INTRODUCTION TO BUSINESS MANAGEMENT CHAPTER 1 QUESTIONS
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Free enterprise
The system of business in which individuals are free to decide what to produce, how to
produce it, and at what price to sell it.
Cultural diversity
Differences among people in a workforce owing to race, ethnicity, and gender.
Interpersonal skills
The ability to deal effectively with individual employees, other managers within the firm,
and people outside the firm.
Analytical skills
The ability to identify problems correctly, generate reasonable alternatives, and select
the best alternatives to solve problems
Technical skills
The skill required to accomplish a specific kind of work being done in an organization.
Although managers may not actually perform the technical tasks, they should be able to
train employees and answer technical questions.
Conceptual skills
The ability to think in abstract terms in order to see the big picture. Conceptual skills
help managers understand how the various parts of an organization or idea can fit
together.
Business
The organized effort of individuals to produce and sell, for a profit, the goods and
services that satisfy society's needs.
Material resources
include the raw materials used in manufacturing processes as well as buildings and
machinery
Human resources
The people who furnish their labor to the business in return for wages
Financial resource
The money required to pay employees, purchase materials, and generally keep the
business operating
Information resource
Tells the managers of the business how effectively the other three resources are being
combined and used
Marketing intermediaries
Buy products from manufacturers and then resell them
Profit
What remains after all business expenses have been deducted from sales revenue
Economics
The study of how wealth is created and distributed
Micro economics
The study of the decisions made by individuals and businesses
Macro economics
, The study of the national economy and the global economy
Factors of production
Resources used to produce goods and services. There are four factors, Land and
natural resources, labor, capital, entrepreneurship.
Land and natural resources
Elements that can be used in the production process to make appliances, automobiles,
and other products typical examples include crude oil, Forest, minerals, land, water, and
air.
Labor
The time and effort that we used to produce goods and services it includes all human
resources such as managers land employees.
Capital
The money, facilities, equipment, and machines used in the operation of organizations.
Although most people think of it as just money it can also be the manufacturing
equipment.
Entrepreneurship
The activity that organizes land and natural resources, labor, and capital. It is the
willingness to take risks in the knowledge and ability to use the other factors of
production efficiently
Four basic economic questions
What goods and services and how much of each will be produced? How will these
goods and services be produced? For whom will these goods and services be
produced? Who owns and who controls the major factors of production?
Capitalism
An economic system in which individuals own and operate the majority of businesses
that provide goods and services
Invisible hand
A term created by Adam Smith to describe how an individuals personal gain benefits
others and a nation economy
Market economy
An economic system in which businesses and individuals decide what to produce and
buy, and the market determines quantity sold and prices.
Mixed economy
And economy that exhibits elements of both capitalism and socialism
Consumer products
Goods and services purchased by individuals for personal consumption
Command economy
An economic system in which the government decides what goods and services will be
produced, how they will be produced, for whom a billable goods and services will be
produced, who owns and controls the major factors of production. Example socialism,
communism.
Productivity
The average level of output per worker per hour
Gross domestic product, GDP
The total dollar value of all goods and services produced by all people within the
boundaries of a country during a one year period.
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Free enterprise
The system of business in which individuals are free to decide what to produce, how to
produce it, and at what price to sell it.
Cultural diversity
Differences among people in a workforce owing to race, ethnicity, and gender.
Interpersonal skills
The ability to deal effectively with individual employees, other managers within the firm,
and people outside the firm.
Analytical skills
The ability to identify problems correctly, generate reasonable alternatives, and select
the best alternatives to solve problems
Technical skills
The skill required to accomplish a specific kind of work being done in an organization.
Although managers may not actually perform the technical tasks, they should be able to
train employees and answer technical questions.
Conceptual skills
The ability to think in abstract terms in order to see the big picture. Conceptual skills
help managers understand how the various parts of an organization or idea can fit
together.
Business
The organized effort of individuals to produce and sell, for a profit, the goods and
services that satisfy society's needs.
Material resources
include the raw materials used in manufacturing processes as well as buildings and
machinery
Human resources
The people who furnish their labor to the business in return for wages
Financial resource
The money required to pay employees, purchase materials, and generally keep the
business operating
Information resource
Tells the managers of the business how effectively the other three resources are being
combined and used
Marketing intermediaries
Buy products from manufacturers and then resell them
Profit
What remains after all business expenses have been deducted from sales revenue
Economics
The study of how wealth is created and distributed
Micro economics
The study of the decisions made by individuals and businesses
Macro economics
, The study of the national economy and the global economy
Factors of production
Resources used to produce goods and services. There are four factors, Land and
natural resources, labor, capital, entrepreneurship.
Land and natural resources
Elements that can be used in the production process to make appliances, automobiles,
and other products typical examples include crude oil, Forest, minerals, land, water, and
air.
Labor
The time and effort that we used to produce goods and services it includes all human
resources such as managers land employees.
Capital
The money, facilities, equipment, and machines used in the operation of organizations.
Although most people think of it as just money it can also be the manufacturing
equipment.
Entrepreneurship
The activity that organizes land and natural resources, labor, and capital. It is the
willingness to take risks in the knowledge and ability to use the other factors of
production efficiently
Four basic economic questions
What goods and services and how much of each will be produced? How will these
goods and services be produced? For whom will these goods and services be
produced? Who owns and who controls the major factors of production?
Capitalism
An economic system in which individuals own and operate the majority of businesses
that provide goods and services
Invisible hand
A term created by Adam Smith to describe how an individuals personal gain benefits
others and a nation economy
Market economy
An economic system in which businesses and individuals decide what to produce and
buy, and the market determines quantity sold and prices.
Mixed economy
And economy that exhibits elements of both capitalism and socialism
Consumer products
Goods and services purchased by individuals for personal consumption
Command economy
An economic system in which the government decides what goods and services will be
produced, how they will be produced, for whom a billable goods and services will be
produced, who owns and controls the major factors of production. Example socialism,
communism.
Productivity
The average level of output per worker per hour
Gross domestic product, GDP
The total dollar value of all goods and services produced by all people within the
boundaries of a country during a one year period.
