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CH. 1 The Dynamics of Business and Economics

Terms in this set (42)

The definition of a business is ____________.
an organization that seeks to provide goods and services to others while operating at a profit
In a free-enterprise system, a business succeeds or fails based on ______.
profit
The difference between what it costs to make and sell a product and what a customer pays for it is known as ______.
profit
The four functions of management are planning, leading, organizing, and ______.
controlling
A better understanding of the many activities that are necessary to provide goods and services that people want comes from ______.
studying business
The study of how resources are distributed for the production of goods and services within a social system is called ____________.
Blank 1: economics or economic
A(n) ______ is defined as trying to earn a profit by providing goods and services that satisfy people's needs and wants.
business
How a particular society distributes its resources to produce goods and services describes a(n) ____________ (Enter one word in the blank.)
Blank 1: economic
The primary goal of all businesses is to earn a _________, the difference between what it costs to make and sell a product and what a customer pays for it. (Enter one word in the blank.)
Blank 1: profit
Select all that apply
Select the three issues that all economic systems must address.
the type and quantity of goods and services needed to satisfy consumers' needs

how goods and services will be produced, by whom, and with what resources

how goods and services will be distributed to consumers
Select all that apply
What are the four functions of management?
Planning
Leading
Controlling
Organizing
True or false: Studying business does NOT offer any benefits for those who decide to work for a government agency or a nonprofit organization.
False

Reason:
Studying business can help you develop skills and acquire knowledge to prepare for a future career working in a large corporation, a government agency, a nonprofit organization, or even as an entrepreneur.
The quantity of goods and services that people are willing to buy at different prices at a specific time is called:
demand.
______ is 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.
Economics
The rivalry among businesses for consumers' dollars is referred to as _____.
competition
A description of how a particular society distributes its resources to produce goods and services is the definition of ______.
an economic system
_____ occurs when an economy is growing and people are spending more money. Their purchases stimulate the production of goods and services, which in turn stimulates employment.
Economic expansion
The central issue of economics is ______.
how to fill an unlimited demand for goods and services with a limited supply of resources
A condition characterized by a continuing rise in prices is the definition of ______.
inflation
In a free-enterprise system, _____ dictates whether or not a business will succeed or fail.
market demand
The United States is a mixed economy with a foundation based on ______.
capitalism
Mark, the marketing manager of a large U.S. corporation, realizes that Afghanistan has virtually no supply of tomatoes. He conducts a study to see what quantity of tomatoes Afghan customers would be willing and able to buy at different prices. Mark is analyzing Afghanistan's ______.
demand for tomatoes
What is a characteristic of open economies?
Open economies engage in international trade.
______ forces producers to offer the best products at the most reasonable price; those businesses that are unable to do so will not be able to stay in business.
Competition
In a(n) _____ economy the colonists were self-sufficient and produced everything they needed at home, including food, clothing, and furniture. Abundant natural resources and a moderate climate nourished industries such as farming, fishing, shipping, and fur trading.
agricultural
Country A had been in economic turmoil for several years, but today people are spending more money which stimulates the production of goods and services. This has resulted in more people being employed. It can be said that Country A is now experiencing _____.
economic expansion
True or false: Today, the biggest thing driving the changing environment of business is marketing.
False
Inflation has a tendency to ______ the buying power of consumers.
decrease
An individual who risks his or her wealth, time, and effort to develop an innovative product or way of doing something for profit is called ______.
an entrepreneur
The economic system of the United States is determined primarily by competition and the forces of supply and demand, although the federal government does intervene in economic decisions to a certain extent. Therefore, it can be said that the United States is a _____ economy.
mixed
What term best describes the American economic system ?
modified capitalism
An economy in which economic activities occur between the country and the international community is a(n) ______ economy.
open
Which situation demonstrates a balanced ethical business model?
A company that obeys the law, and invests in the local communities.

Reason:
Ethical compliance is more than obeying the law.
Reason:
Paying a better than average wage may be in line with retaining talent and increasing profits, but following the law is also required.
Reason:
Giving charitable donations is noble, but following the laws should also be a part of the business model.
Prior to the American economy developing into an agricultural economy, Native Americans lived in a(n) _____ economy with some trade among tribes.
hunter/gatherer
Of the various elements that allow one to be successful in business, which one is based in part on personal insight and understanding?
Good judgment
The methods and processes involved in creating software applications to solve problems, perform tasks, and make decisions are called _____.
technology
Brad thinks the worst part about sledding is having to continually walk back up the slope each time you sled downhill. He has invested his own time and money to create a new motorized sled that allows people to "ride" up the hill instead of having to walk back up. In this example, Brad would be considered a(n) ______.
entrepreneur
Why is the American economic system best described as modified capitalism?
The government regulates business to preserve competition and protect consumers and employees.
The standards and principles used by society to define appropriate and inappropriate conduct in the workplace are referred to as business _______.
ethics

Reason:
(behavior) This refers to all actions, not those defined as appropriate or inappropriate.
Select all that apply
Your text notes that to be successful in business, you need which four attributes?
Experience
Skills
Good judgment
Knowledge
Select all that apply
Studies show that companies with good ethical behavior enjoy what two outcomes as a result?
Improved profits
Enhanced company reputation
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