Intro to Business FINAL EXAM STUDY
GUIDE Questions with Accurate
Answers
Business - ANSWERSA collection of assets belonging to owners, designed and
organized to achieve some purposeful activity (usually the profitable sale of goods and
services to others)
Profit - ANSWERSThe excess return above and beyond the cost of producing and
selling goods and services; the amount of money a business earns after deducting what
it spends for salaries, raw materials, and other expenses
If a business's costs and expenses are greater than its revenue____________ -
ANSWERSThe business will suffer a loss
Risk - ANSWERSThe change a business owner will lose the time and money invested
in a business that probes to be unprofitable
revenue - ANSWERSThe total amount of money that a business receives from the sale
of its goods and services
Stakeholders - ANSWERSThe customers, employees, stockholders, suppliers,
creditors, and others who stand to gain or lose by the policies and activities of a busines
Quality of life - ANSWERSThe general well-being of a society in terms of its political
freedom, education, healthcare, and other factors
outsourcing - ANSWERSmaking other countries produce your product, usually to save
money
Five factors of production - ANSWERSland
Labor
Capital
Knowledge
Entrepreneurship
Goods - ANSWERSTangible products such as computers, food, cars, and clothing
Services - ANSWERSintangible products which cannot be held in your hand, such as
education, healthcare, insurance, and recreation
,Value chain - ANSWERSThe set of all activities needed to bring a good or service into
the hands of the consumer
Social or socio- culture - ANSWERSMany factors and forces in the business
environment affect the choices and activities of firms. Demographic trends (ex: the
increase in the number of older citizens) is part of the social/ socio-culture environment
of business
Three ways government actions can promote business formation and growth -
ANSWERSIncubator- government gives businesses what they need to succeed
Lower taxes- the government gives businesses lower taxes
There are certain areas were the government will lower prices to purchase property for
your business
Economics - ANSWERSThe study of how society employs resources to produce goods
and services for consumption among various groups of individuals
Communism - ANSWERSA government system where major factors of production are
owned and controlled by the government, which makes almost all economic decisions,
and citizens have very limited personal freedoms
Capitalism - ANSWERSThe foundation of the economic system of the US, Canada,
England, and Australia
Market price (equilibrium point) - ANSWERSIn a free market economy, as the demand
for a product or service increases it will cause scarcity, and thus the price that
consumers are willing to pay for that product or service will increase. As consumers'
willingness to pay increases, more profit seeking suppliers will enter the market to
provide the good or service, and the increased supply and competition will cause the
price to go back down. the interaction of these forces of supply and demand will cause
the price for a good or service to eventually settle at the market price (equilibrium point)
Socialist - ANSWERSBusinesses are mostly run by the government
Usually higher taxes because of free healthcare and other government benefits
Fiscal policy - ANSWERSEfforts by the government to adjust taxes and federal
spending to stabilize the economy
Capitalist - ANSWERSThe right to own private property and the right to own a business
and keep all of its profits
Gross domestic product (GDP) - ANSWERSWhen studying the competitiveness of
different nations and comparing their outputs and standards of living, a measure that is
, often used is the total value of all goods and services that are produced in each country
in a given year
GDP per capita - ANSWERSWhen the GDP's total value of output is divided by a
country's population, to give a per-person value of economic output
Adam Smith's theory about how society will be improved with such freedoms -
ANSWERSAdam Smith, the father of economics, came up with the invisible hand
theory. The theory included that people will join the market seeking profits and desiring
innovation, and people will want to buy the product. the invisible hand is working to
stimulate the economy, but really it's people desire for innovations and profits. He also
supported Laissez fair, to let alone
Global value chain - ANSWERSAll the steps it takes (from coming up with the product)
to getting the product to the hands of the consumer. the reason it's a global value chain
is because the value chain "steps" are completed in different countries
Free trade - ANSWERSThe movement of goods and services among nations without
political or economic barriers
Competitive advantage - ANSWERSDavid Ricardo believed that countries should
produce products that they produce best and most efficiently, and import everything
else from other countries that make those products best and most efficiently
Importing - ANSWERSBuying products from another country
Exporting - ANSWERSSelling products to another country
Benefits of global expansion - ANSWERSMore profit- if you have more stores you will
make more money
Grow your brand- it will help make your business's name bigger and more well known
Outsource- it may be less expensive to send your products to other countries because
of lower taxes between countries
An example of international joint venture - ANSWERSGeneral motors and Toyota
formed a partnership called NUMMI to build cars together in an abandoned GM plant in
California
Balance of trade - ANSWERSThe total value of a nation's exports compared to its
imports measured over a particular period of time
Outsourcing - ANSWERSWhen a firm "fine slices" the set of activities required to
produce its goods or services (ex: accounting or manufacturing) and contracts with
other companies to perform some of all of these functions
