intro to business final exam study guide

Wants

Things that you do not have to have to survive, but would like to have

Needs

Things that you must have in order to survive

Goods

Physical products

Services

Tasks that businesses perform for consumers

Resources

Items people can use to make or obtain what they need or want

Profit

Money left over after a business has paid the cost of providing its goods and services

Competition

contest between costumers to win business

Market research

Act of gathering and analyzing information above the wants, needs, and preferences of consumers

Consumer

Person who uses goods or services

Economics

The study of how individuals satisfy needs and wants by making choices

Scarcity

A lack of resources

4 factors of production

All the economic resources necessary to produce a society’s goods and services

What are the 4 factors of production?

• Natural

• Labor

• Capital

• Entrepreneur

Natural

Raw materials from nature

Labor

People who make the goods and services

Capital

Things used to produce goods and services

Entrepreneurial

People who recognize the business opportunity

Price

Amount of money given, or asked, for when goods and services are bought or sold

Supply

Amount of goods or services that producers will provide at various prices

Demand

Amount or quantity of goods and services that consumers are willing to buy a various prices

Equilibrium price

Point at which quantity demanded and quantity supplied meet

What are the economy types

• Traditional

• Command

• Market

• Mixed

Traditional

Family or customs decide the jobs people have. Common in underdeveloped countries

Command

Government decides the jobs people have. What is bought/sold

Market

Individuals decide what jobs people have. What is bought/sold.

Mixed

Individual decision making and government intervention. Most countries have this.

Opportunity cost

The alternative given up when a choice is made

What are the 3 economic questions?

1. What should be produced

2. How should it be produced

3. Who should share in what is produced

How does each economic type answer the economic question

Command: government decided everything

Market: individuals decide everything

Mixed: government AND individuals decide

Ethics

Moral principles by which people conduct themselves

Business Ethics

Rules based on moral principles about how businesses and employees ought to conduct themselves

Bribery

Gift, money, or favors being offered to encourage a business deal

Code of Ethics/ Conduct

A set of guidelines for maintaining ethics in the workplace

Conflict of Interest

A conflict between self-interest and professional obligation

Social responsibility

The duty to do what is best for the goods of society. To whom should we be socially responsible? Customers, employees, owners and society

Economic indicators

Ways to measure economic performance

What are the economic indicators

• Standard of Livings

• Inflation

• GDP (Gross Domestic Product)

• National debt

• Unemployment rate

Standard of living

Level of material comfort

Inflation

Rise in the general level of prices

GDP

Total VALUE of the goods and services produced in a country in a given year

National debt

Total amount of money, the government owes

Budget surplus

Government collects more than it spends in taxes

Budget deficit

Government spends more than it collects in taxes

Unemployment rate

Number of people who are able and willing to work but cannot find work during a given period

Imports

Goods and services brought into a country from abroad

Export

Goods and services sent to other countries

The business cycle

The rise and fall of economic activity over time

What are the 4 phases of the business cycle

• Recession

• Depression

• Recovery

• Prosperity

Recession

A decline in economic activity

Depression

A deep recession

Recovery

A rise in economic activity

Prosperity

A peek of economic activity

Entrepreneurial

Someone who recognizes a business opportunity and organizes, manages, and assumes the risk of operating the business

Characteristic of entrepreneurs

Persistence, confident, risk-taker, independent, creative, etc.

Rewards

Make money for you, being the boss, doing what you love, create schedule

Challenges

Money to get started, are the responsibilities, risk of failure, potential financial loss

Business plan

Written description of a new business idea that describes all aspects of the business

Purpose of a business plan

To provide to potential investors for startup funds

Statement of purpose

A major component of a business plan, which describes to a potential investor, a consider description of an entrepreneur’s business

concursus description of an M intrapreneurs business

Brand identity

Visible elements of a brand such as color, design, logos, that identify and distinguish the brand in consumers minds

Logo

Symbol or other design adopted by an organization to identify its products, uniforms, etc.

Target Market

Particular group of consumers at which a product or service is aimed

Marketing Mix

A.k.a. the four P’s - Price, Product, place, promotion

Autocractic

Style where manager centralizes power and tells employees what to do

Participative

Style where manager decentralizes power and shares it with employees

Free Reign

Style where manager avoids the use of power; operates as a contact person only

6 Leadership Skills

Directing, advising, motivating, coaching, listening, teaching