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Ch. 1 B.E.
Business Essentials
Question | Answer |
---|---|
What is perfect competition? | Lots of small businesses producing the same product |
Example of perfect competition? | Farmers |
What is monopolistic competition? | Many sellers try to seem to be different from competitiors |
Example of monopolistic competition? | Clothing Companies |
What is an oligopoly? | When a market or industry has only a few (usually large) sellers |
Example of oligopoly? | breakfast cereals |
What is an monopoly? | When a market or industry only has one producer |
Example of a natural monopoly? | electric companies |
What is labor? | Physical and mental capabilities of people as they contribute to economic production |
What is capitol? | Funds needed to create and operate a business |
What is an entrepreneur? | Individual who accepts the risks and opportunities involved with creating and operating a new business |
What is a physical resource? | Tangible items that organizations use in their conduct of their businesses |
Example of a physical resource? | supplies, parts, offices, computers, equipment |
What are information resources? | Data and other information that businesses use |
What is supply? | Willingness and ability of producers to offer a good or service for sale |
What is demand? | Willingness and ability of buyers to purchase a product (good or service) |
When does a surplus occur? | a situation in which quantity supplied exceeds quantity demanded |
When does a shortage occur? | a situation in which quantity demanded exceed quantity supplied. |
When does competition occur? | occurs when 2 or more businesses vie for the same resources or customers. |
What is a market economy? | individuals control production and allocation decisions though supply and demand |
What is capitalism? | allows the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive |
What is an external environment? | consists of everything outs tide an organizations boundaries |
What is a domestic business business environment? | the environment in which a firm conducts its operations and derives its revenues |
What is the global business environment? | the international forces that affect a business |
What is the technological environment? | all the ways by which firms create value for their constituents (including electronics and telecommunications, physical equipment, human knowledge, etc) |
What is the political-legal environment? | reflects the relationship between business and government |
What is the socioculture environment? | includes the customs, morals, values, and demographic characteristics of the society in which the business functions |
What is the economic environment? | refers to relevant conditions that exist in the economic system in which a company operates |
What are profits? | difference between revenue and expenses |
What is standard of living? | total quantity and quality of goods and services people can purchase with the currency used in their economic system |
What is the national debt? | amount of money the government owes its creditors |