BUAD 1010 Exam 1 Study Guide with
Complete Solutions
Revenue - ANS-the money that a business or institution has coming in.
Expenses - ANS-The money that a company must pay out to fulfill its operating
expenses. Ex. bills and payroll
Profit - ANS-The difference between a businesses's revenues and its expenses.
six dimensions of the external environment - ANS-1) Political-legal environment,
2) economic environment,
3) technological environment,
4) sociocultural environment,
5) domestic business environment,
6) and the global business environment.
Global Business Environment - ANS-the international forces that affect a business
Technological Environment - ANS-all of the ways by which firms create value for their
constituents.
Political-Legal Environment - ANS-the relationship between business and government
Sociocultural Environment - ANS-includes the customs, mores, values, and
demographic characteristics of the society in which an organization functions
Economic Environment - ANS-refers to the relevant conditions that exist in the
economic system in which a company operates.
Domestic Business Environment - ANS-refers to the environment in which a firm
conducts its operations and derives its revenues.
Five factors of production - ANS-resources used in the production of goods and
services-
1) LABOR
2) CAPITAL
3) ENTREPRENUERS
4) PHYSICAL RESOURCES
5) INFORMATION RESOURCES
, Labor (human resources) - ANS-physical and mental capabilities of people as they
contribute to economic production.
capital - ANS-funds needed to create and operate a business enterprise
entreprenuer - ANS-individual who accepts the risks and opportunities involved in
creating and operating a new business venture.
physical resources - ANS-tangible items that organizations use in the conduct of their
businesses.
information resources - ANS-data and other information used by businesses.
law of demand - ANS-principle that buyers will purchase (demand) more of a product as
its price drops and less as its price increases
law of supply - ANS-principle that producers will offer (supply) more of a product for dale
as its prices rises and less as its price drops.
equilibrium price (market price) - ANS-the price at which the quantity of goods
demanded and goods supplied are equal to each other.
planned economy - ANS-Economy that relies on a centralized government to control all
or most factors of production and to make all or most factors of production and to make
all or most production and allocation decisions.
market economy - ANS-economy in which individuals control production and allocation
decisions through supply and demand
mixed economy - ANS-economic system featuring characteristics of both planned and
market economies
Socialism - ANS-planned economic system in which the government owns and operates
only selected major sources of production
communism - ANS-Political system in which the government owns and operates all
factors of production.
Capitalism - ANS-system that sanctions the private ownership of the factors of
production and encourages entrepreneurship by offering profits as an incentive
privitization - ANS-process of converting governemnt enterprises into privately owned
companies
4 conditions needed for private enterprise to thrive - ANS-1) private property rights
2) freedom of choice
Complete Solutions
Revenue - ANS-the money that a business or institution has coming in.
Expenses - ANS-The money that a company must pay out to fulfill its operating
expenses. Ex. bills and payroll
Profit - ANS-The difference between a businesses's revenues and its expenses.
six dimensions of the external environment - ANS-1) Political-legal environment,
2) economic environment,
3) technological environment,
4) sociocultural environment,
5) domestic business environment,
6) and the global business environment.
Global Business Environment - ANS-the international forces that affect a business
Technological Environment - ANS-all of the ways by which firms create value for their
constituents.
Political-Legal Environment - ANS-the relationship between business and government
Sociocultural Environment - ANS-includes the customs, mores, values, and
demographic characteristics of the society in which an organization functions
Economic Environment - ANS-refers to the relevant conditions that exist in the
economic system in which a company operates.
Domestic Business Environment - ANS-refers to the environment in which a firm
conducts its operations and derives its revenues.
Five factors of production - ANS-resources used in the production of goods and
services-
1) LABOR
2) CAPITAL
3) ENTREPRENUERS
4) PHYSICAL RESOURCES
5) INFORMATION RESOURCES
, Labor (human resources) - ANS-physical and mental capabilities of people as they
contribute to economic production.
capital - ANS-funds needed to create and operate a business enterprise
entreprenuer - ANS-individual who accepts the risks and opportunities involved in
creating and operating a new business venture.
physical resources - ANS-tangible items that organizations use in the conduct of their
businesses.
information resources - ANS-data and other information used by businesses.
law of demand - ANS-principle that buyers will purchase (demand) more of a product as
its price drops and less as its price increases
law of supply - ANS-principle that producers will offer (supply) more of a product for dale
as its prices rises and less as its price drops.
equilibrium price (market price) - ANS-the price at which the quantity of goods
demanded and goods supplied are equal to each other.
planned economy - ANS-Economy that relies on a centralized government to control all
or most factors of production and to make all or most factors of production and to make
all or most production and allocation decisions.
market economy - ANS-economy in which individuals control production and allocation
decisions through supply and demand
mixed economy - ANS-economic system featuring characteristics of both planned and
market economies
Socialism - ANS-planned economic system in which the government owns and operates
only selected major sources of production
communism - ANS-Political system in which the government owns and operates all
factors of production.
Capitalism - ANS-system that sanctions the private ownership of the factors of
production and encourages entrepreneurship by offering profits as an incentive
privitization - ANS-process of converting governemnt enterprises into privately owned
companies
4 conditions needed for private enterprise to thrive - ANS-1) private property rights
2) freedom of choice
