BUS 101: Chapter 1

Eastern Kentucky BUS 101

What is the definition of a 'business'?

Any activity that seeks to provide goods and services to others while operating at a profit.

What are 'goods' in a business context?

Tangible products such as computers, food, clothing, cars, and appliances.

What are 'services' in a business context?

Intangible products that can't be held in your hand, such as education, health care, insurance, recreation, and travel and tourism.

Who is an 'entrepreneur'?

A person who risks time and money to start and manage a business.

What is 'revenue'?

The total amount of money a business takes in during a given period by selling goods and services.

What is 'profit'?

The amount of money a business earns above and beyond what it spends for salaries and other expenses.

What is a 'loss' in business?

When a business's expenses are more than its revenues.

What is 'risk' in business, and how is it related to profit?

Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove profitable. Taking big risks could earn a company big profits.

How can successful businesses contribute to society?

They can raise the standard of living and improve the quality of life.

What is 'standard of living'?

The amount of goods and services people can buy with the money they have.

What is 'quality of life'?

The general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to satisfaction and joy.

Who are 'stakeholders' in a business?

All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.

What is 'outsourcing'?

Contracting with other companies (often in other countries) to do some functions of a firm, like production or accounting.

What is 'insourcing'?

When foreign companies open design and production facilities in the United States.

What is a 'nonprofit organization'?

An organization whose goals do not include making a personal profit for its owners or organizers; they use financial gains to meet social or educational goals.

What are some positives of being an entrepreneur?

Freedom to succeed, making one's own decisions, and possible wealth.

What are some negatives of being an entrepreneur?

Freedom to fail, no paid vacations, and no health insurance.

What are the five 'factors of production'?

Land (natural resources), Labor (workers), Capital, Entrepreneurship, and Knowledge.

Which two factors of production are most important for creating wealth today?

Entrepreneurship and Knowledge.

Name the five elements of the business environment.

Economic and legal environment, Technological environment, Competitive environment, Social environment, and Global business environment.

What is 'productivity'?

The amount of output you generate given the amount of input (for example, hours worked).

What is 'e-commerce'?

The buying and selling of goods online, including Business-to-Consumer (B2C) and Business-to-Business (B2B).

What is 'database'?

An electronic storage file for information.

What is 'empowerment' in a business context?

Giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests.

What is 'demography'?

The statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.

What led to the shift of jobs from farms to factories in the U.S.?

Industrialization in the 19th and 20th centuries, facilitated by technology improvements in agriculture.

What caused the shift of jobs from manufacturing to the service sector?

As technology improved productivity, fewer workers were needed in factories, leading to increased employment in the service industry since the mid-1980s.

what are four ways the government can foster entrepreneurship?

The government can foster entrepreneurship by providing financial support through grants and loans, reducing regulations that hinder startup creation, offering tax incentives for new businesses, and creating education programs to equip entrepreneurs with necessary skills.