theory - Answers - the study of how people behave in strategic situations
GDP - Answers - Total dollar value of all goods and services produced by all people
within the boundaries of a country during a one-year period
Unemployment rate - Answers - percentage of a country's labour force unemployed at
any time
Consumer Price Index (CPI) - Answers - A monthly index that measures the changes in
the prices of a fixed basket of goods typically purchased by typical consumer in an
urban area
Ethics - Answers - Study of right and wrong and of the morality of the choices
individuals make
Business ethics - Answers - Application of moral standards to business situations
3 components of business ethics - Answers - 1. competing fairly and honestly
2. avoiding conflicts of interest
3. being transparent
Economic model - Answers - Businesses exists to produce quality goods and services,
earn a reasonable profit, and provide jobs