GUIDE Questions with Accurate
Answers
Business - ANSWERSA collection of assets belonging to owners, designed and
organized to achieve some purposeful activity (usually the profitable sale of goods and
services to others)
Profit - ANSWERSThe excess return above and beyond the cost of producing and
selling goods and services; the amount of money a business earns after deducting what
it spends for salaries, raw materials, and other expenses
If a business's costs and expenses are greater than its revenue____________ -
ANSWERSThe business will suffer a loss
Risk - ANSWERSThe change a business owner will lose the time and money invested
in a business that probes to be unprofitable
revenue - ANSWERSThe total amount of money that a business receives from the sale
of its goods and services
Stakeholders - ANSWERSThe customers, employees, stockholders, suppliers,
creditors, and others who stand to gain or lose by the policies and activities of a busines
Quality of life - ANSWERSThe general well-being of a society in terms of its political
freedom, education, healthcare, and other factors
outsourcing - ANSWERSmaking other countries produce your product, usually to save
money
Five factors of production - ANSWERSland
Labor
Capital
Knowledge
Entrepreneurship
Goods - ANSWERSTangible products such as computers, food, cars, and clothing
Services - ANSWERSintangible products which cannot be held in your hand, such as
education, healthcare, insurance, and recreation
,Value chain - ANSWERSThe set of all activities needed to bring a good or service into
the hands of the consumer
Social or socio- culture - ANSWERSMany factors and forces in the business
environment affect the choices and activities of firms. Demographic trends (ex: the
increase in the number of older citizens) is part of the social/ socio-culture environment
of business
Three ways government actions can promote business formation and growth -
ANSWERSIncubator- government gives businesses what they need to succeed
Lower taxes- the government gives businesses lower taxes
There are certain areas were the government will lower prices to purchase property for
your business
Economics - ANSWERSThe study of how society employs resources to produce goods
and services for consumption among various groups of individuals
Communism - ANSWERSA government system where major factors of production are
owned and controlled by the government, which makes almost all economic decisions,
and citizens have very limited personal freedoms
Capitalism - ANSWERSThe foundation of the economic system of the US, Canada,
England, and Australia
Market price (equilibrium point) - ANSWERSIn a free market economy, as the demand
for a product or service increases it will cause scarcity, and thus the price that
consumers are willing to pay for that product or service will increase. As consumers'
willingness to pay increases, more profit seeking suppliers will enter the market to
provide the good or service, and the increased supply and competition will cause the
price to go back down. the interaction of these forces of supply and demand will cause
the price for a good or service to eventually settle at the market price (equilibrium point)
Socialist - ANSWERSBusinesses are mostly run by the government
Usually higher taxes because of free healthcare and other government benefits
Fiscal policy - ANSWERSEfforts by the government to adjust taxes and federal
spending to stabilize the economy
Capitalist - ANSWERSThe right to own private property and the right to own a business
and keep all of its profits
Gross domestic product (GDP) - ANSWERSWhen studying the competitiveness of
different nations and comparing their outputs and standards of living, a measure that is
, often used is the total value of all goods and services that are produced in each country
in a given year
GDP per capita - ANSWERSWhen the GDP's total value of output is divided by a
country's population, to give a per-person value of economic output
Adam Smith's theory about how society will be improved with such freedoms -
ANSWERSAdam Smith, the father of economics, came up with the invisible hand
theory. The theory included that people will join the market seeking profits and desiring
innovation, and people will want to buy the product. the invisible hand is working to
stimulate the economy, but really it's people desire for innovations and profits. He also
supported Laissez fair, to let alone
Global value chain - ANSWERSAll the steps it takes (from coming up with the product)
to getting the product to the hands of the consumer. the reason it's a global value chain
is because the value chain "steps" are completed in different countries
Free trade - ANSWERSThe movement of goods and services among nations without
political or economic barriers
Competitive advantage - ANSWERSDavid Ricardo believed that countries should
produce products that they produce best and most efficiently, and import everything
else from other countries that make those products best and most efficiently
Importing - ANSWERSBuying products from another country
Exporting - ANSWERSSelling products to another country
Benefits of global expansion - ANSWERSMore profit- if you have more stores you will
make more money
Grow your brand- it will help make your business's name bigger and more well known
Outsource- it may be less expensive to send your products to other countries because
of lower taxes between countries
An example of international joint venture - ANSWERSGeneral motors and Toyota
formed a partnership called NUMMI to build cars together in an abandoned GM plant in
California
Balance of trade - ANSWERSThe total value of a nation's exports compared to its
imports measured over a particular period of time
Outsourcing - ANSWERSWhen a firm "fine slices" the set of activities required to
produce its goods or services (ex: accounting or manufacturing) and contracts with
other companies to perform some of all of these functions
